Full Terms & Conditions of access and use can be found at http://www.tandfonline.com/action/journalInformation?journalCode=ierv20 Download by: [University of Michigan] Date: 17 April 2016, At: 04:31 Expert Review of Vaccines ISSN: 1476-0584 (Print) 1744-8395 (Online) Journal homepage: http://www.tandfonline.com/loi/ierv20 Financing dengue vaccine introduction in the Americas: challenges and opportunities Dagna Constenla & Samantha Clark To cite this article: Dagna Constenla & Samantha Clark (2016) Financing dengue vaccine introduction in the Americas: challenges and opportunities, Expert Review of Vaccines, 15:4, 547-559, DOI: 10.1586/14760584.2016.1134329 To link to this article: http://dx.doi.org/10.1586/14760584.2016.1134329 Accepted author version posted online: 21 Dec 2015. Published online: 22 Jan 2016. Submit your article to this journal Article views: 87 View related articles View Crossmark data Citing articles: 1 View citing articles
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Full Terms & Conditions of access and use can be found athttp://www.tandfonline.com/action/journalInformation?journalCode=ierv20
Download by: [University of Michigan] Date: 17 April 2016, At: 04:31
Financing dengue vaccine introduction in theAmericas: challenges and opportunities
Dagna Constenla & Samantha Clark
To cite this article: Dagna Constenla & Samantha Clark (2016) Financing dengue vaccineintroduction in the Americas: challenges and opportunities, Expert Review of Vaccines, 15:4,547-559, DOI: 10.1586/14760584.2016.1134329
To link to this article: http://dx.doi.org/10.1586/14760584.2016.1134329
Accepted author version posted online: 21Dec 2015.Published online: 22 Jan 2016.
Financing dengue vaccine introduction in the Americas: challenges andopportunitiesDagna Constenla and Samantha Clark
Johns Hopkins Bloomberg School of Public Health (JHBSPH), International Vaccine Access Center (IVAC), Baltimore, MD, USA
ABSTRACTDengue has escalated in the region of the Americas unabated despite major investments inintegrated vector control and prevention strategies. An effective and affordable dengue vaccinecan play a critical role in reducing the human and economic costs of the disease by preventingmillions around the world from getting sick. However, there are considerable challenges on thepath towards vaccine introduction. These include lack of sufficient financing tools, absence ofcapacity within national level decision-making bodies, and demands that new vaccines place onstressed health systems. Various financing models can be used to overcome these challengesincluding setting up procurement mechanisms, integrating regional and domestic taxes, andsetting up low interest multilateral loans. In this paper we review these challenges and oppor-tunities of financing dengue vaccine introduction in the Americas.
ARTICLE HISTORYReceived 26 September 2015Accepted 17 December 2015Published online22 January 2016
The last two decades have witnessed an unprecedentedincrease in the incidence and severity of the denguevirus worldwide.[1,2] This is particularly true in theAmericas, where dengue has become one of the mosturgent public health concerns facing the region. From1995 to 2010, more than 30 countries in the regionreported over 10 million cases of dengue.[3] This repre-sents a threefold increase in the number of cases fromearlier years. In 2010 alone, more than 1.5 million caseswere reported in Colombia, Venezuela, Brazil, Honduras,Guadeloupe, and Puerto Rico.[3] Presently, all four den-gue virus serotypes are found circulating in many of thecountries in the region, showing the pernicious cycle ofill health from the mosquito vector Aedes aegypti.[4]
The region with the highest reported cases in 2014was the Southern cone region with 234.7 per 100,000,followed by the Central America and Mexico regionwith 179.9 per 100,000, the Andean region with 173.6per 100,000, and the Caribbean region with 87.4 per100,000.[3] The country in the Central America andMexico region with the highest reported lab-confirmedcases of dengue in 2014 was El Salvador with 255.15per 100,000. In the Andean region, the country with thehighest lab-confirmed cases reported in the same yearwas Colombia with 95.73 per 100,000. Brazil was thecountry with the highest reported lab-confirmed casesin the Southern cone region with 108.83 per 100,000.[3]
A paper by the Global Burden of Disease Study2013 collaborators [4] reiterated the substantialincrease of dengue cases (nearly 450%) over thepast decade and compared this increase with malariaand neglected tropical diseases (NTDs). Whilst theyears lived with disability (YLD) for dengue remainlow compared to the ‘big three’ (malaria, tuberculosis(TB), and HIV/AIDS) and many other diseases, thepercentage change over the past decade was sub-stantial. Much of this change has been attributed tothe rise of breeding sites in urban and periurbanareas in the region.[4]
Review of the socioeconomic costs of dengue inthe Americas
Compounding the effect of this dramatic increase inincidence of dengue is the fact that dengue places aconsiderable economic burden in terms of the directcosts of illness and indirect costs on health systemsand society (e.g. lost productivity).[5–10] A recentreview of the literature [11] reported an estimatedtotal annual cost ranging from US$13.5 million (inNicaragua; in 2010 values) [12] to US$56 million (inMalaysia; in 2010 values),[13] depending on the coun-try. The majority of these costs were due to hospitalcare and costs associated with productivity loss.[11,14]The costs associated with dengue outbreaks are alsosubstantial, ranging from approximately US$43 per
case in Vietnam to US$430 per case in the DominicanRepublic (in 2011 values).[15]
The total cost associated with dengue outbreaks inthe Americas has been rising steadily in the last decade,[11] and was estimated at US$2150 million in 2010.[14]Brazil has incurred the greatest proportion of this bur-den, accounting for 40% of the total cost for dengue inthe region.[15] A prospective study conducted in Brazilin 2009 estimated that the economic burden of denguecould be upwards of US$350 million annually (around$835 million in International dollars).[16] The samestudy concluded that the annual economic burden ofdengue is potentially as high as US$1076 million in totalfor El Salvador, Guatemala, Panama, and Venezuela(approximately $1749 in international dollars). InColombia, in 2011, dengue costs accounted for morethan US$54 million (or 0.02% of the country’s 2010GDP).[9]
A study by Castro and colleagues [17] in Colombiaestimated that the dengue epidemic costs in 2010 wereUS$357,189,668 while in 2012, a dengue endemicyear, the total socioeconomic costs of dengue were US$313,437,342. The overall cost of dengue in Colombia in2012 represented 0.036% of Colombia’s gross domesticproduct (GDP), 0.03% of the national general budget,and 0.0385% of the national health budget.[17]Another study estimated the 2011 program costs, includ-ing direct and indirect clinical case management, familyout-of-pocket expenses, and prevention and controlcosts, to be at US$128,769,620, compared to the 2011total program actual costs of US$113,648,671.[18]Additional information about the socioeconomic impactof dengue is provided elsewhere.[11]
The integrated management strategy fordengue prevention and control in the Americas(IMS-Dengue)
The Integrated Management Strategy for DenguePrevention and Control in the Americas (IMS-Dengue)is a model that was developed in 2003 by the PanAmerican Health Organization/World HealthOrganization (PAHO/WHO) Regional Dengue Programand the member states [3] to address the factors thatcontribute to the spread of dengue transmission. Themodel aims to integrate different key components indengue prevention and control in a comprehensivemanner and incorporates an International WorkingGroup on Dengue as a consortium of experts providingtechnical expertise to complement existing nationalskills and reorient the control strategies at the nationaland subregional levels. The IMS-Dengue is the productof the political will of all health ministers in the region.Within this framework, countries work to strengthen sixcomponents of dengue prevention and control. These
include social communication, epidemiology, environ-ment, patient care, laboratory, and the integrated vec-tor management. The effectiveness of thismultipronged approach relies heavily on vertical andhorizontal coordination at the regional, national, sub-national, municipal, and community levels. Political,operational, and administrative difficulties at all levelshas made such coordination challenging. IMS-Dengueprogram (43–100%) comes from external contributions,[3] which include the US Centers for Disease Controland Prevention (CDC), the government of Spain, theCanadian International Development Agency, and theGovernment of Brazil.[3]
Role of vector control programs in reducing thespread of dengue transmission
A number of vector control programs have been imple-mented in the region, including indoor spraying, con-tainer larvicide treatment, education, and publicrelations.[19] Despite vector control programs efforts,dengue epidemics continue to strike. Much of the fail-ure of these existing tools has been ascribed to: (1) alack of personnel (entomologists, social scientists,operational vector control staff) with advanced degreesand proper training to help control dengue epidemics;(2) a lack of technical expertise at decentralized levels ofservices; (3) insufficient funding for vector control pro-grams; (4) inadequate geographical coverage; (5) inter-ventions relying mostly on insecticides; (6) difficulties inengaging communities; (7) limited capacity building; (8)almost no monitoring and evaluation; and (9) inabilityto effectively scale-up and predict the public healthimpact.[19] A framework for an integrated vaccine andvector control program, such as the IMS-Dengue, mayhelp to break this pernicious cycle of dengue given theabove challenges.
Role of a dengue vaccine in reducing thespread of dengue
There are six vaccine candidates in preclinical and clin-ical development. The vaccine candidate calledDengvaxia® is a live recombinant tetravalent denguevaccine produced by Sanofi Pasteur. Dengvaxia® wasevaluated as a three-dose series on a 0, 6, and 12-month schedule in Phase III clinical studies and wassubmitted for registration in several endemic countries.On 9 December 2015, Mexico approved Dengvaxia®,marking the first time a dengue vaccine has beenlicensed for use in a country. The vaccine was approvedfor people aged 9–45 years in areas that are highlyendemic, with a dengue seroprevalence of more than60%, making the introduction of this vaccine more
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targeted. Table 1 describes various aspects of denguevaccines in development.[20]
The development of dengue vaccines has been chal-lenged by multiple factors, including the absence ofsuitable markers of protective immunity, the complex,immune-mediated responses against four antigenicallydistinct serotypes requiring lifelong protection to allfour serotypes of dengue virus, the transient protectionagainst a secondary heterotypic infection, the inabilityof the vaccine to stop dengue virus transmission, thelack of an adequate animal disease model, and theresulting uncertainty around correlates of protection.
[20] These challenges coupled with the limited publichealth utility to dengue-endemic communities thatresults from developing non-altruistic vaccines (vac-cines that benefit the unvaccinated by reducing trans-mission) must be considered not only by those who willlicense this product but also by those who are devel-oping these vaccines and funding new vaccineadoption.
Because dengue vaccines will not eliminate the needfor continued investments in health systems, govern-ments must continue to invest in all aspects of theintegrated vaccine and vector control strategy to
Table 1. Characteristics of dengue vaccines in development.
Sanofi PasteurTakeda
Pharmaceutical Limited Merck & CoNIAID and
Butantan Institute GSK, Fiocruz, and WRAIR
Valency Tetravalent Tetravalent Tetravalent Tetravalent TetravalentStrategy ChimeriVaxTM Platform using
Unknown Unknown 60 million doses= US$.20*–US$.70**
Unknown
Supplyprojections
100 million doses/yearstarting in 2016 (1 billiondoses/decade)
Unknown Unknown Current capacity:500,000 doses/year,planned capacity:100 million doses/year
Unknown
Price structure Too early to provide anestimate; SP will make abalance bet’ develop-mentcapacity, demand, vaccineprofile; in process ofnegotiating price withMexico.
Unknown Unknown For the pricestructure, additionalcosts besidesproduction will beconsidered
GSK tiered pricingapproach
Targetpopulation
In Mexico, target is peopleaged 9–45 in areas that arehighly endemic
All age groups Subjects at risk inendemic areas andtravellers to those areas
All age groups Broad and inimmunocompromisedindividuals
Vaccine type Live attenuated Live attenuated Recombinant subunit Live attenuated Tetravalent purifiedinactivated vaccine
Trial status Nine phase II trialsTwo phase III trialscompleted. Surveillance ofsubjects extended for >2more years, for a totalfollow-up of 6 years(2017–2018).
Phase II age descendingtrials (PR, Colombia,Singapore, and Thailand).Three Phase Ib trials done(U.S. & Colombia) to assessviability reduced doseinterval/needle vaccine.Phase 2b/3 in 2014
Currently in phase IIclinical trial in Brazil(Instituto Butantan) andin Thailand (NIH-sponsored)
Currently in Phase IIIclinical trial planning
Vaccine candidatemoving into formulationstudies in 2016
Safety Five of twenty-twovaccinated Thai childrendeveloped plasma leakageand two were in shockduring breakthroughdengue illnesses with nonein controls*
Safe and well tolerated, nomeaningful adversereactions, self-limited, mostcommon adverse effects:headache, nasopharyngitis,nausea, myalgia of shortduration
No SAEs during the first56 days in DPIV-001 andDPIV-002; no safetysignals identified to date
Vaccine doseschedule
Clinical Development Planbased 6-12 mo schedule
Two doses, day 0 and day 90 Three doses at1-month intervals
One dose schedule Two doses, 4 weeksapart
Vaccinepresentation
Freeze dried w/ no adjuvantor preservative
Subcutaneous andintradermal by needle &syringe
Recombinant envelopeglycoprotein
Lyophilized(reconstituted toliquid for injection)
Unknown
Expectedlicensure date
Approved by the Mexicanregulatory authority(COFEPRIS) on 12/9/15
No earlier than 2020, given Sanofi Pasteur vaccine candidate’s safety profile
Notes: * Individuals receiving any candidate dengue vaccine must be followed up for many years to measure vaccine efficacy and safety, certainly for the6 years mentioned. NIAID: National Institute of Allergy and Infectious Diseases; GSK: GlaxoSmithKline; WRAIR: Walter Reed Army Institute of Research; SP:Sanofi Pasteur; PR: Puerto Rico; NIH: National Institute of Health; DPIV: Dengue purified inactivated vaccine; Mo: month; Cofepris: Federal Commission forthe Protection against Sanitary Risks or Comisión Federal para la Protección contra Riesgos Sanitarios (in Spanish); YF17D: Yellow Fever 17D.
A previously live vaccine candidate was developed by GSK/FioCruz/WRAIR that is currently not being pursued.This table describes the characteristics of dengue vaccines in the pipeline. It includes information about their potential strategy, supply projections, vaccineproduction costs, target population, efficacy, and safety. Schwartz LM,Halloran ME, Durbin A, Longini IM Jr. The dengue vaccine pipeline: Implications forthe future of dengue control. Vaccine 2015;33:3293–3298.[19]
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effectively fight the spread of dengue. An affordablevaccine that is accessible to at-risk populations can playa pivotal role in easing the pressures placed on healthsystems and reduce the economic burden due to den-gue. Most importantly, implementation of an effectiveand safe vaccine – in tandem with effective vectorcontrol strategies – has the potential to greatly alleviatethe human suffering and mortality caused by this terri-ble disease.
In this paper, we will review only the challenges andopportunities of financing dengue vaccine introductionin the Americas while still recognizing the importanceof an integrated management strategy for dengue pre-vention and control in the region, which includes theneed to finance vector control programs, strengthensurveillance programs, and others.
Factors facilitating vaccine introduction in theAmericas
New vaccine adoption in the Americas is typically acomplex process with numerous stakeholders involved,competing priorities, limited resources, and inadequatefinancing. There can be considerable challenges on thepath toward new vaccine adoption. In spite of thesechallenges, several countries in the region have suc-cessfully introduced new vaccines at the national and
subnational levels. Figure 1 describes the factors con-tributing to the successful introduction of a denguevaccine in the Americas. What follows is a more detaileddiscussion on the factors facilitating vaccine introduc-tion in the Americas.
It is critical to have sufficient technical capacitywithin national-level decision-making bodies to assessnew vaccine adoptions. Experts who can evaluate evi-dence and make recommendations to decision-makerscan play a critical role in rapid adoption of denguevaccine introductions by substantially shortening thetime it takes to acquire regulatory approval. In Peru,the Technical Committee and the ConsultativeCommittee within the National Vaccine Strategy Office(ESNI) have considerable influence over decisions tointroduce new and existing immunization programs.All decisions to adopt new vaccination programs mustreceive final approval from this committee.[21]Technical experts within this committee are able toprovide valuable input to policy-makers by criticallyevaluating whether the new vaccines are suitable foradoption within the country’s epidemiological, fiscal,and economic profiles. In the absence of domestictechnical capacity to evaluate new vaccines, countriesmust depend heavily on regional or international tech-nical capacity. This greatly undermines the rapid adop-tion of vaccines, because it is harder to generate
Robust
disease
surveillance
Scientific
evidence
regarding
efficacy and
safety
Financing
mechanisms
and
resources
Evidence non
affordability
& cost
effectiveness
Politcal
support i.e.
“vaccine!
champions”
Well
functioning
national
regulatory
authority
Successful
introduction
of new
vaccine
Figure 1. Factors contributing to the successful introductionof dengue vaccines in the Americas.This figure depicts the factors contributing to the successful dengue vaccine introduction in the Americas. This includes evidence ofaffordability and cost-effectiveness analysis, evidence surveillance.
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support for advocates and policy-makers with evalua-tions conducted by outside sources.
Robust disease surveillance is essential in determin-ing the disease burden and subsequently identifyingthe need for a vaccine. Accurate data on mortality andmorbidity are essential in determining the potentialimpact of vaccination and integrated vector controlprograms in reducing dengue burden and denguetransmission. An example of this is the RotavirusSurveillance Network in Latin America, established in2004. This program was instrumental in providing advo-cates and experts with accurate data on the burden ofrotavirus in the region.[21] Since the establishment ofthe Rotavirus Surveillance Network, many countrieshave developed a robust disease surveillance system.Currently, data from rotavirus sentinel sites in Bolivia,Chile, Colombia, Ecuador, El Salvador, Guatemala,Honduras, Nicaragua, Panama, Paraguay, andVenezuela are being used to develop more evidencein support of the adoption of the rotavirus vaccine inthose countries.[21]
Vaccine champions can be pivotal to the adoptionof new vaccines. There are several examples of indivi-duals within ministries of health and others who propelthe adoption of a new vaccine through their relentlesssupport and advocacy efforts. The Mexico CityDeclaration, made in July 2004 by officials from theMinistries of Health in the Americas calling upon thePAHO Revolving Fund to collaborate with Gavi andvaccine manufacturers for the introduction of an afford-able rotavirus vaccine in the region, demonstrated acommitment and a demand for the vaccine in theregion.[22] Through its action, Mexico City demon-strated a commitment and a demand for the vaccinefor the region. Another example of strong public sup-port by a regional body for new vaccine adoption isPAHO’s 47th Directing Council Resolution in September2006, which urged member nations to introduce newvaccines against rotavirus, pneumococcus, and humanpapillomavirus.[23] Other examples of vaccine introduc-tion champions in the region in recent years include Dr.Cesar Cabezas, popularly known as ‘an apostolate’ ofthe Hepatitis B campaign in Peru, and Dr. Julio Frenk,Mexico’s former Minister of Health who’s unwaveringstewardship of the rotavirus vaccine was central to thevaccine’s adoption in the country.[21,24]
It is equally important to generate sufficient evidenceon efficacy and safety of a new vaccine. A safe andeffective dengue vaccine would signify a major advancefor the control of dengue and could be an importanttool for reaching the WHO goal of reducing denguemorbidity by at least 25% and mortality by at least50% by 2020. Large randomized longitudinal clinical
trials document effective and safe preventive interven-tions against dengue, which is key to generating sup-port from national authorities and technical experts.Prior to WHO prequalification, earlier vaccines such asthe rotavirus vaccines, developed by GlaxoSmithKlineand Merck, were tested for safety and efficacy in largeclinical trials in Latin America.[24,25] This helped toaccelerate vaccine introduction in countries of theregion. Additionally, after rotavirus vaccine was intro-duced in several countries of the region, a vaccinesafety study was collaboratively undertaken by theMinistries of Health of these countries, PAHO, theCenters for Disease Control and Prevention (CDC), theUS FDA, Gavi, and PATH to improve existing knowledgeof the vaccine and its impact on reducing disease bur-den.[25] This work relieved many of the concerns heldby stakeholders in other countries regarding the intro-duction of a new rotavirus vaccine.[22]
Early engagement between the Ministers of Financeand Ministers of Health is key to maintaining dialogueregarding potential funding opportunities for vaccineintroduction. The buy-in of the Ministry of Finance isoften crucial to ensure budget availability for new vac-cine introduction. In the cases of Panama and Ecuador,vaccine introduction laws were facilitated by early sta-keholder engagement and mandatory allocation offunds to support new vaccine introduction.[23] TheMinister of Health provided the Ministry of Financewith relevant and timely information regarding thebenefits and safety of new vaccines. The Minister ofFinance, in turn, was persuaded by the strong burdenof disease and cost-effectiveness evidence, as well as bysolid documentation that showed the positive impactof previous immunization decisions. Planning for newvaccines up to 2 years or more in advance, so that theycan be accounted for in government multiyear plansand budgets, including medium-term expenditure fra-meworks, was helpful in obtaining budgetary resourcesand commitment for Panama and Ecuador.
Well-documented economic and financing evidencesupporting new vaccine adoption is critical in demon-strating the public health impact of a new vaccine.Often, in developing countries, there is insufficientevidence to demonstrate the economic or financialimpact of a vaccine-preventable disease, and theremay be no requirement by the government to pro-vide evidence of the economic benefits of vaccina-tion. The presence of rigorous economic data or thepressure to generate this evidence can have a size-able influence on advocacy efforts, as more informedvaccine introduction decisions can be made. Forexample, prior to the introduction of the Hepatitis Bvaccine in Peru, cost-effectiveness studies conducted
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by Peruvian researchers contributed significantly togenerating evidence in support of the vaccine.[23]
Last but not least, sufficient financial resources forthe purchase and uninterrupted delivery of vaccines arecentral to successful vaccine adoption. Financing stra-tegies must also take into account the costs of effectivevaccine delivery, in addition to vaccine costs. Thisincludes finances for establishing/strengthening effi-cient procurement systems, adequate cold chain capa-city, timely transportation, and training health-careproviders in the proper maintenance and delivery ofthe vaccine. Identifying a source of funding for theintroduction of new pneumococcal and rotavirus vac-cines in Peru was crucial to ensuring that the vaccinecould be universally rolled out.[21] In Peru, US$14 mil-lion in supplementary credit from a previous fiscal yearwere used to purchase sufficient vaccines and tostrengthen the cold chain capacity. Countries in LatinAmerica and the Caribbean that have adopted rotavirusvaccines have devoted individual budget line items forvaccine purchases and delivery.[23] In both examples,financial resources devoted to the specific purpose ofnew vaccine introduction were critical to the successfuladoption of these vaccines.
Challenges to financing dengue vaccineintroduction
In the following section, we discuss some of the chal-lenges to financing dengue vaccine introduction in theAmericas.
Affordable pricing
The issue of affordability is the leading concern amongpublic health officials in the region for all public healthinterventions, [26] and a new dengue vaccine is noexception. Even though the disease burden might war-rant the adoption of a new vaccine, there may beinsufficient fiscal resources accessible to ministries ofhealth to allow for vaccine adoption. While the burdenof dengue in the region clearly warrants the adoptionof any new vaccine that is efficacious and safe, the lackof affordability will prove to be an insurmountablehurdle. For this reason, vaccine suppliers must bear inmind the fiscal limitations of governments in the regionwhen setting the price of a new dengue vaccine. Even ifa new vaccine is deemed cost-effective at a given price,countries will still be unable to adopt the vaccine at thesaid price if the price proves too high from an afford-ability standpoint. Fortunately, there are several finan-cing approaches that can ensure the affordability of anew vaccine. These include taxation, low-rate bilateral
interest rates, and pooled funding mechanisms. Thesewill be discussed later.
Availability of sufficient fiscal resources
Despite the political commitment within ministries ofhealth and affordable pricing of a new vaccine, some-times it can still be challenging for governments inresource-constrained settings to find sufficient financialresources necessary for the introduction of a new vac-cine. In such a scenario, governments must explore thealternative forms of financing, such as internationaldonor support or regional pooling mechanisms, to gen-erate the necessary fiscal resources.[21]
Experience with pricing negotiations
Contracts for new vaccines that are negotiated over alonger time period, acquired through bulk procurementstrategies, and/or bundled with other products haveterms that are generally more favorable for countrygovernments.[21] Countries that have previous experi-ence with contract negotiations are ideally placed toestablish terms with manufacturers. However, if there isan absence of financing expertise within departmentsof health or if countries have not introduced new vac-cines in recent years, they may face considerable chal-lenges in negotiating favorable terms of contract withvaccine suppliers.[21]
Fiscal space
It is essential that before embarking on the path todengue vaccine adoption, countries conduct a rigorousanalysis of the fiscal space available to increase financialsupport for a new vaccine program. Fiscal space indi-cates the ability of governments to provide additionalfunding for new activities.[21] Fiscal space analysisshould focus on providing financial resources for entireprogrammatic costs of a national-level dengue immu-nization program, not just for the purchase of a denguevaccine. Fiscal space analysis is also useful for interna-tional donors in determining the magnitude of supportthat will be required, and the level of cofinancing that ispossible, for the introduction of a new dengue vaccine.Countries at different income levels are capable of pro-viding varying levels of financial support, independentof donor support. Fiscal space analysis allows interna-tional donors to establish cofinancing and fundinglevels that are aligned with individual countries’ capa-city to pay, while also setting clear benchmarks forcountries that are expected to move toward ownershipof their dengue immunizations programs in the future.
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Moreover, fiscal space analysis not only identifies therealistic level of support based on economic indicators,it also signals lack of political commitment by revealinggaps between willingness to pay for a new dengueimmunization program and ability to pay. If such gapsare revealed after a fiscal space analysis for denguevaccines, it will indicate the need for additional advo-cacy or country-level conversations on the need for anew dengue vaccine.
Financing new dengue vaccine introduction inthe Americas: opportunities
There are several existing financing strategies andpotentially new financing models that countries in theregion can adopt to ensure the availability of sufficientresources for new vaccines. The following is not a com-prehensive analysis of every option available. The focusis on approaches that are either ongoing or havealready been implemented and have demonstratedsome degree of political or practical feasibility in theregion.[21] Table 2 describes various financing optionsfor the region, while Table 3 outlines the strengths andweaknesses of these options.
Pooled procurement
Pooled procurement contracts allow buyers (countriesand/or multilaterals) to collectively negotiate lowerprices from developers by combining their bulk pur-chasing power into a larger purchase commitment onbehalf of the group.[21,26] The contract sets the priceand volume to be supplied over a set timeframe.Pooled procurement contracts are designed to providelower pooled price than can be negotiated by countrieson their own; security of price and supply for the buyerover a defined time period; and security of demand forthe developer over a defined time period.[21,26]
PAHO’s Revolving Fund is the most known andsuccessful cooperation mechanism for the joint
procurement of vaccines and has played a pivotalrole in providing countries of the Latin America andCaribbean region with access to vaccines, syringes,and other related medical supplies to member coun-tries at affordable prices.[21,26] For more than30 years, the Revolving Fund has facilitated theuninterrupted flow of resources needed to maintainthe stable functioning of national immunization pro-grams in the region and has been responsible forpurchasing vaccines worth several million dollars forthe region over the last decade. Most importantly,PAHO’s Revolving Fund has ensured that the vac-cines purchased meet the evolving needs of theregion. By consistently purchasing new vaccines –which currently account for nearly half of theRevolving Fund’s vaccine procurements – PAHO hasensured that countries in the region have access tothe latest vaccines and to timely supplies. Throughthe Revolving Fund, countries are able to gainaccess to products based on principles of equityand affordability.[21,26] A single price is establishedfor a product regardless of the country’s size andeconomic status based on economies of scale.[21,26]
Lastly, a line of credit that allows countries to pay theRevolving Fund within 60 days is available to all mem-ber states.[21,26] This line of credit is made possible bycontributions of 3% of the net purchase price by allmember countries to a common fund that is utilizedentirely as working capital. In addition to agreeablecosts and terms of payment, PAHO’s Revolving Fundalso provides members with technical expertise in theprocurement, financing, and negotiation of their pro-ducts. This service is especially critical for individualcountries that lack the expertise to negotiate favorableterms with large manufacturers.
PAHO’s Revolving Fund is not the only procurementmechanism in the region. In September 2009, Brazil’sMinistry of Health signed a contract with GSK, sealing aninnovative deal worth €1.5 billion, which ensures access topneumococcal vaccines for 13 million children over a
Table 2. Financing options for the region of the Americas.
Less than $100 millionLow-interest multilateral loans <$100 m @ @ @ @
Notes: Emptied cells signify that financing options are not applicable to the mechanism of implementation/status of implementation. The cells marked withan ‘x’ denote that financing options are applicable to the mechanism of implementation/status of implementation.
This table provides information about the financing options that are available in the region of the Americas that can potentially assist in developingsustainable vaccine introduction.
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period of 8 years.[21] Under this deal, GSK provides thevaccine at €11.50 per dose and reduces to €5 in followingyears. Additionally, a technology transfer will take place todevelop research and development capacity. This dealalso includes a joint project totaling €17 million for thepurpose of developing a dengue vaccine.[21]
Regional taxes
A regional tax is a tax that a group of countries agrees tocollect nationally, but with the resulting funds pooled atthe regional level for redistribution.[21] They are usuallya very small tax but on a high volume of sales or transac-tions. Possible sources include airline ticket sales, inter-net traffic, or tobacco products. Under the airlines taxexample, countries pass a law to levy a small fee on eachpurchase of an airline ticket made in their country.[21,28]This tax, known as the ‘solidarity levy on airline tickets’, ispaid by passengers when they purchase a flight ticket.This includes airport taxes. Airlines are responsible forcollecting and declaring the tax. Solidarity airline taxes
are responsible for nearly half of the funding forUNITAID, originally established as WHO’s ‘InternationalDrug Purchase Facility (IPPF)’, which is responsible forguaranteeing access to drugs and diagnostic equipmentagainst HIV/AIDS, malaria, and tuberculosis.[21,28]Countries set the amount levied, depending on the air-fare (e.g. economy class, business class) and on whetherthe flight is domestic or international.[21,28]
A clearly successful example of a regional tax is theair ticket levy that was first implemented in France in2006, with funds going toward UNITAID, an indepen-dent not-for-profit group hosted by the WHO, whichuses these revenues to fund AIDS, TB, and malaria-related product development and purchase. Nine coun-tries now participate in the UNITAID airline levy, includ-ing Chile and Brazil. These countries have benefitedfrom this regional tax system to fund vaccination pro-grams.[21] Two possible options are applicable to finan-cing dengue vaccine introductions in the region. Thisincludes persuading UNITAID to extend its remitbeyond HIV/AIDS, TB, and malaria to dengue-endemic
Table 3. Pros and cons of procurement and financing mechanisms.Pros of procurement mechanisms Cons of procurement mechanisms
• Easy to set up with minimal operational and governance requirementsand a short lead time
• Provides clarity for both purchaser and developer on price and volumeover a defined time period. Purchasers can negotiate a lower price fromdevelopers
• Compatible with most financing mechanisms
• Difficult to determine the best terms of the contract: price, time, value• Can be difficult to manage unintended consequences of contracts (e.g.potential negative impact on competition)
Pros of multilateral loans Cons of multilateral loans
• Predictable and stable funding (a set amount is disbursed over a setnumber of years)
• Allows countries in the region to gradually assume financialresponsibility, over a generous timeframe
• Low transaction costs (low interest rates and up-front fees)• Established mechanism (no new infrastructure required)• Quick implementation (approximately 6 months to 2 years, dependingon proposal and approval processes)
• Not specifically for vaccine purchase (may need to seek vaccine funding aspart of a broader health program)
• Must compete with other funding priorities at a national and multilaterallevel (World Bank and IDB funding has tended to favor infrastructure,energy, and public sector/governance programs, rather than health)
Pros of domestic taxation Cons of domestic taxation
• High revenue• High predictability• Low transaction costs• Highly sustainable• Knock-on health gains from ‘sin taxes’ on alcohol/cigarettes
• Politically unpopular (particularly during recession/slowdown)• Require legislative change• The tax revenues can be difficult to ring-fence for vaccine purchase – maybe used for other government priorities
• Consumer-based taxes hit the poorest consumers the hardest• Sector-specific taxes may dis-incentivize business investment in emergingeconomies
• Some countries in the Americas already have a specific health-care tax
Pros of regional taxation Cons of regional taxation
• High potential revenue, low transaction costs • Taxes may be politically unpopular (particularly during recession/slowdown),and must be legislated
• Once set up, funding is predictable and stable • Regional collaboration can be difficult to achieve, and poor track record• For the airline levy: individual countries can decide what the levy willlook like in their country (size of fee; domestic or international)
• An airline levy (or similar) may distort markets and move transactionsoutside the region
• Airline levy has good sustainability with no adverse effect on volumes ofair traffic reported by those who have implemented it
• For ‘Option 1ʹ of the airline levy, it may be difficult and slow to persuadeUNITAID to extend their remit
• Airline levy has a diverse source of funds, tapping into the Asian touristmarket (as both foreign tourists and national residents pay)
• ‘Option 2ʹ of the airline levy may compete with the existing UNITAID model(e.g. some beneficiaries of UNITAID are in the Americas)
• If the option is to secure a UNITAID extension, then no new organizationis needed
• An air levy in the Americas will need a new organization to manage it, but this islikely to be quite small (UNITAID’s operating costs are only 3.6% of total revenue)
Notes: Adapted from Policy Cures’ Innovative Financing Mechanisms for South East Asia.[27]This table provides information about the procurement and financing mechanisms that are available in countries of the region.
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countries of the region and/or establishing an airlinelevy in the region to fund region-specific dengue con-trol and prevention goals.
Domestic taxes
These are taxes designed to raise new funds for healthcare, either by increasing an existing tax, or imposing anew tax on the purchase or use of specific goods orservices.[21] Common options for raising additionalfunds include: broad consumption taxes (e.g. VAT/GST); taxes on specific products, especially those withharmful health effects like tobacco or alcohol (‘sintaxes’); and sector-specific taxes generally levied onprofitable sectors/larger corporations, especially in thefinancial, resource, and telecommunications sectors.[21,29,30]
The funds raised can go into consolidated govern-ment revenues, or be ‘hypothecated’ (i.e. earmarked)for a specific cause, such as a dengue vaccine introduc-tion or dengue prevention and control programs. Thereare many examples where domestic taxation schemeshave been successfully used to raise new funds for aspecific purpose.[21,30]
Examples of VAT schemes (additional levy on top ofexisting VAT rate) are many. Chile uses 1% of its VATto fund health (total rate 19%).[21,31] In Bolivia, one ofthe main sources of funding for the Universal Motherand Child Insurance (SUMI) is Municipal tax transferpayments (CTM).[21] The National Maternity and ChildInsurance (SNMI) implemented in Ecuador in 2000through the Free Maternity and Child Care Law man-dates that 3% of special consumption tax (ICE) isfinancing for SNMI. Funds for SNMI have more thandoubled between 1995 and 2005 from nearly US$8million to US$20 million due solely to the allocationof this special tax.[21,32]
Several countries in Latin America and the Caribbeanregion are raising funds for tobacco prevention andcontrol activities through taxation of tobacco products.These ‘tobacco taxes’ have been implemented success-fully in Costa Rica, Ecuador, and Panama.[21,31,32]Costa Rica raised taxes by 6.5% in early 2012 to fundtobacco control and other health promotion activities.[21,29,30] Similarly, Panama doubled its tax rate ontobacco products and assigned the resulting ‘taxfunds’ to the National Cancer Institute and theMinistry of Health for the prevention and treatment ofdiseases attributable to tobacco products. Additionally,almost 20% of these funds were earmarked for theNational Customs Authority (ANA) to fund its activitieson the prevention of illicit trade of tobacco.[21,29]Ecuador, considered a leader in implementing tobacco
taxes, adopted a universal tax on all tobacco productsto fund health programs.[21,29–32]
Low-interest multilateral loans
Another financing initiative is the low-interest multilat-eral loan in which a multilateral organization (such asthe World Bank or the Inter-American DevelopmentBank (IBD)) provides a loan directly to a national gov-ernment, at a low interest rate to fund new and existinghealth-care programs.[21,33] Also known as conces-sional loans, low-interest multilateral loans are typicallyfor 10–40-year periods, and at interest rates of 1–7%.[21,33] Lending terms (including grace periods, repay-ment terms, and up-front fees) often depend on acountry’s policy and institutional performance, interms of economic growth and poverty reduction.
Concessional loans are usually provided for large-scale programs in a particular sector (health, infrastruc-ture, education) rather than for a single project orexpenditure (such as vaccine purchase). But in somecases, a small proportion of low-interest loans hasbeen used to purchase health products as part of abroader disease-specific or health sector program,while the majority of the loan is for equipment orinfrastructure upgrades, health worker training, capa-city building, and policy development (e.g. develop-ment of national health plans).
The World Bank and the IDB provide various loansfor health programs in countries in the Americas.[21]In 2012, the World Bank Group, comprised ofthe International Bank for Reconstruction andDevelopment (IBRD), International Finance Corporation(IFC), International Development Association (IDA), andMultilateral Investment Guarantee Agency (MIGA),undertook to spend US$11.8 billion in developmentassistance in the region.[21,34] This included spendingin large public sector projects beyond health care. Asignificant portion of these monies is being spent onproviding assistance to the health sector programs andprojects. However, the total amount given for healthcare is unknown, because many projects have health asa component.
The World Bank provides development assistance tocountries in the region through traditional loans andadvisory services that are tailored to meet the needs ofindividual countries. Loans are provided through differ-ent mechanisms, depending on a country’s incomelevel and creditworthiness. For example, the WorldBank provides loans to low-income countries (LICs)through the IDA and to middle-income countries(MICs) through the IBRD.[21,33] Interest rates arelower and repayment terms more generous for LICs.
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Examples of low-interest multilateral loans includethe Third Basic Health Care Project supported by theWorld Bank in Mexico.[21,34] This loan was establishedto improve the quality of health-care services in ruraland marginal urban communities by focusing on cost-effective health interventions in hospital care andemergency medical services, and providing trainingfor HIV/AIDS prevention and control. This project isworth US$581 million and is supported in part byIBRD/IDA.[34] Another low-interest multilateral loan isthe Third Rio State Fiscal Efficiency for Quality of PublicService Delivery Development Policy Loan (DPL)Program supported by IBRD/IDA. This program focuseson improving various aspects of public sector deliveryof services in the State of Rio de Janeiro in Brazil.Twenty percent of the US$300 million budget is spenton ensuring improvements in efficient of health spend-ing, both in regional hospitals and smaller municipali-ties health centers.[34] The Fourth Programmatic SocialReform Loan Project (PSRL IV) in Peru is funded by theIBRD to the tune of US$100 million to support reformsthat are aimed at increasing access, transparency, andefficiency in service provision. A ProgrammaticDevelopment Policy Loan instrument [34] was used toset up this loan.
The following countries are currently receiving, orhave received, development assistance from the WorldBank Group: Argentina, Bolivia, Brazil, Chile, Colombia,Ecuador, El Salvador, Guatemala, Honduras, Mexico,Nicaragua, Panama, Peru, and Uruguay.[21,33] The fol-lowing countries are currently receiving, or havereceived, development assistance from IDB: Argentina,Bolivia, Brazil, Chile, Colombia, Costa Rica, DominicanRepublic, Ecuador, El Salvador, Guatemala, Honduras,Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay,and Venezuela.[21,34]
Conclusions
Dengue burden is substantial. Vaccines may helpreduce this burden. Funding will be needed for vaccinerollout. Given the fiscal reality facing many countries ofthe region, especially regarding the ability to appropri-ate funding for new vaccine introduction, innovativefinancing options need to be developed to fund vac-cine introduction. These include procurement mechan-isms, regional and domestic taxes, and low-interestmultilateral loans.
Expert commentary
MICs face a triple challenge in affording new denguevaccine introductions. According to recent estimates by
the Institute of Development Studies (IDS), three quar-ters of the world’s 1.3bn people live in MICs (e.g. India,China, Nigeria, Pakistan, Indonesia),[27] in contrast to aquarter that lives in LICs (e.g. Africa). Many of the MICsare countries afflicted by dengue. In the changing andchallenging vaccine environment, MICs are facingincreasing financial and technical challenges to main-tain the same levels of access to new vaccine introduc-tions as their LIC counterparts, who benefit fromfinancial and technical support for new introduction ofthese programs. Despite having almost no access tointernational assistance to run an effective dengue vac-cine introduction, MICs are expected to pay significantlyhigher prices than LICs for many of these programs.
To meet the challenge of vaccine financing in thesecountries, we consider a range of financing mechanisms.Some of the new tools include the creation of an inte-grated dengue fund that would combine existing pooledprocurementmechanisms (e.g. PAHO, UNICEF) with finan-cing mechanisms (e.g. low-interest multilateral loans ofthe World Bank, IDB) to ensure that dengue vaccines andother control and prevention strategies are properlyfinanced.[21] The proposed mechanism would consist ofincorporating existing financing mechanisms with exist-ing procurement mechanisms, resulting in a combinedprocurement-financingmechanism. The plan would com-prise strengthening of the overall dengue control andprevention system that entails a robust dengue surveil-lance system, vector control system, disease manage-ment, immunization financing laws, infrastructure (e.g.cold chain), and regulatory capacity.[21]
Another potential financing option is the creation ofa performance-based financing mechanism for vaccineintroduction where resources and infrastructure fund-ing are frontloaded to accelerate the introduction ofnew vaccines.[21] In this model, resources would befrontloaded to accelerate the introduction of new vac-cines based on a shared referential vaccine schedule.Infrastructure funding would also be frontloaded toimprove cold chain capabilities (maintenance, distribu-tion, management, and logistics) and develop humanresource capacity in vaccine delivery and manage-ment.[21]
A third financing option is the creation of additionalfunds for immunization financing through the growthof existing domestic taxes or the levy of new taxes onthe purchase or use of specific goods or services or thepreservation of social security systems.[21] Examples ofdomestic taxes include taxes on specific products orsector-specific taxes. The funds raised from domestictaxes can go into consolidated government revenues,or be earmarked for a specific cause, such as immuniza-tion campaigns or vaccine financing.[21]
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These recommendations could provide significantadvantages to the current vaccine financing system inthe region, including the implementation of an inte-grated health systems fund, the incorporation of acombined procurement-financing mechanism, the crea-tion of a performance-based financing tool, and theimplementation of domestic tax increases. There is stillsignificant work to be done in this area. In the end, wehope that the implementation of these and otherrecommendations will herald the rapid introduction ofa dengue vaccine in the Americas, a region plagued byfrequent, severe dengue outbreaks.
Five-year view
Within 5 years, there will be sufficient data on the safetyand effectiveness of at least three dengue vaccines toallow countries to introduce a dengue vaccination pro-gram. As funding for dengue vaccine introductionsremains a country responsibility and countries are con-tinuously competing against limited resources, they willneed to explore financing options to meet the chal-lenge of financing dengue vaccine introductions.Countries will need to integrate financing strategiesthat extend beyond just vaccine procurement to healthsystem strengthening. The ability of countries tostrengthen their overall national surveillance systemsis a critical step in enabling countries to determinedisease burden and be in a favorable position for rollingout an effective dengue vaccine introduction. The over-arching influence of Pan-Americanism regarding thedevelopment of a dengue financing strategy shouldbe considered when planning the funding of vaccineintroduction. In sum, substantial increases in denguecases resulting in increases in public and private healthexpenditures can be expected in the medium to longterm. Although these cost increases will be offset by thehealth and other social benefits associated with theseadvances in vaccine development, the growing costs ofthese strategies will be increasingly burdensome to all
health sectors. Alternatives to current pricing and pur-chasing of these programs are needed to sustain stableinvestment in the adoption and delivery of thesevaccines.
Acknowledgments
We are grateful to Ms. Vibhuti Hate for her initial literaturereview and early writing contributions. We are also gratefulfor the role of experts from various bilateral organizations,public health agencies, Ministries of Health, and programmanagers who attended a dengue financing workshop,which served as the groundwork for this paper. Full indepen-dence of the content remains with the authors, along withresponsibility for any errors.
Financial & competing interests disclosure
This paper was made possible with a sponsored grant fromthe International Vaccine Institute (IVI), a core partner of theDengue Vaccine Initiative (DVI). IVI received this grant fromSanofi Pasteur. The authors have no other relevant affiliationsor financial involvement with any organization or entity with afinancial interest in or financial conflict with the subject mat-ter or materials discussed in the manuscript apart from thosedisclosed.
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● Dengue remains a substantial burden to the health-care system and society in the region of the Americas.● The last decade has witnessed substantial progress in the clinical development of several dengue vaccine candidates. This development has
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34. Inter-American Development Bank (IADB). Low-interestmultilateral loans; [cited 2014 Aug 11]. Available from:http://www.iadb.org/en/projects/advanced-projectsearch,1301.html? sector=SA&nofilter
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