Introduction to co-financing Santiago Cornejo

1. Introduction to co-financingSantiago Cornejo IRC - Review of New Proposals Geneva, 4 October 2012

2. Overview • GAVI co-financingpolicy • Co-financingcalculations • Co-financing performance • Co-financing projections and fiscal space

3. History of financialsustainability 2001: Although self-sufficiency is the ultimate goal, in the nearer term sustainable financing is the ability of a country to mobilise and efficiently use domestic and supplementary external resources on a reliable basis to achieve current and future target levels of immunisation performance.

4. Co-financingpolicy and objectives • Co-financing signifies that countries share a portion of the cost of their new vaccines and safe injection devices  co-procurement • Overall objective: putting countries on a trajectory towards financial sustainability • Intermediate objective: enhance country ownership of vaccine financing

5. Country co-financinggroupingsdefinition (2012) • Country co-financing grouping definitions: • Low-income countries: <$1,005 GNI p.c. (WB low-income country definition)* • Intermediate:$1,005 to $1,519 GNI p.c.* • Graduating:$1,520 (eligibility threshold) GNI p.c. and above* *revised annually based on World Bank data published in July of each year; countries will have one year to adjust their budget.

6. Policy implications for differentcountry groupings • Low Income: country ownership • Low per dose amount (US$ 0.20) that is not to be a bottleneck to introduction • Intermediate: moving towards financial sustainability • Starting at US$ 0.20 and then steady increases by 15% per year • Graduating: financial sustainability • Gradual ramp up over five years (1+4) to reach projected price after GAVI support ends • Not eligible for new GAVI support

7. How the co-financing policy works Source: GAVI Alliance 2012

8. Whathappens if a country doesn’tpay? • Payment required by 31 December of the relevant year; • A reminder letter will be sent in Q4 for those at risk; • Self-procuring countries need to submitevidence of procurement; • <1 year in default: GAVI approved support continues but no approval for new vaccines possible; • >1 year in default: GAVI support for the vaccine in question is suspended; • >2 years:furtherconsequencesmayfollow.

9. Overview • GAVI co-financingpolicy • Co-financingcalculations • Co-financing performance • Co-financing projections and fiscal space

10. How co-financingiscalculated # of total doses * co-financinglevel per dose = total co-financingamount E.g. 100 doses * 0.20 = US$20 total co-financingamount / total costs (incl. vax, syringes, freightetc.) = share of co-financing in total costs E.g. US$20 / US$200 = 10% Share of co-financing in total costs * target = target for co-f calculation E.g. 10% * 50 children = 5 children Calculate vaccines (incl. syringes*, freight etc.) for 5 children * Does not apply to low-income countries

11. Overview • GAVI co-financingpolicy • Co-financingcalculations • Co-financing performance • Co-financing projections and fiscal space

12. Co-financing: countries fulfilling commitments Source: GAVI Alliance data as of 19 September 2012

13. Defaulterssince the start of implementation

14. Highlycommitted countries

15. Overview • GAVI co-financingpolicy • Co-financingcalculations • Co-financing performance • Co-financing projections and fiscal space

16. Projections • Projections includingestimated new approvals • Total co-financingcurrent portfolio: US$501 million • Total co-financingfuture portfolio: US$14 million

17. Fiscal SpaceAnalysis On average, graduating countries have sufficient fiscal space to finance vaccines… Vaccine spending as % of governmenthealthexpenditure Source: GAVI Alliance, 2012

18. Thank you Photo credits: …

19. Country groupings in 2012 Underlined countries wereidentified as priority countries in 2012