24 July 2013

How the sale of bonds are helping increase access to vaccines

Public health emergencies arise around the world on a regular basis.

Humanitarian and aid organizations need to act quickly, but they need money to get work done. An emergency appeal for millions, if not billions, of dollars can take time to fulfil.

So what if the money was already available? With the money in place, an organization can respond to an emergency immediately.

The International Finance Facility for Immunisation Company (IFFIm) does just that for the GAVI Alliance, a public-private global health organization that increases access to immunizations in poor countries by working with governments, donors and the private sector.

IFFIm sells bonds to private investors in order to raise money for GAVI’s vaccine work. When GAVI needs money a request is made to IFFIm’s board to disburse the needed funds. For vaccines, a health solution that requires early action, gaining access to needed funding quickly has a big impact on programs like the eradication of polio.

“Having predictable, long-term funding in place will help us ensure that the world’s most vulnerable children have access to healthcare, and that is a critical step in achieving the goal of ending extreme poverty by 2030,” said Jim Yong Kim, President of the World Bank.

The GAVI Alliance is a sort of middleman between donors (Gates Foundation, United States, etc), pharmaceutical companies (GSK, Merck, Pfizer, etc) and governments (afghanistan, Eritrea, Haiti, etc). It negotiates on behalf of countries to access lower vaccine prices and donations. The money provided by donors allows GAVI to assist poor countries in purchasing vaccines.

The money supplements the cost further and countries take on more of the cost as the country improves. A country graduates out of GAVI once the gross national income (GNI) per person exceeds $1,550.

IFFIm raised $700 million earlier this month through a new three-year floating rate bond issue. Investors in the bond earn a competitive return on their investments while providing money that will increase access to lifesaving vaccines.

“For us, this is the perfect high social-impact investment, says Benjamin Bailey, Fixed Income Manager, Praxis Mutual Funds. “You’re helping immunize millions of children through an investment that fits comfortably in our mutual fund portfolio. What could be better than that?”

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