The Private Sector constituency has been an active participant in the Global Fund’s recent initiative to revise its Market Shaping Strategy (MSS).

The Global Fund is one of the largest procurers of health-related commodities in the world, and as a result of this purchasing power inevitably shapes the markets in which it operates. Recognition of this market shaping power led to the development of a strategy to guide the Global Fund’s approach to market engagement. The Private Sector played a key role in development of the current MSS in 2011 through its position on the Market Dynamics Committee of the Global Fund Board, and has unique insights into the impact of the strategy from perspectives of the delegation’s member companies and other private sector constituents.

Over the course of 2015, the Private Sector constituency convened a series of consultations and provided written feedback to the Global Fund Secretariat team leading the MSS revision process. The revised MSS as recommended for Board approval reflects input from the Private Sector, and addresses some of the key concerns raised by constituents. The Private Sector is encouraged that the revised MSS includes more overt recognition of the need to incentivize innovation, whether directly through “pull” mechanisms directed towards incremental innovation or more broadly in setting the right tone for engagement with partners and suppliers to address the critical need for fundamental innovation in combatting the three diseases. The increased focus on supporting countries in conducting cost-effectiveness and health technology assessment could also contribute positively to the selection of an optimal product basket to meet the needs of end users.

Other aspects of the MSS remain of concern to the Private Sector, and continued engagement is anticipated as the MSS is implemented over the course of the next Global Fund Strategy period. Fundamentally, the Private Sector remains concerned that tension exists between MSS objectives of consolidating procurement under the Global Fund’s Sourcing Department and strengthening countries’ capacity to procure independently. Additionally, the continued reliance on the Sourcing Department to lead MSS implementation sets the expectation that Strategic Procurement and focus on near-term deliverables will dominate strategy execution. This concern is exacerbated by uncertainty around development of a new KPI for Value for Money; the current focus on cost reduction alone jeopardizes the balanced approach between affordability and market sustainability shown elsewhere in the MSS. External validation of market shaping implementation is also insufficiently addressed by the current strategy.

The Private Sector will remain a vocal and engaged participant as the MSS is finalized and implemented, and is committed to providing a conduit for constituent feedback and oversight.