Challenges and Barriers to Efficient Operation of Existing Supply Chain

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1 Challenges and Barriers to Efficient Operation of Existing Supply Chain Developing and Strengthening the Global Supply Chain for Second-Line Drugs for Multidrug-Resistant TB July 31, 2012 Professor Rifat Atun FRCGP FFPH FRCP Professor of International health Management Imperial College Business School and Faculty of Medicine Imperial College London

2 1. Innovative financing: Push and Pull Mechanisms 2. Funding shortfall and unpredictable financing affecting push and pull mechanisms 3. Low funding for cross cutting procurement and supply chain management activities 4. Possible considerations 2 Prof Rifat Atun, Imperial College London, 2012

3 1. Innovative financing: Push and Pull Mechanisms 2. Funding shortfall and unpredictable financing affecting push and pull mechanisms 3. Low funding for cross cutting procurement and supply chain management activities 4. Possible considerations 3 Prof Rifat Atun, Imperial College London, 2012

4 Innovative mechanisms for financing MDRTB

5 Expanding access: push, pull and crosscutting mechanisms Push-mechanisms - financing of R&D costs and reduction of risks by provision of direct R&D funding and/or other resources; Pull-mechanisms - creation of market incentives, signal presence of demand, sustain and favour uptake, influence market dynamics; Cross-cutting initiatives - improvement of regulatory environment, strengthening procurement, quality assurance, supply chain management infrastructures, health systems and capabilities in endemic countries.

6 Push Mechanisms: Product Development Partnerships Global Alliance for TB Drug Development (TB Alliance) AERAS TB Vaccine Initiative (TBVI) International AIDS Vaccine Initiative (IAVI) International Partnership for Microbicides (IPM) Malaria Vaccine Initiative (MVI) Product Access Partnerships Global Alliance for the Elimination of Lymphatic Filariasis Global Polio Eradication Initiative (GPEI) International Trachoma Initiative (ITI) Malarone Donation Program Mectizan Donation Program Medicines for Malaria Venture (MMV)

7 Pull Mechanisms: Global Financing Institutions The Global Fund to Fight AIDS, Tuberculosis and Malaria (The Global Fund) Global Alliance for Vaccines and Immunization (GAVI Alliance) UNITAID

8 PPPDs along R&D value chain by disease

9 Cross cutting investments HIV/AIDS Malaria Tuberculosis Technical assistance - Project management IAVI SAAVI FIND EMVI (EURHAVAC) RBM PATH Lilly MDR-TB Partnership Advocacy - Fundraising IAVI IPM PATH (GCM) RBM PATH (MACEPA) TB Alliance PATH STOP TB Partnership Lilly MDR-TB Partnership Capacity-building- Training - Health stems strengthening. PATH (GCM) GFATM IAVI IPM CONRAD ACHAP PATH GFATM TDR PATH GFATM STOP TB Partnership TB Alliance AERAS Lilly MDR-TB Partnership Delivery Procurement - Price negotiation - Distribution - Supply Chain Support - Demand forecasting IPM PATH IAVI AAI MMV MVI RBM MERG PATH TB Alliance PATH Stop TB Partnership

10 1. Innovative financing: Push and Pull Mechanisms 2. Funding shortfall and unpredictable financing affecting push and pull mechanisms 3. Low funding for cross cutting procurement and supply chain management activities 4. Possible considerations 10 Prof Rifat Atun, Imperial College London, 2012

11 MDR-TB Funding Needs US$ 47 billion over 2011 to 2015, including almost US$ 37 million for implementation and almost US$ 10 billion for research and development: DOTS: US$ 22.6 billion MDR-TB: US$ 7.1 billion TB/HIV: US$ 2.8 billion 11 Prof Rifat Atun, Imperial College London, 2012

12 Global Fund Resource Allocation ( ) US$ 12 billion approved for HIV grants in 146 countries US$ 3.6 billion approved for TB efforts in 116 countries US$ 6.1 billion approved for malaria efforts in 84 countries

13 Global Fund approved funding for TB control

14 US$ billions Expected Global Fund TB expenditures (a) and contribution to total funding need for DOTS, MDR-TB and TB/HIV treatment, low- and middle-income countries Global Fund/Total TB control implementation need (%) Korenromp, Atun et al PLoS One 2012 Prof Rifat Atun, Imperial College London, 2012

15 MDR-TB Funding Global Fund Target - Fund at least [50%] of MDR-TB treatment needs 27 countries represent approximately 85% of the world s estimated number of incident MDR-TB and XDR-TB cases: In 23 countries, funding for MDR-TB care and treatment has increased from $ 0.1 Billion in 2009 to $ 0.5 Billion in Only Estonia, Latvia, and the Russian Federation are using domestic sources finance MDR-TB control. If domestic funding is not mobilized, the Global Fund may be only funding source for second-line drugs and MDR-TB management in Armenia, Bangladesh, Bulgaria, Georgia, Tajikistan, Kyrgyzstan, and Uzbekistan.

16 Global Fund Contributions to International Service Delivery Targets/Needs Global Fund-supported programs account for around half of the estimated service delivery, but large unmet need remains.

17 Treatments needed (millions) Cost (US$ billions Resource needs for TB control in EECA Global Plan to Stop TB , EECA region: DOTS MDR TB/HIV DOTS MDR TB/HIV Control and cost of MDR-TB will increasingly determine the overall sustainability of TB control in EECA

18 Declining Health ODA:

19 Decline in Global Fund financing Source: IHME Financing Global Health 2011

20 Imbalance in industrial, health and financing policies Industrial policies encourage technology push, but health systems constrain innovation: Not enough emphasis on demand side factors Inadequate incentives and downstream rewards for adoption Inefficiency/ineffectiveness tolerated No incentives for innovation Atun RA, Gurol-Urganci I, Sheridan D. Uptake and diffusion of pharmaceutical innovations in health systems. International Journal of Innovation Management 2007; 11 (2):

21 1. Innovative financing: Push and Pull Mechanisms 2. Funding shortfall and unpredictable financing affecting push and pull mechanisms 3. Low funding for cross cutting procurement and supply chain management activities 4. Possible considerations 21 Prof Rifat Atun, Imperial College London, 2012

22 PSM/$M Global Fund Investments in Strengthening Key Health Systems Functions R5 R6 R7 R8 R9 R10 Shakarishvili G, et al Atun R. Health systems strengthening: a common classification and framework for investment analysis. Health Policy Plan 2011; 26(4):

23 Expenditures by Service Delivery Area for TB (cumulative, by 2008 reporting cycle) Other, 1% Prevention, 1% Source: Global Fund, unpublished Enhanced Financial Reporting data, 2008

24 1. Innovative financing: Push and Pull Mechanisms 2. Funding shortfall and unpredictable financing affecting push and pull mechanisms 3. Low funding for cross cutting procurement and supply chain management activities 4. Possible considerations 24 Prof Rifat Atun, Imperial College London, 2012

25 Novel financing: taking the long-term view Push Strategies Pull Strategies Public private partnerships R&D credits Accelerated approval Long term instruments (IFFIM, AMC, TB bonds) Expanded Health insurance Catastrophic risk insurance Venture capital impact funds Value based pricing Outcome based financing 25 Prof Rifat Atun, Imperial College London, 2012

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