GAVI: Longterm procurement strategy project

1
GAVI Long-term procurement strategy project
2
Agenda

• Objectives for this discussion
• Report-back from survey
• Next steps

3
Background

• Our charge At the July 2004 GAVI Board Meeting,
  the Board requested that UNICEF and the Gates
  Foundation should "convene a small steering group
  to elicit suggestions from the Executive
  Committee and design a process to review and
  address procurement concerns

4
Progress and request for input

• We conducted a survey to understand your concerns
  and objectives and will report back to you today.
  
• After review and revision, the Secretariat will
  ask for your endorsement of
• Updated GAVI Procurement Principles revised to
  incorporate the result of the consultation
• Remaining recommendations arising from the
  survey
• Next steps

5
Report-back from survey
6
Overall survey results suggest

• Principles The GAVI Board broadly agrees with
  existing GAVI principles as the basis for GAVI
  procurement, with a few suggested modifications.

2. Procurement goals The focus of a long-term
procurement strategy should be to support the
development of the market for new products by
offering introductory prices that reward
innovation and achieve lower prices over time by
encouraging the entry of multiple qualified
suppliers.
3. Procurement strategy GAVI should develop
product-specific procurement strategies which
reflect the conditions and needs of the demand
and supply market.
7
1. Principles

• Updated GAVI Principles below, with possible
  adaptations in bold italic.

a. GAVI recognizes immunization as an important
and potentially cost-effective intervention that
can enhance the right of all children to a
healthy life, that has positive effects in
combating poverty and that is a critical
contribution to the achievement of public health
gains and to the attainment of the Millenium
Development Goals (MDGs) for Health. b. GAVI
commits itself to the immediate and long-term aim
of vaccine security the sustained supply of
affordable quality vaccines designed to meet the
needs of developing countries for sustainable use.
8
1. Principles
c. GAVI, based on the work of national partners,
commits itself to enhancing the reliability and
predictability in vaccine demand and supply,
strengthening the planning and forecasting of
vaccine needs in the immunization programmes it
supports and ensuring that updated information is
readily available to Industry, thereby enabling
the efficiency of vaccine supply for the greatest
affordability of vaccines. d. GAVI recognizes the
importance of innovation in the vaccine sector
and commits itself to working with industry and
national partners to ensure increased use of
appropriate under-used vaccines relevant to
benefit children most in need, recognizing that
success in this will greatly motivate increased
research and development of new vaccines
including those of relevance to children in
developing countries.
9
1. Principles
e. GAVI recognizes that the introduction of new
vaccines is a priority, and will be based on
well-determined burden of disease studies and
cost effectiveness conducted by national partners
plus appropriate supply and financing
arrangements. f. GAVI recognizes the vital role
of the vaccine industry in world health
improvements and establishes strategies that
ensure the focus of both industrialized and
developing country manufacturers on providing
vaccines for developing countries. g. GAVI
encourages the vaccine industry to adopt
strategies that allow them to bring new products
to market and improve the technologies applied to
existing vaccines, ensuring sufficient production
capacities and investment in research and
development of new vaccines exist.
10
1. Principles

• h. GAVI commits itself to establishing and
  maintaining effective and continuous dialogue
  with the vaccine industry in line with the scope
  of GAVI-supported procurement relative to the
  global amounts produced
• i. GAVI supports full transparency with industry
  and across partners of criteria used to make
  awards for specific purchase arrangements and
  agreements.
• GAVI commits itself to develop effective
  procurement strategies and tools according to
  market conditions for priority products in order
  to achieve its supply security objectives.
• GAVI commits itself to develop procurement
  strategies based upon the type of vaccine and
  level of maturity of the specific market that
  ensures competition among vaccine manufacturers.
  These may include longer term arrangements and
  guaranteeing of minimum volumes to be purchased.

11
1. Principles

• GAVI acknowledges the desirability of competition
  in the long-term sustained supply of vaccines and
  will actively encourage the engagement of
  manufacturers of vaccines of assured quality that
  submit acceptable bids or proposals for supply.

12
2. Goals

• The focus of a long-term procurement strategy
  should be to support the development of the
  market for new products by offering introductory
  prices that reward innovation and achieve lower
  prices over time by encouraging the entry of
  multiple qualified suppliers.

13
2. Goals

• This goal responds to your comments that
• Need to establish explicit goals/measurements by
  which GAVI procurement can be evaluated and
  continuously improved
• Need to balance dual and different objectives
  with new versus mature products
• Necessity of recognizing the costs of RD and
  commercial sustainability.

14
3. Strategy

• GAVI should develop product-specific procurement
  strategies which reflect the conditions and needs
  of the demand and supply market.

15
3. Strategy

• GAVI Board clearly feels supply strategies and
  procurement need to be product and situation
  specific.
• Survey results suggest stimulating multiple
  suppliers on the market is particularly important
  for GAVIs priority products but that all
  possible strategies should be availableto attain
  the overall goals of the Alliance.
• GAVI is also interested in learning more about
  guaranteed contracting, early negotiations with
  suppliers, and other essential elements (e.g.,
  improved demand forecasting and predictability
  of financing).

16
Next steps
17
Move from report-back to recommendations

• Principles to be updated per survey feedback/

2. Procurement goals The focus of a long-term
procurement strategy should be to support the
development of the market for new products by
offering introductory prices that reward
innovation and achieve lower prices over time by
encouraging the entry of multiple qualified
suppliers.
3. Procurement strategy GAVI should develop
product-specific procurement strategies which
reflect the conditions and needs of the demand
and supply market.
18
And move toward product-specific supply strategies

• Convening of Procurement Experts Meeting
• With the objective of obtaining advice on
  product-specific strategies for vaccine and
  performance indicators for evaluating
  effectiveness of procurement
• Experts include buyers and industry-specialists
• Review to prioritize Hib, but also include OPV
  stockpile, Rotavirus and Pneumococcal
• Tentative 2-day meeting, early June
• With report of outcomes to GAVI Board in July