Office of the Inspector General

Message from the Executive Director: Global Fund Investments in Health and Laboratory-related Equipment

26 January 2024

For the Global Fund, the purpose of our value for money (VfM) framework is to help the partnership maximize the impact of every dollar as we help countries design and implement programs to defeat AIDS, TB and malaria and build resilient, sustainable and inclusive systems for health.

The Office of the Inspector General (OIG) has issued an audit report examining the VfM framework issued by the Global Fund in 2018 and analyzing the VfM achieved by the Global Fund partnership in making investments in health and laboratory-related equipment, with a specific focus on rapid molecular diagnostics for TB (GeneXpert), chest X-ray devices and instruments used for HIV viral load testing and early infant diagnosis. To derive conclusions about the VfM achieved with these tools, the audit examined the Global Fund’s investments in six countries – Bangladesh, Ethiopia, Malawi, Nigeria, Uganda and Mozambique.

VfM framework

The OIG audit found the Global Fund’s VfM framework to be comprehensive, and – with its focus on economy, efficiency, effectiveness, equity and sustainability – appropriately tailored to the partnership’s mission. However, the report calls for more efforts to embed the framework in grant and corporate processes, and greater clarity on roles and responsibilities across the Secretariat.

The Secretariat is committed to progressing the operationalization of the VfM framework in a phased and prioritized way, taking into consideration where such analyses deliver most benefit in informing decision-making and implementation approaches.

VfM analysis of disease and health system interventions is inherently challenging, given the often complex interactions between different interventions, the need to weight sometimes competing considerations, such as efficiency, equity, and sustainability, and the frequency of data gaps and quality issues. VfM analyses can be a powerful tool to guide critical decisions about how to prioritize lifesaving interventions, but must be conducted rigorously, or they may result in misleading conclusions that in turn can lead to poor decisions.

Since robust VfM analysis is itself resource-intensive, implementation of the VfM framework must be carefully prioritized, deploying this approach where it yields most benefit. The OIG audit of VfM for health and laboratory equipment illustrates some of the challenges of using VfM, because while the report provides some useful insights, it could have gone further in exploring the value of investments in health and laboratory equipment, particularly GeneXpert.

National laboratory strategies, viral load testing and early infant diagnosis

The Secretariat agrees with the report’s observations about the need for robust and costed national laboratory strategies, and for the greater involvement of relevant entities in funding requests related to laboratory equipment. The Secretariat also agrees with the report’s conclusions on VfM for viral load testing, which has been an undoubted success, as well as with the need to improve early infant diagnosis. However, as the report notes, deficiencies in early infant diagnosis often owe more to broader weaknesses in national strategies for prevention of mother-to-child transmission and pediatric HIV care than specifically to related investments in laboratory equipment.

Rapid molecular testing for TB (GeneXpert)

The main area of divergence relates to the OIG report’s conclusions on GeneXpert. The report concludes that VfM operational challenges in using GeneXpert platforms have limited attainment of effectiveness, efficiency and equity. As a result, the OIG assesses VfM for these investments as having been only partially achieved. The report specifically highlights lack of regular and timely maintenance of GeneXpert machines, lack of adequate sample transportation network, stock-outs of cartridges due to delayed shipments and gaps in monitoring of utilization at site-level. The report goes on to note limitations in the provision and planning of service and maintenance and the challenges of ensuring sustainability in domestic financing of molecular diagnostics for TB.

The Secretariat, alongside technical and bilateral partners, including the World Health Organization (WHO), the Stop TB Partnership and USAID, takes a different view. We acknowledge that utilization of GeneXpert platforms has been less than optimal, and that service and maintenance issues have been a significant contributory factor. However, we believe the OIG report understates the significance of two other factors: first, the price of GeneXpert cartridges; and second, the disruptive impact of COVID-19. In our view, these two factors, which are mentioned in the report, but not analyzed in detail, are of at least equal and probably greater significance than the service, maintenance and other operational issues the report focuses on.

Pricing of GeneXpert MTB/RIF cartridges

Experts directly involved in the implementation of TB programs frequently cite the price of GeneXpert MTB/RIF cartridges (which until September 2023 cost US$9.98) and the lack of alternatives as the principal impediment to greater utilization of rapid molecular tests for TB diagnosis, and there is considerable factual evidence to support this belief, including:

  • Inadequate budgets to procure sufficient GeneXpert cartridges. As the report notes, TB molecular diagnostic programs have been significantly affected by stock-outs and large funding gaps across the six countries examined as part of the audit. Across the Global Fund portfolio, unfunded demand for GeneXpert equipment, mainly TB cartridges, in the Grant Cycle 6 (GC6) implementation period (2021-2023) amounted to about US$111 million, while actual expenditure on GeneXpert TB cartridges during GC6 was approximately US$101 million. In Grant Cycle 7 (2024-2026), unfunded demand for GeneXpert equipment has increased to US$213 million.
  • Country adoption of implementation approaches to ration use of GeneXpert cartridges. Numerous countries, including some of the six examined in the audit, have adopted implementation approaches to constrain use of GeneXpert cartridges, given considerations of cost and availability. These include only using GeneXpert for prioritized groups; only using GeneXpert following an initial diagnosis via X-ray; and only using GeneXpert to establish drug-sensitivity following an initial diagnosis via smear microscopy, X-ray, or TB-LAMP.
  • Significant pressure to achieve reductions in GeneXpert cartridge pricing. Over the last several years, and particularly in 2023, there has been intense advocacy for reductions in GeneXpert cartridge pricing, more than for any other TB-related commodity. In September 2023, following discussions with the Global Fund, Danaher, the parent company of Cepheid, the manufacturer of GeneXpert, announced a commitment to supply the MTB/RIF Ultra diagnostic cartridge at cost, resulting in an immediate price reduction of 20% from US$9.98 to US$7.97. This news was welcomed by the TB community as a significant breakthrough, reflecting widespread recognition that MTB/RIF cartridge pricing has been a major limiting factor on expanding use of rapid molecular diagnostics.
  • Rapid conversion of recent reductions in the price of GeneXpert cartridges into incremental volume. Since the announcement of new cartridge pricing, many countries, including the six countries included in the audit, have moved swiftly to adjust their procurement plans, using the savings from the price reduction to increase planned procurement volumes. For example, Bangladesh has reinvested price reduction savings in additional procurement to help close the unfunded gap. This demonstration of price elasticity is a powerful indicator of the extent to which cartridge price has constrained platform utilization.

    Consistent with prior input provided by the Secretariat, technical partners and other implementation partners on the importance of cartridge pricing, we believe that this issue should have featured more prominently in the analysis.

Impact of COVID-19

The report mentions the impact of COVID-19 on the utilization of GeneXpert platforms in a number of places but understates the scale of the disruption caused by the pandemic during 2020-2021. For example, the report does not analyze the extent to which diversion of GeneXpert platforms from TB testing to COVID-19 testing affected the availability of these instruments for TB purposes. Nor does it examine the degree to which the supply chain delays and service and maintenance issues were caused by the pandemic. That COVID-19 created such challenges is undeniable. For instance, in 2020, 27% by value of the Global Fund’s Pooled Procurement Mechanism orders for GeneXpert were significantly delayed due to the impact of COVID-19 and COVID-19-related control measures. In discussing the operational challenges affecting GeneXpert utilization, it would have been helpful if the audit had done more to differentiate those resulting from COVID-19, reflecting the exceptional circumstances of the pandemic, and those reflecting underlying weaknesses in implementation approaches.

The report is also largely silent on the benefits provided by investments in GeneXpert platforms in supporting countries’ COVID-19 responses. For many countries in the Global Fund portfolio, GeneXpert platforms (and other high-throughput platforms originally installed for the purpose of HIV viral load testing) played a critical role as the most significant platform for rapid molecular diagnosis of COVID-19.

Recognizing the importance of these platforms and the risk that diverting GeneXpert resources towards COVID-19 would impact TB diagnostic efforts, the Global Fund provided incremental funding for GeneXpert platforms and cartridges (both for COVID-19 and for TB) through our COVID-19 Response Mechanism (C19RM). Under C19RM, spending on GeneXpert equipment during 2020-2023 amounted to US$157 million, comprising US$79 million on COVID-19 cartridges, plus US$55 million on TB cartridges and US$23 million on GeneXpert testing platforms. This constitutes more than half of the Global Fund’s total investments in GeneXpert during 2020-2023. Given that such a significant proportion of the Global Fund’s investments in GeneXpert equipment and cartridges during the period covered by the audit were explicitly directed towards the COVID-19 response, we believe this should have been included in the assessment of VfM.

Operational challenges, including service and maintenance

The Secretariat agrees with the report’s conclusion that operational challenges have impeded optimal utilization of GeneXpert platforms, including issues around the provision of service and maintenance, insufficient trained human resources, non-adherence to testing algorithms, lack of uninterrupted power supply, stock-outs of cartridges due to gaps in supply chain management, and lack of effective utilization monitoring. The Global Fund is working with countries on all these issues as part of our broader strategy to support the strengthening of implementer countries’ national laboratory networks. Specifically, for GeneXpert, alongside other TB partners, the Global Fund has secured improved service and maintenance arrangements with Cepheid as part of the revised GeneXpert package negotiated in 2023. The checklist for proposed investments in molecular diagnostics envisaged in the second Agreed Management Action will help ensure a systematic approach to identifying and resolving such operational challenges.

Overall assessment of VfM for investments in GeneXpert

The Secretariat acknowledges that because of these three factors – the price of cartridges, the disruptive impact of COVID-19 and operational challenges including weaknesses in service and maintenance arrangements – the maximum value of the Global Fund’s investments in GeneXpert has not been fully realized. Yet the Secretariat is of the view that despite these issues, these investments have still delivered significant VfM.

Various independent analyses have shown that testing and treating people with TB has an enormously high return. For example, one analysis suggests a return on investment of US$46 for every US$1 invested.[1] The key constraint on being able to expand TB treatment coverage has been finding the missing people with TB through scaling up testing, and WHO has recommended the use of rapid molecular diagnostic tools for this purpose. Until 2020, GeneXpert represented the only WHO-approved low-complexity rapid molecular platform for TB diagnosis.

Despite factors that led to suboptimal utilization, investments in GeneXpert platforms have contributed to a massive expansion of cases identified by these rapid diagnostic tests. As the report notes, in the six countries examined in the audit, the number of cases identified in this manner increased from 21,454 in 2016 to 283,624 in 2021. The number of cases detected with drug-resistant TB increased over the same period from 4,824 to 7,001. At a global level, 38% of people newly diagnosed with TB in 2021 were diagnosed with a WHO-recommended diagnostic test, while in 2022, the number rose to 47%. These instruments have been a game-changer.

As we enter 2024, the fight against TB has unprecedented momentum, with record numbers of people being tested and put on treatment for both drug-sensitive and drug-resistant TB. Our investments in GeneXpert platforms have been crucial to getting us to this point. The Secretariat acknowledges that these investments can be made even more effective – and the new pricing of MTB/RIF cartridges, the new service and maintenance arrangement agreed with Cepheid, plus the emergence of competitor platforms will make a difference – but we believe that it would be a mistake to diminish what has already been achieved.

In addition to their crucial role in expanding high-quality testing for drug-sensitive TB, investments in GeneXpert platforms have played an indispensable role in increasing diagnosis for drug-resistant TB, which has been, up until recently, one of the weakest aspects of the overall effort against TB. With the rollout of improved treatments for drug-resistant TB (and the significant reductions in the price of such treatments announced in August 2023), being able to diagnose drug-resistant TB quickly and accurately has become even more compelling.

Furthermore, on top of their value in fighting TB, GeneXpert platforms have played an enormously valuable role in many countries’ COVID-19 responses.

Chest X-rays: The audit found significant delays in the procurement and installation of chest X-rays, impacting the equity and effectiveness of the machines. In the period covered by the audit, COVID-19 had a significant impact on delivery and implementation timelines, as it did for GeneXpert. The Global Fund remains committed to supporting the strengthening of information and performance management systems for laboratories, including for chest X-rays, and will be working with countries and manufacturers in pursuit of that goal. The checklist envisaged in the second Agreed Management Action will support this objective.

We thank the OIG for this audit report. We appreciate the OIG’s engagement with the Secretariat and the TB community in the process of production of the report. While the report does not respond to all the concerns of the stakeholders who reviewed it, the discussions between the OIG and TB stakeholders have made it more useful. The work of the OIG complements our active grant management and the risk oversight and controls put in place by the Secretariat and upholds our proactive approach of full transparency in the performance of the operational policies and procedures that support grant implementation. The Global Fund is committed to ensuring we maximize the value of our investments in meeting the needs of implementer countries as they fight HIV, TB and malaria, and build stronger, more inclusive and more resilient systems for health.

  • Global Fund investments in Health and Laboratory-related equipment
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[1] One Million Lives Saved Per Year: A Cost–Benefit Analysis of the Global Plan to End Tuberculosis, 2023–2030 and Beyond