Third Board Meeting

Board Meeting Decision Point Number Title
2002-10-10 B03 GF/B03/DP01 Approval of the Agenda Approval of the Agenda
The Board adopted the meeting agenda with the provision that the topic on communication be included under the Global Partnerships Agenda item and CCM issues be discussed during the item on the Report of the Proposals Working Group. The issue of introducing agenda topics will be addressed under the item on the Report of the Governance Working Group. 
2002-10-10 B03 GF/B03/DP02 Approval of the Rapporteur Approval of the Rapporteur
The Chair thanked the Private Sector representative, Mr Rajat Gupta, for serving as Rapporteur during the Second Board Meeting and proposed Dr Christoph Benn, Member for the Developed Country NGOs, as Rapporteur for the Third Board Meeting. This proposal was unanimously accepted. 
2002-10-10 B03 GF/B03/DP03 Approval of Second Board Meeting Report Approval of Second Board Meeting Report
<ol> <li>The Report of the 2nd Meeting of the Board held 22-24 April 2002 was approved, noting the following correction:“Dr Kiyonga, Chair of the Board, opened the session and thanked the United Nations Secretary-General for hosting The Global Fund session and for his ongoing support to the Fund. The Secretary-General, Mr. Kofi Annan, gave a speech to welcome the Fund’s Board members, delegates and representatives and to reaffirm the global commitment to fight HIV/AIDS, tuberculosis, and malaria. Following his remarks, comments were made by the following delegates: Mr. Rajat Gupta (Private Sector), Minister of Health Girolamo Sirchia (Italy), Dr. Huang Jiefu (Vice-Minister, Ministry of Health, China) Mr. Gordon Conway (Rockefeller Foundation), Secretary Tommy Thompson (United States), Mr. John Junor (Jamaica), Ms Milly Katana (NGOs), and a representative of the South East Asia Region.</li> <li>The references to the delegation of the Gates Foundation should be changed to Private Foundations. In addition it should be noted that the section on new Board Members is inaccurate since the appointment of Professor Lucas as the Board Member for West and Central Africa was only officially made on 1 May 2002, after the Board meeting.</li> <li>The current practice will continue that minutes will be distributed via email to Board Members for review and comment. Thereafter a revised version will be sent by email to Board Members. These final minutes will be ratified by the Board at their next meeting. The fact of formally ratifying the minutes at a Board meeting does not preclude action being taken on those minutes between Board meetings. Any changes to this process should be the subject of a formal Board decision.</li> <li>It was emphasized that should any changes to the approval process of the draft Board minutes be requested, they should be made while being careful not to delay the work of the Secretariat.</li> </ol>
2002-10-10 B03 GF/B03/DP04 Commission of an Additional Legal Opinion on Delegation of Authority Commission of an Additional Legal Opinion on Delegation of Authority
At the request of the Board, and to address concerns regarding this delegation of authority, it was decided to commission a separate legal opinion to ensure that the by-laws allow for appropriate decision-making authority to be granted to the Chair and Vice-Chair between Board meetings.
2002-10-10 B03 GF/B03/DP05 Board and Committee Roles and Functions Board and Committee Roles and Functions
<ol><li>The Board reconfirms its role as stated in Article 14 of the Bylaws.</li><li> Committee matters:<br/><ol><li>Committees will be established according to need with defined terms of reference and deliverables.</li><li>All committees will be reviewed at each Board meeting for decisions on continuation and/or modification.</li><li>There will initially be four (4) committees: <ol type="A"><li>Monitoring, Evaluation, Finance and Audit: Reviewing Fund progress with a view to managing performance including: <ol type="A"><li type="i">financial budget oversight and the mechanisms for accomplishing it (e.g. external audit);</li><li type="i">updates on programmatic progress in beneficiary countries, including its impact on reducing disease burden;</li><li type="i">results based disbursement and overall performance of the Fund at a global level.</li></ol></li><li>Portfolio Management and Procurement: <ol type="A"><li type="i">includes previous and ongoing work of the Proposals Working Group such as TRP review guidelines</li><li type="i">the proposals appeal process (recourse mechanism)</li><li type="i">policies related to grants management;• policies on procurement and supply management.</li></ol></li><li>Resource Mobilization: <ol type="A"><li type="i">supporting the development of projections of resource needs;</li><li type="i">supporting the development of strategies to achieve mobilization targets, especially through cooperative work of Board members and constituencies.</li></ol></li><li>Governance and Partnerships: <ol type="A"><li type="i">focus on making the bodies of the Fund work effectively, including Board processes and structure;</li><li type="i">personnel policies;</li><li type="i">policies on interactions among Board, TRP, Secretariat and Partnership Forum;</li><li type="i">CCM partnership (including a tool on minimum standards of “good practice” for CCM processes, building on experiences from the first two rounds and partner organizations, and evaluating the CCM process and practices, with this work beginning immediately) and policies related to expanding partnerships at the global level.</li></ol></li></ol></li></ol></li><li>In consultation with the Executive Director, the committees should develop Terms of Reference and circulate these to the Board for approval.</li></ol>
2002-10-10 B03 GF/B03/DP06 Committee Membership Principles Committee Membership Principles
<ol><li>There should be a balance between chairs from developed and developing countries. There should be one chair per committee. The committee chair shall appoint a vice chair of the committee.</li><li>Committee chairs will preferably be either Board members or alternates. The Board will also approve any vice chairs who are appointed by committee chairs. The Board Chair/Vice Chair will select the committee chairs and submit these names to the full Board for approval. The Board will also approve any vice chairs who are appointed by committee chairs.</li><li>The Board Chair/Vice Chair will be able to designate or replace committee chairs when necessary as, for example, when a committee chair is no longer available, or is not adequately fulfilling the role. The Board will approve the change of any committee chair.</li><li>Committees will have a minimum of six and a maximum of twelve members.</li><li>The Board Chair/Vice Chair, in consultation with the committee chair and the ED, will propose the constituencies to be included on each committee, based on applications made by constituencies for committee seats, for full Board approval. There will be no more than one member per constituency on any single committee.Each constituency may participate in a maximum of three committees. Where demand for committee seats exceeds the maximum, priority will be given to ensuring the balance of donors, recipient countries, NGOs, private sector and foundations.</li><li>Constituencies will designate an individual to represent them on a given committee. While it is preferable that constituencies choose Board members or alternates to serve on committees, they are free to choose any individual to represent them.</li><li>While substitutes should be discouraged, committee members will be able to send substitutes as an exception without the approval of the committee chair.</li><li>Only committee members (or their substitute) will attend committee meetings, unless other individuals are invited to do so by the committee chair.</li><li>Expert input should be provided at the discretion of committees and in consultation with the Executive Director and may take the form of a panel of independent experts. The committee chair and vice chair, in conjunction with the ED, will then choose the panel of independent experts from the list of nominations submitted by the committee. The Board will not need to approve the specific list of individuals selected. These independent experts will be subject to the agreed conflict of interest provisions. When Board committees have designated an expert panel, the expert panel will be able to meet with the full committee, or (at the committee’s discretion) independently, with only the committee chair and/or vice-chair); in either case, Board/constituency members who are not members of the committee will not attend these expert panel meetings, unless invited to do so by the committee. The committee will provide terms of reference for expert panels.</li></ol>
2002-10-10 B03 GF/B03/DP07 Board Membership and Participation Principles Board Membership and Participation Principles
<ol><li>The status quo will be retained, namely that constituencies will be able to change the alternate as needed and, as stated in the Board Operating Procedures, should confirm the appointment preferably at least two weeks prior to a scheduled Board meeting. If abused the Board should revisit the policy on alternate Board members.</li><li>Other members of a delegation shall only have the right to speak or participate directly in the deliberations of the Board when doing so at the request of and in place of the Board Member of their delegation and the Chair should be informed of this in advance. Only one individual from a constituency, including the Board Members/Alternate, may speak per agenda item. Alternate Members may speak during debates or cast votes, when replacing the Board Member.</li><li>While the Board Chair/Vice Chair is presiding, his/her alternate (or any member of his/her delegation as stipulated by the Board Chair/Vice Chair) from the Board Chair/Vice Chair’s constituency will be permitted to participate in the discussion. However, but the Board Chair/Vice Chair will retain the single vote of the constituency.</li></ol>
2002-10-10 B03 GF/B03/DP08 Board Meeting Room Credentials Principles Board Meeting Room Credentials Principles
The status quo will be retained, namely that five members (the Board member and four others) of each constituency should be allowed in the Board meeting room. There will be video transmission of Board proceedings to a controlled-access room occupied by the additional delegation and Secretariat members who do not have access to the main Board meeting room.
2002-10-10 B03 GF/B03/DP09 Board Meeting Principles Board Meeting Principles
<ol><li>The Board will have three regular in-person meetings per year, two to be held in Geneva and one to be held in a recipient country (with optional visits, as appropriate, to programs supported by the Global Fund before or after the meeting). The location of the recipient country of Board meetings will rotate appropriately between regions. Meetings will generally be kept to two days in length. Committees will normally meet before and/or after the Board meetings, at the discretion of the committee chair and depending on their program of work. When deciding on the location of meetings, due consideration will be given to ensuring that delegations are not faced with any difficulties in visiting the selected country, especially as regards visa requirements.</li><li>The Board Chair/Vice Chair are empowered to make decisions on matters within their discretion between Board meetings . These decisions will be presented to the Board at its next meeting. (Legal advice will be sought on whether the implementation of this decision requires a change to Article 17 of the By-Laws). The Board will review and may modify or reverse these decisions during the next Board meeting. If, in exceptional circumstances, the ED and Board Chair/Vice Chair determine that a pending issue requires Board input, and the issue cannot wait until the next Board meeting, the Board Chair/Vice Chair will consult with Board members. (Such Board input will, wherever possible, take the form of consultations that inform the decision of the Board Chair/Vice Chair, rather than formal Board decisions).</li><li>The Board Chair/Vice Chair will be able to call an in-person emergency Board meeting, in extraordinary circumstances only (e.g. major financial, legal and/or ethical issues, loss of confidence in leadership), and only with support of at least one-third of the members of the Board. Any Board member, or the ED, will be able to suggest the need for an emergency meeting to the Board Chair/Vice Chair. The Board Chair/Vice Chair will have reasonable discretion, as required under the circumstances, to change the normal procedural guidelines for Board meetings for an emergency Board meetings (e.g., provision for delegations, translation services, etc.).</li><li>The Secretariat and Board Chair/Vice Chair will develop the Board meeting agenda, which will be approved by the Board at the beginning of each meeting.</li><li>The Secretariat will prepare synthesized options, recommendations, and supporting rationale (maximum of ten to fifteen pages per agenda item) and distribute it three weeks in advance of the Board meeting. Items requiring decision will be clearly identified and prioritized.</li><li>The Governance and Partnership Committee should develop a few basic, enforceable procedural rules for consideration by the Board at the January Board meeting</li></ol>
2002-10-10 B03 GF/B03/DP10 Approval of Policy on Ethics and Conflict of Interest Approval of Policy on Ethics and Conflict of Interest
<p>The Board will recognize and accept that all constituencies have interests and that these may lead to potential, actual and perceived conflicts of interest. Article 14 of the By-Laws makes provision for a policy on this matter to be established. To ensure fairness in the Board’s decision-making and to protect the Fund’s interests, the Board adopts the Policy on Ethics and Conflict of Interest, which applies to all Board members and other interested persons (including, but not limited to, alternates, members of any Committee, expert panel, Technical Review Panel, and employees of the Secretariat including the Executive Director). This policy is based on clear definitions of potential areas of conflict, a duty to disclose, and a mechanism for managing conflicts as they arise.</p><p>The Policy on Ethics and Conflict of Interest is adopted subject to refinement as appropriate based on legal review, and applies to all activities from here on including consideration of Round 2 proposals. This policy currently applies to both personal and institutional conflicts. Subsequent review should focus attention on institutional conflicts, and the differentiation between personal and institutional conflicts of interest.</p>
2002-10-10 B03 GF/B03/DP11 Approval of the Documents Policy Approval of the Documents Policy
The Board adopts The Global Fund Documents Policy, subject to refinement as appropriate based on legal review. As outlined in the policy, the Board will operate under a principle of maximum transparency and openness; subject to the restrictions outlined in the policy, the Board will make public all documents and records. As outlined in the policy, the Fund and the Board will not release any document or otherwise disclose information which is for discussion (“deliberative“) or “pre-decisional“ in order to encourage dialogue among Board members and other units of the Fund. As outlined in the policy, deliberative information will only be shared with the members of constituencies who need to provide input to the Board member. As outlined in the policy, all Board decisions, actions, or other final statements will be made public under the general principle of openness and transparency.As outlined in the policy, in extremely limited and sensitive circumstances, such as personnel actions, business proprietary information, or resource mobilization and other strategies, the Fund will not release information to the public.
2002-10-10 B03 GF/B03/DP12 Attribution of Committee Leadership Seats Attribution of Committee Leadership Seats
<p>With reference to Section 2.3.2, the Board decided to appoint the following constituencies to Chair the four Committees: - Governance and Partnership : Italy; Resource Mobilization: East and Southern Africa; Portfolio Management and Procurement: South East Asia; Monitoring, Evaluation, Finance and Audit: Point Seven or USA (to be decided). </p><p>Individual nominees from these constituencies will be submitted to the Chair for review and submission to the Board for approval.</p>
2002-10-10 B03 GF/B03/DP13 Approval of MEFA Decisions Approval of MEFA Decisions
<ol><li>The Global Fund Board decided to adopt the decision points requested by the Working Group on Monitoring and Evaluation and ask the M.E.F.A Committee to report back to the Board on progress on their implementation at the meeting of the Board in January, 2003. <ol><li type="a">The Board instructed the Secretariat to prepare annual action plans for monitoring and evaluation of the Global Fund’s performance, and instruct the M.E.F.A. Committee to present a plan appropriate to its mandate as agreed by the Board;</li><li type="a">The Board endorsed the principles of transparency, consultation with stakeholders and coordination of monitoring and evaluation efforts to facilitate optimal use of existing partner capacity, while satisfying the needs of major donors and their internal auditing requirements;</li><li type="a">The Board reaffirmed the importance of linking results to an appropriate disbursement schedule and annual results reviews, and instructed the Secretariat to include results-reporting templates in grant agreements with PRs, ensuring PRs clearly understand the concept of Results Based Disbursement;</li><li type="a">The Board instructed the Secretariat to operationalize an approach for results reviews, which includes a provision for annual results reviews, review criteria, and a strengthening of information systems making this reporting feasible;</li><li type="a">The Board instructed the Secretariat to clarify the role and responsibilities of CCMs, PRs, LFAs and the Fund Secretariat regarding monitoring and reporting within the context of the fiduciary architecture of the Global Fund;</li><li type="a">The Board instructed the Secretariat to define quality assurance in the context of the Fund’s mission, and identify mechanisms for ensuring data quality;</li><li type="a">The Board endorsed the need to set budgetary parameters for monitoring and evaluation at the Fund level and to reconfirm the need for grant proposals to include budgets for monitoring and evaluation.</li></ol></li><li>The Board directs the M.E.F.A. Committee to review the recommendation that there be an independent secretariat in the field of monitoring and evaluation and to report on this matter to the January, 2003 Board meeting</li><li>The Board directs the M.E.F.A. Committee to consider the need for periodic focused external audits of the performance of the Global Fund, or aspects of the Global Fund, and to bring recommendations to the Board in January 2003.</li></ol>
2002-10-10 B03 GF/B03/DP14 Adoption of the report and recommendations of the Working Group on Proposals Adoption of the report and recommendations of the Working Group on Proposals
<p>The Board decided to adopt the report and recommendations of the Working Group on Proposals. The decision points are to: ratify the expansion of the TRP from 17 to 22 members on an experimental basis; The Board decided to revise the TRP review approach so that it strengthens the transparency and consistency of the process while maintaining the independence and flexibility of the TRP. Specifically, the TRP will score all proposals and present them to the Board classified according to four categories, namely:Category 1: Recommended for funding with no or minor modifications; Category 2: Recommended for funding provided clarifications are met within a limited timeframe (e.g. 6 weeks); Category 3: Not recommended for funding in its present form but strongly encouraged to resubmit; Category 4: Not recommended for funding.</p><p>The Board agreed that WHO/UNAIDS and other technical partners will verify data, compile statistics and provide written answers to the TRP on an agreed set of questions relating to all proposals going to the TRP.</p><p>The Board agree that the Secretariat will provide, rationales for non-eligible proposals, executive Summaries and standardized TRP reporting forms for all reviewed proposals, full texts of recommended proposals on request, and statistics on all received proposals (countries, diseases, poverty indicators etc.) to the Board prior to the next Board meeting in January 2003:</p><p>The Board strongly encouraged the Global Fund’s partners (e.g. local civil society and others) with in-country presence to increase their support and assistance to CCMs during all phases of the process.</p><p>The Board requested the Committee on Portfolio Management and Procurement to identify the most needy and poorest countries and ensure they are not systematically excluded; to consider the need for, and make recommendations about, a recourse mechanism (appeal procedure) for countries; to improve the information sharing between the Fund’s stakeholders; to provide guidance on operational research to the TRP;to set clearer boundaries for financial support by the Fund, including eligibility, priorities and Round budgets; to review the functioning of the TRP, including how membership is selected and expanded and how it is renewed after two Rounds; to regard Recommendation 2, evaluating whether there are conflicts of interest for technical experts to CCMs who may be benefiting from Global Fund applications on which they are providing assistance, or who may otherwise be assisting the TRP with its deliberations; to define how to deal more effectively with non-technical and non-disease specific elements of the TRP review such as broader developmental and health systems issues;</p><p>The Board requested the Committee on Portfolio Management and Procurement to expand the partnership between various actors (including TRSG, WHO, UNAIDS), at all levels including technical assistance that can be provided by national and international NGO’s "<br/><br/></p>
2002-10-10 B03 GF/B03/DP15 Measures Related to Procurement and Supply Management (Product Selection, Quality Assurance, Procurement and Pricing, Budgeting and Finance, Monitoring and Evaluation) Measures Related to Procurement and Supply Management (Product Selection, Quality Assurance, Procurement and Pricing, Budgeting and Finance, Monitoring and Evaluation)
<p>The Global Fund Board decided on the following measures related to procurement and supply management:</p> <p>A. PRODUCT SELECTION AND RATIONAL USE</p> <p><u>1. List of medicines to be procured</u></p> <p>Fund resources may be used only to procure medicines which appear in current national, institutional or World Health Organization (WHO) standard treatment guidelines (STGs) or essential medicines lists (EMLs). The relevant STG or EML should be included in the proposal submitted to the Fund. Unlisted products may be procured only with appropriate and specific rationale presented in the proposal, as judged by the Technical Review Panel (TRP).</p> <p><u>2. Plans for preventive, diagnostic and other public health products</u></p> <p>Proposals for purchase of medications must be accompanied in the proposal by a plan of enabling diagnostics and other major categories of supplies related to the provision of these medications.</p> <p><u>3. Adherence, drug resistance and monitoring adverse effects</u></p> <p>a) It is strongly recommended to Recipients that they implement mechanisms to encourage adherence to treatment (including but not limited to Fixed Dose Combinations (FDCs), once-a-day formulations, blister packs, and peer education and support), to monitor and contain resistance, and to monitor adverse drug reactions (ADRs) according to existing international guidelines and, if necessary, drawing on budgeted requests for financial support from the Fund.</p> <p>b) To help contain resistance to second-line TB drugs and consistent with the policies of other international funding sources, all procurement of medications to treat Multi Drug Resistant TB (MDR-TB) must be conducted through the Green Light Committee (GLC). []</p> <p>B. QUALITY ASSURANCE</p> <p><u>4. Compliance with quality standards</u></p> <p>a) For any medicinal product to be eligible for purchase with Fund resources, its compliance with quality standards must be assured. For multi-source, off-patent products with available dosage from public pharmacopoeial quality standards, verification of product compliance with standards would be conducted in accordance with the existing national procedures of the Recipient’s country.</p> <p>b) Provided products are accepted by the national drug regulatory agency (NDRA)of the Recipient country (see 5 below), to be eligible for purchase with Fund resources any single or limited source product (that is, a medicinal product for which there are not publicly available quality assurance standards, analytic methods, and reference standards) must (a) have been found to be acceptable by the WHO-initiated UN Pilot Procurement Quality and Sourcing Project, or (b) have been authorized for consumption in its country by a stringent regulatory authority, [For the purposes of this policy a stringent drug regulatory authority is defined as a regulatory authority in one of the 28 countries which is either a PIC/S and/or ICH member] or (c) have been authorized by the national drug regulatory authority in the Recipient’s country. Option (c) is applicable only until December 31, 2004, after which suppliers must comply with one of the two standards as set out in (a) and (b) and in all cases are subject to monitoring product quality standards prescribed by the Fund as in 6.1.</p> <p><u>5. National drug registration</u></p> <p>a) Products procured with Fund resources are subject to authorization by the National Drug Regulatory Authority (NDRA) in the country in which they will be used, following its standard practices for drug registration for pharmaceutical products. For products that have passed the UN Pilot Procurement Quality and Sourcing Project review, as described in above, NDRAs are encouraged to expedite registration by accepting WHO pre-qualification inspection and supporting dossiers in lieu of national requirements.</p> <p>b) For products which have been authorized by stringent drug regulatory authorities, NDRAs are encouraged to expedite registration by accepting in lieu of national requirements the Executive Summary of the Common Technical Document (CTD) or Summary parts for quality, safety and efficacy together with all necessary information to perform quality control testing of products and necessary reference standards.</p> <p><u>6. Monitoring product quality</u></p> <p>a) Recipients, their procurement agents, or NDRA’s must systematically draw random samples of pharmaceutical products purchased with Fund resources for quality control testing to monitor compliance with quality standards. Testing may be budgeted in proposals, to be funded by the Fund. For multi-source off-patent products with available public standards, samples should be sent to WHO-recognized laboratories in cases where the NDRA have no capacity for this testing.</p> <p>b) For single- or limited-source products without public standards and pre-qualified by UN Pilot Procurement Quality and Sourcing Project, samples should be sent to WHO-recognized laboratories already participating in the WHO pre-qualification project in case the NDRA has no capacity. For single- or limited-source products that have been pre-qualified on the basis of authorization by a regulatory authority in an ICH and/or PIC/S member, testing shall be done by a laboratory identified by the purchaser as stated in the purchase contract. The laboratory should be a WHO-recognized laboratory, or a laboratory in ICH and/or PIC/S countries in case the country does not have identified laboratory capacity.</p> <p>C. PROCUREMENT AND PRICING</p> <p><u>7. Procurement practices</u></p> <p>The Fund will require that, as a minimum, Recipient procurement offices and any contracted agencies/services adhere to the Interagency Operational Principles for Good Pharmaceutical Procurement. [Operational Principles for Good Pharmaceutical Procurement (Interagency document). WHO, Geneva, 1999. WHO/EDM/PAR/99.5.] Where practices differ from the Interagency Guidelines, Recipients or their agents must demonstrate to the LFA comparable systems for competitive bidding within a group of pre-qualified suppliers, transparency and accountability to their practices, and their application of necessary quality assurance mechanisms. Recipients should also demonstrate the existence of a full set of contractual documentation to govern each transaction.</p> <p><u>8. Procurement responsibilities</u></p> <p>a) The Recipient is responsible for all procurement, with the use of contracted local, regional or international procurement agents being at the discretion of the Recipient. The exception to this would be for those product categories for which local procurement capacity is insufficient, as judged by the Procurement and Supply Management Assessment. For such product categories, Recipients would be required to use established regional or international procurement services and will be informed by the Fund on which mechanisms are available. </p> <p>b) Even for product categories for which Recipients have procurement capacity, the use of capable regional and global procurement services is encouraged wherever pooling of demand lowers prices for products of assured quality.</p> <p><u>9. Monitoring supplier performance</u></p> <p>Recipients are responsible for monitoring the performance of suppliers with respect to product and service quality and for submitting that information electronically for web publication through a mechanism established by or identified by the Fund. Reporting guidelines for supplier performance should be specified by the LFA, according to guidelines provided by the Secretariat of the Fund.</p> <p><u>10. Lowest possible price</u></p> <p>a) The Fund requests Recipients to use Good Procurement Practices, which includes competitive purchasing from qualified manufacturers and suppliers, as outlined in section B of these recommendations, to attain the lowest price of products. The Fund encourages Recipients to comply with national laws and applicable international obligations in the field of intellectual property including the flexibilities provided in the TRIPS agreement and referred to in the Doha declaration in a manner that achieves the lowest possible price for products of assured quality.</p> <p>b) The Fund encourages the voluntary efforts of pharmaceutical companies to expand current tiered or preferential pricing arrangements, among other mechanisms, to promote differential pricing.</p> <p>c) Disclosure of information on prices paid for purchases by Fund Recipients is a matter of principle and will facilitate a process leading to lower prices. The Fund will ensure that information on prices paid on products of assured quality with the same conditions (e.g., including other goods or services included in the contract) is made publicly available. The disclosure of this information will be pursued by the Fund. A methodology for assuring this transparency will be presented to the Board by January 2003.</p> <p>d) In the cases of this policy, price refers to DDU costs – delivered duty unpaid. The approach taken may be to publicly list average, minimum, maximum, and mode prices and/or prices for individual companies and/or Recipients. This choice requires further consideration by the Fund to identify or develop standard methods to ensure to the extent possible that price information is based on a consistent set of definitions. It is understood that price comparisons are indicative and must include special “add ons”/conditions included in the price and that actual prices will vary.</p> <p><u>[...]</u></p> <p>E. BUDGETING AND FINANCE</p> <p><u>17. Direct payment to suppliers upon delivery</u></p> <p>Prompt payment in compliance with the terms of payment of the contractual provisions encourages timely delivery of products and reduces transaction costs. Direct payment to suppliers by the Trustee, on confirmation of delivery, will be allowable upon request of the Secretariat if, as confirmed by the LFA, such payment arrangements are expected to reduce costs and to be consistent with necessary accounting requirements.</p> <p><u>18. Exemption from duties, tariffs and taxes</u></p> <p>a) The Fund strongly encourages the relevant national authorities in the Primary Recipient’s country to exempt from duties and taxes all public health products financed by the Fund to NGOs, groups of NGOs, or national authorities, or any other PRs.</p> <p>b) In any case, Fund resources may not be used to pay duties, tariffs, local or national taxes on public health products procured with Fund resources. If payment of such fees is required by relevant national authorities, such payment is the responsibility of the Recipient.</p> <p><u>19. Additionality of Fund resources and contribution to sustainability</u></p> <p>a) The Fund encourages Recipients to manage and to apply Fund resources as part of a sustainable long-term plan for local public health financing. Recipients will be required to declare in the original proposal to the Fund other international financing and product donation programs being utilized by Recipients. Ongoing indicators must show the magnitude of product financing supported by domestic versus international financing.</p> <p>b) Programs which include consumer cost recovery mechanisms are eligible for funding by the Fund when such programs are part of a pre-existing healthcare financing policy, which should be specified in the proposal to the Fund; in these cases, the budget request to the Fund must not duplicate costs to be reimbursed by consumers.</p> <p><u>[...]</u></p> <p><u>21. Prices used for budgeting proposals</u></p> <p>a) For budget requests for pharmaceutical products, proposals to the Fund must use the lessor of current procurement prices, firm offers from suppliers, or existing public price information sources specified by the Secretariat in the Guidelines for Proposals. A rationale for budgeting using prices other than those specified above should be described in the proposal. All prices should be expressed in standard trade terminology to allow transparent comparison.</p> <p>b) During implementation, these budgeted prices will not act as a defined reimbursable ceiling or floor to the full cost of products paid by the Recipient, provided that products are of assured quality and that procurement practices adhere to the policies of the Recipient and Fund.</p> <p>F. MONITORING AND EVALUATION</p> <p><u>22. Monitoring the performance of procurement and supply systems</u></p> <p>a) Prior to disbursement, Recipients must prepare a plan for monitoring the performance and sustainability of procurement and supply management systems. The monitoring plan should include tracking of procurement prices, distribution costs, additionality of Fund resources to domestic and other international sources, and other measures of procurement and supply system performance and sustainability. Indicators for monitoring should be agreed with the Fund and included in the Grant Agreement. The Secretariat of the Fund will make available a menu of existing international indicators with agreed methodology to support this process.</p> <p>b) Baseline data for agreed “core” indicators must be gathered before Fund-supported services and products may be delivered. The baseline survey should be done prior to the Grant Agreement as part of the Procurement and Supply Management assessments undertaken by the LFA.</p> <p><u>23. The Board also approved several follow-up items to be considered by the Portfolio and Procurement Committee (Reference numbers refer to the Report of the Task Force on Procurement and Supply Management) :</u></p> <p>a. Reference 2.1: Diagnostics and other major categories related to provision of medications;</p> <p>b. Reference 4.2.c): A study of the degree of intensity, the frequency, monitoring, and how frequent the testing and monitoring should be done, along with the costs involved;</p> <p>c. Reference 6.1: A study of :</p> <p>• the need to decide on how to make a judgment on NDRA capacity to proceed with analysis of multi-source products, and if required make a recommendation on this topic to the Board;</p> <p>• the potential conflicts of interest involved when products are manufactured in a state-owned laboratory and the Principal Recipient is a public entity;</p> <p>• the potential conflicts of interest involved when products are manufactured or purchased in a state-owned structure and the state is responsible for quality;</p> <p>d. Reference 8.1: Review the feasibility and options for partnering relevant global bidding mechanisms;</p> <p>e. Reference 8.2: Review the feasibility or necessity of global or regional procurement or bidding mechanisms for product categories for which such mechanisms do not currently exist. The Fund will not, in any case, take on such procurement responsibilities itself;</p> <p>f. Reference Annex IV, p. 7: Review specific recommendations on capacity building;</p> <p>g. Reference 10.1: Perform a feasibility study, including a full cost analysis, to develop a pricing reporting mechanism as outlined in the pricing section that will require that information on prices paid by Recipients is made publicly available through existing international pharmaceutical pricing services or be made public by the Fund. This includes determining who will publish the pricing information. Taking into account that it is a difficult matter, the Portfolio Management and Procurement Committee will study the best way of achieving this objective;</p> <p>h. Reference 12: Study and make recommendations regarding the issue of domestic production;</p> <p>i. Reference 18.1: Study the impact of the policy on duties, tariffs, and taxes, including specifically the impact on NGOs, and make appropriate recommendations to the January 2003 Board meeting; </p> <p>j. Explore the necessity for the continuation for a special Procurement and Supply Management Task Force and review the memberships of such a Task Force.</p>