14th GAVI BOARD MEETING
Abuja, Nigeria, 4-5 December 2004
SUMMARY REPORT

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6 Financing

• The gravity of the financial situation that would face countries which introduced the more expensive combination vaccines was not anticipated at the outset of GAVI. The momentum and excitement of the early days were infectious and developing countries hastened to come on board. Now that the situation has become clear, it is essential that GAVI uphold its dynamic nature and change according to lessons learned.
• In the early planning phases of GAVI it was expected that broad-based health sector support would increase, and therefore that support from the Vaccine Fund could be limited to five years, as other funding would become available. Now it appears that the expected increases have not materialized and it would not be appropriate or helpful to approach donors at this time to request more money for immunization and health. So the Vaccine Fund’s definition of time-limited funding will need to be extended to longer than five years.
• The early assumption that vaccine prices would drop in response to greater demand has also not materialized. However, we must revise the common thinking about vaccines prices: new vaccines do not cost pennies per dose, nor should they; even at higher prices vaccines are one of the most cost-effective health interventions.
• Looking forward it is essential that country priorities are at the center of decisions. It might be that different bridge financing models are needed for different situations. But this needs to be weighed against the need to keep transaction costs low – including at the global level – by employing simple procedures.

DECISIONS
The Board:

6.1 Agreed not to create a Board subgroup to explore with major bilateral and multilateral assistance agencies their willingness and ability to increase financing for health and immunization programs, but requested the Executive Secretary to identify other opportunities such as the High Level Forum to do this work.

6.2 Agreed that bridge financing should not be restricted to a $300 million ceiling but that flexibility is needed, and that a period longer than five years may be required, at least in certain countries.

6.3 Agreed that differentiation of countries according to GNI, so that the poorest countries may contribute a lower co-payment than the less poor countries, should be explored.

6.4 Requested the Financing Task Force to look at perhaps three different countries with different situations and calibrate recommendations based on these in depth analyses. The analysis should be conducted in the context of a risk management approach. A complete investment case for bridge financing would be submitted to the Board in March 2005.

6.5 Requested the Working Group to revise the current process for country applications and financial support to ensure that in the future, financial implications are fully understood by the countries prior to introduction of new vaccines with GAVI/Vaccine Fund support. This could include engaging the involvement of finance ministries.

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