Sourcing of ARVs

& HIV diagnostics

Procurement for

Impact P4i

AMDS ANNUAL STAKEHOLDERS AND PARTNERS MEETING 29 September 2014

Global Fund: Procurement for Impact: P4i

Our objective was straightforward: To Increase Access to Products

By fundamentally changing the way we work across the supply chain

Earlier involvement

& closer collaboration

with manufacturers

Improving our purchasing

capability & changing our contracting

models

Optimising the international

supply chain to reduce cost

Better planning & scheduling to

support continuity of supply

Delivering more products at the

right time & place to more people

Global Fund: procurement & contracting Procurement Agent: operational management Increased volume visibility & financial flows

Longer term contracts with committed volumes for the appropriate period

Focus on value as well as affordability: consider both commercial and technical criteria

• better planning & allocation of funds: country level

• leveraging scale in commodity procurement: global

level

ARVs: demand is increasing year-on-year with

ongoing supply challenges

4

• Volumes of ARVs are increasing year or year: 11.7 million in LMIC (end 2013)

• Current Global Fund treatments reach 6.6m people in LMIC (mid-2014)

• Global Fund target to increase this to > 7.6m by 2016

• Supplier delivery performance has been poor - made worse by current order

chaotic practices and some procurement approaches

Investment needed for manufacturers to allocate more production capacity in a

sustainable way and to ensure sufficient and reliable supply

ARVs: the new procurement approach is broad

based & designed to address a range of objectives

These objectives will result in a

new form of supplier engagement

• Reduced lead times

• Improved Delivery

Performance

• Mitigate force majeure

Continued supply of

products through all

stages of the lifecycle

De-risk API supply

Improved payment and

admin processes

Leveraged volumes

Improved planning and

longer term contracts

Use supplier expertise

Collaboration to protect

reasonale margins

Sustainable supply

Competitive pricing &

affordability

On-Time Delivery

Quality & Regulatory

Extend product shelf life

Broader country

registration footprints

Lifecycle Management and ARVs We have overlaid the key ARV attributes to the lifecycle to determine the

strategic priorities

Time

Pipeline Growing Declining

Attributes

Challenges

for suppliers

GF Strategy

Implication

Emerging Mature

Recover from

investment and

Growth

Lack of

clarity for

investment

Brutal competition Ethical exit plan

Address Long lead-time and poor delivery performance

Early engagement Competitive cost Deliver Sustainabiluty: Mitigate price volatility and secure supply

Few FPP

suppliers More suppliers Reducing FPP suppliers Fewer FPP suppliers

Technical Driven

Licensing Continuous process improvement and investment No more investment

Focus on in-

house API supply

Diversification of API

sources

Concentration of API

sources Few API sources

Less competition Competitive drive Few incentives to manufacture

Key elements

1. Based on lifecycle management to drive

affordability and availability.

2. Initial volume commitments will be made out

to the end of 2016

3. New entrants will be encouraged by capping

volume commitments

2. Suppliers encouraged to supply both high

volume and low volume products

3. Initial competitive tender and longer term

value creating partnerships

4. Long term partnerships based on a series of

goal orientated, joint collaborative projects

5. Future volume commitments dependent on

achieving agreed objectives

Paediatric ARVs: Collaboration to improve supply

and access

Cameroon C.A.R.

D.R.C.

Guinea

Angola

Uganda Kenya

Tanzania

Mali

Mauritania

South Africa

Niger

Egypt

Funders Procurers

Observers

Paediatric ARV Procurement Working Group (PAPWG)

Procurement

Consortium

Collaboration of major funders &

procurers • Coordinated procurement

• Consolidate, review, adjust orders

• Review & act on low volume, sub-

batch orders

• Advise non-members of procurement

timelines to facilitate broader

mutually beneficial timeline alignment

• Advocating for use the optimal

formulations (IATT list)

Nigeria

Guinea

Nigeria Cameroon

Cameroon

CHAI

SCMS

UNICEF

PPM

Multiple

C.A.R.

D.R.C.

Congo

Liberia

Guinea

Guine

a-

Bissa

u

Angola

Burkina Faso

Burundi

Cote d’Ivoire

Ghana

Uganda Kenya

Tanzania

Zambia

Mozambique

Mali

Mauritania

Zimbabwe

Niger

Somalia

Swaziland

Togo

Malawi

Egypt

In 2013, 66 countries ordered paediatric ARVs through

the Procurement Consortium of the PAPWG

Chad

Djibouti

Equatorial

Guinea

Gambia

Sudan

Country CHAI SCMS UNICEF PPM

Afghanistan

Albania

Angola

Armenia

Belarus

Brazil

Burkina Faso

Burundi

Cambodia

Cameroon

Cape Verde

Central African Republic

Chad

Comoros

Congo

Cote d'Ivoire

Cuba

D R Congo

Djibouti

Dominican Republic

East Timor

Egypt

El Salvador

Equatorial Guinea

Gambia

Georgia

Ghana

Guatemala

Guinea

Guinea Bissau

Guyana

Haiti

Honduras

Country CHAI SCMS UNICEF PPM

Indonesia

Iran

Kenya

Kyrgyzstan

Laos

Liberia

Madagascar

Malawi

Mali

Mauritania

Mongolia

Mozambique

Myanmar

Nepal

Nicaragua

Niger

Nigeria

Pakistan

Papua New Guinea

Philippines

Somalia

Sri Lanka

Sudan

Swaziland

Tanzania

Thailand

Togo

Uganda

Uzbekistan

Vietnam

Yemen

Zambia

Zimbabwe

HIV Diagnostics: Global Fund spend is increasing

in line with WHO guidelines & international targets

In 2013 and 2014 to date the overall reported spend is $113m broken

Down as shown

CD4 $34m

30%

Viral Load $7.7m

7%

RDT $77m

63%

82 million tests;

15 manufacturers

5 manufacturers

5 manufacturers

Programmatic, Financing & Procurement actions

underway

1. Global Fund Quality Assurance Policy for Diagnostics

2. Expert Review Panel to expedite access to high public health impact

products (ERP) • POC for CD4, Viral Load, Early Infant Diagnosis, molecular technologies using

dried blood spots for viral load – with UNITAID

3. Policies for the procurement of health products • Policies on Procurement and Supply Management

of Health Products

• Guidance for financing: Strategic Investment Notes

for HIV and Health Systems Strengthening

(laboratory systems)

• Guidance for the Procurement & Use of HIV RDTs

4. Leveraging existing entities and initiatives

Clinical algorithm and linkages to care

Funded Demand

Quality Assurance Policy

Effective Supplier Engagement

Optimal Selection and Placement

Laboratory & sample transport Systems

Planning and Forecasting

To Scale-up

effective Viral Load

testing

REQUIRES

1

2

3

4

5

6

7

Addressing the Challenges – example of viral load

Some strategic elements are in place……………

1. Mapping country status readiness/optimisation of existing resources

(with partners including CHAI, MSF, PEFPAR, FEI)

2. Supporting development of funded demand: robust funding requests,

grant design & effective implementation

– “Technical considerations for expansion of viral load

testing”; WHO, PEPFAR, CDC, Global Fund, ASLM http://www.who.int/entity/hiv/pub/arv/viral-load-testing-technical-update

– “Programming of laboratory investments with a focus on

viral load testing”; Global Fund http://www.theglobalfund.org/en/procurement

– Development of National Strategies for HIV Viral Load

Implementation Workshop, Ethiopia; September 2014;

ASLM, CADU, CHAI, Global Fund, PEPFAR, WHO

– Technical support to countries (with partners)

3. Engaging with suppliers

– Better pricing and optimal contracting modalities: minimum packages of

service; framework purchase/lease/rental/performance options

…specifically to support scale-up of effective viral

load services

HIV Dx Strategy: consultation launched: will be broad

based and designed to address a range of objectives

These objectives will result in a

new form of supplier engagement

Reduced lead times

Simplify supply logistic

chains & distribution

models

Improved Delivery

Performance

Mitigate force majeure

Continued supply of

products

Matching the specific

needs of country

programmes

Leveraged volumes

Improved planning &

longer term contracts

Use supplier expertise

Product standardisation

Sustainable Supply

Competitive pricing &

affordability

On-Time Delivery

Quality & regulatory

Procurement of Quality

Assured products

Support uptake of new

proven technologies

improving programme

performance

Thank you.

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