Immunisation costs to spike as donors shrink support

Kenya must look for new, long-term ways of financing child immunisations as donor support shrinks over the next seven years.

The Global Alliance for Vaccines and Immunisation (Gavi), the largest single donor for vaccines used in the country, has announced that beginning the next financial year, Kenya should allocate more funds for buying vaccines as the organisation starts to reduce its financial support.

Currently, Gavi helps Kenya procure its vaccines through a co- financing model, where Kenya pays for 10 per cent of its entire vaccine budget, about Sh400 million, while Gavi pays the other 90 per cent, around Sh3.97 billion, every year.

The money is used to purchase pentavalent vaccine (for influenza), pneumococcal vaccine (for pneumonia), rotavirus vaccine (against diarrhoea) and yellow fever vaccine.

The announcement to scale down assistance to Kenya is informed by the country’s new status as a lower middle-income country, based on World Bank Data.

The country’s new, wealthier status means it will go through a step-wise graduation process in which it will increase vaccine spending by more than 15 per cent annually.

“Countries whose average GNI per capita over the previous three years crosses the eligibility threshold enter the accelerated transition phase and start phasing out of Gavi support,” said Gavi Chief Executive Officer, Seth Berkley during a past interview.

TRANSITION

According to Gavi Kenya is in the preparatory transition phase one since its gross national income per capita is more than Sh106,000 ($1045).

Now, as the continent marks Africa Immunisation Week, the government has to think about how to sustain the programme after the donors leave. As it is, Kenya lacks clear-cut guidelines on how these finances should be allocated, leaving the decision to the incumbent government.

“If this was happening at a time when the donor was funding up to 90 per cent of this money, what will happen when it pulls out the funds?” asked Mr Mule.

According to a source privy to the matter, “as it is, the amount contributed depends on the government in power.”
“We lack institutional or legal guidelines to determine how much should be allocated to vaccines. So depending on the government in power, we will get the full amount required or miss it completely,” says the source.

According to the source, for two financial years (2013/2014 and 2014/2015), the government has been reluctant to allocate money for the procurement of vaccines.

In 2013/2014 for instance, nothing was allocated for immunisation, with the Treasury saying that all the money had been sent to counties.

This led to a delay in the government paying its share, prompting Gavi to threaten a discontinuation of assistance.

“When Gavi issued the warning, we had to persuade Treasury to source the money elsewhere to pay for the vaccines, which should not be the case,” said the source.

In fact, last year, this recurrence in foot-dragging by Treasury led to Gavi threatening to pull out of the co-financing agreement again, citing audit discrepancies.

Matungulu MP Stephen Mule, who is also a Member of the National Assembly’s Health Committee, argues that given the full cost of procuring vaccines, the gains made in vaccination coverage, currently at 79 per cent, are likely to be reversed.

According to Mr Mule, the new middle-income phase that the country has entered will weigh heavily on finances which, he says, are not available in the first place.

The country is not yet ready to procure vaccines without donor support, he says, arguing that the indicators on which the country was rebased were not related to health.

“Last year the county risked losing Sh3.4 billion worth of vaccination after it failed to respond to audit the audit queries that Gavi had raised.”

“If this was happening at a time when the donor was funding up to 90 per cent of this money, what will happen when it pulls out the funds?” asked Mr Mule.

WEALTHIER

But the donors seem to have made their final decision. According to Dr Berkley, the decision to fund vaccines is dependent on the choice and willingness of governments.

“It is not a question of ability, because the economies are growing. When you look at government expenditure vis-a-vis health expenditure you realise that immunisation takes up a very small fraction,” he says.

Dr Berkley explains that the Gavi model is meant to make procurement of vaccines sustainable for countries.

“As the country gets wealthier, and moves into the low middle income category, they spend 15 per cent more per year, until they eventually cross the $1,580 (Sh161,160) GNI per capita threshold. They have five years after crossing the threshold to be able to full self-finance.”

He adds that at the end of the day, the donor cannot adjust the transition period every time countries face a crisis.

“Some countries are heavily dependent on commodities and the service industries. If all of them came to us saying that they cannot sustain their programmes, then none would ever take up this crucial responsibility,” he says.

“All we know at the moment is that we are required to pay close to Sh460 million this June.”

A study published by the Johns Hopkins University School of Public Health indicates that for every shilling spent on vaccines, a country gains back up to Sh16 in economic benefits and Sh44 in indirect benefits.

So, can Kenya really finance its immunisation programme sustainably?

According to the Acting Director of Medical Services Dr Jackson Kioko, Kenya co-finances vaccine procurement in line with the requirements of Gavi.

“We are ready to begin the process, despite some confusion arising after the country was rebased in the middle of its financial year, thereby conflicting with the donor’s calendar,” he says.

He however notes that one of the challenges the country had with meeting up the cost of the procurement of vaccines was generated by a collision in financial years between Gavi and the government.

“Gavi uses a full-year calendar, whereas ours starts in July and ends in June. Therefore, when they needed us to pay, our financial year was midway hence posing a challenge.”

Last year, about Sh7.1 billion was spent on the immunisation programme in Kenya, with Gavi giving Sh3.97 billion and the government spending about Sh3.13 billion.

Dr Kioko however said that although Kenya’s economy was rebased, Gavi is yet to communicate on how the money needed from government will increase over time.

SELF-FINANCING

“All we know at the moment is that we are required to pay close to Sh460 million this June,” Dr Kioko says, despite Gavi noting on its website that the country is in “preparatory transition”.

“The guidelines are yet to be given by Gavi. Therefore we are yet to know how the process, which we expect to be over seven years, will take place,” explains Dr Kioko.

To allay fears that the gains made in the last decades could be eroded, Dr Kioko says that the government has begun allocating enough funds to start the process of self-financing. He says taking up the full financing of vaccines should not be a problem for the government.

“We are already fully funding procurement, shipment and distribution of measles, polio, tetanus and BCG vaccines,” he says.

However true his argument may be, it has not been a smooth ride. A spot check across six counties show that between October 2015 and January this year, there was an acute four-month shortage of vaccines in some county hospitals.

Hospitals in Siaya, Kisumu, Homa Bay, Migori, Busia and Vihiga counties reportedly went for four months without polio, tuberculosis, tetanus and measles vaccines.

But the ministry denies this. “We only had a shortage of BCG after delays in shipment. This had nothing to do with procurement,” says Kioko.