Procurement for Impact
This week, the Global Fund unveiled a new framework for procurement, a big improvement in buying medicines, mosquito nets, diagnostic tools and other health products that are essential to the prevention care and treatment of AIDS, TB and malaria. It is a smart approach. It is built on partnership. It will deliver significant value for money. Most important, it will lead to more predictable delivery that avoids shortages or stock-outs, even when demand for a product is rising sharply, as it will in 2014 for mosquito nets. Christopher Game, the Global Fund’s new Chief Procurement Officer, has carefully constructed and is now driving this approach. In a presentation to the Board of the Global Fund in Geneva on 6 November, he described it as “taking control of the process” so that the Global Fund can pool its purchasing power with partners, and use it intelligently. Instead of ordering and pricing items in an uncoordinated way, organized procurement can significantly reduce costs so that extra resources can be directed toward supporting programs that fight AIDS, TB and malaria in a more effective way. “It’s all about impact,” Game told the Board.
The new approach already has its first concrete deal. The Global Fund has through its pooled procurement mechanism agreed to buy 90 million mosquito nets in 2014, as part of a framework with other partners who will collectively buy 190 million nets next year. The framework began by convening partners from the UK’s Department for International Development, the U.S. President’s Malaria Initiative, UNICEF and others, who collectively represent about 87 percent of the total purchases of insecticide-treated nets. They agreed to pool their purchasing power. When they later sat down with the world’s main manufacturers of mosquito nets, the buyers spoke with a unified voice and were fully open about forecasting, demand management, prices and specifications. The partner approach was a real breakthrough, never done before on such a massive scale for purchasing anti-malaria nets. The benefits flow in both directions: Manufacturers will have reliable long-term orders, allowing them to lower prices; buyers can be assured of delivery that avoids bottlenecks and shortages.
This agreement is likely to save the Global Fund US$140 million over the next two years. By working together in a new framework, partners have created a system that will establish base prices for everyone. Game began his career at Nissan Motors in South Africa, where he was a foreman on a production team, leading 70 people. He relies a lot on common sense, although more than 20 years in procurement also gives him invaluable experience as well. When he saw the 227 different specifications of mosquito nets that were being purchased, he recognized an opportunity to sharply reduce the number of specifications, requiring extensive consultations with countries, and leading to greater cost reduction. But nets are just the first of several items being purchased under the new framework. Antiretroviral drugs, diagnostics and other products are coming next.
Timing the New Funding Model
The Global Fund’s new approach to funding is now gearing up to begin its full implementation in March 2014. The aim of the new funding model is to reach more people affected by HIV, TB and malaria, and it is designed to make the process of accessing funds more predictable, more responsive, and more flexible. The timing of several significant steps is now available:
Late-November – The Technical Review Panel’s schedule for the next three years will be outlined, which may help countries to plan when to submit their funding applications. Initial guidance will be shared on how regional applications will be managed under the new model.
3 December – Donors make pledges at the Global Fund’s Replenishment Conference in Washington D.C., forming the basis of funds that will be available for the 2014-2016 period.
Late-December – The Global Fund will make available a standard format for submitting an application for funding programs to fight the three diseases, including a joint one for HIV and TB.
Late-January 2014 – The Global Fund will share the format for submitting an application for non-standard grants, such as health systems strengthening, non-CCM applications, and regional applications.
Late-February 2014 – The Board of the Global Fund is expected to approve allocation of funding to country bands.
Late-March 2014 – Countries are informed of their allocation envelopes (indicative funding). Full implementation of the new funding model begins.
In the Comoros
In the Union of Comoros, a set of tiny islands in the Indian Ocean, north of Madagascar, HIV prevalence is relatively low. The Global Fund recently signed a grant to support efforts to keep it that way, with a specific goal to keep the prevalence rate under 0.05%. Countries like Comoros, including neighboring islands like Mauritius and Seychelles, face a particular challenge in their key affected populations. Compared with the African mainland, awareness of HIV and AIDS among the most vulnerable is relatively low. For instance, recent data collection showed that only 14 percent of people among most vulnerable groups in Comoros were aware of how to avoid sexually-transmitted infection and HIV. A prevention program in Comoros supported by the Global Fund is geared toward counseling and testing sex workers, men who have sex with men and pregnant women. The new grant, for nearly €1 million, will further this work.