Bridge Financing GAVI Financing Task Force

1
Bridge Financing GAVI Financing Task Force

• GAVI Board Meeting
• December 4, 2004
• Abuja, Nigeria

2
Requests of GAVI Board

• Next steps on Bridge Financing including adoption
  of a resource ceiling (as basis for further
  country and partner consultations)
• (2) Possible revisions to current application and
  future financial support processes.
• (3) Investment case on bridge financing in March
  2005.

3
Recalling Prior Presentations

• Key assumptions flawed
• Prices of combination vaccines did NOT decline
• Government and partners did NOT increase
  resources to immunization
• Five years was NOT sufficient to transition
  financial responsibility
• Most early adopter countries will not be able to
  sustain combination vaccines when GAVI support
  ends

4
Bridge Financing Building on GAVI principles

• Catalytic
• Time-limited (though not necessarily short-term)
• Additional
• Complementary
• Funding to countries in crisis should continue to
  be flexible, with channelling through partners as
  necessary

5
Bridge Financing Two Options

• Phased-in Co-payment Step-wise percentage
  increase in contributions from government/
  national partners
• Fixed co-payment Flat, fixed co-payment level

6
GAVI strategy for financing new vaccine
introduction
GAVI/Vaccine Fund
Vaccine price/dose
5
10
Time (years)
7
GAVI strategy for financing new vaccine
introduction
GAVI/Vaccine Fund
Vaccine price/dose
Governments / Partners
5
10
Time (years)
8
GAVI strategy for financing new vaccine
introduction
GAVI/Vaccine Fund
Vaccine price/dose
5
10
Time (years)
9
GAVI strategy for financing new vaccine
introduction
GAVI/Vaccine Fund
Vaccine price/dose
Governments/Partners
5
10
Time (years)
10
Option 1

• Phased-in co-payment

11
Phased-in co-payment- step increases
Bridge Funding
Vaccine price/dose
GAVI/Vaccine Fund
Governments /Partners
10
5
10
Time (years)
12
Phased-in co-payment- step increases
Bridge Funding
Vaccine price/dose
GAVI/Vaccine Fund
Governments /Partners
5
10
Time (years)
13
Phased-in co-payment- step increases
Bridge Funding
Vaccine price/dose
GAVI/Vaccine Fund
Governments /Partners
5
10
Time (years)
14
Phased-in co-payment- step increases (5 years)
Bridge Funding
Vaccine price/dose
GAVI/Vaccine Fund
Governments /Partners
5
10
Time (years)
15
Phased-in co-payment- step increases (10 years)
Bridge Funding
Vaccine price/dose
GAVI/Vaccine Fund
Governments /Partners
5
10
15
Time (years)
16
Risk ?

• What happens if vaccine prices do not decline as
  anticipated?

17
Phased-in co-payment- step increases (5 years)
Bridge Funding
Vaccine price/dose
GAVI/Vaccine Fund
Governments /Partners
5
10
Time (years)
18
Option 2

• Fixed co-payment

19
Fixed co-payment
Bridge Funding
GAVI/Vaccine Fund
Vaccine price/dose
Governments /Partners
5
10
Time (years)
20
Fixed co-payment- high co-pay
Bridge Funding
GAVI/Vaccine Fund
Vaccine price/dose
Governments /Partners
5
10
Time (years)
21
Fixed co-payment minimal co-payment
Bridge Funding
Vaccine price/dose
GAVI/Vaccine Fund
Governments /Partners
5
10
Time (years)
22
Fixed co-payment minimal co-payment
Bridge Funding
Vaccine price/dose
GAVI/Vaccine Fund
Gap ?
Governments /Partners
5
10
Time (years)
23
Fixed co-payment moderate co-payment
Bridge Funding
Vaccine price/dose
GAVI/Vaccine Fund
Governments / Partners
5
10
Time (years)
24
Fixed co-payment moderate co-payment
Bridge Funding
Vaccine price/dose
GAVI/Vaccine Fund
Gap ?
Governments / Partners
5
10
Time (years)
25
Anticipating a resource envelope

• 300 million appears to be minimum required for a
  basic bridge package
• Combination vaccines only
• 24 early-adopter countries
• Vaccine demand model (Unicef SD/WHO)
• Anticipated price curve for pentavalent
• Co-payment levels (minimum, moderate)

26
Estimated total cost to GAVI/VF for 24 countries
(in million)

• Based on Unicef SD estimates of pentavalent price
  curve 2005-12
• Expert estimates on DTP-Hep B DTP-Hib

27
Concerns

• Some countries may still drop combination vaccine
  irrespective of co-payment level
• Vaccine prices may not decline as anticipated
• Implementation likely to be complex
• Communication must be clear

28
Concerns (cont.)

• Bridge currently calculated for only 24 countries
• BUT. 10 countries planning to apply for
  combination vaccines in early 2005
• Additional bridge resources for these 10
  countries is estimated to be approximately 200
  million

29
Children protected as a result of bridge financing

• 24 countries
• 63.6 million children
• 58.4 m w/pentavalent
• 4.8 m w/DTP-HepB
• 0.4 mi w/DTP-Hib

30
Proposed Next Steps

• Country and partner consultation
• Additional analyses of advantages and
  disadvantages of options
• Implementation mechanisms
• Propose options for Board consideration of how to
  address those countries applying for combinations
  in 2005

Preparation of an investment case
31
Requests of Board (1)

• Does the Board endorse the adoption of 300
  million as a working resource envelope to be used
  to further analyse the options and engage in
  country consultations?

32
Requests of Board (2)

• Does the Board wish to request the Working Group
  to propose revisions to current application and
  future financial support processes with a report
  back in July 2005?
• Does the Board wish the FTF to submit a full
  investment case on bridge financing in March
  2005?

33
(No Transcript)
34
EXTRAS
35
24 countries

• Kenya
• Tanzania

36
10 Countries for 2005

• Angola
• Bangladesh
• Cameroon
• DR Congo
• Djibouti

• Ethiopia
• Lesotho
• Pakistan
• Sudan
• Togo

37
Fixed co-payment possible compromise
Bridge Funding
GAVI/Vaccine Fund
Vaccine price/dose
Governments /Partners
5
10
Time (years)
38
GAVI/Vaccine Fund
Vaccine price/dose
Governments / Partners
5
10
Time (years)
39
Fixed co-payment
Bridge Funding
GAVI/Vaccine Fund
Vaccine price/dose
Governments /Partners
5
10
Time (years)
40
Concerns (3)

• If Board approves bridge for additional 10
  countries, resource ceiling increases by 200m
  million to total of 500m
• If Board delays country applications until late
  2005, this action
• will reduce country uptake of new vaccines during
  2005-06
• may have market and procurement implications
• -- BUT provides countries with time to assess
  value and cost of new vaccine introduction before
  submitting applications

41
Estimated total cost to GAVI/VF for 34 countries
(in million)