Getting medical supplies where they’re needed most
This week, the foundation and the Swedish International Development Cooperation Agency (Sida) announced a US$150 million combined financial guarantee that will help UNICEF ensure that low- and middle-income countries can get vaccines and other health supplies when they are needed.
This financing addresses a predicament that often thwarts these countries from buying health care supplies: the need for cash up front. That can mean paying for goods six months before receiving them, yet funding streams don’t always follow the same timeline. The problem can affect everything from routine childhood immunizations to maternal health care to HIV treatment. Now, with the need for massive volumes of COVID-19 vaccines and related supplies, the inequities have worsened.
Of the new commitment, Sida has guaranteed $50 million and the foundation $100 million through our Strategic Investment Fund. The financial guarantee will allow UNICEF to expand its health care supply procurement to meet ongoing needs in the countries it serves through 2025.
We asked Yusuf Yusufari, a senior program officer in our Nigeria office who’s spent the last decade working on vaccine delivery at the national and subnational level, to talk about a success story there that informed the foundation’s support of this financing tool. Julie Frye, who works on our Strategic Investment Fund team, will share a little about how the program works to support our broader global health goals beyond COVID-19.
For more background on the Strategic Investment Fund and its role in our charitable mission, here’s a Q&A with Vidya Vasu-Devan, director of the fund, from earlier this year.
First, can you tell us a little more about what problem this financing is addressing?
Julie Frye: When governments buy through third-party procurement agents such as UNICEF, these agents require upfront payment to ensure the government’s commitment. On one level, it makes sense because these agents, even when they are UN or multilateral agencies, cannot end up with warehouses full of goods that buyers no longer want. Remember, some of these commodities must be ordered six months in advance. But low- and middle-income countries (LMICs) don’t always have the cash flow to pay in advance, particularly when they have unanticipated public health expenses. Sometimes, it’s a matter of waiting for budget cycles or, say, a loan from the World Bank. That time lag can create serious delays in getting critical commodities where they’re needed. We’ve seen this very clearly in the last 18 months. High-income countries were able to snap up large quantities of COVID-19 vaccines, tests, and treatments, leaving LMICs at the back of the line. It’s also affected medical supplies for more routine care, such as maternal health and childhood vaccinations.
How will this financial guarantee help?
JF: It will allow UNICEF to place orders with manufacturers without requiring that countries pay for the products in advance. UNICEF can also go out and negotiate early in the process, knowing this finance mechanism is in place. This way, critical health care supplies will reach those who need them more quickly, and countries will have a little more time to budget for them. UNICEF can use this fund for COVID-19 or other health care needs such as polio vaccines, syringes, oxygen concentrators, diagnostic tests, and so on. Working with UNICEF, each country determines its own needs. UNICEF says having this financial guarantee can speed up the process by as much as five months. If people are dying from COVID-19 or there’s an outbreak of measles, those five months can be very meaningful—and lifesaving.
Yusuf Yusufari: This financial guarantee is another way for the foundation to meet its goal of ensuring that vaccines and essential health commodities reach every family wherever they live, when they need them. The idea is to remove barriers so lower-income countries can more easily access the resources they need.
What’s the foundation’s history with this kind of financing?
YY: It began in 2015, when Nigeria was struggling to improve its immunization program. At the time, the country was in the midst of political transition, and government financing flows were delayed. That was having an effect on vaccinations. Immunization rates for basic childhood vaccines were at unacceptably low levels. For example, coverage for Penta3, a childhood vaccine that tackles diphtheria, pertussis, tetanus, hepatitis B, and Haemophilus influenzae type b, was at 33%. One of the reasons for the low immunization rates was vaccine stockouts—that is, doses weren’t available at the clinics when vaccination sessions were scheduled. In some states, 40% of clinics didn’t have enough vaccines. We were also seeing an increase in the number of polio cases.
JF: The effect on the health care system is very significant when something like this happens. Let’s say you’re a parent bringing your child to a clinic for an immunization, but the clinic has run out of vaccines. Maybe you try again, but at some point, you’re going to give up. When this happens, we start to see this larger cohort of children who are unvaccinated, and there’s no good way to catch those kids up. Over time, those children are individually at risk of contracting the disease, and the larger community is at greater risk due to the lower vaccination rates that may compromise herd immunity. If the public health care system has what it needs, these children and families can be served. If not, people and communities are left even more vulnerable.
What did the foundation do?
YY: The issue was urgent. Vaccines take time to manufacture, and for a country the size of Nigeria, manufacturers require a minimum six-month lead time. The government was working on financing, but it was clear the country didn’t have the immediate cash on hand to put in large vaccine orders on time. The foundation wanted to find a way to help bridge the funding gap.
JF: The foundation guaranteed $15 million to UNICEF so it could secure the needed supplies. Nigeria was able to resume vaccination programs, and paid for the shipments when its funding came through.
YY: Ensuring that UNICEF had the resources to procure vaccines and deliver them on time really solved the availability problem. Vaccination rates began to improve. For example, we saw a 17% jump in Penta3 coverage in 2018. Today, stockouts have declined from 40% down to 5% in polio high-risk states. We’re now on track to achieve our zero stockout target.
This program has expanded beyond Nigeria; what else does it support?
JF: Between 2015 and today, UNICEF has used it to help more than 100 countries get the supplies they need. In 2020, at the beginning of the pandemic, we raised our total guarantee commitment to $65 million. Other donors have contributed, too. It’s been very effective. More than 840 million doses of vaccine have been procured with the backing of this financing. UNICEF was able to get oxygen concentrators for India when they really needed them. It prepurchased ultra-cold chain storage. It purchased more than 720 million syringes so that LMICs would have them during the pandemic. That’s why we’re further increasing our commitment. That will allow UNICEF to do even more of this work.
Why not just make grants directly to the countries in need?
JF: We can finance far more commodities through this type of mechanism than we can through traditional grantmaking. It isn’t right for every situation, but it’s really helped address this particular problem. It works like a revolving line of credit. In the last five years, UNICEF has been able to procure $900 million worth of health care commodities on behalf of countries that need them using this kind of financial tool. Seeing that success has catalyzed other donors to make similar investments, too. We see it as a really strong example of how philanthropy can leverage resources to fill gaps that other entities can’t. We think that for UNICEF and potentially other UN entities, it unlocks a problem that’s not easily solved via another means.