Board Decisions

GF/B04/DP16

Approved by the Board on: 31 January 2003


Report of the Portfolio Management and Procurement Committee: Procurement

The PMPC recommends that PSM Advisory Panel consider necessary policies for the Global Fund related to the procurement of diagnostics and other products related to the provision of medications. Refer to GF/B4/7) for further details.

(No options are approved by a 2/3 majority vote)  The PMPC requests that the Board adopt one of the three policies on domestic production as discussed GF/B4/7).

  • Option 1: Zero Price Premium
    • Donors: Yes: 7 No: 2
    • Recipients: Yes: 2 No: 6 Abstain: 1 
  • Option 2: 15% Price Premium over the lowest price imported generics
    • Donors: Yes: 1 No: 7 Abstain: 1  
    • Recipient: Yes: 0 No: 8 Abstain: 1
  • Option 3: 15% Price Premium over lowest imported product 
    • Donors: Yes: 2 No: 6 Abstain: 1
    • Recipients: Yes: 6 No: 2 Abstain: 1

The PMPC recommends that the Board amend the policy adopted on exemption on duties, tariffs and taxes to allow but not to encourage that Fund resources be used to pay possible product duties, tariffs and taxes. The amended policy should read as follows: "The Fund strongly encourages the relevant national authorities in recipient countries to exempt from duties and taxes all products financed by Global Fund grants and procured by NGOs or any other Principal Recipient or sub-recipient."

The Board is invited to acknowledge PMPC's decisions 4.a - 4.l on pages 6-10.

  • 4a: The PMPC has agreed to the creation of a PSM Advisory Panel, according to the Terms of Reference in Part 1 Annex II, to provide technical advice to the PMPC as required
  • 4b: The PMPC has agreed to consider the subject of product quality monitoring processes, on the basis of both WHO input and advice by the PSM Advisory Panel, and make appropriate recommendations to the Fifth Board Meeting.
  • 4c: The PMPC has agreed to consider how the Global Fund should ensure the assessment of NDRA recognized laboratories for product quality monitoring, drawing on the advice of the PSM Advisory Panel, and make appropriate recommendations to the Fifth Board Meeting.
  • 4d: The PMPC has agreed to consider potential PSM-related conflicts of interest based on advice of the PSM Advisory Panel and make appropriate recommendations to the Fifth Board Meeting.
  • 4e: The PMPC has agreed to consider issues related to global bidding mechanisms based on advice from the PSM Advisory Panel and make appropriate recommendations to the Fifth Board Meeting.
  • 4f: The PMPC has agreed to approve the importance of capacity building for procurement and supply management as proposed by the PSM Task Force and request the Secretariat to ensure that information on the subject be made available to potential grantees and Principal Recipients.
  • 4g: The PMPC has agreed on the Terms of Reference for a Pricing Reporting Mechanism design study, as attached in Part 1 Annex III, and has directed the Secretariat to commission this study and implement the resulting system for collecting and reporting prices paid for pharmaceutical products by Global Fund recipients by September 2003.
  • 4h: The PMPC has agreed to refer the issueof the direct payment of suppliers to the Secretariat,with further analysis by the Advisory Panel as necessary.
  • 4i: The PMPC has agreed to refer the issueof product prices used for budgeting proposals to the Secretariatfor operationalization, with further analysis by the Advisory Panel as necessary.
  • 4j: The PMPC has agreed to consider issues related to in-kind contributions, if they are considered eligible by the Board of the Global Fund for resource mobilization, based on advice from the PSM Advisory Panel and make appropriate recommendations to the Fifth Board Meeting.
  • 4k: The PMPC has agreed to consider the previous recommendation made to the Third Board Meeting on the issue of international and national law, based on advice from the PSM Advisory Panel and make appropriate recommendations to the Fifth Board Meeting.
  • 4l: The PMPC has agreed to consider the previous recommendation made to the Third Board Meeting on the issue of supply chain management, based on advice from the PSM Advisory Panel and make appropriate recommendations to the Fifth Board Meeting.