E-DRUG: Global Fund : Deal on Mosquito Nets to yield $93 million Savings
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[Cross posted from e-med. LL]
Deal on Mosquito Nets to Yield $93 million in Savings
18 January 2016
GENEVA – As part of a new framework for procuring health products in the
most cost-effective and sustainable way, the Global Fund has reached an
agreement to purchase insecticide-treated mosquito nets that prevent
malaria with projected savings of US$93 million over two years.
By achieving sharply lower prices for nets – a 38 percent reduction from
2013 – the agreement serves the Global Fund’s goal of accelerating
progress against malaria, a preventable disease that most seriously
affects young children and pregnant women. Building on the Global Fund’s
large-scale purchasing power, the framework improves the supply of an
important tool to fight the epidemic.
The Global Fund projects US$350 million in mosquito net purchases over
the next two years through its Pooled Procurement Mechanism. A tender
process has selected 10 suppliers and includes volume commitments from
the Global Fund and performance contracts from the suppliers.
The agreement creates a level of certainty for suppliers, allowing them
greater visibility and planning time to manufacture and deliver nets.
That facilitates lower prices, and yields significant savings for the
Global Fund partnership. The US$93 million in projected savings is
equivalent to about 40 million additional nets.
“The money saved here can buy more nets,” said Christopher Game, Chief
Procurement Officer at the Global Fund. “We worked closely with partners
to strike the balance between achieving cost savings, promoting
sustainable supply, and recognizing manufacturer investment in the
development of new products to fight malaria.”
A previous Global Fund procurement tender for insecticide-treated
mosquito nets was concluded in late 2013 and implemented over 2014-2015.
That agreement saw the successful purchase of 170 million nets at a
stable price, with a major improvement in delivery times.
The agreement is geared to purchase nets from multiple suppliers,
reducing risk and encouraging local production, which reduces transport
costs. About one-fifth of the nets to be procured will be manufactured
in Africa. For the first time, the nets will be color-coded, allowing
their durability to be tested at six-month intervals. The data collected
from this research creates the possibility for future product innovation.