Immunization Financing: A Resource Guide For Advocates . - R4D

K e y Te r m scapital costThe cost of assets (such asbuildings and equipment) thathave a working life of one year orlonger and usually exceed somethreshold cost. In immunization,this could include cold chainequipment, national and regionalmedical stores, and vehicles.capitationpaymentA fixed payment to a health careprovider to deliver an agreedupon package of services toeach enrolled person over a fixedperiod of time.co-financingIn the context of Gavi,contributions from both Gavi andGavi-supported countries towardthe cost of vaccines. Countrycontributions are not paid toGavi; rather, the required cofinancing amount is converted,using the full price that Gavipays, into the number of vaccinedoses the country is responsiblefor financing directly.cold chainA temperature-controlled supplychain. Vaccines must be kept in anarrow temperature range fromthe point of manufacture to thepoint of use.comprehensivemulti-year plan(cMYP) forimmunizationA tool that countries use toestimate costs and financingfor immunization and identifyfinancing gaps.conditionalcash transferprogramA program that provides cashpayments to poor householdsthat meet certain behavioralrequirements, such as bringingchildren in for immunizationsand other health care.earmarking6Setting aside some or all revenuefrom a tax or group of taxes for adesignated purpose.fiscal spaceRoom in a government s budgetthat allows the government toallocate resources for a desiredpurpose without jeopardizingthe sustainability of its financialposition or the stability of theeconomy.generalrevenueMoney that a government raisesthrough personal income taxes,taxes on corporate incomeand profits, value-added andsales taxes, duties and importtaxes, property and inheritancetaxes, payroll taxes, and/ortaxes on profits from the saleof natural resources. Thesesources are typically pooledinto a consolidated fund andappropriated toward payment ofpublic expenses through regularbudgeting and planning cycles.Global Vaccine A strategic framework thatlays out ambitious globalAction Planimmunization goals, proposed(GVAP)objectives, and actions forthe period 2011–2020. It wasendorsed by all 194 memberstates of the World HealthAssembly in May 2012.grantA sum of money or a productthat is provided by one entityto another without expectationof repayment.immunizationfinancingsustainabilityThe ability of a country tomobilize and efficiently usedomestic and supplementaryexternal resources on a reliablebasis to achieve current andfuture immunization targets.loanMoney lent from one entityto another that carries therequirement of future repayment.out-of-pocketpayment forhealthDirect expenditure byhouseholds for health care.w w w. i m m u n i z at i o n f i n a n c i n g . o r g

poolingThe accumulation andredistribution of prepaidhealth revenues on behalf of apopulation for eventual transferto providers in exchange forcovered services.public financial The system by which financialresources are planned, allocated,management(PFM) system and controlled to enable andtransitionprocessThe process during which acountry moves, over a number ofyears, from eligibility for externalassistance to ineligibility, usuallybased on per capita income orother criteria. Also known as thegraduation process .trust fundA mechanism that governmentscan use to ring-fence, or protect,funding for specific purposes.Trust funds may receive fundsfrom multiple streams of revenueand may be legally incorporatedwith policies and tax regulationsthat vary by country; a governingboard oversees the strategy,business plan, management,and operations.universalhealthcoverage(UHC)Ensured access to essentialhealth services for an entirepopulation without riskof financial hardship orimpoverishment.user feeA charge paid by users of goodsor services at the point of use.User fees can be official (formal)or unofficial (informal).WHO prequalifiedvaccineA vaccine from a particularmanufacturer whose quality hasmet standards defined by theWorld Health Organization foruse by United Nations agencies.WHO/UNICEFDTP3 coverageestimateA country-specific estimate, fora specific year, of the percentageof children in a country whohave received the third dose ofvaccine containing diphtheriatetanus-pertussis (DTP3), asreviewed and published by WHOand UNICEF.influence delivery of publicservice goals. PFM includesall phases of the budget cycle,including budget preparation,internal controls and auditing,procurement, monitoring andreporting, and external auditing.recurrent costA resource that is consumedwithin one year or has a workinglife of less than one year andmust be regularly replaced.Also called operating cost .results-basedfinancingFinancial incentives thatare linked to specific actionsby providers or patientsfor improving health orhealth services.shared costThe cost of a resource that isshared by and can be allocatedto multiple health services.social healthinsuranceA health financing model in whichcoverage is mandatory for theentire population or a subsetof the population, entitlementto covered services is linkedto a contribution made by anindividual or on the individual’sbehalf that is not related to healthrisk, and coverage is provided bya government or governmentregulated body or bodies.R e s u lt s f o r D e v e l o p m e n t7

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AcknowledgmentsThis resource guide was prepared by a team at Results for Development (R4D) led byHelen Saxenian and including Daniel Arias, Danielle Bloom, Cheryl Cashin, and Paul Wilson.The authors are grateful to the many individualsand organizations who reviewed this volumeand provided helpful input. At the Bill & MelindaGates Foundation, Brad Tytel initiated the project;it was later overseen by Chelsea Minkler withconsiderable technical input throughout theprocess from Logan Brenzel.We appreciate feedback from Sinead Andersen,Santiago Cornejo, Judith Kallenberg, and DeepaliPatel (Gavi); Gian Gandhi and Jonathan Weiss(UNICEF); and Sarah Alkenbrack, Jane Chuma,Rama Lakshminarayanan, Robert Oelrichs,Alexander Gallatin Paxton, Gandham Ramana,Owen Smith, Ali Subandoro, and Ajay Tandon(World Bank). The case study on Indonesia drawson a World Bank report authored by Ajay Tandon.We are grateful for contributions and/or commentsfrom Vusala Jalal Allahverdiyeva, Niyazi Cakmak,Irtaza Chaudhri, Amos Petu, Susan Sparkes, andXiao Xian Huang (World Health Organization) aswell as Gabriella Felix, John Fitzsimmons, CaraJanusz, and Daniel Rodriguez (Pan American HealthOrganization). Taiwo Abimbola and Sarah Pallasof the Centers for Disease Control and Preventionprovided comments in their individual capacities.R e s u lt s f o r D e v e l o p m e n tWe also appreciate feedback from several unnamedstaff at John Snow, Inc., in a review coordinatedby Robert Steinglass, as well as inputs from AmosChewya, Isaac Mugoya, and Lora Shimp. We alsoreceived valuable input from Heather Teixeira(ACTION), Manjiri Bhawalker and Stephen Resch(Harvard University), Joseph Dielman (Institute forHealth Metrics and Evaluation), Sachi Ozawa andLois Privor-Dumm (International Vaccine AccessCenter), and Andrew Carlson, Mike McQuestion,and Dana Silver (Sabin Vaccine Institute). RachelFeilden, Miloud Kaddar, and Ann Levin also madevaluable contributions.Senior government health officials took timeout of their busy schedules to be interviewed forthe case studies. They include Gayane Sahakyan(Armenia); Victor Gasymov, Oleg Salimov, andRashida Abdullaeva (Azerbaijan); Sangay Phuntshoand Dawa Gyeltshen (Bhutan); Roberto Arroboand Vincenta Machado (Costa Rica); AnthonyOfosu and Daniel Osei (Ghana); Ephantus Maree(Kenya); and Paba Palihawadana (Sri Lanka). OlgaZues (Abt Associates) generously took the timeto communicate on our behalf with governmentofficials in Azerbaijan to collect information for theAzerbaijan case study.9

Many thanks go to Polly Ghazi, editor; RebeccaRichards-Diop, creative director; and Ina Chang,overall editor, for their contributions. Many thanksas well to Robert Hecht, who helped launch thisproject while at Results for Development.10This report is based on research funded in part bythe Bill & Melinda Gates Foundation. The findingsand conclusions contained within are those of theauthors and do not necessarily reflect positions orpolicies of the Bill & Melinda Gates Foundation.Furthermore, the many other individuals whocontributed to this document may not endorse allof these views, and they bear no responsibility forany errors.w w w. i m m u n i z at i o n f i n a n c i n g . o r g

IntroductionImmunization is one of the best usesgovernments can make of limited public funds forhealth. Yet 1.5 million children under age 5 die fromvaccine-preventable diseases every year and 19million remain underimmunized.* This introductionnotes some important developments in the globalimmunization environment that set the context forthis resource guide and highlights some importantthemes in the document as a whole.TrendsSeveral important trends have emerged oraccelerated since the previous edition of thisresource guide (titled Immunization FinancingToolkit) was published in 2010: Countries and the international communityhave made powerful new commitments toimmunization and immunization financing.Most importantly, the Global Vaccine ActionPlan (GVAP) was endorsed in 2012 by all 194member states at the World Health Assembly.This resource guide can help advanceGVAP’s Strategic Objective 5, which calls forimmunization programs to have “sustainableaccess to predictable funding.” In addition, atthe Ministerial Conference on Immunization inAfrica in 2016, African countries committed toincreasing domestic financing for both vaccinesand immunization service delivery. Gavi, the Vaccine Alliance, the most importantexternal source of funding for immunizationprograms in developing countries, revised itspolicies for eligibility and transition (formerlygraduation) in 2009 and again in 2015. As aresult, many countries whose economies havegrown are in the process of phasing out Gavisupport and preparing to assume full responsibilityfor financing their immunization programs. The menu of new vaccines available to lowand middle-income countries has continuedto expand. Since 2010, Gavi has added humanpapillomavirus (HPV), Japanese encephalitis,inactivated polio, and rubella vaccines to itsportfolio, and a dengue vaccine has been licensedin some countries. These vaccines are powerfullife-saving tools, but they also bring new financingchallenges; many are substantially more expensivethan the traditional vaccines that most countrieshave long paid for using their own resources. NonGavi-eligible countries must pay the full cost ofnew vaccines from the start, while Gavi-eligibleand transitioning countries that receive Gavisupport must plan for assuming these costs overthe long term. Interest in new or unconventional financingsources for immunization, and for health morebroadly, has grown. These financing sources rangefrom trust funds and endowment funds to newtaxes and national lotteries. Many policymakersand other stakeholders have no experience withthese mechanisms.These trends are happening in the context of historiccommitments by countries at all income levels toachieve universal health coverage (UHC)—accessto necessary health care for all, regardless of theability to pay and without financial hardship. Thisglobal commitment is embodied in a United Nationsresolution and the 2030 Agenda for SustainableDevelopment, a global plan that includes a targetto achieve UHC by 2030, along with access to* These 19 million children have not received all three doses of DTP3-containing vaccine.R e s u lt s f o r D e v e l o p m e n t11

safe, effective, quality, and affordable essentialmedicines and vaccines for all. Although countriesare moving toward UHC on different paths, theprocess often requires broad changes in theway health services, including immunization,are financed and accessed. The implications ofUHC-related reforms for immunization financingare an important theme of this edition of theresource guide.Assessing ImmunizationFinancing OptionsThis resource guide assesses financing mechanismsand financing sources for immunization usingsix main criteria: additional resources raised,cost, predictability, sustainability, flexibility, andequity. Not all of these criteria are relevant toevery financing mechanism, however, and otherconsiderations may be important in certaincontexts. For example, particular financingmechanisms may promote transparency andaccountability to a greater degree than others,and some new mechanisms may be useful indrawing attention to and building popularsupport for immunization.In most cases, how a mechanism rates ona particular criterion depends on how it isimplemented and on the country context. Forthis reason, the briefs in this resource guide focusless on definitive judgments about particularfinancing options and more on the conditions thataffect whether a mechanism can be effective.For example, the predictability of financing froman earmarked tax depends on factors such as thenature of the tax, how consumption of the taxedgood or service changes with economic conditions,and how easily the tax can be evaded.12Financing mechanisms can, of course, be assessedfrom different perspectives. The resource guide’sprimary focus is on the needs of immunizationprograms, but it also views these needs withinthe broader context of health financing and noteswhen these perspectives may come into conflict.Policymakers must balance immunization againstother health priorities, and they must balancespending on commodities (such as vaccines) againstspending on other aspects of the basic servicedelivery platform on which all programs depend.Ultimately, advocating for larger health budgets isas important as advocating for immunization withinhealth budgets.Major ThemesEach brief in this resource guide can be readseparately, but several themes emerge from thevolume as a whole.Immunization is aUltimately,public responsibility.advocatingfor largerImmunization is in thehealth budgetspublic interest becauseis as importantits benefits extendas advocating forbeyond those whoimmunization withinreceive vaccines to thepopulation as a whole,health budgets.through the controlof infectious diseases.Governments therefore have primary responsibilityfor overseeing and financing immunization programs,with assistance from international donors in the caseof the poorest countries. Moreover, immunizationshould be free because even small costs tohouseholds can be a barrier to access. Thus, whilethe private sector may have important roles to play(for example, in vaccine manufacturing or servicedelivery) in some countries, governments retainoverall responsibility for ensuring that vaccines inw w w. i m m u n i z at i o n f i n a n c i n g . o r g

the national program are available and free to thosewho need them.Immunization financing should be considered inthe context of the movement toward UHC.Access to immunization—and investments inrobust immunization services that can serve as aplatform for delivering other vital health services—is central to the goal of achieving UHC. At thesame time, immunization planning and budgetingmust fit within each country’s health financingarchitecture as it evolves to meet the UHC goal.In the long run, immunization services will benefitfrom efforts to strengthen the capacity of healthsystems to deliver a full package of critical services.But the ongoing transformation of health systemscan also pose risks to immunization programs.Countries must ensure that funding for the variouscomponents of immunization does not fall throughthe cracks as health financing systems evolve.Changes made to health financing and delivery aspart of the move toward UHC can reduce access toimmunization if the new UHC architecture coversless of the population than existing immunizationprograms do. Decentralization processes happeningin parallel in many countries also pose challengesfor immunization financing, and countries mustthink carefully about which essential functions andfinancing responsibilities should lie with whichlevels of government and plan to build neededcapacity accordingly.Regular health-sector budgets are likely to remainthe main source of funds for immunization,although new sources of financing forimmunization can play a complementary role. Awide variety of alternative financing mechanismsfor immunization have been proposed, includingtrust funds, lotteries, and earmarked taxes, butR e s u lt s f o r D e v e l o p m e n tfew have been implemented. Briefs in this resourceguide offer general assessments of several innovativefunding sources, but countries should carry out theirown assessments in light of their own circumstances.General government revenues, supplemented whererelevant by social insurance contributions and donorfinancing, will remain the financial backbone ofmost countries’ healthand immunizationprograms. TheseRegular health-sectortraditional publicbudgets are likelyfinancing systemsto remain the mainare typically thesource of funds formost equitable andimmunization.sustainable, and theyare managed throughexisting public financialmanagement system

This resource guide collects 26 brief documents on topics related to the cost and financing of national immunization programs in low- and middle-income countries. Some of the briefs explore possible financing sources. Others examine the components and drivers of immunization costs, planning and decision-making