DRAFT UNICEF PROCUREMENT OF HIV/AIDS-RELATED SUPPLIES AND SERVICES

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1 DRAFT UNICEF PROCUREMENT OF HIV/AIDS-RELATED SUPPLIES AND SERVICES April 2005

2 Summary: Millions of children in developing countries are affected by the HIV/AIDS pandemic. Despite significant international commitment, many children have a parent or both parents living with HIV/AIDS who still do not have access to treatment. There are also large numbers of children living with HIV/AIDS. Progress however, continues to be made at both national and international levels to improve access to much needed antiretroviral therapy (ART). UNICEF is committed to making more treatments available and accessible to children in need through its Supply Division. In 2004, UNICEF procured $21.3 million worth of HIV/AIDS-related supplies. This paper examines the challenges as well as the procurement solutions and services developed by UNICEF 1, as part of the organization s activities to fight HIV/AIDS. These services are available to developing countries through UNICEF procurement services. Background: Children are affected by HIV/AIDS in many ways. Six percent of people living with HIV are children, with around 600,000 being infected each year. Over 15 million of them have lost one or both parents to the pandemic. UNICEF has made fighting HIV/AIDS one of its top five priorities and, through its efforts, contributes to the Millennium Development Goals of combating HIV/AIDS and reducing child mortality. UNICEF also actively supports the 3 by 5 Initiative launched by WHO on World AIDS Day The purpose of the initiative is to provide universal access to antiretroviral therapy (ART) to those who need it, as a human right and within the context of a comprehensive response to HIV/AIDS. Its interim target is to provide effective ART to 3 million people who need it, by the end of Treating parents, especially mothers, benefits children in many different ways. First, it reduces the likelihood of children being infected with HIV through mother-to-child transmission. Second, improving the length and quality of life of the mother is critical to the development of the child. Achieving the 3 by 5 target and the UN Millennium Development Goals would mean fewer children dying and fewer orphans. Strengthening health care systems in resource-poor settings is probably the greatest single challenge to the success of 3 by 5. Another obstacle is the availability of antiretrovirals (ARVs) and test kits, especially for children. Children living with HIV/AIDS in developing countries have limited access to care, support and treatment due primarily to the following: Disease progression in children is not properly understood There are inadequate testing/healthcare facilities for children ARVs are often not available or accessible Child-appropriate ART is available but costly, difficult to store and complicated to administer. 1 - The paper focuses on the procurement of antiretrovirals (ARVs), HIV/AIDS test kits and diagnostic equipment and related procurement services. However, UNICEF also procures essential medicines used to treat opportunistic infections and laboratory equipment. For more information on those, please contact us at 2

3 UNICEF ROLE AND CONTRIBUTION IN THE PROCUREMENT OF HIV/AIDS-RELATED SUPPLIES It is estimated that $600 million is required annually to provide treatment for 3 million people living with HIV/AIDS in developing countries. UNICEF alone does not have the financial resources to provide all these treatments. Hence, in consultation with partners (both governmental and non-governmental), UNICEF focuses on two issues: Procuring and delivering ARVs, diagnostic equipment and test kits; Strengthening capacities for health services, including budgeting for ARVs, ARV forecasting, supply management and in-country distribution. The role of UNICEF, starting in 1997, was initially to procure supplies for pilot projects and help governments go to scale in the context of Prevention of Mother-to-Child Transmission (PMTCT). This has evolved through the MTCT-Plus initiative 2 and UNICEF Procurement Services 3 to providing HIV-positive mothers and their partners with treatment, as well as protecting newborn babies from HIV infection. In recent years, with additional funding mechanisms such as the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM), UNICEF has been procuring supplies for NGOs, governments and other UN agencies. In view of the challenges and complexity of the ARV market, Supply Division has set up a dedicated ARV Unit as part of the efforts to strengthen UNICEF s response to the HIV/AIDS pandemic. 1. Procuring ARVs and other HIV/AIDS-related supplies UNICEF procurement of HIV/AIDS-related supplies Value (in US$ millions) $4.1 Mill $5.7 Mill $26.3 Mill ARVs Test Kits Diag Equip Lab 2 MTCT-Plus is co-ordinated by the Mailman School of Public Health at Columbia University, and provides an extension of PMTCT programmes to offer family focused HIV/AIDS primary health care services, including access to antiretroviral medications to women who have received PMTCT prophylaxis, and their family members. For more information please visit Through its Procurement Services, UNICEF puts its procurement expertise at the disposal of governmental and non-governmental partners in development. 3

4 In 2004, UNICEF procured $18 million worth of ARVs compared to $28,000 two years earlier. Growing in parallel with the procurement of ARVs, the purchase of diagnostic equipment reached $750,000 and test kits over $2 million. UNICEF procurement of HIV Test Kits Value (in US$ millions) $ % $1.4 $ Year Africa received 83 percent of the ARVs and 76 percent of test kits procured by UNICEF in Over $8 million worth of ARVs were shipped by UNICEF to Zambia, $2 million to Togo and $1 million to Malawi. A total of 39 countries have so far benefited from UNICEF ARV procurement expertise. Most of this procurement was done through UNICEF Procurement Services (only 1 per cent of ARVs were bought with UNICEF funds). The largest customers were the Elisabeth Glazer Paediatric AIDS foundation ($5.2 million worth of ARVs), followed by the UN Development Programme ($4.2 million worth of ARVs), acting as the Principal Recipient from a GFATM grant, and Columbia University ($0.9 million worth of ARVs). An increasing number of country governments and philanthropic organisations are approaching UNICEF for ARV procurement and supply management, as pressure augments to scale-up access to ART and achieve 3 by 5. ARV procurement by funding source UNICEF 1% UN 27% Government 31% NGO 41% 4

5 The continuous supply of ARVs is essential to the treatment of patients, meaning an uninterrupted supply of ARVs. UNICEF has recently set up a warehouse stock of ARVs worth $1.6 million. This emergency stock can be used if a country faces the threat of a medicine shortage. It can also help in providing very small volumes of ARVs to local NGOs. The safety, efficacy and quality of ARVs purchased by UNICEF is assessed via the Procurement, Quality and Sourcing Project (or pre-qualification project) initiated by WHO. UNICEF prioritises purchases of those ARVs that have been approved by the project. As of December 2004, 87 products from 27 manufacturing sites had been fully reviewed and pre-qualified. Where no WHO-pre-qualified ARV options exist, UNICEF has a policy of supplying either FDA or EMEA certified ARVs or performing independent quality evaluations in addition to verifying national registration in the recipient country. As part of the United Nations, UNICEF is concerned with the intellectual property aspects of buying ARVs. Supply Division reviews the patent and regulatory status of individual products, a difficult but vital task to find the best supply solutions for each country. Prices of ARV medicines are falling and have become more affordable through competition. Further price reductions are anticipated in the future once the developing countries market proves to be reliable, predictable, and sustainable. UNICEF also fosters collaboration with partners on accelerating access to commodities through pricing initiatives. For instance, UNICEF has been a partner in the UNAIDS Access Initiative and the Clinton Foundation pricing initiative since early However, UNICEF is interested in other market developments. UNICEF already procures 40 different antiretroviral formulations from generic as well as originator pharmaceutical manufacturers. The organization is encouraging the development of a wider range of paediatric formulations, especially as fixed dose combinations. Greater choice in formulations at reduced prices would allow UNICEF to strengthen its engagement and that of partners, in treating infants and young children. 2. Offering procurement-related services to partners Procuring ARVs is a very complex enterprise, which needs to take into account accurate forecasting, reliable and continuous supply of quality medicines, and safe distribution to the end user. In addition to buying and shipping ARVs and test kits, UNICEF provides other services through its procurement services framework, such as. Capacity building: a frequent request from governments and other partners who benefit from Procurement Services in the area of HIV/AIDS is to build the national capacity in all the aspects of the supply management chain. The HIV/AIDS supply management system and in-country logistics can directly be the subject of this support. Forecasting and distribution planning: Challenges arise due to the absence of consumption data and experience in nationwide ART programmes. By working with the government and other partners UNICEF can provide technical support to needs assessment, guidance in translation of needs into clear procurement plans, with accurate forecasts, distribution planning, as well as programme and policy considerations. 5

6 Ensuring continuous supply (emergency stock): Supply Division maintains a stock of $ 1.6 million worth of ARVs that are immediately available in emergency situations to avoid breaking the supply of medicines. Disseminating information on sources and prices: in June 2004, UNICEF, WHO, Médecins Sans Frontières, and UNAIDS issued their annual report Sources and Prices of Selected Medicines and Diagnostics for People Living With HIV/AIDS. The report provides market information on over 140 reviewed products for the treatment and management of HIV/AIDS from 84 manufacturers. This information can be used by governments and NGOs to procure quality and affordable ARVs and test kits by comparing international prices. This report is available at UNICEF is a partner in the AIDS Medicines and Diagnostics Service (AMDS), as part of the 3 by 5 Initiative, to ensure that HIV-related supplies are continuously available. These services have been established to expand access to quality, effective treatment for HIV/AIDS, by facilitating the increased supply of medicines, diagnostics and preventive supplies in developing countries. It provides forecasting information to manufacturers, and makes available to buyers information on sources, prices, the patent and regulatory status of quality medicines, as well as offering technical support to countries, and assisting in obtaining the best prices. Under the auspices of AMDS, in 2004 Supply Division participated in two country reviews, in Myanmar and Thailand, to assess the readiness of the supply systems to introduce and scale access to ARVs. Preliminary findings suggest a great need for capacity building in setting up and managing HIV supply systems. IMPACT OF THE UNICEF OF ARVS OTHER RELATED SUPPLIES Experiences at the country level show that UNICEF Procurement Services, used by governments and NGOs to purchase ARVs and other supplies, have several impacts: It increases the scale and impact of government and UNICEF-supported programmes in the area of HIV/AIDS. More voluntary testing was observed in countries where the availability of ARVs and test kits increased. As a result of the strengthening of the procurement and distribution of ARVs and test kits, health services have been reinforced and the general capacity of a country to procure medicines has improved For more information on ARV, test kit and diagnostic equipment procurement and other HIV/AIDS- related procurements, please contact the ARV Unit: Or fax: Or phone: For more information on UNICEF Procurement Services, please contact us at: You can also visit the Procurement Services pages on the UNICEF website at 6

7 UNICEF Procurement Services in Malawi: going to scale The Ministry of Health of Malawi and UNICEF signed a Memorandum of Understanding for Procurement Services in October 2003 to provide supplies and services for the first year of the HIV/AIDS programme funded by the GFATM. In 2004, UNICEF delivered ARVs, drugs for opportunistic infections, diagnostic and laboratory equipment worth $4 million. In addition, UNICEF provided in-country logistics for the distribution of supplies to regional warehouses and ARV sites. In view of the preliminary results and the continuous need for capacity building, the project will be expanded in 2005 to procure $14 million worth of HIV/AIDS supplies to cover up to 80,000 people with ART. The supply and distribution of ARVs on behalf of the Malawi Ministry of Health was the first UNICEF large scale procurement operation for this commodity. The project has necessitated a close collaboration with partners in Malawi and has been conducted in a sensitive environment. The greatest challenge was to supply the goods and increase the number of patients introduced into the ART programme in a very short period of time. UNICEF was heavily involved in the preparation of the National AIDS Commission (NAC) Global Fund Procurement and Supply Management Plans to ensure that the project moved forward. It also took the leadership in the coordination function of the project. UNICEF assisted the NAC in leading a group of experts from several agencies and ministries to prepare a Country Coordinating Mechanism (CCM) Continued Request to the Global Fund for years 3, 4 and 5. The UNICEF Country Office in Malawi invested much time and effort in the negotiations, project implementation and follow-up, anticipating the positive impact of the project on children and their families. The scope and impact of UNICEF s assistance in the area of HIV/AIDS was extended significantly through Procurement Services in comparison to the UNICEF-funded HIV/AIDS project. The procurement of ARVs and other supplies through Procurement Services has played an important role in increasing the number of people on ARVs from around 4,000 in April 2004 to 10,000 by end of December The target number of people on ART by the end of 2005 is 80,000 through a scale up of ARV distribution to 59 sites. An expected result of the supply of ARVs under this project is that, due to a better access to treatment, more people are willing to undertake HIV testing. The increase in the number of people knowing their HIV status will eventually lead to behaviour modification and reduced HIV transmission, especially through women accessing PMTCT services as an entry-point for treatment for themselves and their family members. Another significant and indirect impact of ARV procurement has been the general improvement in the health system. In preparation for the distribution of ARVs nationwide, many health workers have been trained, health and management information systems have been strengthened, and financial and procurement systems are being revised. 7

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