 Welcome, everyone. Thanks so much for joining us today. It's a testimonial to your dedication that on such a beautiful Friday afternoon, you're all here with us at CSIS instead of heading over the Bay Bridge to some nice beach somewhere. So we're very happy to see you. I'd like to say a special thank you to our CSIS staff who helped organize today's discussion to Suzanne Brundage. And then also to our colleagues from Results for Development, to Arthi Rao and Amrita Pavarwala. What we want to do today is try to have a very practical discussion of a very complicated set of issues, but issues that I think we can all agree are probably very fundamental to achieving the goals of the Global Health Initiative and to achieving the goals of the MDG. In fact, as we gather here this afternoon, there's a meeting going on at Muskoka between the G8 heads of state and about half a dozen of their African counterparts. And I think we can be fairly certain that the subject of financing for development is somewhere on that agenda. I'll confess that innovative finance is a bit of a new focus area for CSIS, and it's one that I come to with a great deal of humility, recognizing that many very, very smart people have spent a lot of their energy trying to figure out what really works in this area. And we're enormously lucky to have with us four of these very smart people as our panelists today. But what's brought us to this set of issues is the work of the CSIS Commission on Smart Global Health Policy. The commission met over the last year, looked at some of the longer-term strategic issues facing U.S. global health policy, and then came out with a set of recommendations. And one of those sets of recommendations actually focused on this issue. On the importance of the U.S. looking a bit more systematically at how it can engage with the range of new mechanisms, how it can look to use them as a vehicle for leveraging more money, for leveraging more engagement from the U.S. and for getting better results for the dollar. So what we want to try to have today is a very practical discussion around those issues. We think there are both opportunities, but also limitations, and I think we want to be realistic about that as well. So we have 90 minutes. As I said, we have four terrific panelists. I'm going to dispense with lengthy introductions because one of our panelists needs to leave a little bit early, and I think you have their bios in front of you. So we're happy to have with us today Rob Hecht, who's the principal and managing director with Results for Development. Amy Batson, who is a deputy assistant administrator for global health at USAID. John Hurley, who's the director for international debt and development policy at the U.S. Treasury. And Susan McAdams, who's the director for Multilateral Trusteeship and Innovative Financing at the World Bank. So what we're going to do is Rob's going to start us off with an overview of the issue. We'll then move to our three panelists who will each make a five to ten minute presentation. Then we're going to have a discussion among the panelists and then we'll open to the floor for questions. Thank you. Thanks very much, Lisa, and good afternoon to everyone. I'm here really to be just the warm-up band for the main act, and those are my three colleagues who will follow. My job is to try to kick off and to frame this discussion around innovative financing for global health and especially the question of the kind of role that the United States, the United States government could be playing going forward in this important area. The three key messages that I want to get across today are in front of you right now. So if you have a little bit of post-lunch fatigue and you start to doze off, hang on at least for this one slide. That's all you really have to remember from what I'm going to say. The first message is that if we look back over the last decade, development assistance for health has really grown dramatically, and the United States has been a very important part of that. That's important to acknowledge. Between 1998 and 2008, the development assistance for health increased from around $8 billion a year to almost three times that number, $22 billion by 2008. But we would argue, and we do in the paper that Lisa and Steve Morrison asked us to do for their commission, that the traditional forms of aid are still incomplete, inadequate, if we're going to achieve the goals that have been set, including the Millennium Development Goals in the health area. A second message is that innovative finance is not some silver bullet, some magic solution, some G-Wiz thing that's going to solve all the problems that are out there in health financing and in development assistance. But we would argue that there is a real track record there that the innovative financing has real demonstrated potential, as well as I would say still unrealized or untapped potential to do two important things. One is to mobilize additional incremental financing to fill the gaps that are there. And secondly, and not less important, to actually stimulate better use of the money to really produce results. And third and finally, and I think this is what the discussion today will center on, at least I hope it will, in large measure, is that if we look back over the last seven, eight years, perhaps longer, the U.S. government has been involved in this area around innovative finance for health, for global health, but its participation has been on and off, it's been modest in some important areas of initiative. The United States has played a very limited role, if any. And we would submit that there are some tremendous opportunities for the U.S. Administration, for the Congress, for all of us in the U.S. to do more in this area. And the U.S. has a lot of strengths, has a lot of advantages and assets to bring to this. And the position, at least, that our institute took in doing the background work was that it was important for the U.S. to do more in this area. What's wrong with the way in which the aid is delivered in the health sector right now? There are a lot of good things about it, so on the positive side of the ledger, there's much that can be said. But there are two problems which I alluded to earlier. First of all, despite the increases in the total volume, it's still not enough. If we look at just a couple of examples which I cite here, the work that was done by the Task Force on Innovative Financing for Systems, and several people here were very much involved in that last year, perhaps some of you were as well. What I called here the Gordon Brown-Bob Zelich Task Force, published figures saying that as much as 250 billion additional dollars were needed over the next seven years to really get to the MDGs by 2015, the analysis was based in 2008, and it was a seven-year explanation. This was the financing gap that would need to be filled by all the different parties, not just by the donors, also by the domestic resources of the public sector and the private sector, but the part that was seen to be played by the external financiers, the donor assistance was at around $10 billion a year, or $70 billion over that period. So a lot is flowing, a lot more than a decade ago, but more is still needed. Another example from some work that we've been doing in my institute around the trajectory of the AIDS epidemic suggests that unless we make a quantum leap in the prevention area right away, which then will have an impact on the need for spending on treatment and other aid services in the future, that annual aid spending in low and middle income countries could double over the next decade from around $15 billion a year to $30 billion plus that would be needed. I see one of my colleagues, Bill McGreevy, who worked on this with me and others here in the audience. The other problem is that the quality of aid, that shorthand for what I was talking about earlier when I mentioned that it doesn't always stimulate the most efficient drive toward results on the ground, there are some issues with the way in which traditional aid works from a quality perspective. It tends to be relatively short-term a few years ahead at best. It's unpredictable from the point of view of both the developing countries and if we look at the area of health research and development, it can also be difficult for product developers, biotech companies, pharma companies, product development, nonprofit partnerships that are working to try to create new drugs and vaccines and health diagnostics to really plan ahead and to finance projects which can often take five years, a decade or more. Secondly, the existing aid tends to be quite fragmented. We all know about this, a lot of publicity around the need for hermitization and trying to combine streams of external assistance. Often this leads to a parallel competing, confusing not always very efficient ways of procuring goods and services and implementing health programs. And thirdly, the traditional forms of aid for the most part, although this is changing, have been tied to so-called inputs into health systems and services and not to really getting those results as measured by the services themselves or the impacts that they can have on good health of the populations. So what do we have in this area of innovative financing? I'm not going to try to go through an exhaustive definition or a catalog. Our background paper gets into this to some extent. Another very good work has been written on this. The World Bank Susan's team has written exhaustively, has combed the universe and has identified dozens and dozens of ideas, some more developed, some less developed. The point I want to make with this little matrix here is just to say that if you take some of the innovative financing ideas in the health area, it's interesting to try to separate them into different categories. If you look along the one axis, you have the one which runs from left to right. You have ideas and proposals that are still on the drawing board, the ones which we call just proposed ideas. We have some things which are just getting off the ground now. And then we have some things which have several years of experience behind them. Some of them are more targeted at the R&D area, at the new drugs and vaccines, the scientific process and creating new products to go into health systems. And some are really focused on providing more money, better kinds of money to scale up existing services using already approved and licensed technologies. And if you look, for example, in that right-hand column, you see things like the priority review vouchers that the Food and Drug Administration is offering to companies that come up with new drugs and vaccines for neglected diseases. You have the International Finance Facility for Immunization, the use of mandatory and voluntary contributions to finance, unit aid, debt to health swaps. These are things which are real, which are on the books, which are happening. You have some in-between things like the Advanced Market Commitment for the pneumococcal vaccine, which is just getting underway, which has been birthed over the last few years. A couple of other things which are mentioned there. And then we have a slew of things. These are just illustrative that are in the planning stages. A second Advanced Market Commitment, which might be more focused on an early-stage vaccine against a disease where there's a long way to go. Some years to go before the vaccine will reach the market. There's a lot of talk these days about prizes and incentives for companies and for scientists. There's a lot of noise these days around broader levies and taxes on exchange transactions in the currency markets and on financial transactions, not just to finance health, but for a range of purposes and other things like that. So I'd say it's a rich tapestry of some ideas which are really going somewhere, others which are just being considered. Some of them have been more developed and pressure-tested than others, but there's a lot out there. Three which I'm just going to touch on briefly, and I think Susan and others may pick up on this, but to just give the flavor. One which relates more to the late-stage research and development space talked about a lot here in Washington and elsewhere, the Advanced Market Commitment. What is it? It involves legally enforceable commitments to support and subsidize the price of new vaccines, in this case the one against childhood pneumonia and certain forms of meningitis. A number of countries shown there in that ring have committed a billion and a half dollars to help with that subsidy. The work there was led by the Italians and several others, the Gates Foundation, the UK. They're mentioned there among the contributors, and that Advanced Market Commitment program is really just getting underway. Is there some evidence that it's working? It's early stages. It's taken some time to set it up. It hasn't been costless in terms of the transactions involved in the governance arrangements and other real costs, but there appears to be a meaningful response from industry. Four suppliers have registered with this program. Two have now made long-term commitments to supply the pneumococcal vaccine at the agreed price, and the price is only a fraction of what's being paid for the same type of vaccines here in the U.S. and in other OECD countries. And when the Advanced Market Commitment is exhausted, these suppliers have agreed to continue to make the vaccine available at half of the AMC price. So to speak, or about 120, 5% of what is being paid if you go and you take your children to a pediatrician here and get this vaccine. It's also accelerating, I would say, the rate of access or the early access to this vaccine, which hasn't been the case for new vaccines, which came along in the past, more than a dozen low- and lower-middle-income countries have applied to the Global Alliance for Vaccines and Immunization to be a part of this program. And these vaccines have only been on the market here in the OECD countries for a relatively short period of time. And in fact, there are new formulations of these vaccines, which are just coming onto the market and which may well be available and delivered to kids in Sub-Saharan Africa and in other low-income countries almost simultaneous with their availability in the north. And that's a tremendous breakthrough. The second one, again, much talked about and touted, is the International Finance Facility for Immunization. The idea here is to create a series of actions involving government contributions or commitments, which then trigger actions in the capital markets to go out and raise funds, which can augment what GAVI is doing in the childhood immunization area. It front-loads or brings forward the availability of these funds so that more can be done now, more lives can be saved now, and in the future, the costs of trying to deal with these health problems can be reduced. So there's a kind of a timing problem which is solved here through the use of the IFF. That's work that was just dated, I guess, five, six years ago. I'm trying to remember. I was a little bit involved early on, maybe in the mid-2000s, 2004, 2005. Work led by the United Kingdom and the IFFIM has now been up and running for several years. And again, certainly evidence that it's working in achieving this front-loading. I believe that the donor contributions allow IFFIM to go out and borrow a multiple of this 1.2 billion, which is shown as having been dispersed. Susan can tell us exactly how much has been raised on the capital markets. There may still be some additional borrowing capacity or authority which hasn't been exercised, but I believe the total is around $3 or $4 billion. I can't quite remember, but Susan will fill us in. So real money is flowing into these programs and the figure shown here is only a portion of what ultimately will be raised through this. And the IFF has been augmented through the decisions taken last September to go out and expand its borrowing authority and use those funds to deal with some of the health systems, strengthening opportunities that the Gordon Brown Zealot Task Force was so concerned about. The last example that I wanted to mention, which is again very much in the Innovative Finance for Service Delivery space is around Unitade. This is a financial pool which has been fed with revenues that have come from a number of sources. I think most of the publicity has been around the airline ticket taxes or levies in a number of countries including France, which was very much behind the creation of the use of the levies and the entity Unitade which has been set up to receive them. There have also been some contributions from government budgets from a certain number of the countries that have joined. And now there is a program to use voluntary individual contribution, so-called check-offs on travel and vacations and various travel services. And this money, which is now in excess of $1 billion that's been raised over the last three or four years, has mostly been channeled into the purchase of medicines for AIDS, TB, and malaria. And those have been delivered to a number of countries. It's not just been a matter of increasing the amount of funding in these areas, very consistent with the Millennium Goals. But particularly where the funds have been provided to the Clinton Health Access Initiative, CHI, the Clinton people have gone out and used this to leverage discounts or lower prices on, among other things, antiretroviral drugs, both for children and the so-called second-line drugs for people who have problems with resistance to the first regimens for antiretrovirals. And as the graphic here shows, over the last three years, as a result of, I think, an inconsiderable measure related to the bargaining power that CHI, that the Clinton people have had using the unitaid money, the price of the cheapest second-line regimen, as we call it, or second-line therapy for AIDS, has come down by over 40%. So that's just to give you a little bit of the flavor of these things, just to say if you were a skeptic who thought it was that the innovative finance was just some pie in the sky or some idea that an academic had or somebody sitting in a think tank here in Washington, these things are real and are happening, and there are a number of other interesting ideas, I would say, that are out there right now being explored. The five issues I want to put up for discussion are the following. Where is the United States in all of this picture? I mentioned three of the major initiatives, one led by the United Kingdom, another one by Italy, another one by France. The U.S. has certainly not been at the forefront of the work in these three areas. Why is that the case? It's interesting that at least one example I'll cite, which is the advanced market commitment, a lot of the intellectual nourishment for the idea came from the United States, came from people here in this city and in universities in the United States, but it was not an idea where the U.S. government was able or willing, I don't know exactly, to pick up on this and run with it when it came to the decision for a. Secondly, what is the scope, what's the potential for innovative financing in achieving the health goals and the new Obama Administration Global Health Initiative? Where does innovative finance fit into all of this? It's great that Amy and John and others are here and can speak to that. The third one, when we look at some of these specific ideas in innovative financing and mechanisms, which of the problems that I talked about earlier are they meant to address? I think it's pretty clear that a one-size-fits-all doesn't make sense that some of these proposed or actual ongoing instruments or tools are meant to deal with R&D, with the research and development area, service delivery, some may be more linked to performance and getting results, some may have more difficulty doing that. What exactly do they address? What are their strengths and what are their limitations and what are their costs? This is something that Susan and others know very well because in several instances the World Bank has been asked to be the fiduciary agent or to be the one responsible for structuring all this. I know from having talked with her and worked with her, it's very difficult, it takes time, it takes people and money, it takes agreement among organizations that are not always want to agree with one another. So what are we getting into when we do these things? They're not costless. Fourth, and I guess for me, the thing I'm most curious about today, maybe you are too, is there a new wave of interest in this area in the current administration? I think a number of us have heard some things and seen some things to suggest that that may be the case. But it would be great to learn more to the extent that that's possible. Is there interest and growing support for some of the existing tools where a second generation instrument may be coming along, the advanced market commitment a second one, some expansion of the international finance facility, that kind of thing. There may be some real reasons, some complicated legal and administrative reasons why it's difficult, if not impossible, for the United States to participate in these. How serious are those barriers? Are there ways they can be overcome? That's something I'm curious about. And secondly, what about initiatives in some new areas that may not have even been tried out yet? And one of them is around financial prizes for innovations in the science area. He's not here today, but I think the deputy in the Office of Science and Technology Policy, Tom Khalil, I know has a strong interest in this area. And his office has certainly been reaching out and sending a lot of signals that they want to know more about this and are eager to engage. So where is all of that going? And I guess the final question is, for those of us here who are interested in this area, who may be wanting to contribute, maybe healthy skeptics that want to engage in discussion around this or whatever, what are the ways in which we might be able to get involved? Are there certain forms of interagency consultation that are emerging within the government that can be talked about today or that would be interesting to know about? Is it possible that there might be some regular fora or mechanisms for interaction between those in the government who are working in this area and others of us who perhaps have an interest and may be able to contribute? And that's an idea that's, I think, mentioned in the background paper that we wrote for Lisa and the CSIS. So let me stop there, and I hope that's at least giving you a first taste of what this is all about and that I've posed some questions here that may be helpful for the discussion, which we'll follow. Thank you. Thanks, Rob, for the great overview and let me give the floor now to Amy. Thanks to CSIS for organizing this. It's very exciting to be at a conference like this because it brings together my previous life and my current life of having been at the World Bank and having worked quite a bit on innovative financing and now being at USAID and focusing on the Global Health Initiative. Where it's clear that in the Global Health Initiative that there are real opportunities to be leveraging innovative financing as a way to start reaching some of the health targets and the broader MDG targets that have been set. I think it's also indicative that we have Treasury and USAID sitting next to each other here. I think there's a lot of excitement for how we each bring different skills to the table to allow us to have an effective discussion about innovative financing. And not here, but equally important is, as mentioned, groups in state, such as the Science and Technology, HHS, and the White House, all of whom have a lot of interest and a lot of expertise in this area and who are actively exploring how can we go forward. In the context of the Global Health Initiative, which I think you all know is President Obama's $63 billion health focus for the next six years, that initiative is all about saving more lives. It's about doing more, supporting greater ownership, supporting better and more sustainable systems to deliver these health results now and in the future. And to achieve that kind of very high goals that are set in the GHI, it really requires some new thinking. It also requires taking some of the old thinking and applying it more consistently. But in both cases, it's about how can we use our resources more efficiently and effectively? How can we partner with others, with countries, with development partners to maximize the value for every dollar we put on the table? And clearly that's what innovative financing is all about. It's not only an issue of how do we leverage more funds, which is clearly very important, but it is about this issue of how do we structure the way we use those funds to have greater impact? Not to shock my Treasury friend, but a dollar is not a dollar. I mean, it depends on how it's structured, who's providing it, when they're giving to it, that has the impact. And so a dollar combined with predictability can have a lot more value. A dollar combined with sort of lowering market risk can have a lot more value. A dollar linked to measurable results can go a lot further. And it's those kind of issues that I think we want to get at in terms of innovative financing. How can we make each dollar go further by the way we're bundling it with some of these other key issues? I think that one of the most important issues to remember on innovative financing is that it's a means to an end. It's a means towards health results. It's not an end in and of itself. And one issue we all need to guard against is a little bit of what can happen that, you know, I have a hammer and everything looks like a nail to me. And in fact, I think with innovative financing, that's exactly the space. And it's exactly what we've been learning from some of these previous mechanisms where it's critical to be starting from your objective. What is it that you're trying to achieve that the traditional funding mechanisms aren't allowing you to achieve? What are the kind of challenges that are getting in the way? What's inhibiting it? And what does this mean in terms of how an innovative financing mechanism may be able to overcome some of them? It was very interesting for me a week ago. I was in a conference talking about innovative financing with fellow colleagues across the U.S. government. And in particular, we were looking at the whole issue of pandemic flu and some of the learning behind that. And the discussion started off by focusing on, well, do we need to set up in advance some kind of revolving fund that we can use so that there's money immediately available to support countries, to support governments to purchase pandemic flu, if and when there's another pandemic. Very quickly, we moved from, well, just money to buy vaccine, a pandemic flu vaccine, to, well, actually, we may need to think about an innovative financing mechanism to provide incentives for having an adequate capacity that would allow us to have to meet the kind of supply needs, the demand that we would face in a pandemic, and to make sure that we're really incentivizing flexible investments in flexible kind of capacity or keeping some existing capacity hot so it can be ready and waiting as soon as there's a real need. But from there we went, well, actually, it's not all about capacity because it's about how fast you can kind of scale up from where you are. We got into the discussion that, well, with existing technology in flu vaccine, it's actually not a very rapidly scalable type of technology. So really, what maybe we need is an innovative financing mechanism that's about incentivizing investment in the research and development of better flu technology. So we went from sort of a, oh, everyone knows we need to have a revolving fund about purchasing vaccine all the way back up into, well, actually, that's not going to solve the problem. We really need to dissect this problem and move back up, and we came out with this thing of, if we really wanted to do something, we would really need to look at all three of these levers and think about how can we address them and which of them are addressable with existing mechanism and which of them, many of them, which are not. Once one knows what one is really trying to achieve and there's some thought behind what might be an appropriate mechanism to address it, there then needs to be a really careful analysis of the costs. The reality is that as exciting as innovative financing is, and I'm certainly a believer in it, but the reality is that not all mechanisms are good. They can have very significant transaction costs. They can have tremendous opportunity costs. They can actually have high financial costs, depending on how they're structured, or big policy implications. And so once you have a sense of what's the challenge that needs to be overcome and the potential benefit in terms of impact on health that your innovative financing mechanism can bring you, then having a very independent and careful look at let's think about all of these other kind of potential costs that may or may not exist for that mechanism and put it together and make a good independent assessment as to we only have a dollar. Where are we going to get the greatest health impact? Is it through this mechanism or given all the costs associated with it? Is it maybe through something else? And oftentimes that kind of analysis is the wet blanket, and it's always Treasury that gets blamed for it. So we get to be excited and Treasury gets to yell at us. But it is an absolutely critical component in terms of very realistic thinking about where can we have some really good advances in this area. But back to USAID and USAID's role in the U.S. government in the domain of innovative financing, we see part of our function as really as focusing on what are the real needs in the country. Given our programs on the ground, given what we're seeing in different health areas, where are there real gaps which we need to address to actually ensure that the countries are able to deliver the health results that they want to achieve? So for example, that may be around products and about ensuring that the way the product characteristics, the affordability of that product, the quantity of the product available for vaccines, diagnostics, microbicides, drugs, for any of these areas, somehow playing a role to ensure that that need is addressed. It could actually be more about just more predictable support for the work that the countries are doing on the ground so that they know there's going to be the funds there if they make a policy decision, for example, to introduce a new product, or to scale up a strategy that is seen and has been proven to be more efficient and effective. So it's also one of the important issues I think with RBF or with innovative financing is it's also not all about big global mechanisms. What often gets kind of lost a little bit in these discussions is there's ways that we can be thinking about how we structure our funds that can have very significant impact within the country, and those are equally important. And so mechanisms like results-based financing or performance-based financing, where you're just linking the money a little more tightly to the actual results that are delivered all the way down the chain, has actually been proven to have some really big impact in some countries. And more work needs to be done to understand how that works, but really studying those kind of innovative mechanisms as well I think is extremely important in an area where USAID wants to play a role. So for going forward in the future, I'd say the question is not so much where was the U.S. in the past. I think the question should be reframed as where will the U.S. be going forward? And for any of you who know my boss, the Administrative USAID Dr. Raj Shah, you know that there's a real interest from the highest level. And we're very committed to working closely with key partners in this effort across the U.S. government, recognizing the different skills that we bring to the table that are all needed to come up with a robust mechanism. Partners like the World Bank and other multilaterals, the private sector, NGOs, and the great hybrid of these public-private partnerships that have been playing such a critical role in this space. We're actually setting up our systems to be able to focus on this more. Within USAID, we already have a very strong health team that is looking at pieces of this. I'm also delighted to announce that I have a new member of my team who will be joining as of Monday, Wendy Taylor, who many of you may know and who brings with us a lot of background on innovative financing both from her work in bioventures for global health and malaria no more. So it's something, this is an area that we are very committed to and we really look forward to working with many of you and many in the broader community. As we all collectively explore, what's the best way to focus our attention and use the value that innovative financing brings while being realistic about the best ways to go forward? Thank you. Amy, let me just say thanks very much and I suspect we're going to have questions and discussion. I think particularly the concept you raised about bundling and how do you figure out the right mix and what's the real complementarity between the finance and everything else you're trying to do is one that we should try to come back to. So please, John. Thanks. And I think if I had a wet blanket around me yesterday, I would have been thankful. So thank you so much for inviting me today. This great opportunity to delve a little bit into this issue which I've been working on for several years now. And I think everybody in this room knows that supporting global health has been a high priority for the U.S. government for a number of years increasingly over the past decade and the scale up and the resources has been unprecedented and as Amy mentioned, we're now working on the Global Health Initiative, $63 billion over six years. But even with this tremendous increase in resources, there's a growing attention to the potential of innovative finance and I think that this reflects the launch of several initiatives that Robert mentioned over the past few years. What I'm going to do is try to give you a bit of a historical picture on where things, how they developed over the past several years in terms of the U.S. government and the administration and sort of things that we're looking at now and the process and then some thoughts about things going forward. Treasury, we've been leading in the United States government an effort at a working level to discuss the various proposed mechanisms and learn from the experiences of colleagues in other agencies. And in doing this, we are reviewing these proposed mechanisms. We think of several criteria or filters or factors, questions that we ask ourselves. First of all, do they emphasize results and outcomes? Secondly, do they leverage resources? Third, would they require new bureaucratic structures? Fourth, are they additional? And fifth, are they consistent with U.S. policy and budget processes? So in light of those factors, let me just comment briefly on some of the more prominent innovative financing mechanisms that have been discussed and were in the slideshow. First, IFM. I think we were initially approached about the IFF concept, which preceded IFM itself in 2003. And we looked at this very closely and realized that the concept would not work within the U.S. budget system. Unlike the Europeans, we would need an upfront appropriation for the disbursement of the funds that are created or the proceeds from an IFM bond. So IFM issues the bond or the U.K. charity, actually. And so those proceeds are then disbursed into GAVI or it could be to some other mechanism. And under our current budget system, if we were to join that, we would have to appropriate for that disbursement. And so if we wanted to scale up our funding for those types of purposes, the most efficient means would be through our traditional treasury operations. So from an efficiency standpoint, then we felt that the IFM concept or the IFF concept wouldn't work for the United States. Second, on the advanced market commitments. Again, we were involved from pretty much the very beginning of that debate. And I just, I think two groups or two, one individual and another group need a lot of credit for this. The Center for Global Development and Michael Kremmer, they really pushed this and I think that they'd serve a tremendous amount of credit. And again, it was very difficult to fit this into our budget system because as Robert mentioned, the AMC needs a legally binding commitment from donors to disperse those resources in future years to meet those commitments. And we simply could not do that without an upfront appropriation. And that upfront appropriation, we could have done that, which involves trade-offs. It involves trade-offs of putting that money aside for that future disbursement versus trying to meet current needs that were a very high priority at the time. And so that was the reason why we did not decide that we decided not to participate in that AMC. Now, there's been mention of various other potential models within the U.S. government for this multi-year commitment. For example, the Millennium Challenge Corporation has multi-year compacts. But there, the funds for the compact that goes with the country are all appropriated upfront. So even though the monies are disbursed maybe in year five of that compact, all of that money has been appropriated upfront. And then in our multi-year commitments to replenishments of the IDA or the Africa Fund or to the general capital increases of an MDB, those are multi-year commitments, but they always come with the stipulation that they're subject to our appropriation. So those appropriations are difficult to come by and we don't always get them in the manner, in the timely manner that we want. But so that's why for us, the AMC would not work, but we were strong and continue to be strong supporters of the AMC and the AMC pilot for NUMO. And because with the exception of the budget factor, it really fits all the criteria that I mentioned earlier. And so we found other ways to support it. We supported the World Bank using its balance sheet to leverage donor resources and the World Bank's expertise. We were very strong supporters within the board on the proposal. And the AMC for NUMO, if it's to reach its full potential, which we hope it will, the beneficiary countries will need subsidies to purchase these vaccines for a number of years. And whereas we're the largest donor, among the largest donors to GAVI, which is the institution that's facilitating this or is funding the purchase of these vaccines, we are helping to ensure that this will happen. So I think those things shouldn't be lost in this discussion on the AMCs. Third, on results-based financing. As the CIS report mentioned, we are enthusiastic supporters of results-based financing. This not only includes the results-based financing programs that USAID has, but also things such as the buy-downs of IDA credits at the World Bank where countries are relieved of their obligation to repay an IDA credit if they meet certain benchmarks. I'd also like to mention just since we have the opportunity on tobacco as an area where we're working with the MDBs and other parts of the U.S. government to promote better health outcomes in some ways in an innovative way, but we're particularly interested in looking at tobacco tax policy in developing countries because it has the dual benefits of improving health and also increasing domestic revenues in these countries. And currently, we're in discussions. We're trying to facilitate CDC being able to second some personnel with support from the Bloomberg Foundation over to the World Bank to help out with the World Bank's efforts on this part. They're very interested and we're very interested, so hopefully something will come to conclusion in the near future. So looking forward, I'd just like to highlight a couple of things. First, I think, given that I've been working for the U.S. government for some time and then in this field for several years, the one thing that occurs to me with the new administration is that there's really a strong interest in promoting innovation in a wide variety of areas, including health, agriculture, and other sectors. I see it now in terms of like the G20 where in the financial sector area we're pushing or proposing and strongly supporting what's called an SME challenge and it has to do with financial inclusion. It's not in the health area, but it's just symbolic of our interest in promoting innovation and sort of this prize approach within this administration. And I think Amy's hiring at AID is also clear testimony of the administration's interest in pushing this and pushing innovation. And the other thing is the private sector and I think Amy mentioned this as well is there's really a strong interest in leveraging the potential and the creativity and the innovation that comes from the private sector. Thank you very much. Thanks, John. Repeat whatever anybody else said that was... Okay, the laptop's about to lose its battery and my show isn't up here. Here we go. Good timing. Thank you. Okay. With luck, repetition breeds credibility as opposed to being soporific. I taught my eight-year-old what soporific means today. It's lettuce to the flopsie bunnies. Okay, never mind. Innovative financing. I've now been, as many people in this room I've been working this for a long time and it turns out we really don't agree at all what it means. With the financial crisis and the aftermath of the financial crisis a lot of donors, a lot of sovereign donors are now talking a lot about innovative financing and what they mean is can you please find a way to grow money on trees because we've got some big fiscal constraints. Well, occasionally we sort of kind of manage to grow money on trees. We like to think of this in two different ways. One is, as Amy said, the point is you don't start with the financing. You don't start with the hammer. You start with the problem and then you figure out how to solve it and how maybe innovative financing might help. And that said, there are three ways we think of. Raising additional funds, sow the money on trees, which is often in the form of some kind of tax and a macroeconomist will tell you that may or may not be additional funding but at least you have a shot at it there. The second one is efficient financial engineering. In other words, can you structure the way you use the money, not the impact on the ground but just the money itself, the financial structure itself in a way that adds value and hopefully means you can do more with less and then finally effective use of funds. This is energy efficiency. If you're using a car that has better mileage, you will use less gas. Same thing with money. If you can find a way to get better mileage you will be able to go further with it or use less of it. This is Amy's bundling idea. So the first one, raising additional funds. We've got a bunch of examples here. There are a lot of interesting things out there. This actually is a short list of the more famous ones. In the second one, I apologize, we're all talking about IFM and AMC. I'm going to do that too. So you'll all be experts when we're done. But timing of financing is one thing. We'll go into how IFM does that specifically. Ways, you can get overall changes in the scale of financing. We all know the success stories around microfinance and how that really changed the development landscape in a lot of different ways. Also things, ways in which you can deal with other financial issues. Local currency lending, for example, can avoid currency risks. You can pool natural disaster risks. This is the Caribbean Country Risk Assurance Facility. So some examples of that. And then effective use of funds. Market creation, UNITED does this. And also price changing, the AMC, the events. Market commitment tries to do this. Credit buy downs, all things that we've just been mentioning are trying to make sure that you get more results, more impact when you actually get to the money being spent on the ground. Okay, specific examples. What do you mean? What's the problem? How do you get to a solution? This is the very original International Finance Facility concept, Gordon Brown's baby. This looks like a mortgage. This looks like, not in the billions, hopefully, but this looks like a mortgage. I want to buy a house. A house costs a whole lot of money. And I have to spend it up front. That's the black that goes out the door. But I'm going to pay it over a very long period of time. This is how you buy your car if you're me. It's how you buy your house. It's how you buy stuff that's really important to you, but you don't have enough money to buy it up front, at least if you're not if you're a normal human. So where do you go from there? Well, this is the curve of the pilot IFF for immunization. You can see it's the same thing. The bonds that we have already issued are the same thing as the loan from the bank. And we've been spending it up front as well. And here's the curve. The different colors, if anyone can read that, you're younger than I am. The stripes on the curve are the different contributors to the pilot IFM. So we've got a bunch of money up front that we're paying for in a long time. Why is immunization like a house? It's not a, why is a raven like a writing desk? Sorry, I watched Alice in Wonderland on the plane back. Immunization is like a house because it's a development investment that it makes a ton of sense to do now, to do as early as possible. If you immunize kids now, not only are they healthy and they will contribute to the growth, we hope, of their economies, but there are herd immunity effects, there are overall health immunity effects that make a difference. It's one of the, we all argue a lot about the best way to spend money for development, but this is one of the areas where you know if you can spend it early, you're gonna have higher returns. I hope that made it not a joke, but real. What have we done? We've actually put, as of this week, we just closed another 200 million, but we've borrowed $2.8 billion in the markets starting from a benchmark issuance in 2006 when IFM was first established. Of that $2.6 billion, it is a cumbersome complicated structure that we definitely could do a better job on if we ever did it again. But we've put about $1.6 billion out the door on the ground for immunization. The other thing that is really important about this list is it doesn't show you the cost of what these financings were. This matters a lot because taxpayer dollars are being used to back this thing, and so what you wanna compare it to, frankly, is the borrowing cost of the sovereign governments that are giving IFM this money. If the US is paying 2% on money that it could just borrow and put out the door, not the US, because John's right, they can't give it to IFM, but it would be crazy for the US to give long-term money to IFM unless IFM is basically getting 2% as well. As it happens, IFM is within half a basis point for the balanced benchmark of its sovereign donor funds, and the interest cost over its first four years has been less than 2%. It's been quite a success story. This is one area where we will say not to the markets, but it is true. The bank runs this thing, and the rating agencies in the markets view this essentially as a World Bank adjunct, so we're getting the same pricing that the World Bank gets itself as a AAA issuer. When the markets change, this may change. Certainly the interest rates will go up. We do this on a floating basis. However, so far it's really been a very strong success story. I will say that some very sensible people in the US Treasury, one of whom is sitting at the panel table, were very skeptical that this would make sense. So far, we've been lucky. That doesn't mean that it will continue to be successful over time. It's something you have to keep track of over time. Here's how the money's gone out the door. I don't know why these donut charts are all of a sudden very popular. I noticed that Rob had one as well. So that's very quickly. I need money now. I'm going to find a way to do it by finding long-term assets and borrowing against them in the near term. That was the problem and solution. Another immunization problem we're on vaccines is what do you do about the fact that we don't get vaccines that we need in the very poorest countries? The vaccine market is structured so that every incentive for pharma is to come up with a big blockbuster vaccine to be the first to the market for quite some time as a monopolist, charge a bucket of money for it, and make its very extensive costs back as quickly as possible. It costs at least a billion, Amy, to build a new vaccine, and that's the successful ones. So why are these vaccines that we need not available? In some cases, as with HIV-AIDS, which Rob knows a ton more about than I do, we just haven't cracked the science, unfortunately. But the big problem is from the manufacturer perspective, the market conditions and uncertainties for the developing world at the moment prevent the manufacturers from investing heavily in the vaccines for developing countries. So if you start at the bottom left, I said the new vaccines only come out one at a time. First a monopoly, then a duopoly. It's a long, slow process to real competition, and real competition is the point where the prices drop and the vaccine can be introduced to the poorer countries. Countries make their capacity decisions very early in the process. They can't expand. This isn't like a drug where you can just decide to make more. Basically, the whole factory is patented. So it all points to conservatism and what they decide to do. That means that there's limited vaccine supply that keeps prices relatively high with limited supply as the prices are higher. Developing countries aren't certain, aren't sure about what or when they might have access to vaccines or whether they have any capacity to pay for them. So then you're in a vicious cycle and the result is we haven't, we've had a poor track record until pretty recently with getting the vaccines we need in the poorest countries. So here we basically have a market failure because it's such a quirky market with monopoly duopoly, oligopoly power. What do you do? The purpose of the advanced market commitment pilot is to create a market to get as quickly as possible to a sustainable market where there's competition that drives the prices down. In the vaccine market as a very shorthand at this point in time, that means getting emerging market suppliers in their costs have been so far much lower. This may be changing. And Amy knows a lot more about this. The other thing is, it costs a lot to make the vaccine and it costs a lot to build a factory with enough capacity to serve the whole world, especially the poor countries were most worried about serving. So what if we just, we're not going to mess with what pharma knows how to do, what if we just subsidize the cost of the increased capacity? Hopefully, you also will be able to address the uncertainty about demand and better information, saying the demand will be here, we can promise you that and here's why. Yep. In the past, the problem has been there's been a real mistake between need and demand. We say the need is high and unfortunately when the private sector has coughed up what we said we needed, there hasn't been money, there hasn't been actual demand. So you fix that. All right, I'm now going to bolt through a couple of, there's much more on this stuff. This is an animal, that's what the next couple of slides basically show. Why NUMO, I put this in to make Amy laugh. People think of the top three diseases. They aren't the top three killers. Especially not of kids. However, no one can spell or pronounce pneumococcus. So this is not widely known. That's why it's the pilot. Rob already covered this. This is the process. This is a very simplified version of the process. This is a very complicated thing. It took us several years to negotiate. However, we've got manufacturers coming in. That first one was the demand. Can I go back? This is the demand that UNICEF could have assigned. This is what we have right now, 19 million doses for 2010. What we've done is awarded partial supply. What we want to do is keep a lot of room for supply that's still available for bidding, including overtime. Okay, quick lessons learned. The AMC is very specific. It's not just about you've got a market failure. You want to fix it quickly. You've got a developing versus developed country problem. It also is about the specific disease, the specific product, the specific problem. And you need to keep that in mind if you ever want to use this mechanism again. At the moment, there are a lot of donors, not the United States thinking this is a great hammer and looking for nails. In agriculture and in climate change in particular, there have been major conferences with major numbers of high level government officials saying, we really like the AMC. How do we use it for climate change? That's backwards. Agriculture is a good potential area but you don't even want to think AMC. You want to think pull mechanisms. What about prizes? What about other things that are similar? That's my last slide, I promise. We learned IFF is a similar thing. It's a very specific animal. You have to have that front loading argument in place. You should not use an IFF to fund recurrent costs. It doesn't make any sense. Getting long term legally binding donor grants is very hard. It's virtually impossible, not quite impossible but virtually impossible for the United States, Canada and Japan. Three of the biggest and three of the G7. It can be done but it's a big deal. Everybody has this issue of the fiscal budget. What hits my fiscal budget up front. I mentioned the cost of funds is very important. You need to benchmark it so that there's sensible use about taxpayer funds. My final thing is just going back to the first point of innovative financing is useful but go with the problem first and then figure out the best way to tackle it. Susan, thanks very much. My apologies for rushing you a little bit but as I mentioned one of our panelists does need to leave us and that's Amy so I'd like to take a moment or two Amy if we could to follow up first with you and then maybe we can come back to Susan and John. One of the things we try to do here at CSIS is also gather questions online. I think we have about 100 people watching us online this afternoon. What I think I'm going to try to do is summarize a question or two that I have but also pull in some of those questions because I know you don't have a lot of time but I guess the issue I'd like to put to you is can you give us a sense of as you look ahead over the next year or two, what are the priority areas for you where you want to try to look at how you bundle innovative finance as a part of some of the broader solutions that you're looking at could you give us a sense of what you think the internal mechanisms across the USG might be to make that happen and then third something we've heard a lot from people is you see there's tremendous interest in this room. We've heard a lot from folks that they'd like to somehow be helpful in that process and is there any thought being given to some way to develop a broader consultative process with people who are really expert and could perhaps lend some of their expertise to the discussion. So if you could share any thoughts with us on those three questions. I think some of the priority areas would be dividing a little between global and national. I do think mechanisms that where we see kind of products getting stuck because of things like we saw in the case of some of these vaccines of the uncertainty of the market or the lack of predictability for a government so that they can't actually introduce the product because they don't know they can sustain the financing long enough. Trying to think about some of those really pivotal products that we want to accelerate their access would be very important. As Susan said, the AMC is very structured for purpose and it was very much structured around the vaccine market but there are elements of it that may have value in other areas and there are other mechanisms. People have mentioned prizes and I mean in general I think prizes are very interesting for individuals, for scientists and whatnot. Firms that are actually in the business of making a good and selling it and continuing to exist by virtue of making these goods and selling it are a little less interested in prizes. It's nice to have the PR but at the end of the day they're not in the business of getting a prize. They're in the business of making and selling products. The kind of mechanisms in recognizing that you really need to say are we trying to incentivize scientists, individual scientists to kind of come up with the big product. We're trying to incentivize scaling up the supply and making sure that there's greater predictability about what the price will be going forward. I think things like that are things we would like to look at for some critical issues like diagnostics and whatnot. I think we've spent a lot of time focusing on the big pharma but in fact the biotech world is something that's a little bit untapped and we haven't cracked how to create incentives that would have an impact on how this enormous resource, this unbelievable levels of creativity and funding and all the rest, how we could really tap into some of those skills and harness them. I don't have an answer for what the mechanism might be at all but I do think it's a really interesting area that I would like to see us put our minds to. I think the third one I would highlight is more at the country level and that would be mechanisms that are tying a little bit of not all of the funding but tying a little bit of the funding to results. The need to align everyone's incentive to ensure that at the end of the day you can spend all the money you want on training and salaries and getting the buying products and building infrastructure and having all of the components of a health system but fundamentally making sure all of those components come together. So at the end of the day you have a health worker in the right place the right time with the right equipment or drugs with the motivation and the knowledge to deliver the service and with a population that's coming to the facility to demand those services that's the critical piece. It's that whole linkage to get you down to that end point. And so things like result space financing are ways to kind of look at that whole linkage down the chain or rather create the incentive that everybody in the chain creates the linkages addresses the problems and that you harness the creativity of the millions of health workers that are out there rather than trying to just solve a problem from the national level. But of course there's some real challenges with things like results space financing when you're playing with incentives and motivations if you design them wrong if you set up the wrong indicator the wrong system you can have some really perverse effects and so none of these things are magic bullets but I think all of them are important areas that we will be focusing some attention. I actually would add a fourth which is the public-private partnerships. I think that this bringing together the public sector and the private sector has been enormously valuable. Using many of the private sector approaches but recognizing and applying them against a public sector goal bringing in the skills and creating a space where the two groups the different sectors can actually talk to each other in common language and have the safety of understanding where they're each coming from and not vilifying it but rather working within to find the solution space. These partnerships have really done a lot and have really moved us forward in a number of ways and so I think this is an area that USAID is very interested in and US government generally I think is very interested in and so also I think as a not a specific goal but in terms of key players in this are important. I don't have any specific mechanisms things that are more the country-based we have things like results-based financing those are easier because a lot of our funding is focused in that way on issues like some of the new products we do have some mechanisms for supporting public-private partnerships and what not other areas we need to be thinking about creatively the whole sphere of something like how do you actually incentivize biotechs to move in certain directions in a global all-game no answers there. In terms of engaging we are very interested in engaging this is not a sit-in-a-dark room with three people and come up with an answer kind of field the real value of this is bringing in all of these different expertise and pushing and moving to kind of come with a solution and so you know for me listening to Susan talk about herd immunity like you know this was a normal term I mean when we first started working together at the World Bank I knew all about vaccines and markets markets of vaccines and immunizations I knew everything about finance and neither of us knew much about the other and it was by working together and bringing this different knowledge that we could end up structuring something that made sense and both of us walking away with the better expertise and knowledge of what we were doing and I think it's that in a much bigger sense of being able to tap into that and really move it so I'm so happy Wendy's here to hear all this because it's her job and we will want to look at figuring out some kind of consultative process to see how can we be engaging more regularly getting ideas or taking ideas and throwing them on the table and then having a dialogue around them and seeing where they fall out at the end of the day and so we are very interested in that and we would be interested in any specific thoughts you have about better mechanisms for engaging the right people and direct them all at Wendy and we will be back in touch with you as all of this moves forward. In our agency process it's going to be already underway and it depends on the issue I mean for sort of the big global financing mechanisms you know Treasury has the lead so USAID works with them because we're providing more of the knowledge about you know what is the value of doing something what is the development impact and the value but they have the lead in terms of defining what makes sense in terms of how funds, US funds are used in terms of issues at a country level and even some of the public-private partnerships in the USAID's budget and purview and so we have a lot of that going on but we engage other members of the government to improve the quality of what we're doing and so HHS and SDP and these other groups getting them together and sort of discussing it is something that we try and do as part of the kind of whole of government whole of government approach different topics might merit a special kind of committee discussion it depends on where you are in the stage of the process and when something starts to get legs as they say then at that point you know we could say look this would be a really useful thing for us to convene a special meeting or for you know someone bigger than us the White House or something to convene a special meeting to give it some serious consideration All right Well I know Amy's going to have to run off to have a cup of tea with Joe Biden or something in a few minutes so but before she goes just a quick question we're not going to have enough time but something that then goes over to John Amy do you think that when it comes to US involvement in a second advance market commitment or some extension of the IFFIM is it kind of a dead on arrival for the reasons that John is talking about or is there some scope is there some room for exploring ways to get involved a little bit more than John was describing and secondly if that's going to be small and it may be that may be the reality that we have to face some of the things like prizes where the amounts of money are smaller there's a precedent in the aerospace and military and energy areas the legislation is there to allow certain departments maybe not HHS or USAID to do it or something like even taking the small business innovation research program SBIR which has been very successful here which India may want to try to do are there easier areas that you see USAID and the government exploring even though AMC and IFIM have gotten a lot of noise are those basically non-starters I know I wouldn't say they're non-starters and John can correct me after I leave the room because ultimately he'll be more the decision maker but no I do think there is some room for creativity in this area I think that there is it's a careful weighing out of how is the best use of dollars and if the decision and that partly depends on how big is the impact which is linked to the product and the market and all these other issues but if there was something that we saw this would have huge impact and we really think it was the best use of the dollars to get that impact then with things like the AMC as John said there's room to consider it it has to come out properly in the equation on IFIM sort of being a straight donor on IFIM won't I don't think it happened whether there's creative ways that we could consider supporting it we're looking at different things right now so I think there's a lot more openness to thinking creatively but at the end of the day it's not about whether you like a mechanism or not it's about whether the one dollar you have is going to have greatest impact through that mechanism or through another means and I think that's the lens that we're trying to take to these things Amy we need to let you go but if you'd please join me in thanking Amy for participation today I just suggest that we open to the floor now for questions it's great that Wendy is still here so I know we can't invite you up to the table yet but I'm sure she'll be listening very carefully if there are other questions that come up regarding USAID so questions please, please and I ask if you please identify yourself and normally what we try to do is take questions in groups of two or three so if anyone else has a question we could take it now as well I'm Holly Wise I was the founder of the Global Development Alliance at AID and so I was happy that she ended with a mention of partnerships it's just a comment for Wendy and others about AID I think that the suggestion about the big cool stuff that Rob wrote about so nicely is great and we understand the issues there and then the examples of results based orientation are adorable not extensive and what I would suggest is we also have an opportunity to think about extremely boring procurement reform which is there's a little bit of a problem when you're thinking about results based financing in terms of the implementing partners they're not the grants they're cost based they're not price based and so I think there are two opportunities for the US Government to focus a little bit on the price of could we agree on the outputs and could we agree on some notional pricing around outputs in the way we structure projects and then could we amend our plumbing so that we can pay price as opposed to cost because a lot of what we talk about is sort of beating up health workers to work smarter and faster and do more but all of the in between of those and they don't have that same sort of structure in the way in which they're incentivized so it's more a comment than a question okay thanks any other questions gentlemen up in the front row here please thanks I'm Nick Burnett I'm a colleague of Robert's also working a bit on innovative finance but in my case on education but my question is about this problem of the US having to make appropriations year by year instrument that I think USAID has which perhaps could be thought about which is a guarantee instrument and I don't know exactly the leverage you can get but you certainly don't have to put so much money up in year one sorry in a particular year you don't have to put up 100 to guarantee 100 I don't know what the ratio is and I wonder if there's a thought about using that mechanism let's take one more question I think Catherine the lady back here hi Laura Schimp I work with John Snow Incorporated but for many years on USAID funded immunization projects and we've been pretty heavily involved with GAVI and IFUM and the advanced market commitment activities and one of the things that you both showed in your pie chart which is a continuing concern and one that GAVI has been trying to address in their latest iterations is what happens when recurrent operational costs aren't being met I think it was just 2% of the ISS funds in that pie chart were covered and we're finding that many of the countries now are stagnating because they were using the ISS monies to fund their operational costs rather than doing other enabling other financing to come in to cover those costs so the question is with future IFUMs or other activities how can we help put pressure on the governments to make sure that they are meeting the needs of what will actually get the vaccines out to the communities particularly with new and more expensive vaccines coming on board but then also ensuring the continuing commitment that we have I just participated in the Nigeria buy down assessment a month ago and it is successful in that they were purchasing vaccines that the Nigerian government could not cover themselves however the success of the approach depends on whether or not you achieve the objective which is eradicating polio so it's easy to fund commodities and it's easy to ensure that donors commit to that but really some of these operational costs and addressing how do we make sure that that gets taken care of so that when these new vaccines and other commodities come on board we can cover those costs and make sure they get out thanks great question why don't we take this first round I don't know if any of our panelists would like to volunteer and then we'll come back for a further round so first of all on AMC's which Robert mentioned as I mentioned it involves trade-offs and so when we were looking at the AMC for NUMO we were looking at what the trade-offs were with appropriating funds for that AMC NUMO versus others and involved budgets of individual agencies AID, HHS and I think that if the discussion was would this fail if the United States didn't participate we might have ended in a different point but the fact is that there were other donors who were willing to provide the resources that were needed to get this thing launched and we had these other ways of supporting the AMC I don't know if we would have been in a different point but that's that's what happened so we didn't participate in the AMC for NUMO with the original group would we participate in another again we'd have to look at the trade-offs at that point on the plumbing you're spot on I mean I think it's one of these things and I work in a lot of areas in terms of development finance and plumbing is a tough issue and procurement in particular is a tough issue but it's so important to get that right and I think it's something that we can never pay in my view never pay too much attention to because you can really get efficiency gains from procurement reform guarantees that's that's an option I think but we'd have to get into scoring in terms of how that would be scored and we just never got there but it's something to continue to look at I don't know if it would fit into what the World Bank and the IFIM folks would need but it would be something that we could look at we're always happy to take money at any time and then final point health systems I think is an area which everybody recognizes has not been adequately addressed and I think that there's a lot of discussion now on how that can be improved and I know the World Bank together with Gavi and the Global Fund they have a platform that they're working on and then with WHO I think this is really where a lot of the attention is being paid and I realize there's a lot of concerns about sustainability and health systems is where the attention needs to be paid I mean all great questions just one additional complimentary answer to your question about operating costs or recurring costs I think that our institute does a fair amount of other work with Gavi and I have to say one of the things I'm impressed about is that it's not just about the purchase of the vaccine the whole program over time they're very conscious of it when they cost these things out it's not just the cost of the vaccine and the vial excuse me it's the total product and Gavi is notable I'd say among some of the global programs in that it takes very seriously the question of co-financing or cost sharing between the countries and the donors and the purpose there really is to see that there's a smooth trajectory toward self sufficiently when these countries graduate because as they get richer they actually will move away from Gavi there's a tough ceiling there in terms of per capita income and these countries are going to need to take on these programs fully once they graduate from Gavi so this is I think is a real issue I don't think Gavi solved the problem but I think they take it very very seriously and I think it's a major part of the effort in that area Susan did you want to add anything okay any other questions please sir hi my name is Ahmed Mir I retired from the foreign service and dealt basically with science and health policy one of the things I had that tremendous difficulty is getting US support for vaccine development in developing countries one was the vaccine institute in Korea where we were so concerned about Korean sort of history of patent protection and so on that we didn't support it we fought with the CDC officer who they hired to head it and similarly I developed a major vaccine program in India with AID money and there was tremendous politics involved in it it seems to me that one way we can enhance financing is one is to advance scientific collaboration do outsourcing in a way because in the developing countries you can find expertise and encourage both our industry and our government programs in these areas I believe that everybody regards CDC and NIH is the best places to work with you can get the most brilliant people around the world to work with them I think building leaders in African countries we focused on some of the big ones like Brazil and India and so on but we should focus the African countries to build their own leaders through our scientific collaboration and I think you can enhance it by encouraging both state and AID to focus on this area and it would be important the other thing which is really dangerous for me to tread on is can we stop reducing the patent protection for vaccines if we could reduce the period and secondly if we can get them to share their knowledge and develop generics in the poorer countries like Brazil India and so on where the development would be cheaper I think that is an indirect way of getting better financing Thank you and I think that is a great essay just a comment which is in the question the comment on the historical survey looking back in time at innovative financing mechanisms often left out is the debt cancellation that took place at the end of the 90s and in 2000 and that is in a sense a form of innovative financing in a number of countries that resulted in additional resources for the new economics foundation played an important role but I was involved with it at the time and it was the product and the eventual result would not have happened without the noise would not have happened without civil society involvement particularly from religious activists but from others as well but just a question I know you are familiar with what I have just been talking about and I wanted to just ask you as you look at the deficit reduction commission that is studying ways to address our fiscal problem in this country and as you look at the momentum in Japan and in France and Belgium and other countries for the currency transaction tax could you imagine a scenario in which the U.S. would support a tax on the dollar on the trade and the dollar which the leading group as you know the leading group's task force is innovative financing and transaction taxes is recommending going forward and we'll see what happens with Belgium and France obviously on this but I wanted to ask you about that could you see a scenario in which that would satisfy both needs is what I'm suggesting looking at helping to resolve the U.S. own fiscal problems but also creating an unavoidable tax and also create enough revenue to solve the resource deficit assuming that the U.S. still sees it as a problem that resource deficit for health or for climate do we have another question out there panelists with respect to patents I'm not by any means an expert in this area but I do know some discussion in terms of patent pools so this is something that's being looked at and analyzed and there's and I can see some scope for where as there are patents being held that there be some means for purchasing that and then being able to sort of release the intellectual property as a result of that but that's as far as I'll go because I'm not an expert in that area and it's like oh yeah I'm also not an expert in fact I'm mostly Amy Batson trained on this one as well so subject to correction also from Rob but patent protection for vaccines is very different from drugs I'm sure you know this from the work you've already done there has been there have been a number of efforts recently to try to work on sharing vaccine technology one major company and a company in India another and a company in Brazil and it's very hard and it's very distinct to the vaccines because the technology is just much more complicated and it isn't just the technology I mean there really is a reason why they patent functionally patent the whole factory and I'm speaking in generics but they're these are bugs they're not drugs and the way it works is different for every factory even if the factory is next door certainly if it's another part of the world so patent pooling is viewed as a less efficient way to get to the same goal potentially at least for these newer vaccines that are technologically quite difficult to take six months to develop but the single batch and so on doesn't mean no it just means it's not necessarily the most efficient next step like it emphatically is and has been for drugs but it is the same goal though you want to develop generics you want the emergencies to come in and to develop generics that will bring the prices down in either case so maybe not that path but definitely the same goal the easy one no we've had a policy of not supporting in taxes on international transactions and the best of my knowledge that hasn't changed I think I might just pose one last one then and actually I think Susan it's for you and it's just coming back to the sort of global economic situation you know and the fact that so many of these mechanisms have been primarily supported by European donors and that those economies now are hurting and it looks like that might be the case for a while do you have a sense of that's going to have an impact on the continued support I mean what I mean to go to your point John that you made before which is well if no one else had come forward you know maybe we might have to help get this off the ground I mean how long do you think European governments are going to be in this for what is their attention span this is the multi-billion dollar question well the indications are all over the map different countries have very different situations countries where the government has just shifted we're all waiting to see what will happen for example in the UK which has been a primary supporter of a lot of these things and the new government has said it intends to keep to its ODA commitments and we're crossing our fingers that they will there are five major you know many multi-billion dollar replenishments multilateral replenishments going on in 2010 the global environment facility just finished its replenishment with an agreed increase of 55% overall which is very promising except for the fact the climate change is kind of the it girl in the international development circles at the moment and it's you can't tell if that's going to be at the expense of health which was the it girl eight or ten years ago if I can be so bold about this but right now IDA the international development association the african development fund their concessional window Gavi that we've been talking about the reliance for vaccines and immunization the global fund to fight AIDS TV and malaria are all looking for replenishments along the lines of you know three four five two thirty forty plus billion and everyone is running around every government is trying to figure out what it's going to do they're definitely tight it's definitely strained politically but it's not it doesn't look as disastrous as I thought it would at this point people are working very hard to at least keep stuff level it's not a time to launch a big new fund but it's not as devastating and depressing as I thought it would be keep your fingers crossed that's always good to end in an upbeat note so thank you all very much for joining us today and please join me in thanking our panelists