the cabinet of ministers of ukraine …...ah/pr 2005-88 rev.doc short summary key objectives and...

AH/PR 2005-88 rev.doc

THE CABINET OF MINISTERS OF UKRAINE

UKRAINE NATIONAL IMMUNIZATION PROGRAMME

FINANCIAL SUSTAINABILITY PLAN

Kiev, 2005

Ukraine NIP Financial Sustainability Plan

This document was prepared by members of the Working Group for drafting a Financial Sustainability Plan for the Ukraine National Immunization Programme.

Department / Organization

Name, Title Date, Signature

Ministry of Health of Ukraine S. P. Berezhnov, Deputy Minister, Chief State Medical Officer of Ukraine

Ministry of Health of Ukraine L. M. Mukharskaya, Deputy State Health Officer of Ukraine, Assistant Director of the State Health Surveillance Department

Ministry of Health of Ukraine R. A. Moisyeyenko, Head of the Department Coordinating Medical Assistance for Mothers and Children

Ministry of Health of Ukraine L. I. Karamushka, Director of Economics and Finance

Ministry of Health of Ukraine M. G. Vovk, Assistant Director of Economics and Finance

Ministry of Health of Ukraine

O. M. Stel'makh, Chief Specialist of the section coordinating anti-epidemic measures and preventive immunization of the Administration for the Prevention of Infectious Diseases of the State Health Monitoring Department

Ministry of Health of Ukraine S. A. Didenko, Head of Health Finance, Social Programmes, Physical Training and Sport.

Ukraine Ministry of Economics

Y. N. Vitrenko, Head of Humanitarian Development

The L.V. Gromashevsky Institute of Epidemiology and Infectious Diseases

O. P. Sel’nikova, Director of the L.V. Gromashevsky Institute of Epidemiology and Infectious Diseases

World Bank

E. Bekh, Sector Consultant for Human Development, Representative of the World Bank in Ukraine

The National Committee of the Ukrainian Red Cross

A. M. Khabarova, Acting Director of the Red Cross National Solidarity Committee of Ukraine

UNICEF

E. Sherstyuk, Project Coordinator, representative of UNICEF in the Ukraine

USAID

E. Radzievskaya, Senior Advisor on Health Issues, United States Agency of International Development

WHO

Y. V. Subbotin, Head of the WHO European Office for Coordination and Communication with Ukraine

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Contents

Short Summary.......................................................................................................................................... 4 Section 1. Influences of the Country’s Situation and its Healthcare System on the Cost of the

Preventive Immunization Programme, Financing and the Management of Finances..9 Section 2. Particularities, Tasks and Implementation Strategies for the National Immunization

Programme.............................................................................................................................15 Section 3. Routine and Recurrent Programme Implementation Expenditure...............................18 Section 4. Future Programme Resource and Financing Requirements. Analysis of the Expected

Financial Gap.........................................................................................................................22 Section 5. Sustainable Financing Strategies, Measures and Indicators............................................28 Partners Comments ................................................................................................................................33

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AH/PR 2005-88 rev.doc

Short Summary

Key Objectives and Tasks of the Ukraine National Immunization Programme (NIP) for 2004-2010 − To maintain the target population

coverage level for preventive vaccinations included in the national calendar at no less than 95%;

− To achieve measles elimination by 2007; − To reduce the incidence level of diphtheria

to less than 0.1 in 100 thousand population and that of whooping cough and mumps to less than 1.0 in 100 thousand population;

− To reduce the prevalence of congenital rubella to less than 0.01 cases in 1000 live births;

− To provide safe preventive vaccination procedures for the population, including the country-wide introduction of auto-disable syringes;

− To provide for the safe use of syringes and injection supplies;

− To create and maintain an efficient system for transporting and storing immunobiological preparations under cold chain conditions;

− To reduce vaccine losses (spills) by increasing the level of professional knowledge of NIP workers;

− To improve the regional supply system for immunobiological preparations;

− To increase the staff professional readiness level.

The Basic Challenges and Opportunities for Ukraine NIP Financing in the Context of the Economic Situation in the Country and in the Healthcare System

Over the last 5 years Ukraine has observed stable yearly growth in its GDP, with an average value of 7%. According to forecasts,

the rate of economic development will also remain quite high from 2005 to 2010, creating a positive environment for the financing of social programmes, including the National Immunization Programme. The healthcare expenditure part of the consolidated state budget (overall and special funds) stood at 3.7% of GDP and 12.8% of overall state budget expenditure in 2003. It is envisaged that these indicators will, in the future, remain at least at the same level, enabling the NIP requirements to be fully met.

The most probable direction of development for the national health system in the near future is that of reforming the payment methods for healthcare services in order to correlate it with the outcome (quantity and quality of services and also the citizen’s state of health). It is proposed that payments for immunization services be integrated into the packet of services proposed by the primary healthcare establishments. The purchase of vaccines and injection equipment will remain centralized and will be provided by the Ministry of Health and the State Company, Ukrvaktsina, which provides storage for immunobiological preparations in its warehouses and transports them to district warehouses.

Therefore, it is not envisaged that the planned changes in the system for coordinating medical assistance for the national population will have detrimental consequences for the NIP but, on the contrary, facilitate the improvement in quality of the services provided thereby.


The main task regarding the need to maintain a fully-functional cold chain is considered to be the combination of efforts by the Ministry of Health, the Ministry of Finance and local administrations to create and introduce mechanisms to finance the amortization of cold chain equipment. Including capital expenditure on equipment in the cost of immunization services will significantly help ease the situation, inasmuch as the financing priority for immunization services is not under question from any side, since it answers to the NIP financing function.

The total volume of GAVI assistance from 2003 – 2007 stands at US$ 2.5 million for the procurement of Hepatitis-B vaccines; US$ 748 thousand for the procurement of injection safety supplies; and US$ 100 thousand for the provision of other types of support.

The cost part of overall state health expenditure for the National Immunization Programme stood at 1.57% in 2001 and 2.13% in 2003. Vaccine expenditure stood at US$ 3.35 million or 37.5% of overall programme expenditure in 2001 and at US$ 13.03 million or 66.0% of overall programme expenditure in 2002.

The main task of the NIP is also that of improving the mechanisms for efficient interaction between the State Health Epidemiological Surveillance Office and healthcare establishments. A key element in the completion of this task is considered to be the improvement of the NIP’s information and technical mechanisms along with the mechanisms for supplying and monitoring the quality of services offered, both within the healthcare domain as a whole and within the NIP framework in particular.

Programme expenditure per fully immunized child stood at US$ 21.48 in 2001 and US$ 48.65 in 2003.

NIP Financing Needs Forecast 2004-2010

Overall expenditure on the Ukraine National Immunization Programme will gradually increase from US$ 18.12 million in 2004 to US$ 21.63 million in 2009. At the same time, the cost of the programme will increase to US$ 25 million, owing to the measles immunization campaigns to be held in 2005.

Current Programme Running Costs and Sources of Financing

The overall, long-term NIP financing Needs are given in Figure 1.

Total expenditure on the Expanded Program on Immunization (EPI) stood at US$ 8.93 million in 2001 and US$ 19.73 million in 2003. The programme was financed from the consolidated budget (state plus local budget) at 99.6% in 2001 and at 95.8% in 2002. The reduction in the internal state financing part was a result of the GAVI Vaccine Fund starting to provide assistance on the introduction of Hepatitis-B vaccinations into the national calendar in Ukraine in 2003.

Taking into account the probable financing from state and local budgets, no financial gap is assumed until 2007, the year GAVI ceases to provide assistance, thus Ukraine can entirely independently provide for NIP requirements.

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Figure 1. Long-Term NIP Financing Requirements per Expenditure Item (in millions of US$)

Strategic Priorities for Financial Sustainability, Based on the Assessment of Key Financing Challenges

The key challenges for the National Immunization Programme are as follows: − Unjustifiably high expenditure for the

procurement of vaccines; − Insufficient provision of cold chain

equipment for the healthcare establishments in which immunizations are carried out;

− A deficient NIP technical information system;

− Lack of clearly determined criteria for the introduction of new vaccinations and combination vaccines into the national calendar.

The following strategic approaches to NIP financial sustainability have been defined in order to solve the above problems:

I. Optimization of centralized procurement

practices (obtain a more favourable price-quality ratio for the vaccines and equipment purchased)

II. Development of an efficient financial incentives system to encourage regional and local authorities to maintain an adequate infrastructure of the preventive immunization system at the healthcare establishment level.

III. Improvement of the NIP information system (monitoring of the infrastructure and preventive immunization system activity as a whole – vaccine movements, cold chain condition, state provision and other resources)

IV. Improvement of criteria for introducing new vaccines into the Ukraine National Immunization Programme vaccination calendar.

The list of measures envisaged within the framework of these strategic approaches and the corresponding implementation indicators are given in the table below:

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Strategic Component Implementation Indicator

I. Optimize centralized purchasing practices and obtain a more favourable quality-cost ratio for the vaccines purchased

Written report on the listing of vaccines registered in Ukraine;

1. Make an inventory of vaccines registered in Ukraine (V-R list), including the vaccines supplied by UNICEF (V-R-U list). Distribute the lists of vaccines registered in the Ukraine via the website of the Ministry of Health of Ukraine

Availability of information on vaccines registered in the Ukraine on the website of the Ministry of Health of Ukraine

2. Analyse the registration process for the vaccines that are authorized in Ukraine in order to assess the adequacy of the safety mechanisms for registered vaccines and also to expose the ungrounded obstacles in the registration process.

Joint written report on said analysis of the vaccine registration process

3. Determine the types of vaccine supplied by UNICEF that are present in the national vaccination calendar but which are not registered in Ukraine (V-N-U list)

Written report

4. Carry out a comparative analysis of the qualitative characteristics of vaccines on the V-R list (i.e. which are registered in Ukraine) and the vaccines on the V-N-U list (supplied by UNICEF, but not registered in the Ukraine)

Written report on the comparative characteristics of the vaccines on the V-R and V-N-U lists

5. Analyse the comparability of immunization graphs, envisaged for vaccines on the V-N-U list, (supplied by UNICEF, but not registered in Ukraine) with the national calendar for EPI vaccinations

Written report on the comparability of immunization graphs for vaccines on the V-R and V-N-U lists.

6. Determine, on the basis on the results of implementation of points 2, 3, 4, 5 and 6(?) of this plan, those vaccines from the V-N-U list, that it would be prudent to register in Ukraine and develop a registration plan for said vaccines.

Written report with a list of vaccines that it would be appropriate to register in Ukraine.

7. Register vaccines from the V-N-U list (supplied by UNICEF, but not registered in Ukraine) should a positive decision have been made in point 7 (?)

Written report with a list of vaccines that it would be appropriate to register in Ukraine

8. Determine the legislative possibilities for purchasing (supplying) vaccines centrally through UNICEF channels with the costs to be borne by the state budget.

Written report on the legislative requirements affecting the central purchase of vaccines and on the necessities of legal provisions for the conduct of such purchases.

II. Develop an efficient financial incentive system to encourage regional and local authorities to maintain an adequate infrastructure for the preventive immunization system

9. Define the principles for a cold chain equipment- purchasing subsidy system for local self-government bodies, at the expense of the local and state budgets.

Recommendations on the construction of a state subsidization system for the purchasing of cold chain equipment.

10. Development of a logistical cold chain equipment provision plan and a plan for monitoring its operation.

Presence of logistical cold chain equipment provision and monitoring plans

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11. Make a national inventory of cold chain equipment, and also assess the cold chain operation quality control system.

Report on the condition of the cold chain (quantitative indicators, % wear condition, etc.);

Cold chain equipment safety gap indicator;

Report on the condition of the cold chain quality control system.

III. Improve the NIP information system (monitoring of the infrastructure and the activity of the preventive immunization system as a whole– movement of vaccines, condition of the cold chain and staff security and other resources)

12. Analyse the existing NIP management system and determine the information requirements of this system and draft recommendations for its development

Written report on the analysis carried out including recommendations for system development.

13. Analyse the preventive immunization information systems already in use in order to study their possibilities, including the possibility of integrating the existing systems with the future developments thereof.

Written report on the analysis carried out including recommendations for development of the NIP information system.

14. Develop technical specifications and technical targets for the development of the improved preventive immunization information system. Prepare technical documentation for the call for tenders for the right to manufacture the improved NIP information system.

Technical targets prepared for the call for tender for the manufacture of the improved NIP information system.

15. Introduce the improved NIP information system. Launch of the new NIP information system.

IV. Improve the criteria for introducing new vaccines into the Ukraine National Immunization Programme national calendar.

16. Discuss the criteria for assessing the appropriateness of introducing new vaccines into the calendar of compulsory vaccinations in Ukraine

Working Group Report on the criteria for assessing the appropriateness of introducing new vaccines into vaccination practices in Ukraine.

17. Introduce practical financial and economical analyses when making decisions on extending the NIP (introducing new vaccines)

Order published by the Ministry of Health on the procedure for medico-economic analyses on the decision to introduce new vaccines.

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Section 1. Influences of the Country’s Situation and its Healthcare System on the Cost of the Preventive Immunization Programme, Financing and the Management of Finances

1.1. Introduction Ukraine has established its long-term objectives and priorities. These are substantiated by the Constitution of Ukraine and other basic documents.

One such document sets forth the Strategy for Economic and Social Development of Ukraine for 2004-2015. European principles and mechanisms of structurally innovative community-oriented economic models have been reinforced by means of European integration, confirmed by the Decree of the President of Ukraine of 28 April 2004, No. 493, which established the mission of setting the economy on a path of guaranteed growth via the further deepening of market reform. In particular, it is envisaged to maintain the annual GDP growth rate at no lower than 6-7 % in order to at least double manufacturing volumes in the period, thus providing a tangible increase in the standard of life of the population.

The document identifies the unsatisfactory state of health of the population and the healthcare system as the most acute social problem. In spite of slight improvement in the life expectancy indicator at birth in 2000-2003 (from 66.9 in 1995-1996 to 68.3 in 2003) and a reduction in the incidence of primary illnesses in the population, associated, in particular, with both the increased budget financing of the sector and the general morbidity rate of the population, the situation in the sector as a whole remains critical. According to data from 2002, only 42% of the population are considered to be generally healthy, the remainder require systematic medical treatment. The consequences of the Chernobyl disaster have certainly had a significant effect on the indicators given.

This state of affairs in the healthcare domain led to the adoption of a significant number of government-level documents, with the aim of profoundly reforming the system; creating the legal, economic and organizational conditions for the provision of medical assistance; and redirecting the state health service towards the prevention of diseases, primarily infectious diseases. Accordingly, in June 2003 a new version of the Ukrainian Law “On the Protection of the Population from Infectious Diseases” was adopted, which contains, in particular, specific articles on “Financing of preventive and anti-epidemic measures and the treatment of patients with infectious diseases” and in October 2002 the Government of Ukraine adopted the National Preventive Immunization Programme for 2002-2006. Ukraine has included efforts to control HIV/AIDS and tuberculosis among the UN Millennium Development Goals.

The existence of these State documents allows us to assert that Ukraine appreciates the importance of vaccinating its population to improve their health and, thus the necessity of ensuring financial sustainability for vaccinations.

Ukraine's success in overcoming its prolonged and destructive economic crisis, whose roots can be traced back to the soviet system, has had significant results. During the crisis years (1991-1999), GDP plunged by 59.2%, industrial production by 48.9% and agricultural production by 51.4%. The monetary and financial systems were thrown

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totally out of balance, causing galloping inflation.

1.2. The National Economic and Social Situation However, already during 2000-2003, GDP increased by 32.9%, industrial production by 60.3% and agricultural production by 10%. The national monetary unit, the hryvnia stabilized and the overall state debt for Ukraine dropped from 37% of GDP in 2000 to 29.5% in 2003.

Over recent years the ratio of government debt to GDP has continued its downward trend. At the end of September 2004, its part of GDP dropped to 24%, testifying to the economic security of its level, in accordance with world practices.

The State's external debt stood at 73% of the overall state debt, increasing proportionally by 5% at the beginning of each year. It should be noted that its international reserve coverage indicator increased at the same time, explaining the improved credit rating of Ukraine on external financial markets. The planned settlement of Ukraine’s financial commitments on external debt, up to their total repayment (according to the agreements in force on 17.01.2004) is characterized by the following data: 2005 - US$ 1.51 billion; 2006 - US$ 1.42 billion; 2007 - US$ 1.02 billion; 2008 - US$ 0.63 billion; 2009 - US$ 0.64 billion; 2010 - US$ 0.6 billion. The above data decisively testify to the fundamental reduction in external state debt over the period of force of the Financial Sustainability Plan for Immunization (FSP).

Nevertheless, the economic and social situation in the country remains exceedingly difficult and awkward. Per capita GDP indicators testify to this (PPP in US$). According to UN data, in 2002 this indicator

for Ukraine was six times lower than the average indicator for ОЕСD countries with a high level of income, practically half that of the indicator for the countries of Central and Eastern Europe and was equal to that of developing countries. This is a consequence of a large number of both objective and subjective factors, among which the need to eliminate the consequences of the Chernobyl disaster and the incomplete honouring of promises of external aid are far from the least.

1.3. The Healthcare System and its Financing The infrastructure of Ukraine’s healthcare system of has undergone fundamental changes since independence. The number of hospitals decreased by 23%, whilst the number of outpatient polyclinics increased by 1.4%.

As a result of the general economic crisis, the sector’s financing level plummeted. As a result, in 1992-1997 the budget operating costs for healthcare stood at approximately 4% of GDP and 10% of the consolidated budget. Since financial resources were limited, the bulk of them were allocated to healthcare workers’ salaries, which stood at only 50-60% of the average industrial worker's salary, and to payment of building and installation maintenance services (heating, electricity, and drainage, etc.).

In the meantime, as of 1999, the situation gradually started to stabilize and by 2003 a fundamental improvement sector financing had been achieved. Thus, by 2003 healthcare allocations from the consolidated budget increased more than 2.5 times in comparison to 1999, and totalled UAH 9.7 billion (although as a percentage of GDP they still represented only 3.7%). At this time approximately 52% of capital was spent on salaries, 14% on the purchase of

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medication, 6.6% on the purchase of medical supplies and 8.2% on the payment of communal services.

On assessing the influence of Ukraine’s health system on the cost, financing and financial management of the preventive immunization programme it should firstly be noted that the basic state policies in this domain include Article 49 of the Constitution of Ukraine, in which, in particular, it is stipulated that: “…medical services should be provided free of charge in State and community healthcare establishments…” This constitutional standard is responsible for the formation of an economic healthcare model in which the main sources of financing are solely the state and local budgets.

Efforts by the Ukrainian Government to widen the above sources at the population’s expense were found by the Ukrainian Constitutional Court to be in opposition to the Constitution of the Ukraine. This very constitutional clause also considerably affects the attempts to introduce a system of compulsory health insurance, inasmuch as the Ukrainian Constitutional Court, on the assessment of several draft laws in this field, ruled out the deduction of health fund allocations from salaries, identifying this also to be in opposition to the constitutional clause in force.

The basic forecast variants for economic growth in Ukraine until 2015 show growth in the real GDP equal to 2.4 times the 2002 level. The average yearly GDP growth rate for the period 2004-2015 is 6.5%.

Under the optimistic scenario, real GDP in 2015 will have grown to 2.6 times its 2002 value with an average yearly growth rate of 7-9%.

GDP growth indicators for the period covered by the FSP are shown in the following table: Table 1.1. GDP Growth Dynamics Forecast for Ukraine

Year Nominal GDP (billion UAH)

Real GDP Growth (%)

2003* 264.2 9.4

2004 332.7 12.4

2005 387.3 8.6

2006 440.9 6.8

2007 496.6 6.5

2008 559.7 7.5

2009 634.7 8.0

2010 705.1 6.0

*- Actual Data

Expenditure forecast indicators for the consolidated budget for the period of force of the FSP are given in Table 1.2.

As shown by the above basic macroeconomic indicators for the Ukraine for the period 2005-2010, there is sufficient reason to conclude that the healthcare system, the financing of preventive immunizations included, will receive a virtually established capital volume relative to GDP with little increase thereof and thus its nominal value will increase commensurately with GDP growth rate.

It should be added that the volume of budgetary resources allocated to healthcare comes in fourth place in the expenditure structure, below expenditure on education (approximately 5% of GDP), the social safety net (4.5-4.6 %) and economic activity (4.4-4.5 %).

The healthcare system in the Ukraine is financed from state and local budgets. Nationally, approximately 30% of budget expenditure is from state budgets and about 70 % is from local budgets.

Such a relationship is primarily stimulated by clauses in the Ukrainian Budget Codex,

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adopted in 2001, by which actual healthcare establishments and their corresponding medical assistance programmes, financed from

one or other budget and Ukrainian law on local self-governance and existing practices are defined.

Table 1.2. Forecasted Expenditure Dynamics From the Consolidated Budget of the Ukraine

Of Which

Specific Weight as % of Year Global Expenditure (billion UAH ) On Healthcare

GDP Overall Expenditure 2003* 75.8 9.7 3.7 12.8

2004 109.3 10.7 3.2 9.8

2005 117.9 12.6 3.25 10.7

2006 117.6 13.8 3.12 11.7

2007 135.8 15.9 3.21 11.7

2008 153.3 18.0 3.21 11.7

2009 168.8 20.5 3.23 12.1

2010 188.0 22.8 3.24 12.1 *- Actual data

It should be noted that present budgetary provision for regional and local development by input sources is characterized by considerable non-uniformity.

The local tax base provided only 2.06 % of local budget income in 2001 and 1.93 % in 2002 (for information, this was 4% in 1992), whereas allowances from general state revenue totalled 69.0% and 66.8% respectively, i.e. more than two thirds. At the same time, the transfers from the state budget totalled 29.0% and 31.3% respectively. In developed countries the ratio between local and state budgets should be 40:60. In Ukraine, this ratio was stacked against the state budget at 66.4:33.6 in 2001 and 68.2:31.8 in 2002. The above situation does not allow the self-governance bodies to consider themselves financially independent, in which regard a number of measures are envisaged for the future, with a view to overcoming the disproportions in the system of interbudgetary relations.

With this in mind it should be pointed out that the disproportions in the system of interbudgetary relations will be surmounted as an integral part of general state regional policy,

mainly intended to bring it in line with the norms and principles of EU countries; to introduce approaches and procedures currently in force in the EU for programming, financing, monitoring and the use of incentives for regional development; and to adapt Ukrainian legislation on regional policy issues to correspond with European Union legislation.

However, according to expert assessment, the above measures cannot have a fundamental effect on the implementation of the immunization programme, including the purchase of vaccines, inasmuch as they measures will be primarily directed towards providing medical assistance for the population who are suffering from various illnesses rather than preventive measures, including immunization.

Consolidated budget forecast indicators for medium and long-term healthcare expenditure were confirmed by the Government of Ukraine in September 2004, calling for the Ukraine to cross over from the concept of healthcare as a public benefit to the concept of healthcare as the provision of medical services. The main efforts will be concentrated

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on improving the organization of the medical services provided.

The priorities in the medium-term are as follows:

− To introduce state social norms concerning the accessibility and quality of medical assistance, equality and justice in the healthcare domain;

− To develop primary medical care based on family medicine;

− To rationalize and improve the organization of specialized, hospital medical assistance;

− To improve medical services to the rural population;

− To cross over to the provision by healthcare establishments of paid medical services, subject to their quality and quantity;

− To create the conditions for broadening the range of legal organizational forms of medical organizations and develop the private healthcare sector.

We are convinced that implementation of the above measures cannot have a negative effect on the FSP, due to the insignificant specific weight of healthcare expenditure in the overall structure (no more than 1%) and also due to the understanding that the structures of the Ukrainian government have of the importance of immunization of the population as a means of improving the health indicators, to which the documents adopted at a state level bear witness.

Ukrainian medical workers are not affected by the comprehensive reform of the Ukrainian state services; however the salaries of healthcare workers will change as for the majority of workers from other sectors in the

humanitarian field (education and culture).

Direct work on forming state healthcare policy in Ukraine and on implementing its measures has been entrusted to the Ministry of Health, by decree of the President of Ukraine. The Ministry will determine the priorities of these policies, which are then to be included in the all-state economic and social development programme by individual sections, and: develop projects for sector programmes (and also in the area of population immunization, in particular), which will be established by the Government (by Parliament as of 2004, as per Ukrainian laws); draw up programme budget financing demands for the healthcare sector; act as the main administrator of budgetary capital, supported by the Ukrainian laws on the State Budget of Ukraine for the year in question, including that for the immunization programme; coordinate, as per the procedure adopted by Ukrainian law, the associated work for purchasing the main volume (up to 90%) of vaccines and technological equipment and for training, retraining and raising the level of qualification of medical staff; monitor preventive immunization indicators and directly manage 88.5% of medical workers at 91.3% of healthcare institutes.

As is apparent from the above, the Ministry of Health of Ukraine plays a specific role both in the field of health as a whole and in immunization in particular. The Ukrainian Ministry of Economics and European Integration Issues and the Finance Ministry of Ukraine act predominantly as consultants on general economic and financial budgetary problems.

Serious multi-level work to considerably improve the information base for

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elaboration of both general state economic and social development programmes and the corresponding sector and regional programmes is currently under way in Ukraine. In March 2004 the Ukrainian Law “On state target programmes” came into force, defining the principles for the development, supported and carried out by state target programmes.

The following conclusions can be drawn from the results of the effect of the particularities of Ukraine and its healthcare system on expenditure, financing and the financial management of preventive immunization programmes:

1. The legislative base in Ukraine for the implementation of immunization programmes has, for the most part, been created; With credit assistance from the World Bank

and various grants, a programme to introduce a system of national accounts is being implemented in order to improve budgetary and sector statistics, including those of the healthcare sector.

2. The economic and social development forecast for Ukraine and the medium and long-term consolidated budget indicator forecasts envisage an increase in financial resources for healthcare, offering a good background for the corresponding immunization financing.

The budget programmes have been financed at more or less the planned level over the last 2 years.

Work on controlling the use of budget resources has been significantly reinforced both by the Chamber of Accounts of Ukraine and by the Audit Department of the Government of the Ukraine. All this enables the FSP to function at a fairly professional level with a sufficient degree of feasibility.

3. A preventive immunization programme for the population is in force in Ukraine for 2002-2006, which can and should become the basis for developing the Immunization Financing Sustainability Plan until 2010.

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Section 2. Particularities, Tasks and Implementation Strategies for the National Immunization Programme

2.1. Management and Functions of the National Preventive Immunization Programme The Ukraine National Preventive Immunization Programme (NIP) brings together and coordinates establishments, resources and measures, which, by means of vaccinations, help to reduce communicable diseases, invalidity and mortality.

The following activities are carried out within the framework of the Ukraine NIP: − Centralized purchasing of vaccines and

immunobiological preparations; − Regional delivery of vaccine and

immunobiological preparation supplies; − Provision of the appropriate level of

operation of the cold chain; − Training and improvement of the level of

skills of specialists in the preventive immunization sector;

− Research into preventive immunizations.

Ministry of Health-level Coordination of NIP activities is carried out by the State Medical and Epidemiological Surveillance Department and the state-run companies, The Immunobiological Preparation Centre and Ukrvaktsina and also the Central Medical Epidemiological Stations of the Ministry of Health of Ukraine.

At oblast’1 and raion2 levels of the vaccine delivery process, it is the medical epidemiological stations at the corresponding levels that maintain cold chain operation, carry out epidemiological surveillance and control the appropriate immunization practices. The Ukraine NIP is integrated into the

1 An oblast’ is a large administrative area 2 A raion is a smaller administrative area

national healthcare system – corresponding to the treatment and prevention link of the healthcare system represented by the chief oblast’ and raion paediatricians or immunologists for the coordination of its own immunization processes and also for the implementation of social mobilization measures. Vaccinations are carried out by the staff of healthcare establishments, rural outpatients’ clinics and Feldsher’s obstetric stations.

2.2. NIP Contents At present the national calendar of preventive vaccinations in Ukraine provides for the following vaccinations:

1) Vaccinations, envisaged by the schedule of the Expanded Program on Immunization (EPI) – against tuberculosis, diphtheria, whooping cough, tetanus, poliomyelitis (the first two vaccinations are conducted in IPV), measles, rubella, mumps and hepatitis-B;

2) Vaccinations carried out as per the

national schedule to those over two years of age include: - Tuberculosis booster shot at 7 and 14

years of age; - Diphtheria and tetanus booster shot at

6, 11, 14 and 18 years of age and for every 10 subsequent years;

- Oral polio vaccine at 3, 6 and 14 years of age;

- Rubella booster shot for girls at 15 years of age;

- Mumps booster shot for boys at 15 years of age.

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Table 2.1. Calendar of Preventive Vaccinations under the Ukraine EPI

Age Visit Traditional Antigens New Vaccines

1 day 1 Hep-В-1 3 days 2 BCG 1 1 month 3 Hep-В-2 3 months 4 IPV-1* AKDS-1 4 months 5 IPV-2* AKDS-2 5 months 6 OPV-3 AKDS-3 6 months 7 Hep-В-3 12-15 months 8 Measles, mumps, rubella** 18 months 9 OPV 4 AKDS-4 3 years 10 OPV-5 DS 6 years 11 OPV-6 Measles, mumps, rubella

* The first 2 injections against poliomyelitis have been carried out using an anavaccine in Ukraine as of 2003. ** The first measles, mumps and rubella vaccinations were carried out using the combined vaccine (MMR) in 2003.

Along with the calendar of vaccinations by age, a vaccinations schedule is used for the enzootic territories of Ukraine and on evidence of epidemic and the recommended vaccinations (including specific professional groups and groups at high epidemic risk) are also carried out. These vaccines require a relatively small NIP allocation.

Hib-vaccine requirement assessments are being carried out in Ukraine, but at the time of

writing the FSP, the final results of this research were not ready and the decision on the appropriateness of introducing said vaccine had not yet been taken.

The introduction into the vaccination calendar both of new types of vaccines and of new combination vaccines is not envisaged at this time.

Vaccination coverage indicators, both current and forecasted, are given in Table 2.2.

Table 2.2. Initial and Target Coverage of Conventional New Antigens Initial Coverage

(%) Final Coverage Indicator

(%) Antigen 2003 2004 2005 2006 2007 2008 2009 2010

BCG 99 99 99 95 95 95 95 95

AKDS 99 99 99 95 95 95 95 95

IVP+OVP 99 99 99 95 95 95 95 95

MMR 90* 95 95 95 95 95 95 95

Hepatitis-B 76.9 85 95 95 95 95 95 95

* The MMR vaccine was introduced into the vaccination calendar as of 2003, however, a number of children, owing to unfounded counter indications, continued to be vaccinated with single vaccines, such that for example, the coverage of vaccination of children under two years of age against measles (including MMR) in 2003 totalled 99%.

EPI vaccine loss targets are given in Table 2.3. Table 2.3. Initial Loss and Final Vaccine Loss Target

Initial Loss (%) Final Loss Target (%) Antigen

2003 2004 2005 2006 2007 2008 2009 2010

BCG 66 66 66 66 66 66 66 66

AKDS 23 23 23 23 23 23 23 23

IVP+OVP 23 23 23 23 23 23 23 23

MMR 20 20 20 20 20 20 20 20

Hepatitis-B 20 20 20 20 20 20 20 20

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2.3. The Main Tasks of NIP Ukraine was certified as a poliomyelitis-free country in 2002. Completion of the programme will enable the country to achieve the goals determined by WHO document “Health for all policy framework for the WHO European Region”, including, in particular: − To maintain the coverage level of

preventive vaccinations included in the national calendar at no less than 95 % of the population;

− To introduce new vaccines including hepatitis-B vaccines in the preventive immunization programme;

− To achieve measles elimination by 2007; − To reduce the incidence level of diphtheria

to less than 0.1 per 100 thousand population and of whooping cough and mumps to less than 1.0 per 100 thousand population;

− To reduce the prevalence of rubella in newborns to less than 0.01 per 1000 live births;

− To provide safe procedures for preventive vaccinations of the population, including the country-wide introduction of self-destruct syringes;

− To use syringes and injection supplies; − To conduct quality controls on

immunobiological preparations; − To create an efficient transport and

storage system for immunobiological preparations;

− To reduce vaccine losses (spills), by increasing the level of professional knowledge of NIP workers;

− To expand research into the main ways of combating infectious diseases, coordinated by specific prevention means;

− To improve the regional supply system for immunobiological preparations;

− To further development the system for raising public awareness of the prevention of infectious diseases, managed by specific prevention means;

− To prepare specialists in preventive immunizations, including by holding pertinent training sessions and preparing informational materials.

The main strategies directing the Ukraine NIP at this stage will be those of social mobilization and the improvement of epidemiological surveillance, the provision of an uninterrupted cold chain and the improvement of the NIP management information system.

The tasks of providing safe vaccination practices require the conduct of pertinent training and the preparation of informational materials.

2.4. Possible Changes of Programme Tasks Related to Financial Difficulties Over recent years the Government has managed to stabilize NIP financing, in which regard, no problems are foreseen for financing the purchase of vaccines and consumables for routine immunization. Short-term problems may arise only on the provision of additional immunization measures, as a result of which the conduct of these measures would be delayed, but not cancelled.

Moreover, financial problems could arise on the provision or timely replacement of cold chain equipment. Adaptation of the social mobilization strategy and the provision of pertinent staff training are seen as the solution to this problem. At the same time it is envisaged that this factor will have no effect on the vaccination coverage indicator.

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Section 3. Routine and Recurrent Programme Implementation Expenditure

3.1. Routine Programme Expenditure Hepatitis-B vaccines actually started to be supplied to Ukraine via GAVI channels in January 2003. However, 2001 was taken as the base for analysing EPI expenditure, inasmuch as it gives a better representation of the expenditure dynamics for vaccine purchasing, as can be seen in Table 3.1 with the majority of expenditure being allocated to the National Immunization Programme.

The overall cost of the Ukraine NIP was US$ 8.93 million in 2001 and US$ 19.73 million in 2003. The programme expenditure part of overall state healthcare expenditure totalled 1.57% and 2.13%,

respectively. Programme expenditure per fully immunized child stood at US$ 21.48 US$ in 2001 and US$ 48.65 in 2003.

As may be seen from Table 3.1, the main expenditure items of the Republic’s NIP in 2001 and 2003 were: − Purchase of vaccines at 37.5% and 66.0%,

respectively; − Staff expenditure at 25.6% and 15.1%

respectively; − Building maintenance and overheads

expenditure at 19.6% and 9.3%; − Amortization of cold chain equipment at

9.4% and 4.4%; − Purchase of injection supplies to carry out

vaccinations at 3.2% and 2.1%.

Table 3.1. Routine and 2003 Ukraine NIP Expenditure (US$)

Expenditure Category 2001 2002 2003 Plan Operating Expenditure US$ US$ US$

Vaccines (for plan immunization only) 3 351 961 37.5% 4 478 427 42.5% 13 029 499 66.0%

- Traditional vaccines 1 959 819 2 475 847 5 321 204 - New and underused vaccines 1 392 142 2 002 580 7 708 295 Injection supplies 302 173 3.2% 340 110 3.2% 421 614 2.1%Staff (directly employed) 94 461 1.1% 108 261 1.0% 126 124 0.6%Transport (direct costs) 24 998 0.3% 28 814 0.3% 44 970 0.2%Building and consignment expenditure 1 680 842 18.8% 1 715 145 16.3% 1 752 960 8.9%Short-term training 77 250 0.9% 77 911 0.7% 77 822 0.4%IEC/social mobilization 28 620 0.3% 28 865 0.3% 28 832 0.1%Supervision, monitoring and epidemiological surveillance 7 390 0.1% 7 453 0.1% 7 445 0.0%Ukrvaktsina Office rent 931 939 938

Total: Plan Operating Expenditure 5 591 314 6 798 228 15 490 204

Plan Capital Expenditure Means of transport 61 855 0.7% 63 118 0.6% 64 406 0.3%Cold chain equipment 836 368 9.4% 853 436 8.1% 874 760 4.4%Other capital expenditure (please give details) 3 980 0.0% 4 061 0.0% 4 144 0.0%

Total: Plan Capital Expenditure 902 203 920 615 943 310

Allocated expenditure Expenditure allocated to staff 2 190 612 24.5% 2 516 813 23.9% 2 862 696 14.5%Expenditure allocated to transport 199 017 2.2% 229 395 2.2% 358 020 1.8%Expenditure allocated to buildings 72 580 0.8% 74 061 0.7% 75 572 0.4%

Total: Allocated Expenditure 2 988 364 3 106 270 3 296 288

GRAND TOTAL 9 481 881 10 825 113 19 729 802

All expenditure for the procurement of vaccines and injection supplies, other than the provision of hepatitis-B vaccines, which has been carried out by GAVI since 2003, was taken from the state budget. The GAVI supply part of overall NIP expenditure

18


totalled 4.1%. (See Figure 3.1) Figure 3.1. NIP Financing Structure by Source in % of Overall Expenditure

Government, both national and local also financed almost all the remaining expenditure items of the National Programme. UNICEF financed a certain amount of training in 2001–2003 on injection safety procedures, social

mobilization and population awareness raising for those conducting vaccinations along with the purchase of technical information equipment for the development of the NIP management information system. Figure 3.2. NIP Financing Structure by Expenditure Item in % of Overall Expenditure

The financing structure of the National Immunization Programme by expenditure item is given in Figure 3.2.

Expenditure on the purchase of traditional and new EPI vaccines stood at US$ 3.35 million and US$ 13.03 million, respectively (35.4% and 66.0% of overall programme expenditure). Such significant growth in expenditure on the procurement of vaccines was primarily associated with the widespread introduction of the combination measles, mumps and rubella vaccine (MMR), of which the purchase increased from US$ 1.21 million in 2001 to US$ 6.06 million in 2003, and the polio anavaccine, which was first purchased in 2002 and on which overall expenditure totalled US$ 4.36 million in 2003.

Moreover, the Ukrainian Government purchased small quantities of relatively

expensive vaccines such as AKDS with a non-cellular whooping cough component for the sum of US$ 259 thousand in 2003; combination AKDS-hepatitis-B vaccines with a full-cell whooping cough component for a total of US$ 407 thousand in 2002 and US$ 380 thousand in 2003; and even a combination AKDS-hepatitis B vaccine with an non-cellular whooping cough component for the total of US$ 450 thousand in 2003. Even more significant growth in programme expenditure should be expected with the quantitative increase in the future purchasing scales of these expensive vaccines.

3.2. Staff Expenditure On assessment of National Immunization programme expenditure as a whole, it can be

19


seen that staff expenditure became a significant NIP expenditure item in 2001, at US$ 2.83 million (29.9% of overall NIP expenditure) and US$ 2.99 million in 2003 (15.1% of overall NIP expenditure). The essential reduction of staff expenditure relative to overall programme expenditure is associated with the fundamental increase of expenditure for the purchase of vaccines.

Nationally, 19 employees of the Republic’s Scientific and Practical Centre for Preventive Medicine (RSPCPM) carry out the tasks and functions of the Ukraine National Immunization Programme. According to the assessment of the centre employees, NIP-related work occupies 20-100% of their working week.

Regionally there are a total of 52 epidemiologists (part-time - 50%) and 104 assistant epidemiologists (part-time - 75%) implementing NIP-related measures in the country.

There are 120 maternity doctors (part time - 5%); 240 registered nurses (part time - 10%); 3 500 doctors of mobile treatment clinics (part time - 5%); and 10 500 registered nurses of mobile treatment clinics (part time - 10%) carrying out in-house immunization at various levels of engagement.

Compulsory employer deductions were taken into consideration for the calculation of all categories of employees, i.e. 32% state social security deductions

3.3. Cold Chain Equipment Expenditure When determining expenditure on cold chain elements, the following equipment was taken into consideration:

at national level (Ukrvaktsina) 4 cold rooms 4 refrigerators 4 freezers

at oblast’ level

27 cold rooms 64 refrigerators 64 freezers 800 refrigerated containers 1 600 cold boxes

at regional/town level 1 919 refrigerators 441 freezers 1 919 cold boxes

at healthcare establishment level (vaccination points)

18 713 refrigerators 18 713 cold boxes

The refrigeration equipment chosen has a lifespan of 12 years.

3.4. Transport Expenditure In order to assess transport expenditure, it was assumed that three refrigerated SCANIA vehicles (travelling 55 thousand km/year) and that two heat-insulated Gazel vehicles (travelling 20 thousand km/year), would be used 100% of the time for immunization requirements on a national level. At the oblast’ level 27 heat-insulated Gazel vehicles (travelling 50 thousand km/year) would be used 50% of the time. At the Raion level, the same vehicles would be used 10% of the time (travelling 70 thousand km/year).

All vehicles chosen have a lifespan of 7 years and expenditure on technical servicing, including oil changing and other spare parts, is equivalent to 45% of fuel expenditure.

In view of the fact that most vehicles are used for immunization-related tasks only some of the time, capital expenditure on the procurement of such vehicles was not taken into consideration in order to determine overall NIP expenditure associated with the particularities of the recommended GAVI instrument. This could result in an

20


under-evaluation of overall transport expenditure for the immunization procedure.

3.5. Building Maintenance Expenditure and other Expenses On purpose, only expenditure associated with the maintenance of medical and epidemiological stations was taken into consideration when assessing building maintenance expenditure. The maintenance of other healthcare establishments was not taken into consideration, owing to the small share of utility area used, in general, for immunization

purposes. To this end, the main cold chain maintenance expenditure was separately taken into consideration.

According to assessments, approximately US$ 78 thousand was allocated to short-term yearly supply measures from 2001-2003; US$ 29 thousand on IEC and social mobilization; and about US$ 7.5 thousand for training associated with monitoring measures and measures for monitoring infectious diseases prevented by vaccination. These items were financed by expenditure from both the national and local budgets and donor capital from UNICEF.

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Section 4. Future Programme Resource and Financing Requirements. Analysis of the Expected Financial Gap

4.1 Forecasted Resource Requirements The forecasted resource requirements to fulfil the Ukraine NIP 2004-2010 are given in Table 4.1. Table 4.1. Forecasted Resource Requirements for EPI Ukraine 2004-2010 (US$)

Expenditure Category 2004 2005 2006 2007 2008 2009 2010

Plan Operating Expenditure US US US US US US US

Vaccines (for plan immunization only)

11 535 229 11 488 688 11 422 938 11 342 233 11 258 300 11 174 989 11 092 294

- Traditional vaccines 6 865 062 6 814 261 6 763 835 6 713 783 6 664 101 6 614 787 6 565 837

- New and underused vaccines 4 670 167 4 674 427 4 659 103 4 628 450 4 594 199 4 560 202 4 526 457

Injection supplies 428 474 435 472 437 314 435 083 431 863 428 667 425 495

Staff (directly employed) 226 560 253 748 284 198 318 301 356 498 399 277 447 191

Transport (direct costs) 47 218 64 707 83 826 104 695 109 931 115 427 121 198

Building and consignment expenditure 1 837 382 1 952 648 2 066 962 2 182 260 2 301 343 2 347 370 2 394 317

Short-term training 79 214 80 798 82 414 84 062 85 744 87 459 89 208

IEC/social mobilization 29 348 29 935 30 534 31 144 31 767 32 402 33 051

Supervision, monitoring and epidemiological surveillance

7 578 7 729 7 884 8 042 8 202 8 367 8 534

Plan Capital Expenditure

Means of transport 150 226 153 230 156 295 497 765

Cold chain equipment 271 225 405 804 413 522 406 366 414 494

Other capital expenditure (please give details)

93 237 21 990 102 942

Immunization Campaigns

Measles-rubella Campaigns - 6 961 568 - - - - -

Allocated expenditure

Expenditure allocated to staff 3 206 219 3 590 965 4 021 881 4 504 507 5 045 048 5 650 453 6 328 508

Expenditure allocated to transport 375 921 394 717 414 453 435 176 456 935 479 781 503 771

Buildings 77 084 78 625 80 198 81 802 83 438 85 107 86 809

TOTAL 18 122 406 25 989 840 19 522 337 20 090 979 21 082 361 20 810 353 21 634 393

Financing requirements for the Ukraine Expanded Programme on Immunization, 2004-2010 will grow from US$ 18.12 million in 2004 to US$ 21.63 million in 2010. Such comparatively insignificant growth in 6 years is explained primarily by the lack of need for large-scale restructuring of the immunization system; secondly by its integration into the

country’s healthcare assistance and medico-epidemiological welfare systems, thanks to which fundamental savings can be made on the resources required to carry out the tasks set before the NIP; and thirdly, by the demographic slump which Ukraine continues to experience at this time. This slump is not envisaged to end in the near future, according to existing demographic forecasts. Staff salary

22


payments account for most of the increase in programme expenditure.

One of the factors that could lead to an increase in programme expenditure is the decision to introduce the Hemophillus Influenzae type B vaccinations into the basic vaccination schedule. Meanwhile, research into sickness burdens associated with said activating agent, to date, has not provided conclusive evidence of the appropriateness of introducing said vaccine.

As in previous years, the purchase of vaccines will constitute the majority of EPI expenditure at US$ 11.54 million in 2004 and US$ 11.09 million in 2010. The forecast reduction in expenditure on the procurement of vaccines can be explained by the reduction of the EPI target population. Expenses on the procurement of injection safety supplies will decrease commensurately from US$ 428 thousand in 2004 to US$ 425 thousand in 2010.

Within the framework of the work on measles elimination, measles vaccinations campaigns are planned for 2005 for a target population of approximately 7 million people (according to forecasts by the Ministry of Health). This will require the additional purchase of vaccines to the sum of approximately US$ 5 million along with injections safety supplies to the

sum of approximately US$ 587 thousand.

As a whole, expenditure on the procurement of vaccines totalled approximately 64% of the EPI programme cost in 2004 and will go down fractionally to 51% in 2010. Expenditure on the procurement of injection supplies and injection safety supplies will fall from 2.4% in 2004 to 2.0% of the EPI cost in 2010.

In accordance with the legislation presently in force, vaccine purchases for the vaccinations will be fully financed by the government (state budget) except for that provided by the GAVI Vaccine Fund for the purchase of hepatitis-B vaccines until 2007, inclusive. Injection supplies are to be purchased on the local budgets.

The above expenditure totals for the procurement of vaccines have been calculated on the assumption that use, at time of costing calculations, is maximal and that the rise in prices is remote, for new combination vaccines, in particular. The inflation indicator was not taken into account for these calculations.

Meanwhile, we should not ignore the pricing level of vaccines purchased for the Ukraine EPI. Table 4.1 compares the prices for supplies registered in Ukraine with the prices proposed by UNICEF.

Table 4.2. Table Comparing Vaccine Purchase Prices

Type of Vaccine

Purchasing Price for One Dose in Ukraine (US$)

Year of Purchase

Purchase Volume (US$)

Purchasing Price Proposed by

UNICEF

Possible Savings When Purchasing at UNICEF Prices (US$)

1 2 3 4 6 7

AK(w)DS-hepatitis-В

$ 5.08 2002 $ 406 780 $ 1.00 $ 326 705

AK(w)DS-hepatitis-В

$ 5.08 2003 $ 381 356 $ 0.95 $ 310 039

MMR (single dose)

$ 7.98 2002 $ 1 108 399 $ 875 052

$ 7.91 2003 $ 3 638 855 $1.24 $ 3 068 415

MMR (10 dose) $ 4.80 2002 $ 1 536 723 $ 1.00 $ 1 216 572

$ 4.80 2003 $ 6 341 733 $ 1.55 $ 4 293 882

$ 4.71 2004 $ 4 943 503 $ 1.28 $ 3 600 046

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Hepatitis-B* $ 3.27 2004 $ 5 273 070 $ 0.27 $ 4 837 679

Polio-IPV $ 7.32 2002 $ 586 028 $ 2.00** $ 425 912

$ 7.32 2003 $ 4 355 809 $ 2.00** $ 3 165 697

$ 7.11 2004 $ 3 770 713 $ 2.00** $ 2 710 034 * - Purchased for campaigns and to vaccinate adult occupational groups. ** - Recommended price for countries receiving assistance from international organizations. The forecast expenditure on the procurement of vaccines for 2004-2010 is calculated on the basis of those prices that were registered in Ukraine in 2003-2004. If the Ministry of Health of Ukraine had bought vaccines in 2002-2004 at the prices proposed by UNICEF, the following savings could have been made:

in 2002 – $ 2 844 241

in 2003 – $ 10 838 033 in 2004 – $ 11 147 759

Table 4.3 gives the calculated costs of procuring EPI vaccines for 2004-2010 at UNICEF prices for comparison. The data in the table allows us to conclude that a yearly saving of approximately 7 million US$ is possible.

Table 4.1. Resource Requirements Forecast for the Purchase of Ukraine EPI Vaccines at UNICEF Prices, 2004-2010

Expenditure Category 2004 2005 2006 2007 2008 2009 2010

Plan Operating Costs US US US US US US US

Vaccines (Plan immunization only) 4 152 930 4 161 018 4 149 492 4 122 611 4 092 104 4 061 822 4 031 765

- Traditional vaccines 2 445 707 2 427 609 2 409 644 2 391 813 2 374 114 2 356 545 2 339 107

- New and underused vaccines 1 707 223 1 733 409 1 739 848 1 730 798 1 717 990 1 705 277 1 692 658

In view of this the Ministry of Health of Ukraine will take a series of steps intended to optimize vaccine purchase prices. The content of those measures is described in the next chapter of the present document.

The next most important NIP expenditure item is staff expenses, which totalled US$ 3 433 thousand in 2004 and will total US$ 6 776 thousand in 2010. The bulk of this sum (approximately 93%) is take up by allocated expenses, i.e. salaries for staff of the healthcare centres in which vaccinations are carried out. The probable yearly medical staff salary level increase of 12% was taken into account to form the forecast. In all, salaries should almost double from 2005-2010.

Inasmuch as the purchase of vaccines is centrally financed by the state budget in Ukraine and does not directly depend on the budget planning process in healthcare establishments, an increase in salary allocations should not be expected to lead to difficulties in the financing of such important budget items as the purchase of vaccines and injection supplies.

Another important NIP expenditure item is that of building and cold chain equipment maintenance. It is envisaged that this will increase from US$ 1.92 million to US$ 2.48 million and will stand at approximately 11% of overall EPI expenditure.

Annual EPI expenditure on the procurement of additional cold chain equipment will reach

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just over US$ 400 thousand in 2005-2008. The equipment chosen has a lifespan of 12 years, after which its wide scale replacement will occur only in 2013. Meanwhile, according to the observations of the medical epidemiological service employees who have been assessing the state of the cold chain equipment, many items of equipment being used at the healthcare establishment level do not provide the required cold regime (i.e. maintaining a temperature of +4–6°С), some cases of frozen vaccines have been reported. To solve this problem, said equipment must either be repaired or, if possible, replaced with more up-to-date models that are capable of automatically maintaining the required parameters for vaccine storage as soon as possible.

Since, in accordance with Ukrainian budgetary legislation, the responsibility for purchasing equipment for healthcare establishments lies with the local budgets, on the formation of which the Ministry of Health has no influence, it is considered necessary, in order to provide the required condition of the cold chain, to develop and introduce indirect incentives for local authorities and local self-governmental bodies so as to encourage them to provide such purchases when required.

Vaccine transport expenditure totals approximately 2.6 – 2.9% of overall NIP expenditure. In 2005-2007 the yearly expenditure on transport should stand at approximately US$ 150 thousand, and at almost US$ 500 thousand in 2008, owing to the need to replace the SCANIA refrigerated trucks.

Other less significant values, as regards expenditure amount, include EPI expenditure items such as short term staff training; informational, instructional and consultation societies and social mobilization; epidemiological surveillance and sickness rate monitoring, totalling approximately 0.6% of the overall programme cost. The Government of Ukraine intends to independently finance expenditure on these items, but would, at the same time, welcome any technical assistance from the international organizations, which could lead to a more efficient use of NIP resources.

The forecasted EPI financing requirements (by expenditure item) are given in Figure 4.1.

In accordance with the agreement in force between the Government of Ukraine and the GAVI Vaccine Fund, the latter will provide the necessary financing to supply hepatitis-B vaccines from 2003 to 2007 and safe injection supplies for vaccinations for a duration of three years from 2003 to 2005 to a total of US$ 748 thousand.

25


Figure 4.1. Forecasted EPI Resource Requirements 2004-2010 by Expenditure Item

The commitments of the state and local budgets and the GAVI Vaccine Fund are given in Table 4.2. The growing role of local authorities in NIP financing is primarily associated with the growth in salaries, the routine expenditure burden of which lies with the local authorities. Table 4.4. Forecasted EPI Financing Level (as a total – reliable and probable) 2004-2010 (US$)

Source of Financing 2004 2005 2006 2007 2008 2009 2010

Government 11 530 567 11 497 549 11 465 483 11 439 446 11 766 948 11 732 757 11 704 608

Local Authorities 6 029 799 6 275 183 7 102 053 7 721 698 8 403 154 9 077 596 9 826 843

GAVI Vaccine Fund 562 040 699 510 366 058 367 174 0 0 0

Regular financing from the state budget will provide for all NIP expenditure items other than the procurement of vehicles, other basic funds and the purchase of vaccines for measles immunization campaigns. The degree of reliability of the allocations for the latter three items is determined as “probable financing”.

Reliable financing from local budgets will provide for the purchase of injection supplies, the payment of healthcare centre staff salaries, the transportation of vaccines, the maintenance of buildings and cold chain

equipment, the conduct of short-term staff training, IEC and social mobilization of the population and the implementation of monitoring measures and epidemiological surveillance. Financing for the purchase of cold chain equipment and expenditure related to the 2005 measles immunization campaign has been defined as probable.

The forecasted amount of reliable EPI financing in Ukraine is shown by source of financing in Figure 4.2.1; Figure 4.2.2 gives the financing totals, probable financing included.

26


Figure 4.2.1. Reliable EPI Financing Forecast Figure 4.2.2. Forecast for Overall EPI by Source of Financing 2004-2010 Financing (reliable and probable)

by Source of Financing 2004-2010

In Figure 4.2 we can see that the gap in reliable financing in 2005 and 2013 is quite significant, owing firstly to the financing of measles immunization campaigns and secondly to the need for the wide scale replacement of cold chain equipment. On inclusion of probable financing, there is no

financial gap for the Ukraine EPI (Figure 4.2.2).

EPI expenditure per fully immunized child stood at US$ 46.31 in 2004 and will grow to US$ 58.82 in 2010.

Programme expenditure constituted 1.91% of all government health expenditure in 2004 and will account for 1.59% thereof in 2010.

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Section 5. Sustainable Financing Strategies, Measures and Indicators

Financing for the immunization programme for disease prevention by vaccination, is one of the priorities of the Ukrainian Government’s social policy. Thanks to the high status of the programme, financing from the state budget has been released for the purchase of almost all the vaccines on the NIP list, except for the hepatitis-B vaccine, which is presently provided by the GAVI Vaccine Fund.

The dynamic development of Ukraine’s economy over recent years and the corresponding increase in healthcare allocations has not only enabled the purchase of traditional medicines to be financed but has also enabled the crossover to the use of relatively new vaccines for the Ukraine, such as the combined measles, mumps, rubella vaccine (MMR), the poliomyelitis anavaccine (IPV), the AKDS vaccine with an non-cellular whooping cough component and also

combination AKDS vaccines, including the non-cellular vaccine combined with a hepatitis-B vaccine (AKDS-hep-P).

The economic growth forecasts provided by the Ministry of Economics of the Ukraine, allow us to envisage that health allocations, will moderately increase in step with economic growth, and, as a result thereof, the Government will be able to maintain the level of financing for vaccine purchasing attained and painlessly cross over to the independent financing of hepatitis-B vaccine requirements when the GAVI assistance comes to an end in 2007. The calculated programme cost indicator for overall government health expenditure and the decrease thereof, in particular, speaks in favour of this affirmation (Table 5.1.). Consequently, the Government has the fundamental mission of maintaining NIP financial stability.

Table 5.1. NIP Cost as a % of Overall Government Health Expenditure 2001 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10

1.57% 1.55% 2.13% 1.91% 2.51% 1.79% 1.74% 1.69% 1.64% 1.59%

At the same time, as is visible from the data given in chapter 4, Ukraine has the definite potential to reduce expenditure on NIP vaccine purchases to a certain extent.

There are 2 aspects that affect the economy’s supply of State funds for the purchase of NIP vaccines for Ukraine.

One: the possible approach is that of creating the legislative opportunity to use state capital to buy vaccines directly from UNICEF. At

present this step is not possible for several reasons:

Firstly, when buying goods and services on the state budget, tenders must be put forward but UNICEF does not participate in tender purchasing procedures.

It would appear to be wise to create the legislative possibility to use supply mechanisms for vaccines and other medical preparations, proposed by international organizations, which would have a positive effect not only on preventive immunization

28


but also on country-wide supply, HIV/AIDS medication, for example.

Secondly, some vaccines proposed by UNICEF have not undergone such registration. Moreover, the Ukrainian experts responsible for the quality control of the immunobiological preparations in use in Ukraine have a number of questions regarding the qualitative characteristics of some of the substances on the list of vaccines proposed by UNICEF. The main opportunity to use the vaccines provided by UNICEF in Ukraine depends on the comprehensive answers to these questions.

In addition to measures intended to save state money on the purchase of vaccines, the Ministry of Health in conjunction with the Ministry of Finances will develop recommendations on the financial sustainability of the cold chain system. To this end, it is suggested that the volume of purchasing of cold chain equipment be increased in order to maintain an adequate preventive immunization system infrastructure.

Taking into account the importance of sure and reliable information for administrative

decision-making, the Ministry of Health will also take steps to improve the information system for the National Preventive immunization Programme.

Strategic Approaches to Providing Sustainability for the National Preventive immunization Programme

I. Optimize centralized purchasing practices (obtain more favourable price-quality ratios for vaccines and equipment purchased)

II. Develop an efficient financial incentives system to encourage regional and local authorities to maintain an adequate infrastructure of the preventive immunization system at the healthcare establishment level.

III. Improve the NIP information system (monitor the infrastructure and the activity of the preventive immunization system as a whole, i.e. movement of vaccines, condition of the cold chain, state provision and other resources)

IV. Improve the criteria for introducing new vaccines into the vaccination calendar for the National Immunization Plan, Ukraine.

Strategy Component Implementation Indicator Responsible Party Deadline

I. Optimize centralized purchasing practices and obtain a more favourable price-quality ratio for vaccines and equipment purchased

1. Conduct an inventory of vaccines registered in Ukraine (V-R list), including the vaccines supplied by UNICEF (V-R-U list). Distribute the lists of vaccines registered in the Ukraine via the website of the Ministry of Health of Ukraine

Written report on the listing of vaccines registered in Ukraine;

O.P. Sel’nivkova (GP Centre for Immunobiological Preparations (CIBP), Director – Valentin Dmitrievich Dumansky)

by 01.04.2005

29



Availability of information on vaccines registered in the Ukraine on the website of the Ministry of Health of Ukraine

Ukrainian Ministry of Health Website team

after 01.05.2005

2. Analyse the registration process for the vaccines that are authorized in Ukraine in order to assess the adequacy of the safety mechanisms for registered vaccines and also to expose the ungrounded obstacles in the registration process.

Joint written report on said analysis of the vaccine registration process

O.P. Sel’nivkova or other Centre Employee (GP CIBP).

State Service for Medication and Medical Products

by 01.04.2005

3. Determine the types of vaccine supplied by UNICEF that are present in the national vaccination calendar but which are not registered in Ukraine (V-N-U list)

Written report

О.М.Stel’makh (Administration for the Prevention of Infectious Diseases of the Department of Medical and Epidemiological surveillance of the Ministry of Health (SSEM))

by 01.04.2005

4. Carry out a comparative analysis of the qualitative characteristics of vaccines on the V-R list (i.e. which are registered in Ukraine) and the vaccines on the V-N-U list (supplied by UNICEF, but not registered in the Ukraine)

Written report on the comparative characteristics of the vaccines on the V-R and V-N-U lists

O.M.Stel’makh (Administration for the Prevention of Infectious Diseases SSEM)

O.P. Sel’nivkova (GP CIBP)

by 01.04.2005

5. Analyse the comparability of immunization graphs, envisaged for vaccines on the V-N-U list, (supplied by UNICEF, but not registered in Ukraine) with the national calendar for EPI vaccinations

Written report on the comparability of immunization graphs for vaccines on the V-R and V-N-U lists.

Administration Employee (Administration for the Prevention of Infectious Diseases SSEM)


by 01.05.2005

6. Determine, on the basis on the results of implementation of points 2, 3, 4, 5 and 6 of this plan, those vaccines from the V-N-U list, that it would be prudent to register in Ukraine and develop a registration plan for said vaccines.

Written report with a list of vaccines that it would be appropriate to register in Ukraine.

O.M.Stel’makh (Administration for the Prevention of Infectious Diseases SSEM)


by 15.05.2005

7. Register vaccines from the V-N-U list (supplied by UNICEF, but not registered in Ukraine) should a positive decision have been made in point 7

Written report with a list of vaccines that it would be appropriate to register in Ukraine


E.Sherstyuk

by 01.07.2005

30



8. Determine the legislative possibilities for purchasing (supplying) vaccines centrally by UNICEF channels with the costs to be borne by the state budget.

Written report on the legislative requirements affecting the central purchase of vaccines and on the necessities of legal provisions for the conduct of such purchases.

The Legal Department of the Ministry of Health

by 01.04.2005

II.

Develop an efficient financial incentives system to encourage regional and local authorities to maintain an adequate infrastructure for the preventive immunization system

9. Define the principles for a cold chain equipment- purchasing subsidization system for local self-governance bodies, at the expense of the local and state budgets.

Recommendations on the construction of a state subsidization system for the purchasing of cold chain equipment.

Budget Programme Department of the Ministry of Finance of Ukraine

Department of Economics and Finance of the Ministry of Health of Ukraine

by 01.06.2005

10. Development of a logistical cold chain equipment provision plan and a plan for monitoring the operation thereof.

Presence of logistical cold chain equipment provision and monitoring plans


Administration for strategic initiatives and new medical technology

by 01.10.2005

11. Conduct a national inventory of cold chain equipment, and also assess the cold chain operation quality control system.

Report on the condition of the cold chain (quantitative indicators, % wear condition, etc.);

Cold chain equipment safety gap indicator;

Report on the condition of the cold chain quality control system.

L.M. Mukharskaya (Administration for the Prevention of Infectious Diseases SSEM)

by 31.07.2005

III.

Improve the NIP information system (monitor the infrastructure and the activity of the preventive immunization system as a whole, i.e. movement of vaccines, condition of the cold chain, state provision and other resources)

12. Analyse the existing NIP management system and determine the information requirements of this system and draft recommendations for its development

Written report on the analysis carried out including recommendations for system development.

Administration for the Prevention of Infectious Diseases of the Department of Medical and Epidemiological Surveillance of the Ministry of Health

Centre for Medical Statistics of the Ministry of Health of Ukraine

GP Ukrvaktsina

by 30.07.2005

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Administration for the Coordination of Medical Assistance for Mothers and Children

13. Analyse the preventive immunization information systems already in use in order to study their possibilities, including the possibility of integrating the existing systems with the future developments thereof.

Written report on the analysis carried out including recommendations for development of the NIP information system.

Administration for the Prevention of Infectious Diseases of the Department of Medical and Epidemiological surveillance of the Ministry of Health

Centre for Medical Statistics of the Ministry of Health of Ukraine

GP Ukrvaktsina

Administration for the Coordination of Medical Assistance for Mothers and Children

by 31.08.2005

14. Develop technical specifications and technical targets for the development of the improved preventive immunization information system. Prepare technical documentation for the call for tenders for the right to manufacture the improved NIP information system.

Technical targets prepared for the call for tender for the manufacture of the improved NIP information system.

State Purchasing Department of the Ministry of Health of Ukraine

Department of Medical and Epidemiological Surveillance of the Ministry of Health of Ukraine

By 31.12.2006

15. Introduce the improved NIP information system.

Launch of the new NIP information system.

To be determined in the tender process

By 31.12.2006

IV.

Improve the criteria for introducing new vaccines into the vaccination calendar for the Ukraine National Immunization Plan.

16. Discuss the criteria for assessing the appropriateness of introducing new vaccines into the calendar of compulsory vaccinations in Ukraine

Working Group Report on the criteria for assessing the appropriateness of introducing new vaccines into vaccination practices in Ukraine.

Administration for the Prevention of Infectious Diseases of the Department of Medical and Epidemiological surveillance of the Ministry of Health


Administration for the Organization of Medical Assistance for Mothers and Children

By 31.09.2005

17. Introduce practical financial and economical analyses when making decisions on extending the NIP (introducing new vaccines)

Order published by the Ministry of Health on the procedure for medico-economic analyses on the decision to introduce new vaccines.


By 31.09.2005

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the cabinet of ministers of ukraine …...ah/pr 2005-88 rev.doc short summary key objectives and...

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