International Finance Facility for Immunisation

1. International Finance Facility for Immunisation Anna Guthrie International Poverty Reduction Team

2. IFF for Immunisation • The International Finance Facility (IFF) has been conceived as a large-scale mechanism to raise up to an additional US$50 billion per year to help meet the MDGs by 2015 • The IFF uses long-term donor pledges to raise immediate and significant resources from international capital markets to increase development assistance • Its complexity means there is a need to demonstrate the feasibility of the financing mechanism and the benefits of frontloading through a smaller programme • The IFF for Immunisation (IFFIm) has been launched as a pilot for the IFF mechanism, although it is a robust and concrete proposal in its own right with very significant development benefits.

3. Immunisation and frontloading • Vaccines save millions of lives each year. However, 27 million children are not vaccinated each year against the most common childhood diseases. As a result, 2-3 million children die annually from easily preventable diseases. Immunization is ideal for using the IFF principles of frontloading because: • it is an essential and highly cost-effective intervention that helps strengthen health systems. • it can be scaled up quickly, even in resource-poor settings; • it can have an immediate impact on child mortality; • it has significant internal rates of return that far outweigh any costs of the IFF mechanism; and • it can use front-loaded funds to accelerate vaccine market forces.

4. GAVI Alliance

5. IFFIm Programme • Collective GAVI expertise will allow IFFIm resources to have a substantial and immediate impact in two key areas: • Supporting New Vaccines: Stimulating increased manufacturing capacity for the combination DTP-HepB and DTP-HepB-Hib vaccines, which are not produced in enough capacity, or at prices, to satisfy demand. Vaccines against rotavirus, meningococcus A, pneumococcus and Japanese encephalitis will hopefully be available in coming years. • Strengthening Immunization Services:Scaling up substantial investments in the health systems that deliver vaccines. • Funding Measles and Tetanus campaigns: to drive mortality down quickly in the countries where need is greatest. • Polio Vaccine Stockpile: Once the world is declared to be polio-free, an "insurance policy" stockpile of oral polio vaccine will be required to protect against any future recurrence.

6. Eligibility and approval of recipient countries • Existing GAVI criteria and procedures will apply to select recipients for IFFIm funding: annual GNI/capita <$1000.Currently covers 72 countries: • Afghanistan, Angola, Armenia, Azerbaijan, Bangladesh, Benin, Bhutan, Bolivia, Burkina Faso, Burundi, Cambodia, Cameroon, Central African Rep., Chad, Comoros, Congo DR., Republic of Congo, Côte d'Ivoire, Cuba, Djibouti, Eritrea, Ethiopia, The Gambia, Georgia, Ghana, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, India, Indonesia, Kenya, Kiribati, Korea, Kyrgyz Republic, Lao PDR, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Moldova, Mongolia, Mozambique, Myanmar, Nepal, Nicaragua, Niger, Nigeria, Pakistan, Papua New Guinea, Rwanda, Sao Tome & Principe, Senegal, Sierra Leone, Solomon Islands, Somalia, Sri Lanka, Sudan, Tajikistan, Tanzania, Timor-Leste, Togo, Tonga, Uganda, Ukraine, Uzbekistan, Vietnam, Yemen Rep., Zambia, Zimbabwe. • Eligible countries submit funding requests to GAVI, with the assistance of Inter-Agency Coordination Committees. Applications are examined by an Independent Review Committee, which in turn makes recommendations to GAVI Board for approval.

7. Benefits of IFFIm • The anticipated IFFIm investment of US$4 billion is expected to immunize 500 million children,preventing 5 million child deaths from 2005-2015 and more than 5 million future adult deaths after 2015. • It is estimated that by frontloading the $4bn of disbursement over 10 years, 2 million more lives will be saved than if the same amount was spent over the 20 years during which donors will make repayments to the IFFIm. • Work from the Center for Global Development indicates that the benefits to the IFFIm are over 30% more than spending the same money in a non-frontloaded manner. • Economic analysis from DFID suggests a rate of return on the IFFIm investment of between 25 and 90%, depending on various assumptions. Two key benefits accrue from the IFFIm mechanism: greater predictability, which allow for longer-term procurement and a resulting lower price per dose, allowing more children to be immunized, and frontloaded funds, which allow for higher coverage rates sooner, allowing herd immunity to be obtained more quickly and thus protecting even those children who are not immunized. Potentially result in change in broader donor behaviour.

8. Donor pledges and disbursements • This illustrates a $4 billion disbursement ahead of 2015. Assuming that there are no IMF defaults, the sum of additional funds which would be released over and above the initial planned disbursement of $4bn would be $1.1bn. Debt will peak at $3.03 bn in 2014.

9. IFFIm donor pledges The following eight countries have confirmed their participation in the IFFIm, with the following pledges over the next 20 years: • UKhas pledged anaverageof $127m a year; • France has pledged anaverageof $100m a year; • Italy has pledged anaverageof $30m a year; • Spain has pledged anaverageof $12m a year; • Swedenhas made a total pledge of $27m; • Norway has made a total pledge of $27m; and • Brazil and South Africa have each made a total contribution of $20m. The Gates Foundation has also pledged a grant of $750m over ten years, which will not be securitised, but which will be used alongside the above contributions. In addition, long-term nature of IFFIm supports participation from emerging donors looking to gradually scale up contributions.

10. Next Steps • First bond issuance on in a matter of weeks, with first disbursements to developing countries shortly after. • AAA rating for bonds: • Further donor outreach to traditional donors and emerging donors. • Consideration of further application of frontloading to other sectors or sub-sectors.

11. UNITAID • UNITAID is a new facility to improve access to treatment for HIV/AIDS, malaria and tuberculosis by bulk purchasing to reduce prices for quality medicines and diagnostics and accelerating pace at which they are made available. • French-led initiative officially launched in New York on 19 Sept • There are currently five major funders who form the ‘core group’ – France, UK, Norway, Brazil, Chile • Funding from long-term budgetary commitments and air ticket solidarity tax = long-term predictable support • UK long-term 20 year commitment: contribute €20 million from 2007, rising to €60 million per annum by 2010, subject to performance. • Small secretariat hosted by WHO • Priority “green-light” activities identified and approved by board within each disease area

12. UNITAID • Projected expenditure ($ million): • 2006projected 2007 • WHO prequalification 1 6 • HIV - Pediatric ARVs 10 26.1 • HIV - 2nd Line ARVs [tbc] 70 • Malaria - ACTs Scale Up 9.05 60 • Pediatric TB 0.9 4.8 • Total: 20.9166.9

13. Conclusion • IFFIm part of broader health package to deliver vaccines and drugs and to support basic health systems including Air Ticket Taxes, International Drug Purchase Facility (UNITAID) and Advance Market Commitments.