Ruth Levine

Helping poorer countries make locally informed health decisions

Health spending in low income countries is too often driven by outside pressure rather than local evidence. Kalipso Chalkidou, Ruth Levine, and Andrew Dillon report on efforts to help them match spending to local needs

Financial challenges of immunization: a look at GAVI

Securing reliable and adequate public funding for prevention services, even those that are considered highly cost effective, often presents a challenge. This has certainly been the case with childhood immunizations in developing countries. Although the traditional childhood vaccines cost relatively little, funding in poor countries is often at risk and subject to the political whims of donors and national governments. With the introduction of newer and more costly vaccines made possible under the Global Alliance for Vaccines and Immunization (GAVI), the future financial challenges have become even greater. Experience so far suggests that choosing to introduce new combination vaccines can significantly increase the costs of national immunization programmes. With this experience comes a growing concern about their affordability in the medium term and long term and a realization that, for many countries, shared financial responsibility between national governments and international donors may initially be required. This article focuses on how GAVI is addressing the challenge of sustaining adequate and reliable funding for immunizations in the poorest countries.

The economics of vaccination in low- and middle-income countries

Economic principles and tools have aided policy-making on the allocation of resources for health and have been applied convincingly to vaccination. In the late 1970s cost-effectiveness studies of immunization programmes in low-and middle-income countries led to a better understanding of the resources required to reduce morbidity and mortality (1). The push for increased coverage under Universal Childhood Immunization in the 1980s led to cost-effectiveness studies of alternative delivery strategies and interest in sustainability and affordability at country level (2). New vaccines, which cost more per child immunized, present financing challenges for countries--a concern that the Global Alliance for Vaccines and Immunization is responding to by planning for financial sustainability. What can economists bring to the question of how to finance services? Because vaccination of one child confers health benefits for others, in free markets vaccinations will be undersupplied, as the true marginal costs will not be recouped by providers. Families also have disincentives to bear the time and money costs of vaccination: those choosing not to vaccinate reap the benefit of protection created by those who do, but the greater the numbers of unimmunized children the greater the chances of disease transmission. Public financing and provision help to overcome these problems and to ensure an optimal level of service delivery. What can economics bring to the current policy and programmatic questions facing immunization services and the broader global health community? This issue of the Bulletin draws on an international meeting (3), and shows how innovative work can inform contemporary decisions. We highlight below questions for a global research agenda to allow policy-makers to incorporate economics more fully into research and policy-making. What are the most economical ways of expanding immunization programmes? While immunization is a key strategy to reduce child mortality and reach the Millennium Development Goals, little is known about how unit costs change with coverage, or what accounts for variation across strategies, levels of the health system, and countries. Thus, true resource requirements are difficult to estimate. Other questions of interest include: What is the optimal mix of strategies at different coverage levels, given a budget constraint? At what point should a government focus on disease control or eradication? What strategies help achieve equitable coverage gains? What are the most effective approaches for organizing, sustaining and financing national immunization programmes? The context of decentralization, reform and financing of health services has a major impact on performance. …

Advance Market Commitments for Vaccines Working Paper and Spread Sheet

The G8 is considering committing to purchase vaccines against diseases concentrated in low-income countries (if and when desirable vaccines are developed) as a way to spur research and development on vaccines for these diseases. Under such an “advance market commitment,” one or more sponsors would commit to a minimum price to be paid per person immunized for an eligible product, up to a certain number of individuals immunized. For additional purchases, the price would eventually drop to close to marginal cost. If no suitable product were developed, no payments would be made. We estimate the offer size which would make revenues similar to the revenues realized from investments in typical existing commercial pharmaceutical products, as well as the degree to which various model contracts and assumptions would affect the cost-effectiveness of such a commitment. We make adjustments for lower marketing costs under an advance market commitment and the risk that a developer may have to share the market with subsequent developers. We also show how this second risk could be reduced, and money saved, by introducing a superiority clause to a commitment. Under conservative assumptions, we document that a commitment comparable in value to sales earned by the average of a sample of recently launched commercial products (adjusted for lower marketing costs) would be a highly cost-effective way to address HIV/AIDS, malaria, and tuberculosis. Sensitivity analyses suggest most characteristics of a hypothetical vaccine would have little effect on the cost-effectiveness, but that the duration of protection conferred by a vaccine strongly affects potential cost-effectiveness. Readers can conduct their own sensitivity analyses employing a web-based spreadsheet tool.

Aid at the frontier: building knowledge collectively

This paper articulates how programme evaluation generally, and impact evaluation specifically, contributes to good governance – not by replacing politics, but by informing it. We argue that institutions with the mandate to accelerate progress in the developing world through aid transfers are particularly well suited to fund impact evaluations. We argue, in fact, that funding impact evaluations through a collective vehicle like the International Initiative for Impact Evaluation (3ie) should be a primary focus of foreign aid. Finally, we highlight the conditions needed and the additional efforts required to yield the full benefits of collective investment in finding out what works.

1 – GLOBAL BURDEN OF DISEASE: PART B. Cost Effectiveness of Immunization: Asking the Right Questions

Cost-effectiveness analysis, a standard part of an economists armamentarium, is used to inform or at least rationalize decisions about the use of healthcare resources, including those related to vaccines and immunization strategies. The cost-effectiveness of traditional childhood vaccines is clear and undisputed, and the analyses that have demonstrated this feature have contributed to more general support to extend the benefits of national immunization programs. It compares two or more health interventions that have a common objective and are competing for common resources. As new questions emerge regarding the correct approach to extend programs—in terms of coverage and range of antigens—analyses of cost-effectiveness have the potential to maximize the social benefits for every dollar invested. Cost-utility analyses (CUA), which are often mistaken for cost-effectiveness analyses, attempt to incorporate the dimension of quality of life into the measurement of benefits. The appropriate use of cost-effectiveness analysis tool of economic evaluation requires the analyst to understand the fundamental decisions at hand and the perspective that should be considered to examine them.