Sourcing of ARVs & HIV diagnostics Procurement for Impact P4i AMDS ANNUAL STAKEHOLDERS AND PARTNERS MEETING 29 September 2014
Global Fund: Procurement for Impact: P4i Our objective was straightforward: To Increase Access to Products By fundamentally changing the way we work across the supply chain Earlier involvement & closer collaboration with manufacturers Improving our purchasing capability & changing our contracting models Optimising the international supply chain to reduce cost Better planning & scheduling to support continuity of supply Delivering more products at the right time & place to more people Global Fund: procurement & contracting Procurement Agent: operational management Increased volume visibility & financial flows Longer term contracts with committed volumes for the appropriate period Focus on value as well as affordability: consider both commercial and technical criteria
better planning & allocation of funds: country level leveraging scale in commodity procurement: global level
ARVs: demand is increasing year-on-year with ongoing supply challenges Volumes of ARVs are increasing year or year: 11.7 million in LMIC (end 2013) Current Global Fund treatments reach 6.6m people in LMIC (mid-2014) Global Fund target to increase this to > 7.6m by 2016 Supplier delivery performance has been poor - made worse by current order chaotic practices and some procurement approaches Investment needed for manufacturers to allocate more production capacity in a sustainable way and to ensure sufficient and reliable supply
ARVs: the new procurement approach is broad based & designed to address a range of objectives Sustainable supply Continued supply of products through all stages of the lifecycle De-risk API supply Improved payment and admin processes On-Time Delivery Reduced lead times Improved Delivery Performance Mitigate force majeure Competitive pricing & affordability Leveraged volumes Improved planning and longer term contracts Use supplier expertise Collaboration to protect reasonale margins Quality & Regulatory Extend product shelf life Broader country registration footprints These objectives will result in a new form of supplier engagement
Lifecycle Management and ARVs We have overlaid the key ARV attributes to the lifecycle to determine the strategic priorities Pipeline Emerging Growing Mature Declining Attributes Few FPP suppliers Technical Driven Licensing Focus on inhouse API supply More suppliers Reducing FPP suppliers Fewer FPP suppliers Continuous process improvement and investment Diversification of API sources Concentration of API sources No more investment Few API sources Less competition Competitive drive Few incentives to manufacture Challenges for suppliers Lack of clarity for investment Recover from investment and Growth Brutal competition Ethical exit plan GF Strategy Implication Address Long lead-time and poor delivery performance Early engagement Competitive cost Deliver Sustainabiluty: Mitigate price volatility and secure supply Time
Key elements 1. Based on lifecycle management to drive affordability and availability. 2. Initial volume commitments will be made out to the end of 2016 3. New entrants will be encouraged by capping volume commitments 2. Suppliers encouraged to supply both high volume and low volume products 3. Initial competitive tender and longer term value creating partnerships 4. Long term partnerships based on a series of goal orientated, joint collaborative projects 5. Future volume commitments dependent on achieving agreed objectives
Paediatric ARVs: Collaboration to improve supply and access Paediatric ARV Procurement Working Group (PAPWG) Egypt Funders Mauritania Mali Niger Procurers Guinea Observers C.A.R. Collaboration Cameroon of major funders & procurers Uganda Kenya Coordinated procurement D.R.C. Consolidate, review, adjust orders Tanzania Review & act on low volume, subbatch orders Angola Advise non-members of procurement timelines to facilitate broader mutually beneficial timeline alignment Advocating for use the optimal formulations (IATT list) South Africa Procurement Consortium
In 2013, 66 countries ordered paediatric ARVs through the Procurement Consortium of the PAPWG Country CHAI SCMS UNICEF PPM Afghanistan Albania Angola Armenia Belarus Egypt Brazil Burkina Faso Burundi Mauritania Gambia Cambodia Mali Niger Djibouti Cameroon Chad Sudan Cape Verde Guinea Central African Republic Chad Nigeria Guine Comoros C.A.R. Nigeria a- Congo Cameroon Bissa Cote d'ivoire Liberia u Uganda Cuba Cameroon Burkina Faso Congo Kenya Somalia Togo D R Congo Cote d Ivoire D.R.C. Djibouti Ghana Equatorial Guinea Burundi Dominican Republic Tanzania East Timor Egypt Angola El Salvador Equatorial Guinea Zambia CHAI Gambia Malawi Georgia SCMS Mozambique Ghana Guatemala UNICEF Zimbabwe Guinea Guinea Bissau PPM Guyana Multiple Swaziland Haiti Honduras Country CHAI SCMS UNICEF PPM Indonesia Iran Kenya Kyrgyzstan Laos Liberia Madagascar Malawi Mali Mauritania Mongolia Mozambique Myanmar Nepal Nicaragua Niger Nigeria Pakistan Papua New Guinea Philippines Somalia Sri Lanka Sudan Swaziland Tanzania Thailand Togo Uganda Uzbekistan Vietnam Yemen Zambia Zimbabwe
HIV Diagnostics: Global Fund spend is increasing in line with WHO guidelines & international targets In 2013 and 2014 to date the overall reported spend is $113m broken Down as shown RDT $77m 63% 82 million tests; 15 manufacturers CD4 $34m 30% 5 manufacturers Viral Load $7.7m 7% 5 manufacturers
Programmatic, Financing & Procurement actions underway 1. Global Fund Quality Assurance Policy for Diagnostics 2. Expert Review Panel to expedite access to high public health impact products (ERP) POC for CD4, Viral Load, Early Infant Diagnosis, molecular technologies using dried blood spots for viral load with UNITAID 3. Policies for the procurement of health products Policies on Procurement and Supply Management of Health Products Guidance for financing: Strategic Investment Notes for HIV and Health Systems Strengthening (laboratory systems) Guidance for the Procurement & Use of HIV RDTs 4. Leveraging existing entities and initiatives
Addressing the Challenges example of viral load 1 Clinical algorithm and linkages to care 2 Funded Demand To Scale-up effective Viral Load testing REQUIRES 3 4 5 Quality Assurance Policy Effective Supplier Engagement Optimal Selection and Placement 6 Laboratory & sample transport Systems 7 Planning and Forecasting Some strategic elements are in place
specifically to support scale-up of effective viral load services 1. Mapping country status readiness/optimisation of existing resources (with partners including CHAI, MSF, PEFPAR, FEI) 2. Supporting development of funded demand: robust funding requests, grant design & effective implementation Technical considerations for expansion of viral load testing ; WHO, PEPFAR, CDC, Global Fund, ASLM http://www.who.int/entity/hiv/pub/arv/viral-load-testing-technical-update Programming of laboratory investments with a focus on viral load testing ; Global Fund http://www.theglobalfund.org/en/procurement Development of National Strategies for HIV Viral Load Implementation Workshop, Ethiopia; September 2014; ASLM, CADU, CHAI, Global Fund, PEPFAR, WHO Technical support to countries (with partners) 3. Engaging with suppliers Better pricing and optimal contracting modalities: minimum packages of service; framework purchase/lease/rental/performance options
HIV Dx Strategy: consultation launched: will be broad based and designed to address a range of objectives Sustainable Supply Continued supply of products Matching the specific needs of country programmes Competitive pricing & affordability Leveraged volumes Improved planning & longer term contracts Use supplier expertise Product standardisation These objectives will result in a new form of supplier engagement On-Time Delivery Reduced lead times Simplify supply logistic chains & distribution models Improved Delivery Performance Mitigate force majeure Quality & regulatory Procurement of Quality Assured products Support uptake of new proven technologies improving programme performance
http://www.theglobalfund.org/en/procurement/information/ http://www.theglobalfund.org/en/p4i/events/ http://www.theglobalfund.org/en/business/ Thank you.