Report of the Global Health Forecasting Working Group Now Available

CGD convened the Global Health Forecasting Working Group in 2006 to study the challenges surrounding demand forecasting. The group concluded that better forecasting requires wider sharing of the risks involved in producing drugs among those who influence market dynamics, and aligning incentives through three mutually reinforcing actions:

• Improve the capacity to develop credible forecasts by taking forecasting seriously.
• Mobilize and share information about product demand in a coordinated way through the establishment of an infomediary.
• Adopt a set of contractual arrangements.

These recommendations are presented in the Working Group’s final report, A Risky Business: Saving Money and Improving Global Health through Better Demand Forecasts (as well as an accompanying policy brief). The Working Group report was launched on May 29 before a standing-room only crowd at an auxiliary event of the Global Health Council’s 34th Annual International Conference. Several news organizations have picked up the findings, including the Financial Times (full text below) and Voice of America, demonstrating there is much interest in the demand forecasting challenge. Please let us know if you would like a complimentary copy of the Working Group report; additional copies will soon be available for purchase.

Plan to help drugs reach poorMany extra lives could be saved around the world by creating an intermediary agency to reduce waste in the distribution of drugs for killer diseases, a leading think-tank will say on Wednesday.A neutral "infomediary" to collect information, improve forecasting and help co-ordinate risk between drug producers and purchasers would significantly bolster the delivery of medicines for infections such as malaria, says the US-based Centre for Global Development.In a new report the centre calls for mechanisms to enhance the supply chain for medicines, which in its current state creates substantial waste for both governments and pharmaceutical manufacturers."This is a chronic challenge which is getting worse," said Ruth Levine, the centre's programmes director, warning that new drugs and vaccines under development would prove useless if they could not be efficiently distributed to poor people around the world. "There is the risk of a technology pile-up."The report was produced following growing concern over the supply bottlenecks for new drugs and frustration by drug companies including Novartis and Sanofi-Aventis, which have manufactured effective malaria medicines and then found countries are not ordering them in the quantities forecast.Much of the shortfall below predicted order volumes is caused by reluctance in developing nations to commit to purchases when they are unsure they will have sustainable funding for a newer generation of more expensive drugs.There are also blockages caused by inefficiency, corruption and regulatory hurdles which mean that even when drugs are available they are distributed slowly."We are trying to introduce some of the most sophisticated and complicated medical regimes on the planet into some of the most fragile systems," said Ms Levine.The centre calls for an infomediary funded by subscriptions by all participants which would collect, analyse and distribute supply and demand data and forecasts for drugs.It stresses the need for risk-sharing agreements, such as buyers committing to a minimum level of drug purchases, or flexible contracts requiring suppliers to make a specified quantity of drugs available beyond agreed levels at a premium price if demand rises.Earlier this month the infomediary was endorsed in a separate study by the TB Alliance.