Improvements in demand forecasting require better sharing of risk and aligning incentives among the actors who influence market dynamics. This can be achieved by three mutually reinforcing actions:
- Improving the capacity to develop credible forecasts by taking forecasting seriously
- Mobilizing and sharing information in a coordinated way through the establishment of an infomediary
- Sharing risks and aligning incentives through a broader range of contractual arrangements
Implementing these recommendations will greatly enhance the relationship among funders, suppliers, intermediaries and users of health products and go a significant distance toward achieving the alignment across participants in the global health value chain that is essential for long-term improvements in access to quality products. Far from being small technical patches, these recommendations would help the global health supply chain function more efficiently, allowing the new funds and products realize their potential in better health outcomes in the developing world.
Armed with better information from a credible infomediary and the adoption of key principles of forecasting, funders will be able to comfortably assume a greater portion of the risk currently borne by suppliers, which will allow for a greater return on their aid investment in the form of improved public health outcomes. Efficient contracting arrangements, in turn, will establish the incentives to improve the forecasting process itself, creating a virtuous cycle. Fully implemented, these recommendations can save lives by dramatically improving aggregate demand forecasts for critical medical technologies at the global level, and will lay the groundwork for a broader and longer-term agenda of strengthening health systems and building supply chain capacity in-country; increasing the market-orientation of product development; enhancing the regulatory regimes and enforcement for global health products; and improving the predictability of donor funding.