Global Health, Development and Business Leaders Announce New Innovative Financing Partnership to Deliver Essential Health Supplies More Quickly and Efficiently

Fri May 17, 2013 8:30am EDT

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Global Health, Development and Business Leaders Announce New Innovative Financing Partnership to Deliver Essential Health Supplies More Quickly and Efficiently

A New 5-year Guarantee Has the Potential to Unlock Immense Private Sector Financing, Accelerating Efforts to Achieve MDGs

Today, leading global health and development experts from the public and private sectors are joining forces at the 2013 GBCHealth Conference to announce a new partnership that will leverage private sector funding to speed up delivery and access to life-saving health supplies, such as contraceptives, bed nets, and medicines to those in need. Through Pledge Guarantee for Health (PGH), this new financing mechanism will help increase the impact of each dollar of donor funding and ultimately improve healthcare access and outcomes for the millions who are helped by foreign aid.

The traditional sequence and timing of aid disbursement can lead to delays in supply and commodity procurement. PGH, developed and incubated by the United Nations Foundation, facilitates innovative financing that expedites the disbursement of donor funds, making global health supplies more accessible and more affordable for developing countries.

The United States Agency for International Development (USAID) and the Swedish International Agency for Development Cooperation (SIDA) are scaling up PGH with a 5-year partial guarantee to help speed up the procurement of essential medicines and health supplies by governments and civil society partners. In collaboration with commercial banking partners, this partial guarantee enables PGH to access $100 million in credit that, over 5 years, can mobilize a tremendous value of lending capacity.

Recognizing the potential for increased access and affordability that accelerated financing can provide, private sector suppliers such as Merck & Co., Inc., known as MSD outside the U.S. and Canada, and Vestergaard Frandsen have stepped up to provide up-front price discounts to aid recipients who utilize PGH to purchase their life-saving health supplies.

With the support of leading multilateral donor organizations such as the Global Fund to Fight AIDS, TB, and Malaria, this cross-sector collaboration can help boost the impact of donor aid and accelerate progress towards key health Millennium Development Goals and improve the lives of mothers, children, and families globally.

A financial tool developed by the United Nations Foundation, PGH works to streamline the procurement of life-saving health supplies. By facilitating short-term loans to developing country recipients, this innovative financing partnership enables recipient countries to access higher quality and more effective methods of health supplies at no additional cost. Currently, due to extensive lag time between the donors and recipients, aid disbursements can take up to 14 months. By providing funding up front, PGH shaves months off of the commitment-to-disbursement timeline.

Quotes from key principals

Dr. Raj Shah, Administrator, USAID: “This announcement builds on our efforts to partner with the private sector to help end preventable child death within a generation. USAID’s partnership with the Pledge Guarantee for Health will help make this promise a reality by ensuring that people around the world—especially mothers and their children—have access to life-saving vaccines, bed nets, and other supplies that are delivered more quickly, cheaply, and broadly than ever before.

“The PGH guarantee, facilitated through USAID’s Development Credit Authority, will guarantee 50 percent of any loan that commercial banks issue to PGH over the next five years. This will allow commercial lenders to get comfortable with this unique structure and eventually continue lending to PGH after the guarantee expires. Through this new approach, we can cut inefficiency even further and better maximize the impact and reach of each dollar we invest.”

Dr. Anders Nordström, Ambassador for Global Health, Swedish Ministry of Foreign Affairs: “We all have to think creatively and collaboratively, through partnerships like PGH, to bring stakeholders together and focus on delivering more donor value for money.”

Dr. Mark Dybul, Executive Director of the Global Fund to Fight AIDS, Tuberculosis and Malaria: “The Global Fund has undergone a number of enhancements in our process and we are joining efforts with partners like Pledge Guarantee for Health to not only accelerate delivery of essential health commodities, but also to increase value for money.”

Ms. Kathy Calvin, President & CEO, United Nations Foundation: “Pledge Guarantee for Health works because it delivers aid faster, saving millions of lives. While the financial mechanisms may be complex, the goal of PGH is simple: to quickly and effectively reduce deaths from easily preventable diseases.”

Mr. Adam Schechter, President of Global Human Health, Merck & Co., Inc.: “By joining in this partnership with PGH, our company will help to provide developing countries and local health workers with improved faster access to our life-saving medicines and vaccines. This aligns with our overarching goal to partner with governments to develop sustainable programs and efforts to increase access to health care.”

Mr. Mikkel Vestergaard Frandsen, CEO, Vestergaard Frandsen: “Through this valuable partnership with PGH, we can help save more lives and prevent unnecessary illness among people living in developing countries, who will receive our anti-malaria bed nets quickly and efficiently.”

Mr. Aron Betru, Managing Director, PGH: “Building off the success of PGH’s proof-of-concept transactions in Sub-Saharan Africa with the help of our guarantor, donor, supplier and banking partners, we are ready to scale up and move on a number of transactions in contraceptives, vaccines, anti-retrovirals and malaria bed nets. Leveraging innovative financing, we hope to help programs achieve more impact with each deal, helping every donor dollar reach the end-user faster and with more value.”

About Pledge Guarantee for Health

Pledge Guarantee for Health is an innovative financing partnership designed to increase the availability and predictability of funding from international donors for health commodities. Through a 5-year partial guarantee from the governments of the United States and Sweden, PGH is able to leverage $100 million in credit from commercial banking partners which, in turn, extend short term credit to traditional donor aid recipients. Recipients are empowered to use donor committed funding in advance of disbursement, resulting in increased buying power, greater value, accelerated procurement and delivery, and, ultimately, more lives saved.

About US Agency for International Development

The American people, through the U.S. Agency for International Development, have provided economic and humanitarian assistance worldwide for over 50 years.

USAID’s Development Credit Authority works with investors, local financial institutions, and development organizations to design strategic risk-sharing agreements, known as credit guarantees, that unlock financing from banks for entrepreneurs in the developing world. Through these loan guarantees, DCA has leveraged $2.7 billion in financing from local lenders for infrastructure projects, small, and medium sized businesses. These loans have spurred untold economic growth over the last 13 years in 70 countries. For more information, please visit www.usaid.gov.

About Swedish SIDA

Sida is a government agency working on behalf of the Swedish parliament and government, with the mission to reduce poverty in the world. Through our work and in cooperation with others, we contribute to implementing Sweden’s Policy for Global Development (PGU). We work in order to implement the Swedish development policy that will enable poor people to improve their lives. Another part of our mission is conducting reform cooperation with Eastern Europe, which is financed through a specific appropriation. The third part of our assignment is to distribute humanitarian aid to people in need of assistance. We carry out enhanced development cooperation with a total of 33 countries in Africa, Asia, Europe and Latin America. Our selection of cooperation countries are based on political decisions made by the Swedish government.

About The Global Fund

The Global Fund is an innovative financing institution that provides funding to countries to support programs that prevent, treat and care for people with HIV and AIDS, Tuberculosis and Malaria. The Global Fund to Fight AIDS, Tuberculosis and Malaria was created in 2002 to dramatically increase resources for the fight against the three pandemics. It spurs partnerships between government, civil society, the private sector and communities living with the diseases, the most effective way to fight these deadly infectious diseases. The Global Fund does not manage or implement programs on the ground, relying instead on local experts. It works with partners to ensure that funding serves the men, women and children affected by these diseases in the most effective way.

About Merck & Co., Inc.

Today's Merck & Co., Inc., Whitehouse Station, N.J. USA, known as MSD outside the United States and Canada, is a global healthcare leader working to help the world be well. Through our prescription medicines, vaccines, biologic therapies, and consumer care and animal health products, we work with customers and operate in more than 140 countries to deliver innovative health solutions. We also demonstrate our commitment to increasing access to healthcare through far-reaching policies, programs and partnerships. For more information, visit www.merck.com.

About Vestergaard Frandsen

Vestergaard Frandsen is a global public health company that innovates game-changing solutions to improve the lives of disadvantaged people worldwide. We operate according to a Humanitarian Entrepreneurship business model and aim to support the United Nations Millennium Development Goals. Our award-winning LifeStraw® water filters combat diarrheal diseases, and over a half billion of our best-selling PermaNet® bed nets have contributed to reducing malaria deaths by one third since 2000. Other company solutions target neglected tropical diseases, increasing HIV testing, reducing hunger and malnutrition, and mitigating climate change.

Merck & Co., Inc.
Lainie Keller, 908-423-4187
or
Pledge Guarantee for Health:
Paige Robson, +1-952-836-5202
probson@unfoundation.org
or
UN Foundation:
Becky Davis, +1-202-862-6305
rdavis@unfoundation.org
or
US Agency for International Development:
usaidpressofficers@usaid.gov, +1-202-712-4320
or
Swedish SIDA:
Roger Garman, +46-70-254-8752
roger.garman@sida.se
or
The Global Fund to Fight AIDS, TB and Malaria:
Seth Faison, +41-79-788-1163
seth.faison@theglobalfund.org,
or
Vestergaard Frandsen:
Meryl Rader, +1-908-528-3826
mer@vestergaard-frandsen.com

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