Presentation to 13th Annual General Meeting of the DCVMN UNICEF Vaccine Forecasting
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1 Presentation to 13th Annual General Meeting of the DCVMN UNICEF Vaccine Forecasting 1 November 2012
2 Deaths among children under 5 globally; 19,000 die every day from preventable causes 18% 1% 2% 2% 5% 35% 7% 11% 18% Annual U5 deaths M M
3 Committing to Child Survival: A Promise Renewed In June 2012, a global consultation hosted by Ethiopia, India and U.S. to scale-up action on three fronts: revitalize the global movement for maternal, newborn and child survival; sharpen and resource evidence-based country plans; enhance transparency and accountability for maternal, newborn and child survival. set national targets To date around 150 member states have signed the pledge & hundred of CSO and FBO.
4 The Under-five mortality dashboard Insert: Countries procuring vaccines through UNICEF Full programme Partial programme Source: 2012 Country forecasts
5 Vaccines are essential to child survival Opportunity Unprecedented global support to introduce additional vaccines that target the greatest killers Mobilised vaccine industry Strong partnership forums in particular GAVI Challenges Countries face increased financial burden: higher priced vaccines & increased GAVI co-financing requirements Delivery and logistical challenges as fragile infrastructures are further challenged by more vaccines Fragile vaccine industry and constrained supply for most vaccines Competition from other priorities for limited funding
6 UNICEF procurement, 2011 $2.14 billion (millions of US$)
7 Supplies then and now 7
8 Where UNICEF supplies are used by value/percentage
9 Largest supplier countries 2011 (millions of US$) By invoicing country
10 In addition to Governments and Industry, UNICEF partners for children
11 Multiple roles in ensuring healthy markets
12 Millions of doses Strategies need to address the contexts of each product & market Quantity offered to UNICEF comfortable crisis cautious innovative Measles TT DTP BCG DTP-HepB/Hib HepB New approaches needed to ensure equitable access of new vaccines, HiB, Pneumococcal, Rotavirus
13 Forecasts are at the foundation Forecast type Main purpose Example Vaccines Duration Methodology Tendency Public? GAVI SDF 20 years Programmatic Financial Country Procurement Production Planning forecasts Projected programme targets / achievements provides targets for fundraising and financial planning Projects 1-5 year need for UNICEF procurement projects what will be procured during tender period Projects monthly deliveries to LTA Suppliers Penta, PCV, Rota, HPV, GPEI polio 5-10 years Measles measles 5 years Partnershi GAVI SDF Penta, PCV, Rota, HPV, etc. 20 years GPEI polio 5-10 years Governme 5 yr. nt/unicef Routine & Supplementa l country based UNICEF All vaccines 1-10 yr. provided in aggregate and bycountry UNICEF All vaccines 12 month (rolling) Global aggregate; Informed guestimates on country decisions & readiness aggregate provided in aggregate and bycountry Tends to be aspirational Tends to be conservative Tends to be aspirational Tends to be conservative Tend to be conservative
14 GAVI Strategic Demand Forecast (SDF) Purpose: The SDF provides view on the most likely country demand based on demographic, programmatic and other local environmental factors and constraints. The SDF aims to estimate when demand will effectively materialize in the countries, e.g. when the product is going to be consumed. The SDF includes the entire demand generated in each country irrespective of the source of financing. Periodicity, horizon, time buckets Data sources Key assumptions Twice annually (Feb/Aug); current year plus 20; 1 year time buckets UN Population Prospect, WHO measles and DTP coverage, GAVI policies (eligibility, cofinancing) and prices, product subteams Adoption timing as per subteam; products as per WHO PQ and product pipeline analyses Stakeholders Opportunities for Improvement 7-Nov-12 AVI, Industry, Board, Donors Alignment/benchmarking of data sources and assumptions around uptake and analogue coverage
15 Million doses SDF - Illustrative 70 AVI SDF v5.1: Total GAVI73 required supply Nov-12 Eligible Other countries graduated Graduating before introduction AVI SDF v5.1 High AVI SDF v5.1 Low AVI SDF v5.1 IRC assumptions
16 Polio- illustrative
17 Country Forecasts to UNICEF Purpose: Country forecasts provide basis for production at manufacturers and funding needs for country s planned programmes. Periodicity, horizon, and time bucket Data sources Key assumptions Stakeholders Annual; 5 year horizon; monthly time buckets for CY, then quarterly, then annual Country MOH data via UNICEF CO, Campaign activities reviewed by UNICEF PD &WHO, GAVI DL used for GAVI supported vaccines. Reviewed against historical demand, introduction plans, GAVI DL s, Current orders. Countries, Industry and Partner agencies Opportunities for Improvement 7-Nov-12 Earlier issuance of GAVI DL s. Provision plans issued to countries for budgeting purposes based on forecast Earlier issuance of Prov Plans could be helpful.
18 Country Forecast Illustrative (1) 7-Nov-12
19 Annual Vaccine Forecasting Process & Timelines Preparation of the Forecasting exercise Issue Spread sheet to Countries Country Office review and submit Forecast Review Process & Clarify Queries on Data Compile Summary Data Allocate Forecast Demand Demand against Data Supply Follow-up and with Provisional Industry Plans preparation Issue Provisional Plans On-line Survey Follow-up Manage the Allocation Process June-July Mid Aug 4 Weeks Mid Sep 6 Weeks End Oct 1 Week Early Nov 1 Week Mid Nov 2 Weeks Late Nov 1 Weeks Dec 4 Week January Continuous All Year
20 Procurement Forecasts to Industry- ilustrative Quantities are categorised based on certainty
21 Shipment Plan to Suppliers Purpose: Periodicity, horizon, Data sources Key assumptions Stakeholders Opportunities for Improvement monthly basis, for 12 months. Issued per supplier; not public. Funded requests from Countries, GAVI annual approvals, Delivery confirmations from countries. Lead-times from suppliers; Production Plans from Suppliers Suppliers, receiving country Governments Suppliers & UNICEF improve lead-time accuracy; final confirmation of country readiness (new vaccine) done earlier; 21
22 Shipment Plan - Illustrative 7-Nov-12 CCCT SCM Workstream DRAFT for comment 22
23 How do the forecasts work together? Country Application / Annual Progress Report (value/timing of co-financing/procurement mechanism) Review & recommendation for approval by IRC GAVI-funded commitment Approval by GAVI Decision Letter to countries (specifies GAVI and Country commitments) UNICEF SD plans with country for procurement UNICEF SD requests funding from GAVI Fund for procurement (as per MOU) UNICEF SD issues a Cost Estimate to the country for procurement (normal Procurement Services transaction) GAVI Fund transfers funding to UNICEF SD for procurement (as per MOU) Country releases funding to UNICEF SD for procurement based on cost estimate Procurement & delivery to country Procurement & delivery to country Reporting: Country Annual Progress Report UNICEF SD Reporting to GAVI on GAVI and co-financed
24 Efforts on forecasts are having impact Different forecasts serve specific needs Forecasts have become a standard component of programmes, financing and supply Short, medium and long-term Transparent However, the forecasts Can be complex to understand and assumptions may seem opaque Are dependent on Government s plan, some with fragile infrastructure and planning systems Need more support to improve accuracy and efficiency Will always be subject for continuous improvement & critique Need short, medium and long-term production forecasts from suppliers
25 Challenges of vaccine supply management from the country s perspective How many cold or freezer rooms do we need to procure to store vaccines this year? I do not know the cold chain capacity requirement for vaccines to be delivered in this shipment. I am not sure whether current vaccine stock and planned deliveries are enough to cover programmatic needs this year We are unsure what month we will be ready to introduce We are unsure of the funding for outbreaks Data Source : Forecast 2010 Online Survey Analysis
26 Support to improve efficiency & effectiveness Improvements underway Increasing focus Forecasting & in-country supply management Revised tools to improve accuracy, visibility & efficiency in communication Strengthening in-country health supply systems Ensuring cold chain equipment is right-sized & FFP. Helping vaccine delivery system is strong in context of strong health supply chain Addressing supply shortfalls New monitoring tools in place to enable faster review during supply failures Supplier performance New tool to provide regular feedback on performance
27 End to end supply chain Planning Procurement Logistics & Delivery Definition of Need Budgeting and planning Procurement Delivery & Clearance Inspection Warehousing, distribution, & re-order Utilisation by end users M&E M & E 27
28 Support to end-to-end supply issues 28
29 Multiple roles in ensuring healthy markets 29
30 Innovative Finance Increase use of innovative financing and contracting tools to positively influence the vaccine markets Volume Guarantees provide increased (long-term) visibility to manufacturers and the certainty of a contractual obligation to purchase Prepayments have been exceptionally made in return for very attractive pricing from manufacturers
31 Innovative Finance Achieving Results Tools Used Transaction Examples Goal Volume Guarantee & Prepayment Volume Guarantee Volume Guarantee & Prepayment Volume Guarantee Rotavirus Vaccine: Volume guarantee provided for a portion of the quantities with some volumes paid for in advance Contract duration of 5-years covering 132M doses New vaccine launched and sustained at lower price Financing provided by GAVI, with strategic and technical support from the Gates Foundation ( BMGF ) Oral Polio Vaccine (OPV): Firm contract signed for with large bulk and fill-finish manufacturer who at the time was considering exit of market Duration of 2-years originally covering 270M doses per year (540M doses total) Financing provided by BMGF Pentavalent Vaccine (lyophilised): Contract signed with new entrant to Pentavalent market with volume paid for in advance Duration for <1 year covering 10M doses Financing provided by GAVI PCV Volume guarantees for 20/10/5% of quantities or years 1/2/3 of 10 year contract Financing provided by GAVI and WB $15 per course 3.76 per course >$400M in savings over 5 years Prepayment understood to facilitate expected expansion of manufacturing capacity Accelerated introduction of Rotavirus vaccine made possible through certainty provided by commitment in new markets Decrease in price offered to <$0.118 per dose generated significant savings versus current WAP of >$0.13 Delayed exit of manufacturer by >2 years Increased visibility for manufacturer and certainty of UNICEF procurement during fragile OPV market New entrant to market secured volume and able to offer extremely attractive price of $1.80 per dose, Expanded vaccine security with expanded manufacturing capacity in a fragile market Part of overall AMC structure to achieve tail price of max. $3.50 and sufficient production quantities to meet demand
32 Setting goals to help sustain introduction In the context of: Fiscal prudence coupled with new financing mechanisms Opportunity & need to reduce the number of children dying of preventable causes Need for equitable access Right balance of low price and reasonable returns (USD) Projected decreasing cost of vaccines : DTP, Hib, HepB, Rotavirus, Pneumococcal per fully immunised child
33 Vaccine availability & affordability 33
34 Transparency as a principle and a means of helping markets be efficient Public posting of bid plans and industy consultation presentations Public posting of awards > $100,000 Posting of prices for product markets where UNICEF has strategic influence: vaccines, RUTF, medicines, syringes, etc. Information notes (eg, Why a 20d BCG vial?) Unicef.org/supply
35 Vaccine tender plan
36 Terima kasih! Thank you!
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