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UNITAID WHO EXPERT WORKING GROUP ON R&D* FINANCING Geneva, 13 January 2009 Dr. Philippe Douste-Blazy, Chairman, UNITAID.

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Presentation on theme: "UNITAID WHO EXPERT WORKING GROUP ON R&D* FINANCING Geneva, 13 January 2009 Dr. Philippe Douste-Blazy, Chairman, UNITAID."— Presentation transcript:

1 UNITAID WHO EXPERT WORKING GROUP ON R&D* FINANCING Geneva, 13 January 2009 Dr. Philippe Douste-Blazy, Chairman, UNITAID

2 US$ The innovative funding

3 Quantitative and qualitative criteria for innovative financing Significant increase of funds to achieve the MDGs Additionality with current aid flows to prevent any decrease in traditional aid Stability and sustainability to enable efficient planning Political feasability to minimize negotiation time Rapid disbursement of funds to respect the 2015 deadline Transparency and traceability to build confidence among donors The innovative funding

4 UNITAID : a lab for the innovative financing and the efficient aid for a common future

5 Official signature of the five founding countries when UNITAID was launched, on 19 September 2006, at the United Nations General Assembly, New York Five founding countries (September 2006)

6 Tax received on each ticket by UNITAID (in France) Economy class First class or business Flight in France or in Europe 1 10 International flight 4 40 An aircraft with 300 passengers on board leaving from Paris will cover the treatment for 1 person with multi drug resistant tuberculosis (approx $) or 60 HIV-positive children for one year Antimalarial treatment for 2 children 1 HIV-positive child under treatment for 1 year ex: flight Paris - Berlin ex: flight Paris - Dakar Furthermore… no economic impact on air traffic UNITAID membership

7 Over $600 million collected in less than 2 years mainly through air travel tax No economic distortion for the air industry A solidarity movement UNITAID : a lab for innovative financing

8 Up to present, in cooperation with the Clinton Foundation, the Project of UNITAID on Antiretrovirals against HIV/AIDS for children : has reduced the price of ARVs on average by 40% is funding the supply of diagnostics and treatment for more than 102,000 children, including more than 62,000 new treatments, in 38 developing countries. UNITAID : a lab for innovative financing

9 UNITAID initiatives have already driven major price reductions (partnering with CHAI) Change in peds ARV prices (AZT FDC vs. individual syrups) US$/patient per year 2006Q % $66 $130 Change in 2 nd -line ARV prices (TDF+3TC) US$/patient per year 2006 Q % $159 $315


11 Now (UNITAID-CHAI): Fixed dose combination 3 tablets a day 60 $per patient per year Before: Single dose syrups 16 bottles of syrup monthly 200 $ per patient per year Better products at lower price

12 UNITAID, in partnership with UNICEF and WHO, delivered more than 1.4 million malaria treatments in Burundi and Liberia. UNITAID, in conjunction with the Stop TB Partnerships Global Drug Facility, is funding pediatric therapies against tuberculosis for approximately 180,000 children in 30 countries to be supplied from September 2007 at a cost of US$ 5.6 million. UNITAID plans to continue to finance this program until 2010 with the aim of providing treatment to the 900,000 children who need it. UNITAID : a lab for innovative financing

13 More than 90 countries already receive UNITAID support… UNITAID ongoing actions HIV / AIDS 53 recipient countries Malaria 22 recipient countries Tuberculosis 58 recipient countries - Pediatric ARV - Second line ARV - PMTCT - ACT - LLIN - First line TB - Pediatric TB - MDR-TB - Diagnostics

14 Innovative Financing : Tax or Voluntary Contribution ?

15 Voluntary Solidarity Contribution could allow Unitaid to reach countries – like the US – unlikely to be part of the tax on airline tickets mechanism UNITAIDs tax on airline tickets has been a success in the last two years UNITAID will continue to encourage new countries to implement the tax (e.g., Portugal is likely to join in 2009) But some countries are not likely to join this initiative: –The US (first airline market) already is not likely to implement it because of the tax dimension Voluntary Solidarity Contribution (VSC) would allow UNITAID to reach non- member countries unlikely to implement the tax, by involving citizens on a voluntary basis

16 Voluntary Solidarity-Contribution is a concept to raise funds : From individuals and corporations who purchase plane tickets 2 ($,,£) solidarity contribution per ticket Entirely voluntary, simple and hassle-free process Traceable donation experience The VSC project constitutes a great opportunity to develop a massive citizen movement

17 Physical agencies Online Phone Individuals Corporations […] so, Mr. Smith, an amount of 2$ (or 2/2£ depending on location) per flight will be charged on your ticket as part of the UNITAID program against infectious diseases in the world. If you would like to give more, I can also specify a free additional amount now that will also be included in the global price of the ticket […]. The VSC project constitutes a great opportunity to develop a massive citizen movement

18 The Voluntary Solidarity Contribution (VSC) project has demonstrated a revenue potential of USD ~1 billion by 2011 in the travel industry and its feasibility from a market and technical standpoint thanks to strong support from potential partners Voluntary Solidarity Contribution Revenue Potential

19 19 Revenue from travel agencies and e-brokers Revenue from airlines and low-costs Total revenue ASSUMING NO TAX (1)All targetable countries (2)Compound of 73% implementation rate for travel agencies and e-brokers (GDS volume: 65%) and 44% implementation rate for direct sales (direct volume: 35%) i.e., 16 first airlines / low-costs (3)10% of GDS activities (car rentals, hotels, trains, cruises) (4)% of donors to charities donate to UNITAID (5)02 ($,, and £) per ticket in economy class and 20 in business/first classes Source:PhocusWright, ICAO, Amadeus, Star Alliance report 2003, Back Aviation OAS database 2007, Project Team analysis USD millions; based on 2006 volumes Voluntary Solidarity Contribution proposed on 848m (39%) travels out of 2,200m worldwide air tickets Core case hypotheses 771m airline tickets worldwide –125 countries (1) –Credit card payments only –Implemented for 63% of tickets (2) 77m easy to capture other types of travel (3) Travelers donate 27% of the time (4) An average amount of USD 4.3 (5) Pessimistic and optimistic cases range from USD ~120m to ~1,800m The VSC project has demonstrated a revenue potential of USD 1 BN by 2011 in the travel industry

20 *Among which 48% offline and 17% online **Among which 14% offline and 21% online Tourism Organization 2007, ING Oct 2004, ICAO, Euromonitor 2006, PhoCusWright 2005 & 2006, Analysys international 2007, ProjeSource:World ct Team analysis Distributors Travel agencies Managed business 41% Leisure and unmanaged business 59% 47% % Share of passengers Intermediaries 65%* 35%** ProvidersCustomers e- brokers 18% Airlines LCC 24% 11% Indirect sales Direct sales Airlines GDS as software provider GDS Airlines WORLD AIR TRAVEL STRUCTURE

21 *If implemented in all distribution channels. Indirect volumes represent ~65% of all air travel tickets sold worldwide **Worldspan and Galileo are now part of Travelport Group Source:Amadeus, PhocusWright 2006 ; Experts interviews Percent Galileo/ Travelport Amadeus Sabre Travelsky Other 3 main GDSs could allow UNITAID to technically reach ~100% of indirect volume* in tier 1 countries Amadeus Galileo/ Travelport Sabre US Germany Sabre (infini) Galileo/ Travelport** Amadeus Sabre Galileo/ Travelport ** Amadeus 19 China Japan UK VSC is feasible from a market standpoint thanks to high concentration of tickets sold 3 main GDSs

22 *Approximated from number of passengers carried, 2006 **48 first countries account for 95% of number of tickets sold ***Not considered for Voluntary Micro-Contribution because potential tax contributors ****Among which ~1.88 billion tickets sold in non-UNITAID member countries Source:ICAO 2006, Project Team analysis Non-member countries GERMANY JAPAN FRANCE SPAIN AUSTRALIA IRELAND CANADA BRAZIL INDIA*** ITALY RUSSIAN FEDERATION REPUBLIC OF KOREA SCANDINAVIA INDONESIA NETHERLANDS TURKEY GULF STATES CHINA, HONG KONG SAR MEXICO THAILAND SINGAPORE MALAYSIA SAUDI ARABIA IRAN (ISLAMIC REPUBLIC OF) SOUTH AFRICA NEW ZEALAND SWITZERLAND COLOMBIA AUSTRIA GREECE PORTUGAL FINLAND PHILIPPINES ARGENTINA QATAR CZECH REPUBLIC 730 PAKISTAN EGYPT VIET NAM UNITED STATES CHINA*** CHILE ISRAEL TUNISIA PERU MOROCCO UNITED KINGDOM VENEZUELA 125 targetable countries represent 1,800 m tickets out of 2,200 worldwide Deep understanding of Tier 1 countries (~55% of total number of targetable countries) is necessary to assess revenue potential Priority targeted countries: –United States –Germany –Japan –United Kingdom Total 2,200**** Tier 1 Tier 2 Tier 3 Percentage of total** %, 14.1%, 8.4%, Number of airline tickets* sold (in millions) ; targetable countries represent 1,800 million tickets out of 2,200 worldwide

23 Description of the solution Features Fully integrated within travel agencies and e-brokers booking flow Implementation first in travel agent/e-broker but extendable to airline/LCC direct sales Only credit card payment permitted Payment Service Providers (PSPs, e.g., Bibit, Cybersource, others) for money collection: fees to negotiate Risk of double password entry may occur in 2 years at the earliest PSP Bibit, Cybersource TicketContribution Travel agencies / e-brokers Airlines BSP/ARC Implementation Pilots (Australia – Italy) can be run in April 2009 Roll-out can be effective ~ 6 months later Millenium Foundation Amadeus designed a fully integrated solution

24 Total charitable giving, US USD billions In the US, the past 15 years have demonstrated a correlation between people's generosity and number of opportunities to give (approximated by the number of charities) PRELIMINARY Source:Project Team, Giving USA, Pew Charitable Trust, Chronicle of Philanthropy, Bridgespan Large media campaigns + new "niches" initiative (Harvest Foundation of the Piedmont) Internet charitable giving development (American Red Cross, United Way,…) "Historic" donations (Religious, Communitarian giving – Salvation Army,…) Number of charities with >USD 25,000 budgets in the US USD thousands Over the past years, charitable trends have demonstrated that more occasions to donate people have, the more generous they tend to be

25 The VSC project could find applications in many other industries worldwide: –Web transactions and e-gambling –Other industries These opportunities have to be further explored to confirm both their presumably large revenue potential and feasibility Other innovative financing opportunities could be explored

26 In addition, the VSC project has already prompted support from major institutions (Google, Amadeus...) and personalities (Ban Ki-moon, Bill and Melinda Gates, Bill Clinton...) Growing interest for the VSC project

27 Thank you

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