Historical Analysis of the Comprehensive Multi-Year Plans in GAVI-Eligible countries ( )

Historical Analysis of the Comprehensive Multi-Year Plans in GAVI-Eligible countries (2004-2015) Joint Collaboration Between the Bill & Melinda Gates Foundation and the World Health Organization Revised March 12, 2012 i

Acknowledgements This document was prepared by Logan Brenzel, consultant to the Bill & Melinda Gates Foundation, with inputs from Claudio Politi, Department of Immunization, Vaccines, and Biologicals, World Health Organization. The authors would like to thank Miloud Kaddar and Lidija Kamara, Department of Immunization, Vaccines and Biologicals, WHO, for their contributions in the analysis and feedback on earlier versions of this report. In addition, members of the GAVI Alliance Immunization Financing and Sustainability (IF&S) Task Team from WHO Regional Offices, UNICEF Headquarters, UNICEF Supply Division, and the Bill & Melinda Gates Foundation provided useful comments and suggestions. This final version of the analysis benefitted from reviews by Patrick Lydon (WHO), Carol Levin (PATH), Gian Gandhi (UNICEF); Damien Walker (Bill & Melinda Gates Foundation); Helen Saxenian (Results For Development); and, Natasha Hsi (Abt Associates). An earlier version of the analysis was presented at the World Bank Workshop on Co-Financing and Immunization Financing, London on 25-27 May 2010. Thanks go to country participants who also provided insightful comments. ii

Abbreviations AFRO AMRO BCG cmyp DTP3 EMRO EURO GDP GNI HepB Hib HPV ISS NHA MMR OPV PAHO SEARO TT UNICEF WHO WPRO WHO African region WHO Americas region Bacillus Calmette-Guérin Comprehensive Multi-Year Plan Diphtheria, Pertussis and Tetanus (third dose) WHO Eastern Mediterranean region WHO European region Gross Domestic Product Gross National Income Hepatitis B vaccine Haemophilus influenzae type b vaccine Human Papillomavirus vaccine Immunization Services Support National Health Accounts Measles, Mumps and Rubella vaccine Oral Polio vaccine Pan American Health Organization WHO South East Asia region Tetanus Toxoid vaccine United Nations Childrens Fund World Health Organization WHO Western Pacific region iii

Table of Contents Executive Summary v 1. Introduction 1 2. Methodology 2 2.1 General Approach 2 2.2 Data Sources 3 2.3 Data Analysis 4 2.4 Limitations of the Methods and the Data 4 2.5 Description of the Analysis Sample 5 3. Costs of National Immunization Programs 6 3.1 Summary of Program Costs 6 3.2 Regional Analysis 7 3.3 Cost Categories 8 3.4 Comparison of Costs by Vaccine Schedule 10 3.5 Routine Program Costs for Other Country Groupings 12 3.6 Unit Cost Analysis 13 3.7 Non-Vaccine (Delivery) Costs of Routine Programs 17 3.8 Campaign Costs 19 3.9 Immunization Costs and Level of Scale 20 3.10 Affordability Indicators 20 4. Financing of the National Immunization Program 23 4.1 Financial Levels 23 4.2 Sources of Routine Program Financing 24 4.3 Secure Routine Program Financing 27 4.5 Funding Gaps for the Routine Program 30 5. Discussion and Conclusion 33 References 37 Annexes 38 Annex 1: Comparison of Population Data: cmyp and UN Population Prospectus, 2008 38 Annex 2: Country Sample Characteristics by Grouping 39 iv

Executive Summary Immunization is a critical intervention for achieving the Millennium Development Goal of reducing deaths among children less than five years of age (MDG4) by two-thirds. More than 100 million children are vaccinated each year, protecting them against life-threatening diseases (WHO and UNICEF, 2010). Immunization is considered to be one of the best buys in public health (WHO and UNICEF, 2010; World Bank 2010). Traditional vaccines cost pennies per dose and provide health benefits not only for the immunized child, but also for the community in which a child lives through herd immunity. In addition, studies have shown that immunization extends life expectancy and the time spent on productive activity later in life, thereby contributing to economic growth. Given the public goods aspect of immunization and its potential returns for growth and poverty reduction, this is an intervention definitely worth investment by governments. While newer vaccines are more expensive on a per dose basis, they have been shown to be highly cost-effective investments. The purpose of this analysis is to summarize historical trends in immunization costs and financing, both for routine services and campaigns, as countries have introduced new vaccines. The main audience for this document is national, regional, and global technical staff working on national immunization programs. This paper estimates and compares the costs and financing of a sample of 54 national immunization programs as reflected in comprehensive multi-year plans (cmyps) submitted to the GAVI Alliance, for the period 2004 to 2015. As this analysis pertains to an older set of cmyps that incorporates higher unit prices of new vaccines, the results cannot be generalized to the present time. However, they have value in adding to our historical knowledge of immunization program costs and financing. The cmyp is a planning tool used by countries. Each cmyp has a baseline year that report on actual costs and financing, followed by a five-year period in which costs and financing of the program are estimated. Most of the sample is for countries in the AFRO Region (63%). The sample also contains information primarily from the poorest countries based on World Bank classification. An analysis database was created that counted each year of estimates for a country (baseline plus five projection years = six years) as a separate observation. This resulted in a total sample size of 313 observations from which to undertake the analysis in STATA v10. The major findings related to program costs are the following: The cost of immunizing children is increasing. The mean annual cost of the national immunization program for the sample increases from $120 million in the baseline year, to an average of $1726million per year for the projection period. Routine costs account for 49% of total costs of the national immunization program in the baseline year. The annual cost of routine services is expected to double from $47 million in the baseline year to an average of $103 million in the projection period. Vaccines continue to be the major cost driver, accounting for 45% of routine program cost in the baseline year, followed by immunization-specific personnel costs (23%). In the projection period, the share of vaccines is expected to be more than half (55%) of routine program costs. Routine program costs increase with every additional new vaccine that is introduced into the program. Introducing tetravalent vaccine adds $5 per infant, and adding pentavalent vaccine adds $10 to the costs of traditional programs. Introducing pentavalent and pneumococcal vaccines increases v

the cost per infant by $19. Rising expenditures are related not only to the higher unit costs of vaccines, but also to the related expenditures on cold chain, vaccine supply chain and transportation, and costs associated with outreach strategies to cover the remaining pockets of low coverage. In addition, these figures are based on older, and higher unit prices of vaccines. The cost per capita, cost per infant, and cost per child immunized with DTP3 have all increased since previous estimates (Lydon P, et al, 2008). The cost per capita is $0.61 on average in the baseline year, increasing to $1.15 for the projection period. The cost per infant is expected to double from $21 in the baseline year to $41 during the projection period. The cost per child vaccinated with the third dose of DTP is $28 in the baseline period, rising to $48 in the projection year. Finally, the cost per dose is estimated to be $1.57 in the baseline year, rising to $2.02 in the projection period. Non-vaccine delivery costs account for nearly half of routine program costs (49%). The delivery cost per dose is estimated to be $0.78 on average for the baseline year. The delivery cost per infant increases to approximately $11. These results vary by region and by the types of vaccines in the immunization schedule. The delivery cost per dose is $0.59 for the traditional vaccine schedule, rising to $0.78 for the pentavalent vaccine; and, $2.13 for countries that have added both the pentavalent and pneumococcal vaccines. These findings suggest that significant resources are needed to deliver vaccines, above the cost of the vaccines themselves. The current GAVI grant of providing countries with $0.30 per child for new vaccine introduction appears low and needs to be reconsidered, as the amount represents a very small fraction of the cost. The major findings related to routine program financing are the following: Forty-four percent (44%) of total immunization financing in the baseline year went to the routine program, and this figure increases to 66% in the projection period. In the baseline year, 97% of routine program financing came from secure sources, but this figure declines to 48% of secure financing on average during the projection period. This demonstrates the challenge countries have in planning the financing of their routine programs, when less than half of potential financing is secure. Governments appear to be spending more, both in absolute terms and as a percent of total financing. Government sources account for more than 56% of total routine program financing in the baseline year. Government sources also represent more than 40% of vaccine financing, and 52% of nonvaccine financing in the baseline year. Government financing also increases with each new vaccine introduced. These findings demonstrate government commitment to financing new vaccines and routine immunization programs. Financing from the GAVI Alliance accounts for an increasing proportion of total routine program financing, from 26% to 46% between the baseline and projection years. GAVI resources represent 48% of total vaccine financing in the baseline year, and 28% of non-vaccine delivery costs. The latter result is most probably related to GAVI support to immunization programs through Immunization Services support (ISS) funding. The funding gap per child for secure routine financing is $0.21 in the baseline year, rising to $21 per child in the projection period. These figures are much larger than what was previously estimated at about $4 per infant. The study also finds that the rising cost of routine programs accounts for 0.1% of Gross Domestic Product (GDP) and 9.6% of Government Health Expenditures (GHE) on average for the baseline year. The findings are more than double what was estimated in previous studies (between 2.4% and vi

3.7% of GHE). While these figures are based on older, and higher unit prices of vaccines, governments may find it challenging to fully finance their routine programs without jeopardizing resource allocation to other priority health programs. There are no internationally recognized benchmarks for what is affordable or sustainable, but spending of 10% of GHE for one health program seems high. The cmyp provides a wealth of information that can be exploited by countries, regions, and at the global level to track trends in immunization program costs and financing. However, the cmyp is based on a five-year planning period, and during this period, conditions might change, so that initial cmyp estimates may not match current reality. More needs to be done to ensure that cmyp-based planning and budgeting for immunization programs are affordable and that cost estimates are realistic. Improving the alignment of current country reporting systems, Joint Reporting Form and Annual Progress Reports, with cmyp methodology may help countries to verify consistency of information. In the absence of immunization costing studies, there is currently no other reliable source of information on resource requirements and financing of national programs. It would be useful to undertake some stand-alone costing studies, particularly in countries that have or will be introducing new vaccines to get a better handle on incremental costs and funding sources. Also, the cmyp methodology was developed in 2005 and introduced to countries in 2006. At the five-year mark, there is need to conduct a stocktaking of the approach and whether it is meeting the needs of countries and the global immunization community. Planning and budgeting for national immunization programs cannot be made in isolation from the rest of the health system. The analysis highlighted potential issues related to affordability and sustainability of national immunization programs, and routine service delivery, in particular. Donors and other sources may help to fill in any financing gaps, but rather than create greater donor dependency for immunization, other, additional domestic resources should be mobilized, involving high-level decision makers and parliamentarians. Price reductions for new vaccines will help reduce costs and the burden of additional financing required. vii

1. Introduction This paper presents an updated analysis of Comprehensive Multi-Year Plans (cmyps) from 54 countries obtained from the World Health Organization (WHO) Immunization Financing Database as of May 2011. The purpose of the current analysis is to document trends in immunization costs and financing, both for routine services and campaigns. The cost and financing implications of new vaccines are also a focus of the analysis. The main audience for this document is national, regional, and global technical staff working on national immunization programs. Immunization is a critical intervention for achieving the Millennium Development Goal of reducing deaths among children less than five years of age (MDG4) by two-thirds. More than 100 million children are vaccinated each year, protecting them against life-threatening diseases (WHO and UNICEF, 2010). Immunization is considered to be one of the best buys in public health (WHO and UNICEF, 2010; World Bank 2010). Traditional vaccines cost pennies per dose and provide health benefits not only for the immunized child, but also for the community in which a child lives through herd immunity. In addition, studies have shown that immunization extends life expectancy and the time spent on productive activity later in life, thereby contributing to economic growth. Given the public goods aspect of immunization and its potential returns for growth and poverty reduction, this is an intervention definitely worth investment by governments. While newer vaccines are more expensive on a per dose basis, they have been shown to be highly cost-effective investments. Despite the extraordinary progress made in recent years, nearly 19 million children remain unvaccinated or nearly 20% of the number of children born each year. Seventy percent of these children live in ten countries: India (8.6 million), Nigeria (3.1 million), Pakistan (0.8 million), Indonesia (0.7 million), DR Congo and Ethiopia (0.6 million each), Uganda and China (0.5 million each), Kenya (0.4 million), and Chad (0.3 million). WHO estimates that if global coverage levels could be raised to 90%, an additional two (2) million deaths could be avoided every year (WHO, 2011). Historically, total immunization expenditures have increased from $3.50 per live birth in the 1980s, to $6.00 in 2000, and were expected to reach $17.5 per infant between 2005 and 2010 due to the introduction of new vaccines, namely Hepatitis B and Hib (Lydon P, et al 2008). In 2003, the average cost per child immunized with the third dose of DTP (a proxy for fully immunized) was estimated to be $20 (Levin et al, 2003). These figures could reach even higher levels with the introduction of pneumococcal and rotavirus vaccines. Delivery costs were noted to increase approximately 22% after new vaccine introduction (Lydon, P et al, 2008). Previous analyses have shown that governments finance less than half of the cost of their national immunization programs (42%) on average, which translates into approximately $5.60 per infant (Lydon P. et al, 2008). Almost ninety percent of countries have budget line items for vaccines and immunization. Therefore, from past assessments, trends in total costs of national immunization programs appear to be increasing, as well as the total financing of programs from national governments. These trends are related to introduction and use of new vaccines, which have much higher unit costs than traditional vaccines. 1

2. Methodology 2.1 General Approach This analysis evaluates immunization costs and financing based on an analysis of country-level data extracted from comprehensive multi-year plans (cmyps) from 54 GAVI-eligible countries. These data are contained within the WHO Immunization Financing Database as of May 2011. 1 The WHO Immunization Financing Database classifies each expenditure or financing amount for each country. The database classifies costs by whether they are shared costs, campaign costs, or routine costs. Shared costs are health systems costs allocated to the immunization program on the basis of country-specific assumptions. Because of the potential wide variation in approaches taken by countries to estimate shared costs, the report focuses primarily on results for routine and campaign costs that are both immunization-specific. Costs are classified according to thirteen line items, based on the 43 categories utilized in the cmyp (WHO, 2011). The major cost categories for this analysis include: Immunization-specific personnel and per diem Traditional and new and underused vaccines Injection supplies Transport for fixed sites and outreach services Short-term training Social mobilization and advocacy activities (broadly categorized as Information, Education and Communication IEC- activities Disease surveillance Program management Operational costs, including cold chain maintenance and maintenance of other equipment, and building operating costs and utilities Other recurrent costs Cold chain equipment Vehicles Other equipment, including construction of buildings In addition, costs are categorized into vaccine costs (traditional and new vaccines, and injection supplies), and non-vaccine costs (remaining line items). Financing amounts are classified according to whether they are secure, probable, or other (not classified). Secure financing reflects the knowledge of a country on future financing commitments by the government and other partners. Probable financing represents those amounts that are likely, but for which there is some uncertainty as to whether they will be forthcoming. 1 Countries include Afghanistan, Armenia, Azerbaijan, Bangladesh, Benin, Bhutan, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Comoros, Republic of Congo, Democratic Republic of Congo, Cote d Ivoire, Djibouti, Democratic People s Republic of Korea, Eritrea, Ethiopia, Gambia, Ghana, Georgia, Guinea, Guinea Bissau, Indonesia, Kenya, Kyrgyz Republic, Laos, Lesotho, Liberia, Mali, Malawi, Madagascar, Moldova, Mongolia, Mozambique, Myanmar, Nepal, Niger, Nigeria, Pakistan, Rwanda, Sao Tome & Principe, Senegal, Sierra Leone, Sri Lanka, Sudan (north), Tajikistan, Tanzania, Timor L Este, Togo, Uganda, Ukbekistan, Yemen, Zambia, and Zimbabwe. In addition, three GAVI-eligible countries (Cambodia, Mauritania, and Vietnam) are not represented in the analysis because their data were not available in Excel. 2

Because of the wide range in years covered by the sample (from 2004 to 2015), all costs and financing amounts prior to 2009 are converted into 2009 USD equivalents using the consumer price index for those years so that all results and comparisons are made in a common metric. 2 Values from 2010 to 2015 are adjusted based on the average change in the CPI for the previous time periods. The year 2009 is selected because most of the baseline years in the sample were for 2009. Results are weighted based on population size. The number of doses used in the routine program (doses administered and wasted) was estimated from input data from the cmyp. However, information on the number of doses is not available for the baseline year, and was imputed based on trends between total routine program expenditures and doses for the projection period. Data on coverage rates were based on WHO-UNICEF Best estimates up to 2010. Coverage rates through 2015 were projected up to 100% by estimating a line that best fits the data using the least squares method. Government health expenditure data were available from the WHO National Health Accounts website up to 2009. Projections of GHE were based on growth rates in GDP applied to 2009 GHE estimates. Estimates come from a recent analysis produced for the Decade of Vaccines Costing and Financing Working Group (DOV, 2012). 2.2 Data Sources In addition to information obtained on the sample of cmyps directly from the WHO Immunization Financing Database, additional information was collected and entered into the statistical dataset for the relevant years on the following variables. Table 1 provides the sources of information used in the database. Table 1: Source of Secondary Variables in the Statistical Dataset Secondary Variable Data Source Year Total Population UN Population Prospectus 2008 Population of Surviving Infants UN Population Prospectus 2008 DTP3 Coverage WHO-UNICEF Best Estimates Last accessed February 2011 GAVI Co-financing Groupings (poorest, GAVI Alliance 2011 intermediate, and graduating) World Bank income classifications (lowincome; World Bank Last accessed February 2011 lower-middle income; and upper- middle income) Type of new vaccine introduced cmyps 2011 GNI per capita (constant $2009) World Bank, World 2011 Development Indicators GDP (constant $2009) World Bank, World 2011 Development Indicators Existence of a Sector-Wide Approach WHO Health Systems Database 2011 General government health expenditures WHO National Health Last accessed February 2011 per capita (constant $2009) CPIA for Resource Mobilization, Public Expenditure Management, and Corruption Accounts Database World Bank, World Development Indicators 2011 2 The source of the Consumer Price Index was the National Bureau of Economic Research (www.nber.org). Data for indices were last estimated for 2009. The multipliers used for each year based on the Consumer Price Indices are the following: 1.136 (2004); 1.098 (2005); 1.064 (2006); 1.035 (2007); 0.986 (2008); 1.00 (2009-2015). 3

2.3 Data Analysis In the cmyp planning process, each country estimates costs, financing, and financial gaps for the baseline year, (current year) and projects these forward for a future 5-year period (Years 2-6). As a result, there are six points in time for each country for which there is cost and financing information. cmyp data were organized based on country-year observations into a separate analysis database for statistical analysis using STATA v10 (Stata Corporation LP, 2011). Summary statistics were evaluated for all variables in the database. For a few observations (23), the mean value for routine expenditures was much greater than two standard deviations, and these were removed from the final analysis. 3 The final database contained 313 observations, and 52 baseline observations. 2.4 Limitations of the Methods and the Data While effort was made to have as robust an analysis as possible, there are several limitations of both the approach and the data used that should be borne in mind when interpreting the results. The cmyp is a tool to assist countries in analyzing and planning their future financing and programming for the National Immunization Program (NIP), and is not designed as a reporting tool for cross country-comparisons of costs and financing. Therefore, there will be some variability by country and by region in how the analysis is conducted and the assumptions that are made. This is particularly the case for shared health system costs. Different sources of population data might influence country-level projections for vaccine requirements, and the weighted average vaccine prices used often by countries in planning may be quite different from actual prices paid. 4 In addition, some of the cmyps in the analysis have not been analyzed before, and some have been incorporated into previous assessments (Lydon et al, 2008 for example). Therefore, there is some overlap with previous work, although this analysis uses a different methodology than previous exercises. Countries in the PAHO region complete a different format for estimating costs and financing of new vaccines, and are not included in the WHO cmyp database. Therefore, this analysis excludes any information that could have come from this source. Indicators, such as cost per capita and cost per surviving infant are calculated in the analysis by using population data from the UN Population prospectus (2008) to ensure consistency of denominators and improve cross-country comparability. However, for the sample of countries, total population figures appear to be underestimated in the cmyps, and the number of infants appear to be overestimated compared UN figures (see Annex 1). Thus indicators and projections estimated by countries might differ from the indicators reported in the present analysis. Because countries estimate future costs and financing with some degree of uncertainty, baseline year information is thought to be a more reliable estimate of program costs and financing. Currently, there is no process to go back to analyze the extent to which country projections match actual expenditures. 3 Data for Bhutan and Djibouti are removed from this analysis for all time periods; data for Pakistan and Madagascar are removed for the baseline year. 4 Countries use a range of unit prices for the same vaccines in their cost estimates. For instance, the projected price of rotavirus vaccine has been estimated $5 by some countries and $8 by others; the price of pneumococcal vaccine has been estimated $3.5, $5 and $7. These differences influence cross-country data comparability. 4

Financing sources will reflect that last source from which financing is allocated to the NIP. If one donor agency transfers funds to another for use at country level, the source of financing will be the second agency and not the original agency. As a result, some donor support, such as bilateral financing may be under-represented in the analysis. In addition, the sources of financing are not entirely mutually exclusive, as pooled financing includes funds from the government, bilateral donor agencies, development banks, and other sources. A few countries, particularly those in Francophone Africa (e.g., Niger), have no anticipated financing gap. Not only is this highly unlikely, but Niger has been in default with the GAVI Alliance for cofinancing of new vaccines three years in a row. This suggests a potential inconsistency between the cmyp cost and financing estimates and the reality at the country level. Finally, most of the cmyps included in the dataset cover the period of introduction of a HepB mono, the tetravalent and pentavalent vaccine, with a lower proportion of observations for pneumococcal and rotavirus vaccines. Unit prices of new vaccines have declined over time, and the cmyps developed with baseline years from 2004 to 2009 would have incorporated higher unit prices. For example, the unit price for pentavalent vaccine was $3.60 in 2006 and is now $2.25 (UNICEF Supply, 2012). 5 The pneumococcal vaccine was previously $5.00, and is now $3.50. Because the prices of vaccines will affect the total cost and share of vaccine expenditures and funding, this paper should be viewed more as an historical analysis of immunization costs and financing, not specific to the present time. A subsequent analysis of updated cmyps will include more country experience with introducing pneumococcal and rotavirus vaccines at current prices. 2.5 Description of the Analysis Sample Annex 2 presents information on the countries in the analysis. The time period covered by the sample of cmyps is 2004 (Mongolia only) to 2015. The mean year was 2010 for the entire sample of observations, and 2007 for the baseline year. The baseline year covers the period 2004 to 2009. The AFRO Region represents 63% of the sample, with nine countries in the SEARO/WPRO Regions, seven countries in EURO, and three countries in the EMRO Region. Most of the sample countries and observations are for the poorest group (gross national income per capita- GNI/capita <$975). The mean GNI/capita in the sample is $993, ranging from $132 to $4840. Overall, the baseline sample of countries represents a population of 1.3 billion and 38.6 million surviving infants. The simple average population for the sample is 28.6 million. 6 Thirty-nine percent of the sample has a population size between 3 and 15 million, and 9% of the sample has a population greater than 80 million. Most of the sample includes observations with pentavalent vaccine in the immunization schedule (51%), with 13% of observations are for those countries with pentavalent and pneumococcal vaccines. Finally, less than half of the sample countries have a sector-wide approach (SWAp) mechanism for coordinating planning and budgeting of national programs. 5 UNICEF Supply Division currently quotes a price of $1.75 per dose of DTP-HepB-Hib vaccine from Serum Institute. 6 The weighted average population is 89.5 million. 5

3. Costs of National Immunization Programs This section reports the results of the analysis on total, routine program,and campaign costs for the baseline and projection years. Costs are also disaggregated and compared by region, vaccine type, population size, and income group. This section presents unit costs per capita, per surviving infant, and per child receiving the third dose of DTP3 (proxy for fully immunized child), as well as compares costs with government health expenditures. 3.1 Summary of Program Costs Table 2 presents the mean annual immunization cost for the sample of cmyps (2004-2015) by type of cost for the baseline year and for the subsequent five-year projection period. 7 On average, routine programs cost $47 million; campaign costs amount to $28 million and shared health system costs account for $44 million in the baseline year. 8 There is considerable variation in average annual costs for the routine program, ranging from $216,000 to $117 million in the baseline year. Average annual routine program costs double during the projection period to $103 million per year; whereas, campaign costs decline to $22 million per year. Shared health system costs increase to $50 million per year. Total immunization costs were expected to increase from $120 million to $176 million per year representing a 47% increase between the baseline and the projection period. Table 2: Mean Annual Immunization Costs by Type for Baseline Year and Projection Period ($2009 USD) Type of Cost Baseline Projection period (Average) Routine program $47.03 million $103.18 million Campaign $28.3 million $22.2 million Shared (health systems) $44.4 million $50.3 million Immunization specific $75.3 million $125.4 million Total $119.7 million $175.7 million Source: author s calculations. Figure 1 illustrates the evolution of mean annual routine, campaign shared health systems, immunization specific and total costs for the six-year period covered by each cmyp. Routine costs increase by nearly 150%, while campaign costs decrease over the period by 25%. 7 Previous analyses (e.g., Lydon et al, 2008) emphasize results for immunization-specific costs (routine plus campaign costs). However, volatility is campaign costs by year may lead to erroneous results if merged with routine program costs. For this reason, routine program costs and campaign costs are reported separately. 8 Health system shared costs are those that are not exclusive to the national immunization program, but which may be shared across other priority health programs, such as personnel, vehicles, equipment, and buildings costs. Health workers who administer vaccines may also spend time providing family planning and MCH services. In this case, only a portion of their time would be allocated to the national immunization program. Immunization-specific costs represent the sum of campaign and routine immunization program costs. 6

Figure 1: Mean Annual Immunization Costs Baseline and Projection Years (2009 millions $USD) 200,000,000 180,000,000 160,000,000 140,000,000 120,000,000 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 0 Routine Campaign Shared Imm Spec Total Source: author s calculations. For the baseline year, Figure 2 shows that routine costs accounted for 49% of total immunization program costs on average, followed by shared health systems costs (29%), and campaign costs (22%). For the five-year projection period, the share of routine costs increased to 68%; and campaign costs declined to 10%. Health systems costs as a proportion of total immunization program costs decreased to 22%. Figure 2: Share of Total Cost by Component for the Baseline Year 29% 22% 49% Source: author s calculations. Routine Shared Campaign 3.2 Regional Analysis Table 3 illustrates the range of mean annual routine immunization program costs by region and between the baseline and projected years. The SEARO/WPRO regions have the highest average annual routine program cost in the baseline year ($56 million), followed by the AFRO region ($46 7

million per year). 9 The average annual routine program cost for the AFRO region more than doubles between the baseline year and the projection period to $102 million. Routine program costs remain relatively stable in the EURO Region between the baseline and project periods ($19 million and $22 million, respectively). Regional variation in routine immunization costs may be related to regional differences in goals and strategies for the national immunization program; the population size and level of immunization coverage; as well as the types and unit prices of vaccines. Table 3: Regional Analysis of Routine Costs Baseline and Projected Years ($2009) Type of Cost Baseline Projection period AFRO $46.19 million $101.6 million EMRO $23.43 million $90.5 million EURO $19.48 million $22.07 million SEARO/WPRO $55.65 million $119.89 million Total $47.02 million $103.18million Source: author s calculations. 3.3 Cost Categories Another possible source of the variation in routine costs by region may be how resources are allocated among expenditure classifications (line items). Figure 4 shows that in the baseline line year, vaccine costs accounts for 45% of total routine program cost, followed by expenditures for personnel specifically working on immunization and per diem cost (23%), other recurrent costs (14%), and operating and maintenance costs (9%). Injection supplies accounts for 5% of total routine immunization cost in the baseline year. Figure 4: Share of Total Routine Immunization Cost by Line Item (Baseline Year) 1% 3% 14% 23% 9% 5% 45% Personnel Vaccine Injection Maint & Op Other Recurrent Cold Chain Other Capital Source: author s calculations. 9 Nigeria, Bangladesh, Kenya, Pakistan, Tanzania, Indonesia, DR Congo, and Afghanistan were the countries with the highest level of total routine immunization costs in the sample. 8

Cold chain costs in Figure 4 are for equipment costs only. When cold chain equipment and maintenance costs are aggregated, total costs associated with cold chain amount to 6.6% of total routine program cost in the baseline year on average, ranging from 5% in the EURO region to 8% in the AFRO region. Full cold chain costs are $0.06 per capita; $0.10 per dose; and, $1.26 per infant in the sample on average. Figure 5 illustrates the distribution of routine immunization costs by line item by region for the baseline year. This graphic shows that the major cost driver for all regions is vaccines, ranging from 38% in the AFRO region to 63% in the EMRO region. Immunization-specific personnel and per diem costs are the second most important cost category, varying from 11% in the EMRO region to 32% of routine costs in the EURO region. Operational costs (maintenance and utilities) represent 14% of total routine costs in the EURO region. Recurrent costs account for 97% of routine immunization program costs for the baseline year. Figure 5: Percent Distribution of Routine Immunization Program Costs by Line Item and Region for the Baseline Year 100.0% 90.0% 9.0% 13.9% 80.0% 4.6% 11.3% 70.0% 60.0% 42.9% 50.0% 37.8% 52.5% 63.2% 40.0% 30.0% 20.0% 32.3% 26.7% 10.0% 19.5% 11.2% 0.0% AFRO EMRO EURO SEAR/WPRO Source: author s calculations. Other Capital Vehicles Cold Chain Other Recurrent Surveillance IEC Training Management Transport Maint & Op Injection Vaccine Personnel Figure 6 shows a slight change in the distribution of the share of routine program costs by line item for the projection period. Vaccine costs are expected to account for a greater proportion of routine costs (55%) on average. The rise in proportion of costs for vaccines is compensated by associated declines in personnel costs (15%), other recurrent costs (11%), operation and maintenance (7%). The full cost of cold chain (equipment and maintenance) is expected to rise to 6% of total routine program cost on average in the projection period. For the projection period, vaccine costs are expected to reach 68% of total routine cost for the countries in the EMRO region, but will account for 44% for countries in the EURO region. SEARO/WPRO countries will have the highest share of cold chain equipment costs (11%), compared to less than 1% in EURO and EMRO regions. The full cost of cold chain equipment and maintenance will be highest for the AFRO region at 6.8% of routine program costs on average. 9

Figure 6: Percent of Routine Immunization Program Cost by Line Item (Projection period) 15% 55% 3% 5% 11% 7% 5% Source: author s calculations. Personnel Vaccine Injection Maint & Op Other Recurrent Cold Chain Other Capital A comparison can be made between costs associated with vaccines and safe injection and all other costs related to delivery of the vaccine (non-vaccine related costs). Figure 7 makes this comparison for the baseline year. Vaccine and injection costs account for 51% of routine program costs, ranging from 68% in EMRO to 43% in the AFRO region. Non-vaccine delivery cost account for 49% of routine costs: 57% in AFRO compared to 32% in EMRO Region. Figure 7: Comparison of Vaccine and Non-Vaccine Costs by Region (Baseline Year) SEAR/WPRO 58% 42% EURO 46% 54% Vaccine EMRO 68% 32% Non Vaccine AFRO 43% 57% Source: author s calculations. 0% 20% 40% 60% 80% 100% 3.4 Comparison of Routine Program Costs by Vaccine Schedule A sub-analysis was conducted by type of vaccine schedule for the sample of cmyp observations. For each country, the type of vaccine schedule was classified for each year of the analysis. Comparisons 10

can be made between vaccine schedules to illustrate potential cost implications of changing from one vaccine schedule to another for instance, from tetravalent vaccine to pentavalent vaccine. Table 4 illustrates the sample by type of vaccine schedule. There are seven observations for the traditional immunization schedule (BCG, three doses of OPV, three doses of DTP, and measles) in five countries in the sample. The sample includes 145 observations for pentavalent vaccine in 45 countries; 49 observations for pentavalent and pneumococcal vaccines in 18 countries; five observations for pentavalent and rotavirus vaccines in four countries; and 41 observations for a combination of all three vaccines in 14 countries. 10 Table 4: Sample Observations by Type of Vaccine Vaccine Schedule Number of Countries Number of Observations in the Analysis Sample Number of Observations Baseline Year Traditional schedule 5 7 5 Traditional schedule + Yellow Fever 11 14 11 Traditional schedule + Hepatitis B vaccine 6 18 6 Tetravalent vaccine 10 28 7 Pentavalent vaccine 45 145 20 Pentavalent + rotavirus vaccine 4 5 - Pentavalent + pneumococcal vaccine 18 49 3 Pentavalent + pneumococcal + rotavirus 14 41 - Mengigococcal A vaccine 2 6 - Total 54 11 313 52 Source: author s calculations. Table 5 compares the mean annual routine immunization program cost requirements by selected vaccine schedules for the baseline and projection years. For the baseline year, introducing the tetravalent vaccine doubles the total annual routine requirements from the traditional EPI schedule (from $4 million to nearly $9 million). Introducing the pentavalent vaccine results in an annual routine program cost that is more than ten times the cost associated with the traditional vaccine schedule ($4 million compared to $42 million). In the baseline year, introducing both pentavalent and pneumococcal vaccine is associated with an 11-fold rise in routine costs to $44 million. Table 5: Mean Annual Routine Program Cost by Vaccine Schedule (Baseline and Projection Years) Vaccine Baseline Year Projection Years Traditional $4 million $9.9 million Tetravalent $8.78 million $20.4 million Pentavalent $41.94 million $86.7 million Pentavalent + Pneumococcal $44.13 million $133 million Rotavirus vaccines n/a $127.7 million Source: authors calculations. 10 One country had introduced Tetra-Hib (Gambia) and one country had introduced the Hib monovalent vaccine (Republic of Moldova). 11 The total number of countries exceeds 52 because countries move through changes in vaccine schedule during the cmyp planning period. 11

For the projection period, routine program costs associated with traditional vaccines was more than double that in the baseline year ($4 million to $10 million). Again, introducing the tetravalent doubled routine program costs, and introducing the pentavalent resulted in more-than 9-fold increase in program costs. Adding pneumococcal and rotavirus vaccines raised the total routine program costs per year. 3.5 Routine Program Costs for Other Country Groupings Table 6 below analyzes total routine cost estimates by country groupings for the baseline and projection period. For the baseline and projection years, population-weighted routine costs for the intermediate GAVI co-financing grouping are higher compared to the group of graduating countries. Costs for the projection years are double those of the baseline year. Table 6: Mean Annual Routine Immunization Cost Estimates by Country Groupings for the Baseline and Projection Years (millions $2009) Groupings Baseline Year Projection Years GAVI Co-Financing Groups Group 1 (<$975/capita) $35.1 million $87.0 million Group 2 ($975 - $1500/ capita) $70.6 million $134.3 million Group 3 (>$1500/capita) $55.9 million $101.4 million Population < 3 million $1.3 million $2.12 million 3 15 million $6.73 million $12.2 million 15 80 million $24.3 million $47.3 million > 80 million $79.3 million $161.6 million Socio-economic Group GDP/capita $1/day $25.4 million $46.8 million GDP/capita $1-$2/day $48.4 million $13.7 million GDP/capita >$2/day $59.9 million $92 million SWAp country $41.7 million $104.7 million Non-SWAp country $51.6 million $101.3 million Source: author s calculations. The table shows a clear positive relationship between routine program costs and population size and levels of socio-economic development in both the baseline and projection years. Figures for the projection years are generally twice those for the baseline year. SWAp countries have significantly lower routine immunization program costs on average than their counterparts (p<0.007). Figure 8 illustrates the positive relationship found in the analysis sample between GDP (constant 2009 US) and routine expenditures for immunization. 12

Figure 8: Relationship Between GDP and Routine Immunization Expenditures 150000000 Lowess smoother bandwidth =.8 050000000 100000000 150000000 Routine EPI Expenditures 0200000 400000 600000 GDP Constant 2009 millions Lowess smoother 0 Routine EPI Expenditures 50000000 100000000 0 bandwidth =.8 200000 400000 GDP Constant 2009 millions 600000 Source: authors calculations. 3.6 Unit Cost Analysis This section reports the population-weighted results of the analysis of unit costs, including the cost per capita, the cost per child, the cost per dose, and the cost per child immunized with the third dose of DTP3. The latter indicator has been used in previous cost-effectiveness analyses as a proxy indicator for the cost per fully vaccinated child (Brenzel and Claquin, 1994; Levin et al 2003). Table 7: DTP3 Coverage Between in Year 1 in the Study Sample WHO Region Mean DTP3 Coverage at Baseline Mean Number of Surviving Infants Mean Number of Children Receiving DTP3 12 AFRO (n=33) 71% 2.2 million 1.40 million EMRO (n=3) 79% 1.08 million 0.85 million EURO (n=7) 92% 0.31 million 0.29 million SEAR/WPRO (n=9) 81% 3.0 million 2.4 million Total (n=52) 76% 2.35 million 1.7 million Source: authors calculations. For the sample of countries, the average DTP3 coverage rate was 76%, ranging from 71% in the AFRO region to 92% in the EMRO region. The mean number of surviving infants in the sample was 2.35 million, with the countries in the EURO Region having the lowest number of surviving infants and children vaccinated with DTP3. The mean number of children vaccinated with DTP3 for the countries in the sample is 1.7 million in the baseline year (see Table 7). Countries with a SWAp mechanism have statistically significantly higher DTP3 coverage (p<0.0001) than those without (87% compared to 81%). 12 This figure is estimated by multiplying the number of surviving infants by DTP3 vaccination coverage rates. 13

Table 8 summarizes the population-weighted unit cost results for the baseline year for countries in the analysis sample. The average cost per capita is estimated to be $0.61, and the mean cost per dose is $1.57. The average cost per infant is approximately $21, and the cost per child receiving the third dose of DTP increases to $28. This figure is higher than previous estimates in the literature (Lydon P et al, 2008; Wolfson L. et al, 2004). Unit costs are highest for the countries in the EURO region. This may be related to the higher coverage levels, which would tend to increase the cost of providing services. Spreading routine costs over smaller population sizes and fewer children will increase unit costs. In addition, general health systems costs, such as the cost of labor, may be higher than those found in other regions. The cost per capita is lowest in the SEARO/WPRO regions ($0.35) most probably related to larger population sizes. Table 8: Mean Routine Program Unit Costs for the Baseline Year (2009 $USD) Indicator Cost per Cost per Cost per Cost/Dose Capita Infant DTP3 Baseline year (52) $0.61 $21.18 $27.96 $1.57 Region - AFR (33) $0.75 $20.88 $30.17 $1.85 - EMR (3) $0.72 $21.62 $27.62 $3.14 - EUR (7) $0.97 $53.60 $57.64 $2.87 - SEAR/WPRO (9) $0.35 $17.73 $21.64 $0.77 Vaccine Schedule - Traditional (5) $0.26 $14.93 $16.98 $1.27 - Tetravalent (7) $0.52 $20.09 $26.25 $1.60 - Pentavalent (20) $0.71 $24.84 $28.85 $1.91 - Penta/Pneumo (3) $1.24 $34.32 $41.80 $3.91 GAVI Co-Financing Grouping <$975/capita (34) $0.63 $20.27 $25.50 $1.68 $975 - $1500/capita (9) $0.80 $26.28 $37.91 $1.80 >$1500/capita (9) $0.34 $18.18 $24.10 $0.97 Population < 3 million (7) $0.78 $28.64 $33.39 $1.70 3 15 million (23) $0.72 $23.70 $30.50 $1.95 15 80 million (18) $0.69 $22.20 $27.95 $2.41 > 80 million (4) $0.50 $19.45 $27.15 $0.73 GDP per capita < $1 per day (12) $0.55 $15.30 $20.95 $1.52 $1 - $2 per day (18) $0.72 $24.05 $29.40 $1.83 >$2 per day (20) $0.61 $23.03 $31.64 $1.53 SWAp Country (24) $0.73 $25.37 $29.26 $1.94 Non-SWAp Country $0.50 $17.53 $26.83 $1.25 (28) Source: authors calculations. 14

The analysis found that the type of vaccine schedule in operation affected unit costs. The cost per dose for countries with a traditional vaccine schedule was $1.27, compared to $3.91 for countries that had introduced the pentavalent and pneumococcal vaccines. This represents a three-fold increase in the cost per dose. Increases were observed in the cost per infant and cost per child vaccinated with DTP3 with every new vaccine. Adding a tetravalent vaccine increased the cost per infant by $5 on average. Introducing the pentavalent vaccine resulted in an average cost per infant $10 more than a traditional vaccine schedule on average. Countries that introduced both pentavalent and pneumococcal vaccines had an average cost per infant of $34 that is $20 more per infant than the traditional vaccine schedule. Countries classified as intermediate under the GAVI country grouping for co-financing (GNI per capita between $975 and $1500) had higher unit costs than both the poorer and graduating countries. This finding may be related to lower than average DTP3 coverage rates for countries in the intermediate group (69% compared to 79% in the lowest group); and much higher than average routine immunization program expenditures (see Table 6). Similar trends were found for countries grouped according to the GDP per capita per day, with the intermediate group having higher unit costs. The analysis revealed a negative relationship between population size and unit costs, with larger countries having lower averages for cost per capita, cost/dose, and cost per infant. The cost per child immunized with DTP3 also declines with population size. However, there was an increasing relationship between population size and the cost per dose, except for the largest countries. This might be related to the type of vaccine schedule used in different countries, inefficiencies and wastage rates, or other factors. Unit costs (cost per capita and cost per infant) are significantly higher for countries with a Sector Wide Approach (SWAp) to health planning, budgeting, and coordination, compared to those countries without. It is unclear why this would be the case, though it might reflect smaller infant populations. Table 9: Mean Unit Costs for the Projection Period (2009 $USD) Indicator Cost per Cost per Infant Cost per DTP3 Cost/Dose Capita Projection years (261) $1.15 $41.16 $48.43 $2.02 Region - AFR (163) $1.54 $44.24 $54.65 $1.87 - EMR (18) $0.99 $33.35 $38.30 $5.33 - EUR (35) $1.05 $58.17 $61.10 $2.64 - SEAR/WPRO (45) $0.71 $38.43 $43.03 $0.77 Vaccine Schedule - Tetravalent (21) $0.62 $26.84 $31.76 $1.31 - Pentavalent (125) $1.05 $37.56 $45.59 $1.53 - Penta/Pneumo (46) $1.32 $42.10 $49.20 $3.57 - Penta/Pneumo/Rota (41) $1.45 $56.06 $62.30 $1.94 GAVI Co-Financing <$975/capita (169) $1.36 $45.71 $53.68 $1.62 $975 - $1500/capita (48) $1.15 $38.83 $45.46 $3.45 15

>$1500/capita (44) $0.55 $31.53 $3775 $0.96 Population < 3 million (36) $1.27 $40.42 $46.90 $1.70 3 15 million (107) $1.21 $39.36 $49.83 $1.90 15 80 million (95) $1.34 $42.28 $48.82 $2.32 > 80 million (23) $1.00 $40.75 $47.12 $1.83 SWAp Country (120) $1.48 $52.53 $58.85 $1.82 Non-SWAp Country $0.89 $32.16 $40.17 $2.19 (141) Source: authors calculations. The Africa region now has the highest cost per capita, but the EURO region has higher values for cost per infant and per child receiving DTP3, due to smaller population sizes and numbers of children for the projection period. There is now a declining trend between socio-economic status and unit costs, while there are no discernable trends associated with population size for the projection period. Unit costs for countries with a SWAP are significantly higher, except for the cost/dose. The results by vaccine schedule are more dramatic for the projection years. Figure 9 illustrates that for both the baseline and projection years, the cost per infant for each type of vaccine schedule increases with each new vaccine; and, that projection year figures are higher than baseline figures. In the projection period, introducing the tetravalent vaccine increases the cost per infant by $12 over the baseline case of traditional vaccines (at $15 per infant). Introducing the pentavalent vaccine raises the cost per infant by $23 over baseline; and including the pentavalent and pneumococcal vaccines result in an additional $27 per infant that is required over the base case. Figure 9: Cost per Infant by Type of Vaccine Schedule (Baseline & Projection Years) Pent/Pneu/Rota $56 Penta/Pneumo Pentavalent $25 $42 $34 $38 Tetravalent Traditional $15 $27 $20 $0 $10 $20 $30 $40 $50 $60 Projection Baseline Source: authors calculations. 16

3.7 Non-Vaccine (Delivery) Costs of Routine Programs There is much interest to understand the delivery costs for routine programs associated with new vaccines in order to adequately plan the cost of new vaccine introduction and to arrange for necessary financing. In this analysis, non-vaccine (delivery) costs include all other costs associated with routine program implementation except for vaccines and injection supplies. Table 10 shows that for the baseline year, non-vaccine costs represented 49% of total routine program expenditures, ranging from 32% in EMRO to 57% of routine expenditures on average in the AFRO Region. Non-vaccine (delivery) cost per capita was $0.32 on average, ranging from $0.15 in SEAR/WPRO regions to $0.59 in the EURO region. The cost per dose, cost per infant, and cost per DTP3 covered child showed wide variation by region as well. Table 10: Non-Vaccine (Delivery) Costs Baseline Year (2009 $USD) Indicator Share of Non- Vaccine Cost in Routine Programs Cost per Capita Cost per Infant Cost per DTP3 Cost/Dose Baseline year (52) 49.4% $0.32 $10.84 $14.80 $0.78 Region - AFR (33) 57.1% $0.43 $12.06 $18.17 $1.12 - EMR (3) 31.7% $0.23 $6.94 $8.57 $1.27 - EUR (7) 54.1% $0.59 $32.58 $34.46 $1.72 - SEAR/WPRO (9) 42.0% $0.15 $7.40 $9.19 $0.34 Vaccine Schedule - Traditional (5) 46.6% $0.14 $7.72 $8.92 $0.59 - Tetravalent (7) 54.8% $0.29 $11.31 $14.88 $0.88 - Pentavalent (20) 36.3% $0.27 $10.07 $11.49 $0.78 - Penta/Pneumo (3) 58.4% $0.83 $23.23 $28.14 $2.13 GAVI Co-Financing <$975/capita (34) 45.9% $0.30 $9.35 $12.13 $0.81 $975 - $1500/capita 63.3% $0.52 $17.02 $25.26 $1.01 (9) >$1500/capita (9) 44.1% $0.15 $8,34 $11.02 $0.46 Population < 3 million (36) 70.6% $0.56 $21.35 $24.77 $1.16 3 15 million (107) 52.0% $0.35 $11.66 $15.69 $1.00 15 80 million (95) 50.8% $0.37 $12.09 $15.15 $1.21 > 80 million (23) 47.2% $0.25 $9.34 $14.09 $0.33 SWAp Country 41.8% $0.33 $11.65 $13.33 $0.86 Non-SWAp 56.9% $0.30 $10.13 $16.08 $0.70 Country Source: authors calculations. 17

The analysis shows that delivery costs per capita decline with population size. While the share of non-vaccine costs is higher in countries without a SWAp, unit costs are lower primarily because population sizes are larger. The non-vaccine (delivery) cost per infant increases from $7.72 for the traditional vaccine schedule to $23 for countries that have introduced both the pentavalent and pneumococcal vaccines. Figures 10 and 11 show the difference in vaccine and non-vaccine costs by type of vaccine schedule for the baseline year. Vaccine costs account for a greater portion of the total cost per infant in the sample of countries with the pentavalent vaccine. Figure 10: Vaccine and Non-Vaccine (Delivery) Cost per Dose by Vaccine Schedule (Baseline Year, $2009) Penta/Pneumo $1.78 $2.14 Pentavalent Tetravalent $1.13 $0.72 $0.88 $0.78 Traditional $0.69 $0.59 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 Vaccine Non-Vaccine Source: authors calculations. Figure 11: Vaccine and Non-Vaccine (Delivery) Cost per Infant by Vaccine Schedule (Baseline Year, $2009) Penta/Pneumo $11 $23 Pentavalent $15 $10 Tetravalent $9 $11 Traditional $7 $8 $0 $5 $10 $15 $20 $25 $30 $35 $40 Vaccine Non- Vaccine Source: authors calculations. 18

The current GAVI policy (GAVI, 2012) is to provide countries with a new vaccine introduction grant equivalent to $0.30 per infant, which is significantly less than the delivery costs per infant for new vaccines found in this analysis. However, an important distinction needs to be made in that the GAVI grant is to help defray the costs of introducing new vaccines and is not designed to cover all delivery expenses of routine programs with new vaccines. The GAVI policy is currently being revised to be more in line with country needs. While this analysis compares delivery costs between different vaccine schedules that incorporate new vaccines, the analysis does not measure the actual incremental cost of adding a new vaccine into a country vaccine schedule. Additional country-level analyses are required to make these estimates. 3.8 Campaign Costs Almost all countries in the sample planned to conduct accelerated immunization activities, or campaigns, either in the baseline year, or during the projection years. Campaign costs comprise vaccine and operational costs, and population-weighted results are reported in Table 11. Table 11: Mean Campaign Costs and Unit Costs for the Baseline Year (2009 $USD) Indicator Costs Share of Cost per Capita Cost per Infant Delivery Cost Baseline year (52) $28.2 million 52.2% $0.30 $9.58 Region - AFR (33) $35.3 million 55.9% $0.43 $11.69 - EMR (3) $14.8 million 59.8% $0.46 $13.49 - EUR (7) $0.19 million 5.6% $0.03 $1.33 - SEAR/WPRO (9) $24.7 million 51.5% $0.14 $7.04 GAVI Grouping <$975/capita (34) $10.24 million 45.6% $0.24 $7.31 $975 - $1500/capita (9) $71.4million 55.7% $0.58 $16.85 >$1500/capita (9) $33.1 million 67.8% $0.16 $8.15 Population < 3 million (7) $0.3 million 39.4% $0.25 $6.98 3 15 million (23) $4.5 million 35.3% $0.45 $12.17 15 80 million (18) $7.6 million 50.4% $0.22 $6.46 > 80 million (4) $53.6 million 59.0% $0.33 $11.60 SWAp Country (24) $10.8 million 43.5% $0.23 $7.34 Non-SWAp Country $43.5 million 60.0% $0.36 $11.53 (28) Source: authors calculations. For the baseline year, the average annual expenditure on campaigns is $28.2 million, ranging from $191,500 for countries in the EURO Region to $35.3 million for countries in the AFRO Region. The analysis shows a clear positive relationship between campaign expenditures and population size for the baseline year. Countries in the intermediate GAVI grouping tend to spend the most per year on campaigns ($71.4 million), and non-swap countries have significantly greater campaign expenditures ($43.5 million versus $10.8 million for SWAp countries). 19

Delivery costs amounted to more than half of total costs of campaigns (52%) for the baseline year. This figure drops to 43% for the projection years. Delivery costs as a share of total campaign cost was greatest for countries in the EMRO Region (60%) and least for those in the EURO Region (6%). There is a positive relationship between the share of delivery cost and GAVI country groupings, with the largest share (68%) of campaign delivery costs in graduating countries. There is also a positive trend in the share of campaign delivery cost with population size. The cost per capita for campaigns for the sample of countries in the baseline year was estimated to be $0.30, and the cost per infant was $9.58. Countries in the EURO Region had the lowest campaign unit costs, while those in the EMRO Region had the largest figures. The campaign cost per infant was significantly higher in non-swap countries than in SWAP countries. 3.9 Immunization Costs and Level of Scale For the sample, there was a strong positive association between routine immunization resource requirements and the number of fully immunized children (Figure 17), as well as the total population. These results suggest that the level of scale of an immunization program is a good predictor of costs: the more children that need to be reached, the larger the resources required. In addition, the larger the population, the lower the average unit costs in the sample. Figure 12 illustrates this relationship for the entire sample of observations. Figure 12: Relationship between Routine Immunization Expenditures and Numbers of Fully Immunized Children DTP3 coverage * Surviving Infants bandwidth =.8 150000000 050000000 100000000 150000000 Routine EPI Expenditures 01000000 2000000 3000000 4000000 0 Routine EPI Expenditures 50000000 100000000 Lowess smoother Lowess smoother 0 1000000 2000000 3000000 DTP3 coverage * Surviving Infants bandwidth =.8 4000000 Source: authors calculations. 3.10 Affordability Indicators To examine the potential affordability of new vaccines for national immunization programs, costs were compared with data on government health expenditures (GHE) obtained from the WHO National Health Accounts Database, and estimates of gross domestic product (GDP) for each country obtained from the World Development Indicators Database from the World Bank. On average, routine immunization program costs represent nearly 10% of GHE and 0.1% of GDP for the baseline year in the sample of countries. For the AFRO Region, routine immunization 20

accounts for 12% of GHE on average. For the projection period, routine program costs as a percent of GHE doubles to 15.6% on average (Table 12). Table 12: Mean Affordability Indicators by Region for Baseline and Projection Years Region/ Indicator Baseline Year Projection Years Routine Cost as a % of GHE Routine Cost as a % of GDP Routine Cost as a % of GHE Routine Cost as a % of GDP AFRO 11.7% (32) 0.16% 20.9% (158) 0.28% EMRO 11.0% (3) 0.07% 16.4% (18) 0.1% EURO 3.5% (7) 0.07% 3.6% (35) 0.01% SEARO/WPRO 7.2% (7) 0.05% 9.3% (35) 0.04% Total 9.6% (49) 0.11% 15.6% (246) 0.15% Source: author s calculations. These indicators also vary by region. For instance, routine program costs account for 12% of GHE for countries in the AFRO Region, and 3.5% of GHE for those in the EURO Region in the baseline year. For the projection period, routine program costs are expected to account for 20% of GHE for countries in the Africa region, or 0.3% of GDP. These results are based on older vaccine unit prices that are higher than current price levels. Table 13: Affordability Indicators by Country Groupings Indicator Baseline Year Routine Cost as a % of GHE Routine Cost as a % of GDP GAVI Grouping <$975/capita (31) 14.2% 0.17% $975 - $1500/capita (9) 5.3% 0.06% >$1500/capita (9) 1.6% 0.02% Vaccine Schedule - Traditional (4) 3.4% 0.04% - Tetravalent (6) 6.3% 0.09% - Pentavalent (19) 10.6% 0.11% - Penta/Pneumo (3) 13.8% 0.17% Population < 3 million (7) 20.6% 0.14% 3 15 million (21) 7.2% 0.15% 15 80 million (17) 15.5% 0.17% > 80 million (4) 5.1% 0.07% SWAp country (24) 10.2% 0.12% Non-SWAp country 9.1% 0.01% (25) Source: authors calculations. Table 13 presents the affordability indicators by country grouping for the baseline and projection years. The cost of routine immunization accounts for 14% of GHE for poorer countries on average, as compared 1.6% of GHE for graduating countries. The table also shows that routine immunization program costs represent a growing share of GHE as more new vaccines are introduced, from 3.4% of GHE for the traditional schedule to 14% for countries that have adopted 21

both pentavalent and pneumococcal vaccines. In addition, the analysis shows that low-population countries and those with a population between 15 and 80 million have higher shares of GHE for routine program costs. Finally, routine program costs in countries with a SWAp mechanism represent slighty lower shares of GHE (9% compared to 10%, respectively) for the baseline year. More needs to be done to ensure that immunization programs are affordable and that cost estimates are realistic. Comparing results per year with GHE could form a useful spot check on the validity and viability of the cmyp results and their utility for planning purposes prior to submission of the cmyp to the WHO and GAVI Alliance. 22

4. Financing of the National Immunization Program This section presents population-weighted results in $2009 USD on trends in financing the routine immunization program and campaigns by source of funds, as well as results on the total financing gap and gap per child for the baseline year of the analysis. 4.1 Financing Levels In the baseline year, the total mean annual immunization program financing is $127.8 million, of which 52.7 million is financing of the routine program, $37.5 million is financing for campaigns; and, $37.6 million is financing for shared health system costs. This amounts to $1.30 of total financing per capita, and $1.13 of routine program financing per capita. The mean annual financing of the total program, ranges from $129,000 to $440 million, and from $129,000 to $115 million for routine services. Table 14: Financing of the National Immunization Program (Baseline Year) Indicator Total Immunization Financing Routine Immunization Financing Campaign Financing Shared Health Systems Financing Baseline year (56) $127.8 million $52.76 million $37.5 million $37.5 million Region - AFR (34) $130.1 million $44.4 million $34.2 million $54.5 million - EMR (5) $166.2 million $75.9 million $76.6 million $13.6 million - EUR (7) $33 million $19.48 million $0.19 million $13.3 million - SEAR/WPRO (10) $111.5 million $55.7 million $25.8 million $30 million Financing/Capita $1.30 $1.13 $0.33 $0.39 Financing/Infant $44.78 $21.03 $10.86 $13.45 Source: authors calculations. Figure 13 shows that on average, financing for routine services accounts for 54% of total financing, followed by campaign financing (24%), and shared costs (27%) in the baseline year. This pattern changes in the projection period when 69% of financing is expected for routine services, and 22% is for shared health system costs. Campaign financing only accounts for 8% in the projection period. 23

Figure 13: Share of Total Financing by Program Component (Baseline and Projection Years) 80% 70% 60% 50% 40% 69% 30% 54% 20% 10% 24% 27% 22% 8% 0% Routine Campaign Shared Source: authors calculations. Baseline Projected 4.2 Sources of Routine Program Financing The sources of financing of the routine immunization for the sample of cmyps include the government, pooled funds that include government and partner resources, bilateral and multilateral assistance, the GAVI Alliance, non-governmental organizations (NGOs), community, and other sources such as private organizations and foundations. Figure 16 shows that government and pooled financing accounts for the largest share of financing of the routine program (56%) in the baseline year. GAVI financing represents 26% of total routine financing, and financing from multilateral organizations, such as WHO and UNICEF, account for 10% of total routine program financing. Figure 16: Total Routine Program Financing by Source (Baseline Year) 10% 3% 4% 26% 56% Government GAVI Multilateral Bilateral Other Source: authors calculations. Table 14 below disaggregates the source of total financing for routine programs for the baseline year. The share of government and pooled financing of routine programs is largest for the SEARO/WPRO Region (72%) and smallest for the EMRO Region (22%). By contrast, the shares of 24

GAVI financing (63%) and multilateral financing (14%) are largest (63%) for the EMRO Region countries. Government and pooled financing play the largest role in countries with a traditional vaccine schedule (59%), and those that have introduced pentavalent and pneumococcal vaccines (58%). Multilateral financing as a percent of routine program financing declines with the addition of new vaccines into country programs. While the proportion of support may be declining, the absolute amounts are increasing. Table 14 shows that the share of government and pooled financing increases with population size, from 37% in the smaller countries, to 72% in the largest countries. There is also a positive relationship between the role of government and pooled financing and socio-economic status, with countries having a higher GNI/capita having a greater share of government and pooled financing. The share of GAVI and multilateral financing declines with increasing country income. Finally, it appears that countries with a SWAp have significantly lower government and pooled financing shares (61% compared to 60%) than their counterparts, but higher shares of GAVI assistance (39% versus 15%). Table 14 also presents results on total routine program financing per infant. The average for the sample is $21. Total financing per infant increases with each additional new vaccine, from $18 in countries with traditional vaccine schedules, to $30 per infant in countries that have introduced both the pentavalent and pneumococcal vaccines. Financing of routine programs per infant declines with population size, and financing per infant is significantly higher in countries with a SWAp than their counterparts (p<0.001). Government financing per infant is $12 on average for the baseline year, ranging from $5 in EMRO countries to $33 in EURO countries. The poorest country governments finance lower amounts per child ($10) than countries with higher GNI/capita ($16 per child). However, it is interesting to note that there is little difference in government financing per child between the intermediate and graduating country groupings. The most interesting finding is that government and pooled financing per child increases with each new additional vaccine introduced into the schedule, from $8 for countries with traditional vaccine schedule, to $20 for countries with pentavalent and pneumococcal vaccines. This suggests that governments are committed to immunization and new vaccines and are mobilizing the necessary resources to cover increasing costs. Finally, government financing per child is statistically significantly higher in countries with a SWAp than their counterparts (p<0.0001). 25

Table 14: Routine Financing Source by Population Group (Baseline Year) 13 Indicator Government & Pooled Financing GAVI Financing Multilateral Financing Financing per Infant (Government Financing per infant) Baseline year (52) 56% 26% 10% $21 ($12) Region - AFR (33) 48% 30% 12% $21 ($11) - EMR (3) 22% 63% 14% $22 ($5) - EUR (7) 57% 23% 3% $54 ($33) - SEAR/WPRO (9) 72% 14% 8% $18 ($13) GAVI Grouping <$975/capita (33) 44% 34% 14% $20 ($10) $975 - $1500/capita 57% 27% 9% $26 ($15) (9) >$1500/capita (9) 89% 2% 2% $18 ($16) Vaccine Schedule - Traditional (4) 59% 14% 23% $18 ($8) - Tetravalent (6) 38% 43% 10% $20 ($9) - Pentavalent (19) 48% 41% 8% $25 ($13) - Penta/Pneumo (3) 58% 31% 9% $30 ($20) Population < 3 million (7) 37% 13% 12% $37 ($11) 3 15 million (23) 43% 30% 16% $24 ($11) 15 80 million (17) 42% 33% 15% $22 ($11) > 80 million (4) 72% 20% 5% $19 ($14) SWAp Country (24) 51% 39% 8% $25 ($14) Non-SWAp Country 60% 15% 13% $18 ($11) (27) Source: authors calculations. Figure 17 shows the average sources of financing of the routine program by source for the projection years. Government and pooled financing are expected to decline to 40% of total routine program financing, while GAVI financing is estimated to increase to 46% of routine program financing. Multilateral and bilateral financing is expected to decline, while financing from other sources is shown to increase as a percent of total routine program financing. 13 This table focuses on the three main sources of financing for routine programs. 26

Figure 17: Total Routine Program Financing by Source (Projection Years) 7% 1% 6% 40% 46% Government GAVI Multilateral Bilateral Other Source: authors calculations. While there are declines in the share of financing from government and pooled resources between the baseline and projection period, the total estimated amount of financing from this source increases from $31.5 million to $43.7 million in the fifth projection year (or a 39% increase in financing by governments). 4.3 Secure Routine Program Financing Countries also classify whether each financing source and amount is secure or probable. Secure financing is those amounts that can be assured in subsequent years. In the baseline year, nearly 100% of financing is classified as secure financing for the routine program and campaigns. Financing of shared health system costs is less secure at 87% of total financing in the baseline year. For the projection period, the share of secure routine program financing declines to 54% of total financing; 39% for campaigns; and 78% for shared systems costs. These figures suggest that campaign financing is the least secure and perhaps the most challenging to plan. There is some variation in the proportion of financing classified as secure by region. For instance, secure financing of the routine program represents 93% of total routine financing in the EURO Region; but only 48% of total routine financing in the SEARO/WPRO Regions. The proportion of secure campaign financing is lowest for the EMRO Region (31%). Figure 14 illustrates trends in total and secure financing by year for the entire sample, and for the AFRO Region. The gap between secure and total financing increases over time. The difference between these lines is the first financing gap that needs to be met by national programs. 27

Figure 14: Mean Total and Secure Routine Immunization Financing by Year for the Total Sample and for the AFRO Region (Baseline and Projection Years) $140,000,000 $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 Routine Secure Routine AFRO Routine AFRO Sec Rout $0 Source: authors calculations. Figure 15 presents differences between total routine program financing and secure financing for the baseline and the projection period. There is little discrepancy between total financing and secure financing for both time periods for the EURO Region. For the other regions in the baseline year, total financing and secure financing are relatively equal. However, for the projection period, large discrepancies appear between total and secure financing estimates. Figure 15: Routine Total and Secure Financing by Region (Baseline and Projection Periods) $140,000,000 $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 AFRO EMRO EURO SEA/WPRO Total Base Routine Base Sec Routine Proj Routine Proj Sec Routine Source: authors calculations. 28

4.4 Financing Sources for Routine Vaccine and Non-Vaccine (Delivery) Costs A subsequent analysis was done to evaluate sources of financing for vaccine costs (vaccines and injection supplies) and all other non-vaccine or delivery costs. Figure 16 illustrates that government and pooled financing sources account for 41% of total vaccine costs. GAVI resources finance 48% of vaccine costs, with multilaterals, bilaterals and other sources financing the remaining balance of vaccine costs. Figure 16: Financing Sources for Routine Secure Vaccine Costs (Baseline Year) 48% 41% 2% 8% 0.2% Government GAVI Multilaterals Bilaterals Other Source: authors calculations. Governments also are contributing a significant share of financing of non-vaccine delivery costs. Figure 17 illustrates that government financing accounts for 53% of financing of delivery costs in the baseline year. GAVI financing contributes to 28% of non-vaccine delivery costs, most probably through Immunization Services Support (ISS), and possibly Health Systems Strengthening (HSS) support or New Vaccine Introduction support. 29