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CHAI VG Facility

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CHALLENGE

Fragmented global health markets often result in high prices and low capacity allocations to the poorest:

  • Capital intensive manufacturing processes for many global health interventions require early visibility into and firm commitments for volume requirements to allow suppliers to offer lower prices to expand access for those most in need
  • Current procurement practices combined with demand and funding uncertainty do not address these needs and often lead to high risk premiums and supply shortages

PROGRAM STRATEGY

To ensure that existing life-saving drugs, preventatives, and diagnostics are introduced into countries where people need them most at an affordable price

  • Firm commitments provide valuable certainty to suppliers that can be utilized to achieve price reductions and incentivize capacity expansion to increase access for those most in need
  • Expanding the reach of the volume guarantee tool through backstop funding support to CHAI will accelerate these health impacts across a greater set of sectors

PARTNER

Clinton Health Access Initiative (CHAI)
CHAI works to improve markets for medicines and diagnostics, lower the cost of treatments, and expand access to life-saving technologies across the world

Foundation focus: To facilitate CHAI’s price reduction and increased access efforts utilizing volume guarantees by providing partial backstop support to CHAI in the form of a funding commitment

INVESTMENT

Backstop funding commitment to CHAI to facilitate volume guarantees
Date: November 2015
Co-Investors: none
Associated funding: CHAI will contribute 10% of the backstop support for each volume guarantee under the facility

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