Tackling the Triple Transition in Global Health Procurement

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Tackling the Triple Transition in Global Health Procurement
Publication Date: 06/19/2019

There have been impressive gains in global health over the past 20 years, with millions of lives saved through expanded access to essential medicines and other health products. Major international initiatives backed by billions of dollars in development assistance have brought new drugs, diagnostics, and other innovations to the fight against HIV, malaria, tuberculosis, and other scourges. But behind these successes is an unacceptable reality: in many low- and middle-income countries, lifesaving health products are either unavailable or beyond the reach of the people who need them most. While each country’s context is unique, a reliable, affordable, and high-quality supply of health products is a vital necessity for any health system. In its absence, lasting health gains will remain elusive.

Access to medicines, diagnostics, devices, and equipment is driven in large part by the efficiency of their procurement. Procurement is, therefore, central to the efforts of low- and middle-income countries to improve health, meet the Sustainable Development Goals, and achieve universal health coverage. Health product purchasing in low- and lower-middle-income countries already makes up a sizeable share of overall health spending; in fact, in just a subset of these countries, spending on health products totals an estimated $50 billion per year. Procurement is not only essential to the missions of global health entities like the Global Fund, Gavi, UNICEF, UNFPA, and PEPFAR, but it also represents big money. In the case of the Global Fund, health product procurement accounts for $2 billion per year, or almost half of its 2017 disbursements. Yet despite its importance, procurement is an underappreciated health system function. Today’s procurement systems are hobbled by inefficiencies that leave some of the poorest countries paying some of the highest drug prices in the world.

Within a changing global health landscape, a forward-looking approach is needed to anticipate tomorrow’s challenges and plan for the future. To this end, the Center for Global Development convened the Working Group on the Future of Global Health Procurement to review the evidence and formulate recommendations for how the global health community—international health organizations, their bilateral and foundation donors, and low- and middle-income countries—can ensure the medium- to long-term relevance, efficiency, quality, affordability, and security of global health procurement. Importantly, the group limited its focus to the procurement process: the journey of a health product from manufacturer to a centralized warehouse or other wholesaling facility. The downstream supply chain and delivery process—a product’s journey from warehouse to end user—was beyond the Working Group’s scope.

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Center for Global Development