Sunday, January 24, 2010

Innovative Funding for Global Health

The fight for global health seems hopelessly overwhelming. Each year, almost 11 million children die before age 5 due to poor nutrition and preventable disease. Many of the Millennium Development Goals, which call for decreases in child mortality and AIDS, appear unattainable by their 2015 deadline. The U.S. government alone pledged $23.3 billion to fight HIV/AIDS in 2008, and yet almost $33 million people live with HIV/AIDS globally. While health aid was once seen as the responsibility of government agencies and international organizations, new private and public entities are taking up the cause with a fervor. These companies, foundations, agencies, and entrepreneurs are realizing that one agency cannot handle the daunting challenge, and are collaborating to find ways to raise money that is so urgently needed. They are turning to new donors of all sizes and creating mechanisms to finance large-scale aid.

The GAVI alliance is one example of a public-private partnership creative innovative funding sources. The alliance hits up lenders, channeling money for much needed vaccines for neglected diseases in the developing world. It has raised more than $1 billion in short-term financing by issuing bonds backed by sovereign pledges of aid money in the future. By financing a larger sum now, rather than finite amounts over time, the project has created economies of scale that enable widespread vaccinations.

UNITAID is another such facility that buys up drugs to fight disease. The agency, a group hosted by the WHO raises money under the radar by putting a fee on airline tickets, imposed by states. Along with contributions from various countries, UNITAID has raised over $1.5 billion in the last four years. UNITAID’s private foundation is taking this effort to the next level by asking passengers to donate a few dollars each time they purchase a flight online. The project, MassiveGood, is projected to raise between $600 million and $1 billion in 2010. The efforts, aimed at achieving collective awareness and solidarity for global health, will hopefully show that donations big and small can make all the difference.

By banking on plane ticket purchases, UNITAID seems to have a reliable mechanism for generating donations. Pharmaceutical companies are also making headway by pooling patents, therefore decreasing the exorbitant R&D costs that go into producing these drugs. But the real sustainability of these efforts will rely on more than fundraising and production. In my humble opinion, education on hygiene and nutrition, contraception and the economic empowerment of women are all huge issues that need to progress before this battle can be won on the ground. Without community involvement and broader understanding of the causes and prevention methods for these diseases, fundraising for vaccinations is futile.

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