As the world's leaders gather in Addis Ababa, Ethiopia, for the Financing for Development Conference [1], a study published in The Lancet demonstrates that a new approach is needed for classifying funding that reflects the function the funding serves, rather than the specific disease or country. The study is the first in-depth assessment of how donor funding is spent on global versus country-specific functions of health [2].
The paper also presents an expanded definition of official development assistance (ODA) for health, which is used to identify important underfunded areas and could reshape how governments provide financial support for global health issues.
This new approach--developed by a group of leading global health experts and economists led by Dr Marco Schäferhoff, Associate Director of SEEK Development in Berlin, Germany-- provides a more complete picture of donor support. It combines both financing officially reported as ODA for health with additional spending by countries on pharmaceutical research and development for neglected diseases that disproportionately kill the world's poor, and breaks down this funding by function.
The analysis estimates that just 21% (US$4.7 of US$22.0 billion) of this funding in 2013 was devoted to global functions providing global public goods (eg, research on drugs, vaccines, and diagnostics), managing cross-border externalities (eg, preparing for the next disease outbreak and tackling antimicrobial resistance), and providing global leadership and stewardship. In contrast, 79% (US$17.3 billion) was disbursed for individual county support.
The analysis highlights the mismatch between donor support and global health needs. For example, the entire donor investment in cross-border externalities was around US$1 billion in 2013--less than a third of what the World Bank estimates the annual cost of building a pandemic preparedness system (US$3.4 billion). What is more, spending in 2013 for all global public goods (around US$3 billion) is less than half the annual US$6 billion that WHO estimates is needed to support research and development for neglected diseases alone, and is just one of many global public goods. Additionally, the researchers examined country-specific funding by country income-groups, finding that a third of aid was allocated to middle-income countries.
The authors urge governments to adopt an approach to international health financing that more strongly emphasises funding for global health functions, as these promise great impact for all countries.
Former U.S. Treasury Secretary Lawrence Summers, a co-author and Professor of Economics at Harvard University says, "The best way for donors to improve the health of poor people in middle-income countries is to invest in research and development for neglected diseases, pandemic preparedness, and other global functions of health. These investments will improve existing tools, lower drug prices, and increase global coordination to make it cheaper and more efficient for all countries to deliver health services to poor people." [3]
Dr Schäferhoff adds, "We should be investing in essential global functions, as these investments would benefit poor people wherever they live, including the poor within middle-income countries. For example, countries like China and India would substantially benefit from market shaping to lower drug prices and increased international efforts to control multi-drug resistance tuberculosis. At the same time, health aid to the world's poorest countries must continue and donor countries should also ensure that vulnerable and marginalised populations in middle-income countries, such as ethnic minorities who suffer discrimination, refugees, and people who inject drugs, receive sufficient support." [3]
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NOTES TO EDITORS:
This study was funded by the Bill & Melinda Gates Foundation.
[1] Financing for Development Conference in Addis Ababa, Ethiopia, 13-16 July, 2015 http://www.un.org/esa/ffd/ffd3/conference.html
[2] Global functions are those that address transnational issues by supporting global public goods, such as research and development (R&D), managing cross-border externalities, including pandemic preparedness, and fostering global health leadership and stewardship.
[3] Quotes direct from authors and cannot be found in text of Article.
Journal
The Lancet