The Case for Sustainability

Investments in immunization are increasing worldwide, but costs are rising even faster. Thanks to many donor agencies, national immunization program budgets in GAVI countries have been able to keep pace with these increasing costs. But external aid is volatile and, in many countries, the funding gap is growing wider. It is in this climate that financial sustainability must be achieved.

Sustainability Defined

Fiscal sustainability is the key to safeguarding public health and building healthy, thriving populations.

In accordance with the GAVI model, we believe self-sufficiency must be the ultimate goal of national immunization programs. In the short term, many countries will need to mobilize and efficiently use both domestic and supplementary external resources to achieve their stated immunization financing goals. This approach allows countries to develop secured, long-term funding arrangements as they build stable, high-performing immunization systems.

Note the emphasis on performance. Reaching every unimmunized child will likely cost a country more per capita. But if program performance declines and funding and the overall target population stay fixed, that country will ultimately be spending more per capita— for the wrong reasons.

Engaging new investors is the key to solving this sustainability problem. New investors can be domestic— from the public or private sector— or international. Enlarging the donor pool will help protect national budgets from potential funding shifts among the current donor base.

Achieving Financial Sustainability

Three routes are available to achieve a full-scale sustainable immunization system: (a) increasing existing national government immunization allotments, from both general revenue and social insurance contributions; (b) identifying new domestic funding from the private sector or new government sources; (c) identifying new external funding, such as new donors and debt relief.

For most countries, achieving fiscal sustainability in the medium term using only existing resources is not realistic because their economies are small or not growing fast enough. But funding gaps can be reduced if governments increase their routine immunization budgets, and it appears many are taking that step. They can also increase revenues and/or re-allocate public funds from other sectors. In that case, they must show that funds are not being switched from other important primary health care programs to immunization, a condition known as the “additionality criterion."

Tapping new domestic funding from the private sector or new government sources is feasible in all project countries. It is important to expand the fiscal space by bringing in new investors while keeping current participants involved at their present levels, at a minimum. Private sector donations may be in cash or in-kind. Local and provincial governments can also be expected to invest new revenues, particularly in cases where the national immunization system is decentralized.

Most countries will also need to attract new external funding in order to achieve sustainability. Any new funding a country arranges is also subject to the additionality test: new immunization aid should not replace existing aid, whether through GAVI or otherwise. Furthermore, new donors should not “crowd out” government funds. (New immunization funding is not desirable if it induces governments to switch funding away from immunization.)

Debt relief is another potential strategy. Some countries are eligible for multilateral debt relief initiatives, which may free up new government revenues to increase immunization budgets. The World Bank and World Health Organization are leading these efforts.

Whatever the source of the additional funds, all budget revisions are made through the inter-agency coordinating committee or sector-wide government mechanisms.

Improving Affordability of New Vaccines

Increasing affordability for newer vaccines is an important piece of the sustainability puzzle. Two new mechanisms— International Finance Facility for Immunisation and Advanced Market Commitments— allow donor countries to commit funds to GAVI for future vaccine orders and the development of new vaccines. Both strategies reduce vaccine costs to the program countries.

Sustainability, however, also requires initiatives at the country level.
In a typical lower-income country, government revenues represent about 18 percent of gross domestic product. Between four and six percent of public revenues are allocated for health programs, resulting in per capita health expenditures averaging 25 USD. GAVI countries recognize this level is woefully inadequate and have repeatedly pledged to allocate up to 15 percent of government revenues to health initiatives. This goal is achievable because, as per capita income rises, revenues capture a larger proportion of GDP and public spending accounts for a greater share of health expenditures.

Within the health sector, more revenue should be allocated to the national immunization system, subject to the additionality test. Additional resources will:

• Move governments closer to their stated goal of expanded health budgets
• Strengthen infrastructure for use on other health programs
• Reduce the out-of-pocket cost burden on the poor
• Reduce donor dependency
• Demonstrate a government’s commitment to securing an important public good

Can this be done five years? We believe it can. The global community is already committed to achieving the Millennium Development Goals by 2015. Building innovative and sustainable financing for immunization and other vital health services is an essential milestone on that path. The Sustainable Immunization Financing Program is dedicated to helping countries make that journey.