Infrastructure Consortium Meeting June IFF for Immunziation Andrew Jones Senior Programme Officer, Innovative Financing

Infrastructure Consortium Meeting June The PPP model – Works through and using partners’ comparative advantages – Quick learning and driver for innovation Coordination and consensus building among partners – Around policies, strategies and priorities related to vaccines and immunisation GHP: The GAVI Alliance

Infrastructure Consortium Meeting June The GAVI Alliance

Infrastructure Consortium Meeting June The IFF Need for predictable long-term resources- not just more – but better aid The IFF has been conceived as a large-scale US$50 billion per year mechanism to double global aid and help meet the MDGs An IFF for immunization (IFFIm) has been proposed as a pilot for the IFF mechanism

Infrastructure Consortium Meeting June The IFFIm On September 9th, 2005 the IFFIm was launched in London with the five donors - UK, France, Italy, Spain, and Sweden: now Norway and Brazil have announced contribution as well Estimated disbursable of $3.2 billion before 2015 Ongoing effort to secure resources from additional donors to reach $4 billion resource goal Target date for first bond issuance is September 2006

Infrastructure Consortium Meeting June Components of the IFFIm Donors enter into 20 year legally binding commitments These commitments are leveraged in the bond market Proceeds distributed to countries and for supply procurement Resources nominally split 50/50 systems and vaccines

Infrastructure Consortium Meeting June The IFF: Donor Pledges Pledges from Donors Spare cash – “cushion” Long term commitments generate near term resources Disbursements (to programs)

Infrastructure Consortium Meeting June The IFFIm: Speeding Availability Predictable, long-term flows can accelerate market forces GAVI’s significant resources have stimulated the entry of additional manufacturers for combination vaccines, resulting in a price drop ultimately delivering more vaccines to children For both WHO prequalified & non-prequalified vaccines Offers of DTP + HepB Vaccine to UNICEF Number of Manufacturers $0 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 Price per Dose Weighted average price

Infrastructure Consortium Meeting June The IFFIm: Leverage in Market IFFIm funds could lower prices more rapidly Source: CGD Working Paper “The costs and benefits of front-loading and predictability of immunization” Price per dose

Infrastructure Consortium Meeting June Implications of the IFFIm New donors – Countries not previously contributing to GAVI attracted by innovative nature of IFFIm supplying additional resources Influencing the market – Long-term predictable commitments allow longer-term planning for supply strategy – More flexibility for contracts with manufacturers with a potential to negotiate a lower price or accelerate supply through strategic use of long-term contracting Better planning and sustainability for countries – Commitments can be made to countries over longer-term allowing for better integration within national planning cycles and longer lead time to plan for country financing and eventual sustainablility

Infrastructure Consortium Meeting June Cost vs. Benefit The IFFIm raises additional monies through a borrowing mechanism (securitization)….. …but saves many additional lives more quickly. IFFIm Funds Continued growth of current funding Additional IFFIm impact Continued gains in lives saved due to growth of current funding

Infrastructure Consortium Meeting June Cost vs. Benefit Principal IFFIm benefits are: – Accelerating coverage of immunisation with traditional and new and under used vaccines, and – ‘pulling’ the vaccine industry through predictable market, leading to increased industry capacity and lower vaccine prices Key benefits are 5.3 million additional children’s lives saved over 10 years, ( Africa 3.1 million, Asia 2.1 million and others 0.1 million) A further 5 million adult lives saved through HepB Estimated “financial cost” of IFFIm at 3.5% against IRR of accelerated benefits of 18%