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Global Fund Observer

Newsletter

Issue 225: 21 August 2013

GFO is an independent newsletter about the Global Fund.
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CONTENTS OF THIS ISSUE:

1. COMMENTARY: Greater Value for Money Through Enhanced Pooled Procurement

Better procurement systems are an essential element of the Global Fund’s drive to increase value for money and impact, writes Mark Dybul, the Fund’s Executive Director. The Global Fund expects to achieve big savings, he says, as a result of the increasingly proactive approach to procurement it is taking.

2. NEWS: Pilot Project Launched to Assist CCMs to Engage Key Populations

The Global Fund has started a pilot project with 10 country coordinating mechanisms whereby the CCMs receive additional funding to engage key populations in the country dialogue and in concept note development.

3. NEWS: Aidspan Removes Alert About Global Fund Grant Data on the Aidspan Website

Aidspan has removed from its website an alert concerning the quality of Global Fund grant data on the site. The problem was caused by the fact that the Global Fund had been providing erroneous data for grant agreement amounts and related fields on the grant pages of its website.

4. NEWS: Letter from Board Leadership Sets Out Priorities for the Next Two Years

Nafsiah Mboi, the new Chair, and Mireille Guigaz, the new Vice-Chair, have sent a letter to Global Fund Board members outlining where they believe the Board should focus its energy over the next two years.

5. NEWS: African Leaders Taking More Interest in Global Fund

African leaders are taking a more active role in fundraising for the Global Fund. They have held several meetings where they have expressed commitment to work with the Fund in fighting AIDS, TB and malaria in the continent.

6. NEWS: France Awards Funds for Technical Support for Global Fund Grants

Fourteen projects will be funded from the latest calls for proposals under France’s 5% initiative. The projects are related to governance and to procurement and supply management.

ARTICLES:

1. COMMENTARY: Greater Value for Money Through Enhanced Pooled Procurement

By Mark Dybul

From January to June of 2013, the Global Fund to Fight AIDS, Tuberculosis and Malaria has saved $42.5 million in procurement. And our goal is to double that in the remaining six months of the year. As an example, earlier this year, the Tanzania National Malaria Programme acquired 16 million rapid diagnostic test kits for malaria by accessing the Global Fund’s pooled procurement facility. What was unusual about the transaction was not just its size but the fact that the price tag was less than half of what was originally budgeted for the purchase. Even more remarkable, the diagnostic kits were procured at a price per kit that was about one-third of what was paid in previous procurements of this vital tool in our fight against malaria.

These big savings are the result of an increasingly proactive approach at the Global Fund to procurement, aimed at bringing down prices for high-quality products and managing the supply chain to extract maximum value and ensure timely delivery. Running a smooth procurement process not only delivers better value for money, it also allows the Global Fund to better support countries to reach more people with life-saving programmes.

The Global Fund is one of the largest buyers of pharmaceuticals and health products in global health. More than 40% of Global Fund grant spending is for products ranging from drugs to treat HIV, TB and malaria; to mosquito nets; and to diagnostics that can ensure children are treated appropriately when they have a fever, and can ensure drug-resistant TB is detected within hours rather than weeks.

Our objective is to make the Global Fund the best possible partner to support national procurement mechanisms to obtain the greatest value for money in commodity and supply purchase and distribution. We aim to be their benchmark organisation in global health for sourcing and procurement by building collaborative relationships with partner agencies, including funders and suppliers to best meet country needs. That means harnessing the Global Fund’s enormous buying power – $1 billion for drugs and another $1 billion on health equipment, goods and services annually – to negotiate the best possible terms from our suppliers.

The Global Fund is working with national procurement agencies to develop simple leading-edge processes and tools that meet their needs and that will be “branded” as their own procurement systems for accessing globally negotiated prices. But our strategy is about more than just lower prices. At the heart of our effort is a programme to improve the way we manage pooled procurement by cutting out waste and activities that do not add value; and by ensuring effective governance and watertight compliance.

About half of the procurement supported by the Global Fund is currently managed through the pooled mechanism. To increase the return on investment, we plan to work with countries to ensure that the system meets their needs and that, increasingly, it becomes their mechanism of choice. This would enable us to raise the share of procurement done through the pool to about 80% within two years.

To ensure that we get the greatest value for money for the long term, our strategy includes working with the other large procurers for each commodity to develop long-term agreements with suppliers; forecasting demand more accurately; and ensuring a smooth supply chain that minimises delays in delivery and eliminates stock-outs. For example, the Global Fund is collaborating with organisations such as the (UK) Department for International Development, the (US) President’s Emergency Plan for AIDS Relief and UNICEF to better manage supply markets and relationships with manufacturers of health products, thereby increasing our negotiating leverage and security of supply. Until recently, we made “spot” purchases of relatively small amounts of medicines and paid a significant premium as a result. Long-term supply deals with drugs makers obviate that need by ensuring that purchase orders are in synch with production cycles of pharmaceutical companies, thus ensuring the best value for money. Standardising our procedures by narrowing the number of products that we procure to an approved list will also drive down costs.

One significant issue is counterfeit medicines and loss of commodities as they move through parts of the supply chain. We are working with international and national partners to establish rigorous systems to detect and weed out counterfeit drugs. We have recently introduced a “track and trace” system which locates the exact whereabouts of much of what the Global Fund procures, by means of an online tracking tool. For example, track and trace will keep tabs on the diagnostic kits ordered by Tanzania as they move from a manufacturer, across the ocean and through ports; and from central medical stores into the hands of health workers.

Better procurement systems are just one of the many ways that the Global Fund is putting more rigorous systems of accountability and transparency in place to increase value for money, while supporting national procurement systems to develop long-term capacity. But because of the large part of the Global Fund’s portfolio that supports the purchase of commodities and supply, it’s an essential element of our strong forward progress to maximise impact and save and lift up more lives.

Mark Dybul is Executive Director of the Global Fund.

[This article was first posted on GFO Live on 19 August 2013.]

To comment on this article, click here.

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2. NEWS: Pilot Project Launched to Assist CCMs to Engage Key Populations

Additional funding under the new funding model (NFM) is being provided to 10 country coordinating mechanisms (CCMs) that are proactively engaged during country dialogue and concept note development with people living with or affected by the three diseases and with key affected populations.

This pilot project was announced in the 21 July issue of the Global Fund’s News Flash.

CCMs in the 10 countries – Democratic Republic of Congo, Lesotho, Sri Lanka, Swaziland, Uganda, Moldova, Thailand, Guyana, Nigeria and the Philippines – will each receive between $10,000 and $50,000, depending on the country’s size and disease burden.

The countries were selected because they were interim applicants, because their CCM is applying for CCM funding in 2013; or because the country is applying for funding for a large grant.

The intent of the initiative is to strengthen the ability of the CCMs to identify programmatic gaps and intervention needs, and to create “safe spaces” for key affected populations, especially those who are criminalised and marginalised, to engage in the process.

Each country will select a regional or global organisation to support the CCM and give feedback to the Secretariat on how the pilot is working.

The pilot project is expected to last until the end of 2013. Then, the Global Fund Secretariat will evaluate the initiative and decide whether to roll it out to all CCMs applying for funding in 2014.

[This article was first posted on GFO Live on 07 August 2013.]

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3. NEWS: Aidspan Removes Alert About Global Fund Grant Data on the Aidspan Website

Aidspan has removed an alert on the portion of its website devoted to information on Global Fund grants. The alert had warned users to interpret the grant data with caution because the Global Fund had recently made changes to the grant data that it provided and because Aidspan needed some time to reflect these changes on its website.

On 10 July, GFO reported that the Global Fund was providing erroneous data for grant agreement amounts and related fields on the grant pages of its website. In that article, GFO reported that the Global Fund had recently implemented a new web services platform to correct the problem.

Aidspan is now satisfied that that the grant agreement and disbursement data on its website now match the data provided by the Global Fund on its new web services platform and, by extension, on the Fund’s grant pages.

[This article was first posted on GFO Live on 16 August 2013.]

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4. NEWS: Letter from Board Leadership Sets Out Priorities for the Next Two Years

One of the priorities of the new Chair and Vice-Chair of the Global Fund Board (“Board leadership”) is to assist implementing country delegations to be more fully engaged in strategic decisions taken by the Fund, “including those that have immediate impact at the country level.”

This was one of the messages in a letter that Chair Nafsiah Mboi and Vice-Chair Mireille Guigaz sent to Board members outlining the areas where they believe the Board should focus for the next two years.  

The Board leadership said that the Board can learn from the capacity-building process recently undertaken by its two African constituencies.

The leadership said that continuous improvement in the management of human resources is crucial. “By focusing more on ethics, corporate values, clarification of our position vis-à-vis our organizational risk appetite, systematic personal and global quantitative and qualitative assessment, training and career prospects, we can achieve high levels of satisfaction and excellence in our human resources.”

With respect to how the Global Fund manages its overall resources, the Board leadership said that the priority for the rest of 2013 is to complete the design of the new funding model so that it can be fully rolled out in 2014. In 2014, they said, the Board will need to focus more of its attention on its fiscal strategies and practices, “to ensure that resources are managed by the Fund as effectively and efficiently as possible.” The leadership said that a discussion will be launched at the first Board meeting of 2014 on the way the Global Fund manages its own assets (at the World Bank).

The Board leadership said that at its meeting in Sri Lanka in June, the Board affirmed the need to maintain the focus on holding the Global Fund accountable for the achievement of measurable targets and standards. The Board will be asked to approve new key performance indicators (KPIs) at its November 2013 meeting. The leadership said that progress against these KPIs will be an important part of the Executive Director’s annual performance assessment. In addition, some of the KPIs will be relevant to the annual performance assessment of the Inspector General.

The Board leadership said that the Global Fund’s current risk management framework will be revised by February 2014. The leadership is recommending that the Board place a risk oversight discussion on its annual Board calendar, “so that we are collectively discussing risk tolerances, their determination, and appropriate responses more routinely than in the past.”

The Board leadership said that in 2014 the Board will be asked to continue the conversation on evolving the Partnership Forum mechanism. “Used well and with value for money principles also in mind, the mechanism presents a powerful opportunity for us to keep the Global Fund focused on being a true partnership,” they said.  

The leadership said that it would like to ensure that the Board achieves more effective coordination of key cross-cutting issues such as assessing performance against the KPIs and overseeing risk management.

Another priority for the Board, the leadership said, is the mid-term review of progress related to the Fund’s 2012–2016 Strategy. The review will start in 2014.

The letter from the Board leadership included a section on principles, in which the leadership said that the Board should adhere to the path created by the previous Board “without changing models even before their implementation.”

[This article was first posted on GFO Live on 16 August 2013.]

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5. NEWS: African Leaders Taking More Interest in Global Fund

Nigerian President Goodluck Jonathan will co-chair this year's replenishment efforts

African leaders are taking a more active role in promoting the efforts of the Global Fund to Fight AIDS, Tuberculosis and Malaria to raise money to address the three diseases in the continent.

In April this year, Nigeria President Goodluck Jonathan agreed to help lead the Global Fund's efforts to raise funds. President Jonathan will co-chair the Fund’s Fourth Replenishment alongside UN Secretary-General Ban Ki-moon and heads of state from developed countries, emerging economies and the private sector.

President Jonathan met with Mark Dybul, Executive Director of the Global Fund when Dr Dybul visited Nigeria earlier this year.

In May, leaders of African countries met at a summit meeting of the African Union in Ethiopia and called on partners and supporters to mobilise fundraising efforts on behalf of the Global Fund. The meeting was held during the summit celebrating the African Union’s 50th anniversary.

The Chairperson of the African Union, Ethiopian Prime Minister Hailemariam Desalegn, asked the leaders to appeal to everyone to support the Global Fund’s goal of raising $15 billion in its replenishment effort.

“All of us should make the replenishment of the Global Fund a priority,” the Prime Minister said.

A declaration issued by the African Union, and signed by heads of state, cited a united determination to defeat AIDS, TB and malaria.

Dr Dybul attended the meeting and urged the leaders to take the replenishment message everywhere by talking about the achievements African countries have made with the support of the Global Fund.

“HIV, tuberculosis and malaria are in retreat,” Dr Dybul told the African leaders. “You have it in your power to achieve what no leaders in history have had a chance to do: End AIDS, TB and malaria.”

Dr Dybul told the leaders that the Global Fund is their partner and servant, and will be a reliable friend as African nations seek to achieve the milestone of controlling the three diseases and removing them as a threat to public health.

In July, the African Union organised a special summit on HIV/AIDS, TB and malaria in Nigeria. The meeting was a follow-up to Abuja summits on HIV/AIDS, TB and Malaria of 2000, 2001 and 2006. The theme of the 2013 summit called for sustained commitment from governments and leaders across Africa to funding expanded and durable solutions to the three diseases. 

Africa has the most AIDS cases in the world and receives the bulk of Global Fund financing. The Fund has enabled the continent to achieve tremendous progress to reverse the trend. HIV infection has been reduced by more than 25% in 22 countries and AIDS-related mortality has been declining. Some countries such as Ethiopia have reduced incidence of HIV infection by more than 50%.

Information for this article was taken from the Global Fund’s website and other news sources.

[This article was first posted on GFO Live on 20 August 2013.]

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6. NEWS: France Awards Funds for Technical Support for Global Fund Grants

France Expertise International (FEI) has announced the results of two calls for proposals under France’s 5% initiative.

France sets aside 5% of its contribution to the Global Fund for the provision of technical support for the design, implementation, monitoring and evaluation of programmes financed by the Fund. (The US does something similar.) Fifty-one countries are eligible. The 5% initiative has a budget of € 18 million each year for the period 2011–2013.

From the latest calls for proposals, 14 projects have been “pre-selected.” Eight of the projects are related to governance; the other six are related to procurement and supply management (PSM). “Pre-selected” means that final decisions on funding for these projects will be made only after negotiations with the applicants. The total budget for the two calls is up to € 11 million.

One of the governance projects selected will involve, among other things, strengthening and expanding community-based monitoring and advocacy for the implementation of Global Fund grants to Benin and Niger. Technical support will be provided to CeRADIS (Centre for Reflection on Actions for Joint Development and Solidarity), MVS (Mieux Vivre avec le Sida) and Lasdel (Laboratoire d'Etudes et de Recherche sur les Dynamiques Sociales et le Développement Local).

Another governance project will involve supporting the implementation of a treatment access watch initiative to monitor access to health care in Cameroon, Central African Republic and Republic of Congo. Technical support will be provided to Positive-Generation, Fondation Femmes Plus and ANJFAS (National Association of Active Young Women for Solidarity).

One of the PSM projects will involve strengthening the quality assurance systems of eleven procurement agencies to ensure compliance with the Global Fund’s quality assurance policy. The agencies are all members of the Association of African Central Procurement Agencies for Essential Medicines (ACAME). The countries involved are Benin, Burkina-Faso, Burundi, Cameroon, Madagascar, Mali, Democratic Republic of Congo, Togo, Senegal and Chad.

Another PSM project will focus on strengthening mechanisms to secure the medicine supply chain in Benin, Burkina Faso, Mali and Guinea. This is part of the fight against fake medicines. Technical support will be provided to PAH (Pharmacy & Humanitarian Aid), UEMOA (Union Economique et Monétaire Ouest-Africaine), ReMeD (Réseau Medicaments de Développement) and CIOPF (Conférence International des Ordres de Pharmaciens Francophones).

A full list of the selected projects is available on the website of the 5% initiative here. GFO reported on the launch of the 5% initiative here.

[This article was first posted on GFO Live on 19 August 2013.]

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This is an issue of the GLOBAL FUND OBSERVER (GFO) Newsletter.

We welcome suggestions for topics we could cover in GFO. If you have a suggestion, please send it to the Editor of GFO (see contact information below).

Author: Articles 2, 3, 4 and 6: David Garmaise (david.garmaise@aidspan.org), GFO Editor. Article 5: Karanja Kinyanjui (karanja.kinyanjui@aidspan.org), Aidspan’s Senior Editor.

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