At its annual board meeting in December 2010, the Global Alliance for Vaccination and Immunization (GAVI) endorsed a new co-financing policy. Over the period March to November, 2010, an R4D team was deeply involved in the background analysis and design of the new policy.

GAVI is the main source of donor assistance for vaccinations in developing countries. Since its inception in 2000, GAVI has been concerned with the long-term sustainability of immunisation programs in developing countries.

GAVI’s current co-financing policy and the planned policy revision:

In 2008, GAVI introduced an innovative policy of co-financing, whereby countries were required to finance a share (albeit small) of the cost of the new and underused vaccines being introduced with GAVI support. Countries were divided into four groups, and each group had a co-financing obligation that it was required to pay, per dose, for its vaccines. There was some differentiation in the amount depending on whether it was the first vaccine adopted with GAVI support or subsequent vaccines. At the time the policy was introduced, GAVI recognized that the policy should be closely monitored and that it should plan for a policy revision in 2010 to make any necessary adjustments. R4D was brought in to work with staff from the GAVI Secretariat and a time-limited oversight task team made up of experts and partners on the policy revision.

Analyses undertaken by R4D:

One of the first pieces of analysis that the R4D team carried out was to analyze the fiscal space in GAVI-eligible countries for vaccine expenditures. Fiscal space refers to the ability of a government to make budgetary resources available for desired purposes without harming the sustainability of the government’s financial condition. GAVI’s co-financing policy has a direct and important impact on the public expenditures of recipient countries. For this reason, any decision to increase (or even decrease) co-financing amounts requires a thorough look at likely future available funds and the share of these funds vaccines could plausibly require. If GAVI imposed a co-financing requirement that was beyond a government’s ability to pay, the country might default on that obligation, or only meet the obligation by reallocating money from other key programs. The fiscal space analysis helped us look at the following issues: How likely are countries that are graduating from GAVI support in the coming years going to be able to absorb the cost of GAVI-supported vaccines into their health budgets? What can GAVI do to help this transition process? What levels of co-financing would be reasonable to require for GAVI-eligible countries at different income levels? How should country income groupings for co-financing requirements be defined? What countries are likely to find the most difficulty in meeting obligations to contribute to vaccine costs? R4D also did a review of other organizational experience with co-financing, and worked with the GAVI Secretariat on a case study in Honduras, which is a country whose GAVI support will be ending by 2015.

Co-financing Policy Revision:

GAVI’s Board first endorsed, in June 2010, the overall objectives for the revised policy. The main objective is to encourage countries on a transition path to financial sustainability to prepare them for the eventual phase out of GAVI support for new vaccines. This objective recognizes that the time frame for reaching financial sustainability will vary across countries. The Board also endorsed a secondary objective of country ownership for vaccine financing, especially for those countries with an extended time frame for achieving financial sustainability.

At its December 2010 meeting, the GAVI Board endorsed three income groups for co-financing purposes. Countries will be reviewed annually for transitions from one group to the other. It endorsed a co-financing obligation of flat level of 20 cents per dose for vaccines for low income countries. It endorsed a starting point of 20 cents per dose for vaccines in the intermediate group (or the amount paid in the most recent year) with a 15% increase per year. And for the countries that are graduating from GAVI support, it endorsed a linear ramp up in co-financing such that the country can fully pay for the vaccines by the time GAVI support is phased out.

Detailed information can be found in the Board paper on Co-financing.