Authors: Helen Saxenian, Logan Brenzel, Leah Ewald, and Meghan O’Connell
The Ministry of Finance is a crucial ally for Ministries of Health and country immunization programs aiming to successfully manage Gavi transition. Ministries of Health, Ministries of Finance, Ministries of Budget, and development partners often have separate planning processes, which can make it difficult to plan for the needs of changing immunization programs as they move toward self-sustainability. Four essential points for Ministry of Finance staff in Gavi transitioning countries are below.
1. Immunization is a critical driver of primary health care (PHC), Universal Health Care (UHC) and the health Sustainable Development Goal (SDG).
The immunization schedule requires numerous points of contact between the child, mother, and health system, particularly in the first year of life. To successfully prevent disease outbreaks, immunization coverage rates of around 80-95% of the population are needed in all districts. Immunization programs therefore strive for equity and often reach farther into hard-to-reach, mobile or otherwise marginalized populations than do other health services. These contacts can serve as an entry point for the child and mother into primary healthcare through referrals or, in some cases and with careful planning, through the integration of immunization service delivery with delivery of vitamin A, deworming, family planning, or other services. Investing in immunization program performance may also bolster health system performance as whole, including primary healthcare and surveillance capacity.
2. Immunization is an excellent investment, but poor budget execution can put large economic gains at risk.
With an estimated $16 return on every $1 dollar invested thanks to savings from productivity loss and averted treatment cost, immunization ranks as one of the best development investments in terms of value for money. It is also a pro-poor intervention given that the poor are at the highest risk of developing vaccine-preventable diseases and suffering significant financial losses as a result.
Insufficient or unpredictable funding for vaccines or immunization program operational costs can cause coverage rates to fall, leaving the population vulnerable to disease outbreaks. Disease outbreaks can have far-reaching economic implications, damaging trade, tourism, manufacturing, and transportation industries. The World Bank estimates that the 2014-2015 West Africa Ebola epidemic cost Guinea, Liberia and Sierra Leone a combined $2.8 billion.
3. Realizing the substantive return on investment for immunization will require close collaboration between the Ministry of Finance and Ministry of Health to align cost requirements with expenditure commitments
A variety of budgeting tools exist to help Ministries of Health understand and plan for the increasing costs of immunization programs. Ministries of Finance play a critical role in ensuring that the government meets its commitments to provide immunization services to its citizens by:
- Incorporating increasing immunization program requirements into budget plans or Medium-Term Expenditure Frameworks (MTEF).
- Exploring ways in which sub-national levels of government can support the immunization or health program, including incentive mechanisms.
- Ensuring that immunization financing requirements are framed within national health financing policies for universal health coverage (UHC), including social health insurance.
- Rationalizing the financing of immunization between the development and recurrent side of the national budget.
- Encouraging the Ministry of Health to track and monitor immunization spending.
- Encouraging and enabling the Ministry of Health to obtain greater value for money and efficiencies in the immunization program.
- Exploring budget structure reforms such as program-based budgeting that allow autonomy and flexibility in how health funding is spent and increase accountability for health program performance and budget allocations.
A recent interview with Peru’s former Minister of Health Midori de Habich offers further insight into improving dialogue between health and finance ministries.
4. Vaccine and operational costs for immunization will likely increase during and after Gavi transition. In most cases, countries can obtain lower vaccine prices through UNICEF Procurement Services compared to procuring vaccines directly from manufacturers. Procurement policy and regulatory changes may be necessary to use this option.
Understanding and planning for increasing immunization program requirements during and after Gavi transition is a critical component of maintaining immunization program performance. Gavi-transitioning countries need to fund an increasing portion of their immunization program costs. The Gavi Eligibility and Transition Policy is intended to ease the transition process with phased, predictable increases in vaccine co-financing requirements over time. Some manufacturers have also introduced product-specific price commitments that allow transitioned countries to access the same prices as Gavi-supported countries for a period of five years or more.
In addition to potentially rapid increases in vaccine co-financing requirements, countries may decide to introduce new vaccines, which will have up-front introduction costs along with the long-term costs of adoption. Countries with below-target coverage, growing populations, or outdated capital outlay (e.g. cold chain equipment) must plan for increasing immunization program requirements per year. Furthermore, Gavi transition may coincide with donor transitions of other priority health programs, putting additional strain on health budgets. You can see a projection of your country’s vaccine financial obligations by selecting the country from Gavi’s County Hub, navigating to “Country Documents” and downloading the “Co-financing Information Sheet.”
Countries can choose to procure vaccines on their own or through international organizations such as UNICEF to access more competitive prices and allow those organizations to handle the complex vendor selection, contracting and payment process. Some regions like PAHO have organized regional pooled procurement mechanisms. However, a country’s procurement laws and procedures are not always adapted to the vaccine market.
Procurement through UNICEF may require excepting vaccines from some procurement laws or regulations that involve the Ministry of Finance, including:
- Restrictions on single-source procurement and adherence to international competitive bidding processes.
- Restrictions on pre-payments for goods before they are received in country.
- Customs charges.
- Requirements for producers to have a permanent representative in country.
- Requirements for payments to be made in local currency.
Flexible financing arrangements exist to support countries that are interested in UNICEF procurement but are hampered by timing of disbursements or availability of funds, such as the UNICEF Vaccine Independence Initiative (VII), which provides short-term financing options for UNICEF procurement, or commercial financing options like bank guarantees.