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The Intersection of Economics and Access: Sustainability Issues. Andrew Farlow University of Oxford Oxford Conference on Innovation and Technological Transfer for Global Health 9 th -13 th September 2007. Overview of Session. Sustainable infrastructure and human resources - PowerPoint PPT Presentation
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1
The Intersection of Economics and Access:Sustainability Issues
Andrew FarlowUniversity of Oxford
Oxford Conference on Innovation and Technological Transfer for Global Health
9th-13th September 2007
2
Overview of Session
• Sustainable infrastructure and human resources
• Sustainability of vaccine programs
• Sustainability of global health funding
• Power from the bottom to drive sustainability?
3
HIV/AIDS Reverses Life Expectancy
Source: United Nations Population Division, World Population Prospects (2004 Revision)
4
Projections of Future Burden due to HIV/AIDS
5
Capital Flight at its Peak…
Public Private Private Capital Capital capital wealth capital flight flight per per per per ratioworker worker worker worker
SSA 1,962 1,758 1,062 696 0.4South Asia 2,008 1,930 1,840 90 0.05East Asia 4,505 10,331 9,704 627 0.06
Now the problem is human brain drain and depletion of human resources…
With severe consequences…
6
Infrastructure: Health WorkersDistribution of health workers by level of health expenditure
and burden of disease
Source: WHO World Health Report (2006)
7
Infrastructure: Health WorkersCountries with a critical shortage of health service providers
(doctors, nurses and midwives)
Source: WHO World Health Report (2006)
8
Infrastructure: Consequences for Maternal Mortality
Source: WHO “The World Health Report 2005 – make every mother and child count” (2005)http://www.who.int/whr/2005/chap1-en.pdf
9
Maternal Mortality per 100 000 Live Births in 2000
Source: WHO “The World Health Report 2005 – make every mother and child count” (2005)http://www.who.int/whr/2005/chap1-en.pdf
10
Sustainable Vaccine Programs?Countries with DTP3 Coverage < 50%
1990 DTP3 coverage < 50% (19 countries)
2000 DTP3 coverage < 50% (20 countries)
2004 DTP3 coverage < 50% (10 countries)
Source: WHO/UNICEF estimates, 2005192 WHO Member States. Data as of September 2005
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Hib vaccine not introduced (166 countries)
Hib vaccine introduced but no coverage data reported (26 countries)
1997: 26 countries introduced
Hib Vaccine and Hib3 Coverage
Hib3 < 80% (12 countries or 6% )
Hib3 > 80% (78 countries or 41%)
2004: 92 countries introduced in infant immunization schedule
Hib vaccine not introduced (100 countries or 52% )
Hib vaccine introduced in part of the country (2 countries or 1% )
Source: WHO/UNICEF estimates, 2005192 WHO Member States. Data as of September 2005
12
Cost / Fully Immunized ChildAvg. Resource Requirements per DTP3 Targeted Child (Total Period)
$-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
Vie
tna
m
Ta
jikis
tan
Uzb
eki
stan
Mo
zam
biq
ue
Ma
da
gas
car
Ma
li
Cam
bod
ia
La
o P
DR
Côt
e d
'Ivo
ire
Gha
na
Bur
un
di
Za
mb
ia
Uga
nd
a
Ta
nza
nia
Rw
an
da
Bur
kin
a F
aso
Gam
bia
Ken
ya
Hai
ti
Kyr
gyz
stan
Non-Vaccine Costs
New/Underused Vaccines(HepB; Hib; YF)
Traditional Vaccines(BCG; DTP; Measles; Polio)
HepB (mono)
DTP+HepB DTP+HepB+Hib
14
Estimated DeathsSaved by Vaccination
15
EPI Coverage, Select Countries
16
27 Million Children Still Not Vaccinated (DTP3 2003a)
17
Sustainability:Global Fund Requirements to 2010
for TB, Malaria, HIV/AIDS
Source: The Global Fund “Partners in Impact Progress Report” (2007) http://www.theglobalfund.org/en/files/about/replenishment/oslo/Progress%20Report.pdf
18
Vaccine Funding 2005-15
0.9 1.4
New Vaccines
Existing Vaccines
2.7
8.5
3.4
18.0
UK Germany Poland Mexico Thailand GAVI
Bill
ion
s re
qu
ired
to
ach
ieve
ta
rge
ted
€
vacc
ine
pro
gra
ms
ove
r 1
0 y
r. p
erio
d.
New VaccinesGAVI New Vaccines
Conj. Men ACWY, Men B, HPV, MMRV
Men AC, HPV, Rota, TB,
Malaria, Strep
+ Hib. MenC, Rota
+ Rota + Rota, TB + TB + Rota, TB, Dengue, Malaria
in UK in Germany in Poland in Mexico in Thailand
A prospective analysis in UK, Germany, Poland, Mexico, Thailand - Smart Pharma Consulting
19
Financial Sustainability
• GAVI: “Although self-sufficiency is the ultimate goal, in the nearer term, sustainable financing is the ability of a country to mobilize and efficiently use domestic and supplementary external resources on a reliable basis to achieve target levels of immunization performance.”
20
Phasing in…• 5 year Vaccine Fund commitment extended over 8
year phase
• Countries will be notified of 5 year Vaccine Fund commitment
Year 2 Year 4 Year 6 Year 8
Vaccine Fund
Government & Partners
Investments in
Immunizationprogram
21
Meeting the Resource Gap
$0
$50
Year 2 Year 4 Year 6 Year 8
Gap
Possible External
Probable External
Probable Gov't
Secure External
Secure Gov't
Immunization Program Financing
22
Future Resource Requirements, Financing & Gaps
$-
$50
$100
$150
$200
$250
Pre-VF Year VF Year 2004 2005 2006 2007 2008
GapOtherBilateralsMultilateralsGAVIGovernment
23
Financial Sustainability
‘Innovative’ Financing Mechanisms– Global Alliance for Vaccines & Immunization
• The Vaccine Fund• Advanced Development & Introduction Plans• International Finance Facility for Immunization
– Other Funding Mechanisms• PAHO Revolving Fund• Vaccine Independence Initiative• ARIVAS (Appui au Renforcement de l’independence
Vaccinal en Afrique Sub-Saharien )• ‘Advance Market Commitments’/prize funds
GAVI, IFFIm, and prize funds $5bn-$10bn 2006-2010
24
1. What is the IFFIm?• An IFF for immunization (IFFIm) has been proposed as
a pilot for the IFF mechanism in general– IFF a large-scale US$50-75 billion per year
mechanism to double global aid and help meet the MDGs
– On September 9th 2006 the IFFIm was launched in London with the five donors - UK, France, Italy, Spain, and Sweden: now Norway and Brazil have announced contribution as well; South Africa is considering a contribution
– Estimated disbursable of $3.2 billion before 2015– Ongoing effort to secure resources from additional
donors to reach $4 (now $6) billion resource goal• First bond issuance took place late 2006
25
International Finance Facility for Immunization
• IFFIm will raise additional funds for GAVI programs– Pilot of the UK-sponsored International Finance Facility to
frontload immunization financing over 10 years– $4 billion borrowed from the capital markets in the form of
bonds
New and under-used vaccines: $1.9 b
Systems support for new vaccine introduction: $290mMortality reduction campaigns: $515m
Funds for services strengthening: $1.1b
Polio stockpile: $175m$100
$200
$300
$400
$500
$600
$700
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
US
$ (m
illi
on
s)
Over 2005-15, 5.3 million under 5 deaths and an additional 5 million adult deaths could be prevented
26
The IFF: Donor Pledges
Base Case
0
100
200
300
400
500
600
700
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$US
m
Disbursements Pledges Cash Available
Pledges from Donors
Spare cash – “cushion”
Disbursements (to programs)
27
Implications of the IFFIm• Influencing the market
– Long-term predictable commitments allow longer-term planning for supply strategy
– Increased industry capacity and lower vaccine prices
• Better planning and sustainability for countries– Commitments can be made to countries over
longer-term allowing for better integration within national planning cycles and longer lead time to plan for country financing and eventual sustainability
28
Implications of the IFFIm
• Additional financing & donors– Countries not previously contributing to GAVI
attracted• Accelerating coverage of immunization with traditional
and new and under-used vaccines
• But:• Transaction costs have proved much higher than
expected (not per se negative, but must be factored in)• It has to be repaid, and will phase out at a later date• How will funding be sustained if still needed?
29
0
2
4
6
8
10
12
14
16
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Prizes: Previous Vaccine Prices
Price
Quantity(& time)
Price declines over time
Marginal costpays for R&D
30
0
2
4
6
8
10
12
14
16
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Prize: Two Stage Pricing
Price
Quantity(& time)
Marginal cost
Guaranteedfirst stage price
sponsorsguarantee
to top upprice
developing countries
buy at lowprice
$(x)bntotal
market
sponsors top upthe price for a
maximum numberof treatments
In return, firms obliged to sell at lowerlong run price
31
Some Issues Though• No Simple one-off vaccine solution,
– Can’t have a quantity guarantee– Must allow less exhaustive technical standards– Firms must face demand risk?
• How to set right?• How to make credible and avoid time
inconsistency• Still need to keep pressure on affordability• If a package of measures, how to use a ‘prize’ for
one of them?• What about all those ‘on-the-ground’ infrastructure
failures?• How to fit in with the typical ‘philosophy’ of PDPs?
32
Multi-national
LaunchedClinical trial
Phase IIIClinical trial
Phase IIClinical trial
Phase I
9-valent
11-valent
Steptorix1 10-
valent
Prevnar (7-valent)
13-valent
7-valent
Pre-clinical stage
>5 mulit-valent conjugate vaccine projects
Emerging suppliers
Expected launch 2008
~20 vaccinesin research/Pre-clinical
stage(includes
conjugate &protein-based
vaccines)
Discontinued
1Completed first Phase III trial; results announced in Jun05
DevelopmentStage
Pneumococcal Vaccine Pipeline:Recent Developments
Source: BCG Global Supply Strategy 2005
PneumoADIP team analysis
33
Accelerated Introduction Plan -- Routine ImmunizationsPotential Annual & Cumulative Deaths Averted
050
100150200250300350400450500
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
An
nu
al
Death
s A
vert
ed
(1000s)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Cu
mu
late
d D
eath
s
Averte
d (1
000s)
Annual Deaths Averted (1000s) Cumulative Deaths Averted (1000s)
Projected Impact from Accelerated Pneumococcal Vaccination
3.9 million child deaths prevented by 2025
5.4 million by 2030
34
Strategic Demand Financing Requirements
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Donors Country
US
$ m
illio
ns
35
However…
• According to key sponsor files, most resources are gone by 2015– Leaving 98% of total burden out to 2030– Follow on vaccines– Capacity risks– Cost of goods– Packaging issues in first round countries– Costs of sustaining first round countries
