June 6th, 2012
New York/Copenhagen — UNICEF Executive Director Anthony Lake said today that a more transparent and competitive market will lead to savings of more than US$20 million over the next 12 months through a price reduction of 20 per cent for bed nets that protect people from malaria.
“Especially at a time of financial uncertainty, these savings are good news for governments and even better news for children,” he said during the annual session of the UNICEF Executive Board in New York.
“Never before have bed nets been as accessible and affordable for children and families in developing countries,” said Shanelle Hall, Director of UNICEF’s Supply Division in Copenhagen.
“This is the result of a long-term strategy to create a healthy global market for bed nets, where high quality goods can be purchased in bulk at a fair price, and demonstrates UNICEF’s commitment to value for money,” she added.
The price of an insecticide-treated, long-lasting bed net has dropped to under $3.
This reduction followed projected cost savings and cost avoidances for vaccines and child survival supplies worth a total of US$735 million in the coming years, according to UNICEF Supply’s Annual Report 2011.
These included a projected $498 million in costs avoided in rotavirus vaccine procurement between 2012 and 2015 due to a price reduction. Diarrhoea is the second largest cause of under-five child deaths and the vaccine protects against the most virulent strains.
Some US$60 million in savings was secured for oral polio vaccine procurement for supply in 2011 and 2012.
As more countries reach zero transmission of polio and hope to stop buying vaccines, UNICEF and its partners have worked to stop suppliers from exiting the market too early.
Another $153 million in price decreases were obtained for pentavalent vaccines, which protect children against diphtheria, tetanus, pertussis, hepatitis B and haemophilus influenza type B, as a result of an increasingly competitive supplier base and the entry of new suppliers into the market.
Price reductions for ready-to-use therapeutic food – used to treat severe acute malnutrition in children under five – were also significant with an 8 per cent fall from 2010 to 2011.
These results were achieved in partnership with the UN Secretary-General‘s Special Envoy for Malaria, the GAVI Alliance, the Bill and Melinda Gates Foundation, UNITAID, the Roll Back Malaria Partnership and the African Leaders Malaria Alliance.
The strategies implemented to achieve these savings include aggregating demand and pooling procurement to help achieve economies of scale, transparent and long-term forecasts to industry, volume guarantees, special financing terms and clear quality requirements.
In 2011, UNICEF made available on its website the prices it pays for vaccines. In 2012, the prices paid for ready-to-use food and bed nets were also published. The availability of this information improves market transparency and efficiency, and supports governments and partners in making more informed decisions.
The announcement on bed nets came shortly before the launch of a major global initiative on child survival in Washington, D.C. on 14-15 June convened by the Governments of the Ethiopia, India and the United States with 700 leaders and global experts from government, the private sector and civil society.