1. 1 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

2. 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. 3 HIV/AIDS Reverses Life Expectancy Source: United Nations Population Division, World Population Prospects (2004 Revision)

4. 4 Projections of Future Burden due to HIV/AIDS

5. 5 Capital Flight at its Peak… Now the problem is human brain drain and depletion of human resources… With severe consequences…

6. 6 Infrastructure: Health Workers Distribution of health workers by level of health expenditure and burden of disease Source: WHO World Health Report (2006)

7. 7 Infrastructure: Health Workers Countries with a critical shortage of health service providers (doctors, nurses and midwives) Source: WHO World Health Report (2006)

8. 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. 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. 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, 2005 192 WHO Member States. Data as of September 2005

11. 11 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, 2005 192 WHO Member States. Data as of September 2005

12. 12 Cost / Fully Immunized Child Avg. Resource Requirements per DTP3 Targeted Child (Total Period)

13. 13 Global Immunization 1980-2004 DTP3 Coverage Source: WHO/UNICEF estimates, 2005, covering year 2004 192 WHO Member States. Data as of September 2005

14. 14 Estimated Deaths Saved by Vaccination

15. 15 EPI Coverage, Select Countries

16. 16 27 Million Children Still Not Vaccinated (DTP3 2003 a )

17. 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 http://www.theglobalfund.org/en/files/about/replenishment/oslo/Progress%20Report.pdf

18. 18 Vaccine Funding 2005-15 0.9 1.4 New Vaccines Existing Vaccines 2.7 8.5 3.4 18.0 UKGermanyPolandMexicoThailandGAVI Billions required to achieve targeted € vaccine programs over 10 yr. period. New Vaccines GAVI 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 UKin Germanyin Polandin Mexicoin Thailand A prospective analysis in UK, Germany, Poland, Mexico, Thailand - Smart Pharma Consulting

19. 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. 20 Phasing in… 5 year Vaccine Fund commitment extended over 8 year phase Countries will be notified of 5 year Vaccine Fund commitment Investments in Immunization program

21. 21 Meeting the Resource Gap Immunization Program Financing

22. 22 Future Resource Requirements, Financing & Gaps $- $50 $100 $150 $200 $250 Pre-VF YearVF Year20042005200620072008 Gap Other Bilaterals Multilaterals GAVI Government

23. 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. 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 9 th 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. 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: $290m Mortality reduction campaigns: $515m Funds for services strengthening: $1.1b Polio stockpile: $175m $100 $200 $300 $400 $500 $600 $700 20052006200720082009 2010 2011201220132014 2015 US$ (millions) Over 2005-15, 5.3 million under 5 deaths and an additional 5 million adult deaths could be prevented

26. 26 The IFF: Donor Pledges Pledges from Donors Spare cash – “cushion” Disbursements (to programs)

27. 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. 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. 29 Prizes: Previous Vaccine Prices Price Quantity (& time) Price declines over time Marginal cost pays for R&D

30. 30 Prize: Two Stage Pricing Price Quantity (& time) Marginal cost Guaranteed first stage price sponsors guarantee to top up price developing countries buy at low price $(x)bn total market sponsors top up the price for a maximum number of treatments In return, firms obliged to sell at lower long run price

31. 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. 32 Multi- national Launched Clinical trial Phase III Clinical trial Phase II Clinical trial Phase I 9-valent 11-valent Steptorix 1 10- valent Prevnar (7-valent) 13-valent 7-valent Pre-clinical stage >5 mulit-valent conjugate vaccine projects Emerging suppliers Expected launch 2008 ~20 vaccines in research/ Pre-clinical stage (includes conjugate & protein-based vaccines) Discontinued 1 Completed first Phase III trial; results announced in Jun05 Development Stage Pneumococcal Vaccine Pipeline: Recent Developments Source: BCG Global Supply Strategy 2005 PneumoADIP team analysis

33. 33 Projected Impact from Accelerated Pneumococcal Vaccination 3.9 million child deaths prevented by 2025 5.4 million by 2030

34. 34 Strategic Demand Financing Requirements US$ millions

35. 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

36. 36 THANK YOU Comments and feedback always welcome: andrew.farlow@sbs.ox.ac.uk