28 April 2017
Programs supported by the Global Fund have made significant progress, saving more than 20 million lives in the past 15 years, largely due to the successful delivery of health products that have been enormously effective in preventing and treating HIV, tuberculosis and malaria.
Specifically, programs supported by the Global Fund have delivered:
The impact of supplying those commodities is clear: Mortality rates among children under five – by far the most vulnerable group – fell by 69 percent between 2000 and 2015. In East and southern Africa, the regions most affected by HIV, AIDS-related deaths have decreased by 36 percent and treatment coverage has more than doubled since 2010. The number of people dying of TB fell 22 percent between 2000 and 2015.
Clearly, procurement and supply chains are delivering. In fact, the targets that have been set have been met. What was thought impossible only 15 years ago has been achieved.
But we can do better. Procurement and supply chain processes have been identified as requiring additional action, by our own internal risk assessments, including the evaluation of key roadblocks to progress through a broad-ranging group of key global health actors through Global Fund-initiated “Impact Through Partnerships,” as well as in audits of programs in several countries by the Office of the Inspector General (OIG.) The OIG Audit Report on Global Fund In-Country Supply Chain Processes, further validates that extensive body of work.
The OIG is a central and important part of providing assurance, conducting independent audits and investigations to complement the active risk management and controls put in place by the Secretariat with oversight by the Board of the Global Fund.
As this report indicates, procurement and supply chain represent a continuum. The work of procuring drugs and medical supplies in a timely way is only the first step in getting them through a supply chain, so that they can actually reach the people who need them, at clinics and in villages that often present obstacles in the “last mile.”
We could not address many supply chain issues until we had first worked hard on procurement, the primary building block toward delivery of any products. Our work on procurement came in tandem with a fundamental change in our business model in 2013-2014, as we shifted to an allocation-based funding model that led to more active engagement from the Secretariat. In addition, we needed to prioritize actions, given limited human and financial resources in the Secretariat.
Since the Global Fund began investing heavily in procurement four years ago, an expanded pooled procurement mechanism has saved more than US$650 million. That is money that countries now use to save more lives and improve systems. On Time and In Full (OTIF) deliveries increased from 36 percent in 2013 to 80 percent in 2016 for the Pooled Procurement Mechanism (PPM), which now covers 60 percent of procurement supported by the Global Fund and is at levels achieved in the private sector.
But OTIF is measured at a central warehouse level, and the ‘last mile’ can be significantly more challenging. Therefore, in 2016, the Global Fund launched a new supply chain initiative, including the development of a supply chain strategy, conducting in-depth diagnostics in 12 high-risk countries by the end of 2017, and work with government and private sector partners to implement supply chain transformation projects. The Global Fund created a new Supply Chain Department within the Grant Management Division, and appointed senior managers with significant private sector experience to implement a coordinated approach.
Many pieces of our new approach are already underway. For instance:
Overall, the Global Fund’s new strategic approach on supply chain aims to significantly improve product availability, reduce product waste, reduce supply chain costs, significantly improve forecast accuracy and also increase inventory turnover, which in itself can reduce costs and waste.
As we implement this work, we welcome the Audit Report by the Office of the Inspector General (OIG) on the Global Fund In-Country Supply Chain Processes. The report identifies many of the challenges that are already being addressed with the new supply chain strategy and other transformative measures.
Although stock-outs sometimes occur, we have consistently preventing disruptions of supply by operating a rapid supply mechanism starting in 2015 that responds to emergency orders for antiretroviral drugs for HIV, artemisinin combination therapy for malaria, and raid diagnostic tests for TB. The rapid supply mechanism is accessible in all countries supported by Global Fund grants, and leverages Global Fund Framework Agreements that require vendor-managed inventory.
The audit encompasses agreed management actions, nearly all of which were initiated as part of the supply chain management project launched in 2016 and so validate the work that was begun, include:
The Global Fund is constantly evolving, to improve. Based on extensive input, including from OIG reports, from best-practice in the private sector, and from in-country experience, we are working to fulfil our commitment that people affected by diseases get the supplies they need.
The Global Fund partnership has made exceptional progress towards the global goal ending epidemics. We are grateful for the suggestions so that products get to the maximum number of people who need them to achieve the greatest impact.