If we want to make sure everyone can get quality products without financial burden, here’s why we think value-based pricing and competitive markets beat the “fair pricing” approach.
CGD Policy Blogs
Effective procurement of health products—medicines, diagnostics, and devices—is a foundational function for any health system and essential for progress toward the health-related Sustainable Development Goals.
To achieve universal health coverage and provide their citizens with access to quality and affordable medicines, countries will need to buy these lifesaving products efficiently and effectively.
In recent years many global health institutions—particularly Gavi and the Global Fund—have adopted eligibility and transition frameworks for the countries they support. These frameworks lay out criteria under which countries will lose eligibility for their support, and, typically, a gradual timeframe to phase out external financing. The question of how these transitions will play out in practice—and whether global health progress will be put at risk through premature or poorly planned transitions—is a hot topic in global health.
At CGD, we believe that the thoughtful application of economic theory and evidence can help build a better world. This conviction is clearly shared by Dr. Jean Tirole, Nobel laureate in economics and chairman of the Toulouse School of Economics (TSE).
The Global Fund’s Office of the Inspector General (OIG) released a new audit report on Wambo.org, its online procurement platform for drugs and other health commodities. The headline: despite high marks from its users, Wambo.org is not yet on track to deliver the projected savings. But more than the headline, a close read of the report narrative helps us understand why reality does not yet reflect the Global Fund’s optimistic assumptions—and, reading between the lines, suggests three important lessons for the Global Fund and other international funders
Health products—including drugs, devices, diagnostics, and vector control tools—are essential for meeting the healthcare needs of any population. Right now, many low- and lower-middle-income countries rely on donor-managed mechanisms to procure a large share of these health commodities. But this status quo won’t stay static for long, and the global health community must prepare for sweeping changes in global health and procurement over the next 10–20 years. Here’s some of what we see happening now and on the immediate horizon.