Event: The Global Fund Explores Innovative Finance for Health

Alyssa GovindanNews, Newsletter

On November 13th, the Private Sector Constituency to the Global Fund Board hosted a discussion on “Opportunities in Innovative Financing for Health” on the sidelines of the 38th Board Meeting of the Global Fund to Fight HIV, TB and Malaria.

The Global Fund is the largest financing institution in global health, having funded programs that have saved more than 22 million lives as of 2016. A public-private partnership, the Global Fund invests nearly US$4 billion a year to support programs run by local experts. Approximately 95 percent of funding comes from donor governments—the remaining 5 percent comes from the private sector, private foundations and innovative financing initiatives.

Organized by the Global Fund Private Sector Constituency’s Health Financing Task Force led by Sherwin Charles (Goodbye Malaria/Nando’s), the event provided an opportunity for Global Fund stakeholders to learn about the fundamentals of innovative financing mechanisms, better understand its potential, and pose questions to subject-matter experts.

The event’s focus was timely. Since its founding in 2002, the Global Fund has increasingly incorporated innovative financing into its grantmaking “toolkit” including the Debt2Health initiative. The Fund’s 2017-2022 strategy incorporates co-financing as a key element to increasing domestic resource mobilization, requiring countries that receive Global Fund resources to make contributions to their own disease programs and health systems. As the Global Fund considers how to most effectively utilize its resources in the push to end the epidemics by 2030, attention is increasingly turning to how Global Fund resources can catalyze additional domestic and private financing to support sustainable health systems.

Amb. John Simon (Board Vice Chair, the Global Fund) remarked, “As the Global Fund seeks new ways to leverage its capital, learning about current models of innovative and blended finance is essential.  The event was a great opportunity for the Board and senior leadership to more fully explore the whole landscape of blended finance instruments and hear from practitioners deploying them in the field for real impact on health.”

Before the event’s panel discussion, participants heard from Priya Sharma (USAID) on the changing development and global health funding landscape, within which the Global Fund and other donors operate. By 2020 there will be a significant gap of US$17 billion annually needed to end HIV, TB and malaria. This gap cannot be covered by official development assistance (ODA) funding for global health—between 2010 and 2016, the annual growth rate for global health funding was less than 2%, compared to the previous decade’s growth rate of 11.4%. New sources of funding must be mobilized, and donors need to think differently about how they use their resources. Emerging themes in the landscape include:

  • Traditional development assistance is evolving as donors become more efficient and effective with their existing resources;
  • Private investments and other non-donor sources of financing are increasingly generating social impact; and
  • Donors, governments, private and philanthropic funders are transacting across an increasingly diverse financial landscape with players figuring out how best to work together.

Learn more in USAID’s Investing for Impact report

In addition to Ms. Sharma’s presentation, participants heard from Chuck Slaughter (Living Goods), Dr. Maximillian Martin (Lombard Odier) and Onno Schellekens (PharmAccess). Panelists discussed the role of technology in decreasing the risk of investments, enabling pay-for-results models in health programs, decreasing costs and increasing access; the disruptive nature of innovation and new models in the health and development space; a revolution taking place in capital markets with private investors increasingly looking for social returns; and bringing pay-for-results and social impact bond models to scale using donor resources and blended finance to de-risk investments and decrease transaction costs.

Sherwin Charles (Goodbye Malaria/Nando’s), lead for the Health Financing Task Force, provided closing remarks, urging the Global Fund to create the space for innovation with the goal of making investments catalytic and additional.  While innovative and blended finance mechanisms are not a silver bullet to bridge the funding gap needed to end the three diseases, they should be added as tools within the Global Fund’s grantmaking “toolkit” to save more lives and improve health systems.

The Private Sector Constituency will be releasing a primer on innovative finance and potential opportunities it presents for the Global Fund and its partners later in 2018.

About the Health Financing Task Force:

The Global Fund Private Sector Delegation (PSD) is a group of companies that brings the business voice to the Global Fund Board and helps shape the strategy of the leading funding agency in global health. In its role as PSD Focal Point, GBCHealth works with dozens of committed businesses who bring their expertise, assets and networks to the Global Fund.

The Health Financing Task Force provides a forum for PSD members to have regular, in-depth discussions on the Global Fund’s approach to innovative financing mechanisms, sustainable health systems, and opportunities for private sector engagement at all levels of the Global Fund architecture. The Task Force aims to ensure that the Global Fund’s policies are effective, well-implemented and contribute to the Fund’s mission of advancing the fight against HIV/AIDS, TB and malaria.

Alyssa GovindanEvent: The Global Fund Explores Innovative Finance for Health