Financial markets are not usually associated with saving lives. Today, with the launch of the International Finance Facility for Immunisation (Iffim), that is about to change. A bond that uses long-term financing to help pay for vaccines will ensure that millions of children in the poorest countries have a fighting chance at a healthy life.
This facility will significantly increase predictable resources for development and ignite a broader debate around innovative ways to raise and spend donor dollars, both public and private, on global health. Financing techniques to deliver existing health interventions, as well as to promote research and development on new tools, could become a powerful force in the fight to end preventable diseases over the coming decades.
Two to three million children under the age of five die every year from diseases for which we have, or soon will have, a vaccine. The Gavi Alliance (formerly the Global Alliance for Vaccines and Immunisation) was created in 2000 to address this appalling situation. With an initial pledge from the Bill & Melinda Gates Foundation, Gavi has immunised more than 115 million children against such diseases as hepatitis B and yellow fever, likely preventing 1.7 million deaths.
Yet each year, nearly 30 million children still miss out on essential immunisations, leaving them vulnerable to devastating illness or death. That is why innovation is desperately needed to overcome funding constraints and provide more resources in a shorter period of time, while ensuring a better predictability of aid flows. The launch of the first Iffim bonds will help save some of these children by giving Gavi new funds to expand its immunisation work, by starting to bridge the gap between the money that is available and the money that is needed.
Long-term, legally binding aid commitments from six donor countries - the United Kingdom, France, Italy, Sweden, Spain and Norway - have been made to Iffim, which can use that funding stream as collateral to raise money in capital markets right now. It will deliver an extra $4bn to Gavi over the next 10 years. This means we can immunise 500 million children against vaccine-preventable diseases before 2015, saving some 10 million lives. And we can get one step closer to eradicating polio, just as we have done with smallpox.
Front-loading these resources not only saves lives now but also reduces the spread of disease. Without front-loading, investing this $4bn over 15 years, would save only 2.5 million lives and leave millions more at risk from infection.
In September, at the UN, a new programme was kicked off to raise money to buy drugs for Aids, tuberculosis (TB) and malaria as cheaply as possible on behalf of the poorest countries. Unitaid, the agency overseeing the funds, expects to raise €50m this year and €300m next year, largely from a tax on airline tickets. That is a significant increase over current funding. France proposed the idea, and now 19 countries have indicated their support. As with Iffim, the benefit of this new scheme is not solely the amount of the resources but their predictability, which then allows for the negotiation of cheaper prices for these lifesaving drugs. We hope other schemes will be equally creative.
New approaches to financing can also elicit more and better research and development (R&D) around global health. One way is through product-development partnerships, which fund and manage portfolios of new candidate drugs, vaccines and diagnostics for diseases such as malaria, HIV and TB.
With the help of more than $2bn from the Gates and Rockefeller foundations and governments including the UK and the Netherlands, 15 new partnerships with universities and private companies have put more than 40 products into clinical testing in less than 10 years. That contrasts with the mere 21 medicines out of 1,500 that were approved for treatment between 1975 and 2005 specifically for tropical diseases.
Another promising way to encourage R&D is to create a credible market for new products. An Advance Market Commitment (AMC), whereby donors supplement the purchasing power of the poorest countries, could provide strong commercial incentives for companies to accelerate the development of new and improved vaccines for diseases such as pneumococcus and malaria.
We need more donors to join these financing initiatives. We need more minds devoted to finding creative solutions. By matching the power of medical advance with innovative finance we can fill the gap between what we are capable of and what we are willing to do - and unleash the power of human ingenuity and goodness to save millions of lives.
As Mahatma Gandhi once said: "The difference between what we do and what we are capable of doing would suffice to solve most of the world's problems."
The writers are the Chancellor of the Exchequer and the chairman of Microsoft