Bridge Financing

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Bridge Financing Phase 2 Policies10 11 Jan
06, GenevaMercy Ahun, Country Support, GAVI
Secretariat
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GAVI Phase I Model Assumptions

• Vaccine prices Will decline over 5 years
• Planning horizon 2- to 3-year period sufficient
  to mobilize new resources
• Resource headroom Governments and partners
  significantly increase their allocations to
  immunization

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GAVI Phase I Model - Lessons Learned

• No drop in price of combination HepB and Hib
  vaccines
• Cost implications of new vaccines still important
• Planning horizon too short
• FSP came late
• Increased resources
• Very modest
• Mostly increases in government contributions
• Multi-bilateral donors unable to make multiyear
  commitments
• Additionality
• In most cases, there is no evidence of
  substitution

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GAVI Phase I - Price Trends
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Increasing Programme Costs with New Vaccines
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Increasing Programme Costs with New Vaccines
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Bridge Financing Objectives

• Goal of bridge financing
• "Improve public health by assisting countries
  that adopted combination vaccines sustain the
  gains achieved through their expanded, enhanced
  immunization programs"
• Sustain public health impact of new vaccines as
  prioritized by countries
• Support evidence-based priority setting/better
  decision-making
• Stimulate downward pressure on vaccine prices
• Support countries on a trajectory towards
  financial sustainability
• Support integrated planning and budgeting (MTEFs,
  PRSPs )

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Bridge Financing Components

• Effective 2006 to 2015
• One year additional full support
• Country financing
• Target payment
• GAVI subsidy for Bridge Financing

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Bridge Financing Target Payments by Vaccine
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GAVI Subsidized Price

Bridge Period
Constant Price 3.60
Vaccine Price
GAVI
End of Bridge
Target Payment DTP-HepBHib 1.85
Flatline
DTP-HepB Hib
Time
2005
2015
2007
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GAVI Subsidized Price

Market Price
Projected price decline
End of Bridge
Vaccine Price
Target Payment
GAVI Payment
Country Payments (Govt and Partners)
Time
End of Bridge
2007
2015
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Countries approved for bridge financing

• 32 countries to date
• 18 Hib countries, 14 using Hep B combo, may
  switch to penta (Hib)
• 11 countries ending support in 05/06 7 from E
  S Africa 3 from W Africa
• Bridge offer letter sent to 25 countries
• Letter to be sent to Cote dIvoire countries
  approved in 05 approved by Board in 05
  (Afghanistan, Angola, Ethiopia, Pakistan, Sierra
  Leone, Congo DRC)

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Bridge Financing Contractual Agreements

• General Framework Agreement
• Covers entire Bridge period. Lays out general
  principles, objectives and procedures of Bridge
  Financing.
• Country Financing Agreements
• Short term agreement to fit country planning and
  budget cycle. Spells out annual level of GAVI and
  country payments. In place 6-9 months before GAVI
  Phase I support ends

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Bridge General Framework Principles

• Country driven decision making process
• Simple, measurable and manageable
• Builds on and compatible with existing country
  processes and mechanisms for planning, budgeting
  and financing vaccines
• Easily synchronized with existing country
  processes
• Flexible to allow for changes
• Monitoring and evaluation of country payments not
  over burdensome

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Implementing Bridge Financing

• Set up of multi agency team for monitoring
• Role of agencies in Bridge management lead
  Agency, link with activities of Hib Initiative
• Identifying supporting information needs of
  countries Regular information sharing between
  Hib Team, Bridge Team and GAVI Secretariat
• Priority setting which countries to work with
  (?Bridge countries, especially 05 06
  countries, ?no response countries)
• Applying Lessons learned in Bridge financing
  Hib Initiative to country financing of vaccines
  in GAVI-2

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Principles of Phase 2 support for vaccines

• Support integrated with national planning cycle
• Financial analysis of new vaccine introduction is
  part of application process
• Purchase of vaccines at highly subsidised prices
  from onset of support
• For Hib vaccine, explore work with Hib
  Initiative
• Agreement integrated with application process
• Monitoring of country payments

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SAGE Recommendations Phase 2 support

• GAVI requirement for Hib application Phase 1
• no justification (AFRO, EMRO, PAHO)
• justification required for SEARO, WPRO, EURO
  (near Asia)
• SAGE 05 - Global use of Hib vaccination unless
  low disease burden, lack of benefits or
  impediments to implementation can be demonstrated
  in countries

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Next Steps

• Global
• Closer integration of Hib Initiative regular
  sharing of information with ongoing GAVI task
  teams, Partners and Secretariat
• Membership of Hib Team in work on bridge
  financing
• Moving forward on SAGE 05 recommendations WHO
  to outline next steps
• Countries
• Hib Initiative works towards the goal of helping
  all countries to be aware of importance of Hib
  vaccination with a clear understanding of
  programmatic, financial and supply issues

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