unitaid who expert working group on r&d* financing geneva, 13 january 2009 dr. philippe...
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UNITAID
WHO EXPERT WORKING GROUP ON R&D* FINANCING
Geneva, 13 January 2009
Dr. Philippe Douste-Blazy, Chairman, UNITAID
2000 2004 2008 2011 2015
US$
The innovative funding
Quantitative and qualitative criteria for innovative financing
Significant increase of funds to achieve the MDGs
Additionality with current aid flows to prevent any decrease in traditional aid
Stability and sustainability to enable efficient planning
Political feasability to minimize negotiation time
Rapid disbursement of funds to respect the 2015 deadline
Transparency and traceability to build confidence among donors
The innovative funding
UNITAID : a lab for the innovative financing and the efficient aid for a
common future
Official signature of the five founding countries when UNITAID was launched, on 19 September 2006, at the United Nations General Assembly, New York
Five founding countries (September 2006)
Tax received on each ticket by
UNITAID (in France)
Economy classFirst class or
business
Flight in France or in
Europe
1 € 10 €
International flight
4 € 40 €
An aircraft with 300 passengers on board leaving from Paris will cover the treatment for 1 person with multi drug resistant tuberculosis (approx. 4.000 $) or 60 HIV-positive children for one year
Antimalarial treatment for 2 children
1 HIV-positive childunder treatment
for 1 year
ex: flight Paris - Berlin
ex: flight Paris - Dakar
Furthermore… no economic impact on air traffic
UNITAID membership
Over $600 million collected in less than 2 years mainly through air travel tax
No economic distortion for the air industry
A solidarity movement
UNITAID : a lab for innovative financing
Up to present, in cooperation with the Clinton Foundation, the Project of UNITAID on Antiretrovirals against HIV/AIDS for children :
has reduced the price of ARVs on average by 40%
is funding the supply of diagnostics and treatment for more than 102,000 children, including more than 62,000 new treatments, in 38 developing countries.
UNITAID : a lab for innovative financing
UNITAID initiatives have already driven major price reductions (partnering with CHAI)
Change in peds ARV prices
(AZT FDC vs. individual syrups)US$/patient per year
2006 Q1 2008
50%
$66
$130
Change in 2nd-line ARV prices(TDF+3TC)US$/patient per year
2006 Q1 2008
50%
$159
$315
Now (UNITAID-CHAI):Fixed dose combination
3 tablets a day60 $per patient per year
Before: Single dose syrups
16 bottles of syrup monthly200 $ per patient per year
Better products at lower price
UNITAID, in partnership with UNICEF and WHO, delivered more than 1.4 million malaria treatments in Burundi and Liberia.
UNITAID, in conjunction with the Stop TB Partnership’s Global Drug Facility, is funding pediatric therapies against tuberculosis for approximately 180,000 children in 30 countries to be supplied from September 2007 at a cost of US$ 5.6 million. UNITAID plans to continue to finance this program until 2010 with the aim of providing treatment to the 900,000 children who need it.
UNITAID : a lab for innovative financing
More than 90 countries already receive UNITAID support…
UNITAID ongoing actions
HIV / AIDS53 recipient countries
Malaria22 recipient countries
Tuberculosis58 recipient countries
- Pediatric ARV- Second line ARV- PMTCT
- ACT- LLIN
- First line TB- Pediatric TB- MDR-TB- Diagnostics
Innovative Financing :
Tax
or
Voluntary Contribution ?
Voluntary Solidarity Contribution could allow Unitaid to reach countries – like the US – unlikely to be part of the tax on airline tickets mechanism
• UNITAID’s tax on airline tickets has been a success in the last two years
• UNITAID will continue to encourage new countries to implement the tax (e.g., Portugal is likely to join in 2009)
• But some countries are not likely to join this initiative: –The US (first airline market) already is not likely to implement it because of
the “tax” dimension
• Voluntary Solidarity Contribution (VSC) would allow UNITAID to reach non-member countries unlikely to implement the tax, by involving citizens on a voluntary basis
Voluntary Solidarity-Contribution is a concept to raise funds : •From individuals and corporations who purchase plane tickets• •2 ($,€,£) solidarity contribution per ticket
•Entirely voluntary, simple and hassle-free process
•Traceable donation experience
The VSC project constitutes a great opportunity to develop a massive citizen movement
Physicalagencies
Online
Phone
Individuals
Corporations
“[…] so, Mr. Smith, an amount of 2$ (or 2€/2£ depending on location) per flight will be charged on your ticket as part of the UNITAID program against infectious diseases in the world.If you would like to give more, I can also specify a free additional amount now that will also be included in the global price of the ticket […]”.
The VSC project constitutes a great opportunity to develop a massive citizen movement
The Voluntary Solidarity Contribution (VSC) project has demonstrated a revenue potential of USD ~1 billion by 2011 in the travel industry and its feasibility from a market and technical standpoint thanks to strong support from potential partners
Voluntary Solidarity Contribution Revenue Potential
19
980210
770
Revenue from travel agencies and e-brokers
Revenue fromairlines and low-costs
Total revenue
ASSUMING NO TAX
(1)All targetable countries(2)Compound of 73% implementation rate for travel agencies and e-brokers (GDS volume: 65%) and 44% implementation rate for direct sales (direct volume: 35%) i.e., 16 first airlines / low-costs(3)10% of GDS activities (car rentals, hotels, trains, cruises)(4)% of donors to charities donate to UNITAID(5)02 ($, €, and £) per ticket in economy class and 20 in business/first classesSource:PhocusWright, ICAO, Amadeus, Star Alliance report 2003, Back Aviation OAS database 2007, Project Team analysis
USD millions; based on 2006 volumes
Voluntary Solidarity Contributionproposed on 848m (39%) travels out of 2,200m worldwide air tickets
Core case hypotheses
• 771m airline tickets worldwide
– 125 countries(1)
– Credit card payments only
– Implemented for 63% of tickets(2)
• 77m “easy to capture” other types of travel(3)
Travelers donate
• 27% of the time(4)
• An average amount of USD 4.3(5)
Pessimistic and optimistic cases range from USD ~120m to ~1,800m
The VSC project has demonstrated a revenue potential of USD 1 BN by 2011 in the travel industry
*Among which 48% offline and 17% online**Among which 14% offline and 21% onlineTourism Organization 2007, ING Oct 2004, ICAO, Euromonitor 2006, PhoCusWright 2005 & 2006, Analysys international 2007, ProjeSource: World ct Team analysis
Distributors
Travel agencies
Managed business
41%
Leisure and unmanaged business
59%
47%
% Share of passengers
Intermediaries
65%*
35%**
ProvidersCustomers
e-brokers
18%
Airlines
LCC
24%
11%
Indirect sales
Direct sales
Airlines
GDS as software provider
GDS
Airlines
WORLD AIR TRAVEL STRUCTURE
*If implemented in all distribution channels. Indirect volumes represent ~65% of all air travel tickets sold worldwide**Worldspan and Galileo are now part of Travelport GroupSource: Amadeus, PhocusWright 2006 ; Experts interviews
Percent
Galileo/Travelport
AmadeusSabre
10
90
Travelsky
Other
3 main GDSs could allow UNITAID to technically reach ~100% of indirect volume* in tier 1 countries
14
8
78
Amadeus
Galileo/Travelport
Sabre
US
Germany
15
35
50
Sabre (infini)
Galileo/Travelport**
Amadeus24 57
SabreGalileo/Travelport**
Amadeus
19
China
Japan
UK
VSC is feasible from a market standpoint thanks to high concentration of tickets sold 3 main GDSs
*Approximated from number of passengers carried, 2006**48 first countries account for 95% of number of tickets sold***Not considered for Voluntary Micro-Contribution because potential tax contributors****Among which ~1.88 billion tickets sold in non-UNITAID member countriesSource:ICAO 2006, www.unitaid.eu, Project Team analysis
Non-member countries
45555556677789101010111212131518182020222225272930333738394044475153
6061
104109
127160
GERMANYJAPANFRANCESPAINAUSTRALIAIRELANDCANADABRAZILINDIA***ITALYRUSSIAN FEDERATIONREPUBLIC OF KOREASCANDINAVIAINDONESIANETHERLANDSTURKEYGULF STATESCHINA, HONG KONG SARMEXICOTHAILANDSINGAPOREMALAYSIASAUDI ARABIAIRAN (ISLAMIC REPUBLIC OF)SOUTH AFRICANEW ZEALANDSWITZERLANDCOLOMBIAAUSTRIAGREECEPORTUGALFINLANDPHILIPPINESARGENTINAQATARCZECH REPUBLIC
730
PAKISTANEGYPTVIET NAM
UNITED STATESCHINA***
CHILE
ISRAELTUNISIAPERUMOROCCO
UNITED KINGDOM
VENEZUELA
• 125 targetable countries represent 1,800 m tickets out of 2,200 worldwide
• Deep understanding of Tier 1 countries (~55% of total number of targetable countries) is necessary to assess revenue potential
• Priority targeted countries: – United States– Germany– Japan– United Kingdom
Total 2,200****
Tier 1
Tier 2
Tier 3
Percentage of total**
32.67.15.74.84.62.72.62.42.32.12.01.81.81.71.61.51.31.31.21.11.01.00.90.90.80.80.70.60.60.50.50.50.40.40.40.40.30.30.30.30.30.20.20.20.20.20.20.2
54.8%,
14.1%,
8.4%,
Number of airline tickets* sold (in millions) ; 2006
125 targetable countries represent 1,800 million tickets out of 2,200 worldwide
Description of the solution Features
• Fully integrated within travel agencies and e-brokers booking flow
• Implementation first in travel agent/e-broker but extendable to airline/LCC direct sales
• Only credit card payment permitted
• Payment Service Providers (PSPs, e.g., Bibit, Cybersource, others) for money collection: fees to negotiate
• Risk of double password entry may occur in 2 years at the earliest
PSPBibit, Cybersource
Ticket Contribution
Travel agencies / e-brokers
Airlines
BSP/ARC
Implementation• Pilots (Australia
– Italy) can be run in April 2009
• Roll-out can be effective ~ 6 months later
Millenium Foundation
Amadeus designed a fully integrated solution
295
250
158150
100
200
300
1990 1995 2000 2006
Total charitable giving, USUSD billions
• In the US, the past 15 years have demonstrated a correlation between people's generosity and number of opportunities to give (approximated by the number of charities)
PRELIMINARY
Source:Project Team, Giving USA, Pew Charitable Trust, Chronicle of Philanthropy, Bridgespan
Large media campaigns + new "niches" initiative (Harvest
Foundation of the Piedmont)
Internet charitable giving development (American Red
Cross, United Way,…)
"Historic" donations (Religious, Communitarian giving –
Salvation Army,…)
332
183
150 175 200 225 250 275 300 325 350
1998 2000 2002 2004 2006
Number of charities with >USD 25,000 budgets in the USUSD thousands
Over the past years, charitable trends have demonstrated that more occasions to donate people have, the more generous they tend to be
•The VSC project could find applications in many other industries worldwide:–Web transactions and e-gambling–Other industries
•These opportunities have to be further explored to confirm both their presumably large revenue potential and feasibility
Other innovative financing opportunities could be explored
In addition, the VSC project has already prompted support from major institutions (Google, Amadeus...) and
personalities (Ban Ki-moon, Bill and Melinda Gates, Bill Clinton...)
Growing interest for the VSC project
Thank youThank you