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Immunization Financing Analysis - A look across 50 countries

Introduction

By September 2005, the last set of countries submitted their Financial Sustainability Plans GAVI. In order to bring closure to the FSP development phase and derive the key information from the data, a complete analysis of the full set of countries available was undertaken in late 2006, early 2007.

More specifically, the data provided through the FSP costing, financing and gap analysis tool were extracted into the immunization financing database. The data extracted was processed and presented according the methodologies defined by the database development team. This key findings from this analysis are presented below and based on the data from 50 countries as reported in the financial sustainability plans submitted to GAVI.

• Full report
  pdf, 313kb
• Country pages
• Indicators
• Presentation GIM
  pdf, 397kb
• Presentation GAVI Working Group
  pdf, 397kb
• Presentation SAGE
  pdf, 615kb
• Presentation iHEA
  pdf, 2.02Mb

Immunization expenditures are on the rise…

Since 2000, expenditures for routine immunization in the poorest countries have seen an upward trend and are projected to increase in the future. Whereas total baseline expenditures for the 50 GAVI countries totalled $153 million, by 2010 the needs to both sustain the gains and scale up will exceed $500 million. In other words, resource requirements to scale up immunization during 2005-2010 need to increase beyond baseline investments in immunization by at least a factor of 3 - or approximately a doubling of current investment that include GAVI support from Phase 1.

Figure 1 - Immunization expenditures and future resource requirements (2005-2010)

On a per infant basis, baseline expenditures averaged $6.0. These increased to $9.2 in the year with GAVI and are projected to reach an average of $17.5 per infant during the 2005-2010 period in order to scale up of immunization coverage, including with new vaccines.

Cost profile of immunization is changing….

Looking at the composition of expenditures gives some insight as to what cost categories are driving the increase. It is not surprising to see that GAVI awarded vaccines for HepB and Hib vaccines account for the majority of the increase. Combined with related injection equipment, vaccines are now becoming the single largest cost driver of routine delivery systems. Their importance in overall expenditures will increase in the future to account for at least 50% of overall resource requirements. Such a changing cost profile for immunization will have implication in terms of mobilizing greater annual funding to guarantee the provision of all vaccines and injection materials to countries in the future.

Figure 2 - Immunization expenditures profile (2005-2010)

The variability in cost profiles for immunization comes out strongly when grouping countries according to their vaccination schedules. The average cost per infant in countries that expanded their immunization programme beyond the traditional vaccines (BCG, DTP, OPV and Measles) to include HepB monovalent is approximately $13. This contrast against the $20 per infant in countries that introduced DTP+HepB+Hib combination vaccines. The relative share of new vaccines in the total can range from $4 per infant in countries with monovalent HepB vaccine, to $11 per infant in the group of countries that introduced DTP+HepB+Hib. The cost profiles will vary and the requirements for vaccines can be expected to increase by a factor of 3 to 4 if both HepB and Hib containing vaccines are added to national immunization schedules.

It should be noted that the cost implication of new vaccines will go beyond the vaccine alone. Overall, non-vaccine recurrent expenditures have risen by 22% and are mainly attributable to increases in cold chain equipment and maintenance, training, additional human resources, vehicles, transportation, and surveillance activities.

Other important sources of variability in costs….

Whereas the variability of expenditure flows are largely influenced by differences in immunization schedules and in human resource costs, the data shows evidence of further variability in unit costs (cost per infant) linked to economic development, demographics, performance and delivery strategies. The analysis suggests that expenditures on immunization will tend to have a positive relationship with levels of development, income and coverage (see full report).

In addition, many countries rely on supplemental immunization activities to reach more children, and respond to epidemiological needs or eradication initiatives. While mass campaigns, national immunization days, mop-up activities and outbreak responses are becoming an integral part of national immunization programmes, the amounts being spent to support these are important, and can sometimes exceed the resources provided for routine delivery systems.

Immunization financing is also on the rise…

Increasing costs always come with the challenge of mobilizing the needed financing. The good news is that since 2000 immunization financing experienced a positive trend in the past years, and funding from all sources has been increasing to support routine immunization. This would suggest that overall, GAVI Phase I support has been additional with only limited replacement of existing investment for immunization. In the absence of GAVI awards, immunization financing from all sources has increased between the baseline and the year with GAVI. The rise in immunization financing is confirmed over the 2005-2010 period from most sources.

Figure 3 - Immunization financing trends and profile (routine)

Individual country variability show different trends than those observed overall. Of the 50 countries used in the analysis, 5 saw a drop in their overall funding even with additional GAVI resources made available. By excluding GAVI Phase I support, 17 countries saw a drop in routine immunization financing. Having said this, it is difficult to ascertain whether this trend is simply cyclical, or indicative of a real downward movement in financing. Funding for vaccines and capital equipment can explain upward and downward movements depending on stock levels for vaccines and needs to invested in new equipment (ex: cold chain). As such, it is difficult to conclude that these specific country trends would have occurred whether or not GAVI resources had been made available.

The immunization financing trends are quite different if funding for campaigns are included. The funding to support these are important, and can sometimes exceed the resources provided for routine delivery systems. This is the case for multilateral donor agencies where campaign funding often exceeds flows for routine immunization. If campaign funding were included, financing from multilaterals would represent 30% of overall financing and approximately $4 per infant. Although substantial funding for immunization are tied up in supplemental immunization activities, campaigns as a strategy to deliver vaccines continue to play a significant role in reaching the objectives and targets of immunization programmes.

The financing trends and profiles will show important variability from one country to the next, particularly when looking beyond aggregate financial flows and by specific source of funding. The trend in government financing for immunization is one characterized by increasing financing - from $3.4 to $4.0 per infant between the baseline and the year with GAVI; and projected to be around $5.6 per infant over the 2005-2010 period. Findings showed that the ability of national government to financing immunization increases with income levels and development status.

Funding gaps are looming ….

Despite positive immunization financing trends, expected future funds will not be enough to match the needs to sustain the gains, and scale up immunization to complete the HepB and Hib agenda. The growth rates in financing are far outpaced by the growth rate in resource requirements presented earlier in this analysis even with GAVI Phase I resources available.

Overall funding gaps during 2005-2010 will approximate $4.3 per infant per year if both committed and non-committed funds are considered. Regionally, the largest gaps are found in Africa where the shortfalls exceed $5.0 per infant per year in order to reach programme objectives.

Figure 4 - Funding gaps and trends - 2005-2010

The size of the gaps reflect the different capacities and opportunities available to countries to mobilize the needed resources for their programme in the short term and medium term.

Despite the favourable context for immunization financing, there is little evidence to suggest that the GAVI Phase I model, with the new funds it provided, succeeded in fully catalysing the needed support for immunization to ensure a financially sustainable transition.

Financial Sustainability is far from assured…

Getting on a path of financial sustainability during the first phase of GAVI has been constrained by the optimistic assumptions about vaccine price movements towards lower and affordable levels. With the exception of HepB vaccine in monovalent formulation, the price of other GAVI supported combination products have shown a pattern of either stagnant or rising cost per dose since 2000. Based on UNICEF Supplies Division information¹, the price of DPT-HepB+Hib vaccine rose from $3.20 to $3.60 between 2000 and 2006.

Figure 5 - Trend in GAVI supported vaccines - 2000-2006

Moving towards financial sustainability is invariably linked to future macroeconomic trends and how these will affect the availability of overall resources for health. This in turn will be influenced by the ability to finance immunization given health budget constraints, and the budgetary impact of expanding immunization with HepB and Hib vaccines.

Within the overall health financing context, routine immunization represented on average, 2.4% of government health expenditures in the baseline year. During 2005-2010, immunization is expected to average 3.7% of projected government health expenditures. If campaigns and shared health systems expenditures are included, total immunization expenditures would represent more than 5% of overall government health expenditures.

Stratifying the analysis by vaccine introduced gives a sense of the relative affordability of different vaccination schedules. During 2005-2010 when we can expect full introduction of GAVI Phase I supported new vaccines, the findings suggest that for those that opted for monovalent HepB vaccine, a 1.1% allocation of the government health budgets would be sufficient to cover the entire future needs to scale up immunization. This compared to an average of 6.0% and 9.2% in the groups of countries that introduced DTP-HepB or DTP-HepB+Hib vaccines.

If we take as a benchmark the 3.7% average future immunization requirements in estimated health budgets, the figures presented suggest that the pressure on health budgets will be significant in countries that choose to introduce combination vaccines with Hib. This raises concerns about their medium term affordability at current price levels for these vaccines.

¹ See UNICEF website http://www.unicef.org/supply/index_7991.html (last accessed in December 2006)

In summary …

This analysis with 50 GAVI countries allowed for some of the original funding assumptions of the GAVI model for immunization financing to be better tested against the realities in a wide set of countries. While the GAVI model for immunization financing was expected to be a functional model under the following assumptions:

• Prices of new and underused vaccines would decline over the initial GAVI Fund grant period so that the future recurrent cost burden would be relatively modest.
• Two and a half years would be sufficient time for national governments and partners to mobilize new resources to permit the phase-out of GAVI Fund resources while still adequately covering programme costs, regardless of immunization programme finance starting point or macroeconomic conditions.

The analyses of the information from the financial sustainability plans allowed the GAVI Board to assess the extent to which starting assumptions were borne out, and to highlight the main issues and implications for future immunization efforts.

Several factors hindered countries ability to move towards financial sustainability not anticipated in the GAVI model. The most important has been the optimistic assumptions about movement in vaccine prices to more affordable levels. The second has been the realization that beyond GAVI, there lacks adequate frameworks for traditional immunization donors to make multi-year commitments in the future. Two and half years was insufficient time to plan a transition. As such, widening funding gaps are expected in the future and mainly for new vaccines.

The majority of these funding gaps are for new vaccines which highlight the challenge of future co-financing by countries. Closing the funding gaps for immunization and the probability of financial sustainability will require multiple factors that will favour greater funding for immunization: a larger public sector budget resulting from economic growth; greater government commitments to immunization and greater donor multi-year commitments; a reduction in vaccine prices; and under any scenario, will require a major sustained efforts by the GAVI Alliance in it's second wave of support (Phase 2).