A new initiative called the Pledge Guarantee for Health, which has just completed a two-year pilot program, is now receiving support from major American organizations from both the public and private sectors.
The Pledge Guarantee for Health is a loan insurance program for health commodities designed to help countries in need of health care supplies. Its mission is to help governments and NGOs secure funding for essential health care products.
This accomplished by providing third-party guarantors for loans issued to NGOs or governments. This process allows them to obtain funding six to eight months sooner than usual, allowing essential health care products such as bed nets, vaccines and antibiotics to reach patients much faster.
An additional benefit of the program is that the increases funding speed also enhances the predictability of supply, helping to reduce problems related to stock shortages or transportation costs.
USAID, a US government agency that helps fund international assistance programs all over the world, has committed to guaranteeing $50 million worth of Pledge Guarantee for Health loans in conjunction with the Swedish International Development Cooperation Agency. These funds will effectively double the funding power of the program to $100 million.
Merck, one of the world’s largest pharmaceutical companies, has also agreed to offer Pledge Guarantee for Health loan recipients with health products at a discounted price. The cost savings generated by these discounts will offset the financing costs related to the loans used to purchase the needed products.
The Pledge Guarantee for Health was first established two years ago by the United Nations Foundation in conjunction with organizations such as the Bill and Melinda Gates Foundation and USAID. It started out as a pilot program that proved to be effective by helping UNICEF send bed nets to Zambia much faster than usual, ensuring that they were delivered in time to help prevent an outbreak of malaria during the rainy season.
The involvement of these major organizations in helping to back this program will greatly contribute to increasing its scope. It is hoped that this initiative will help accomplish the Millennium Development Goal of eradicating preventable child mortality within a generation.
The participation of Merck as well as other companies highlights how the private sector can help this and other Millennium Development Goals be achieved. USAID has stated that in the area of preventable child deaths in particular, partnerships with the private sector to provide financing and share risk with government agencies can help remove bureaucratic obstacles and therefore save more lives. Hopefully this will serve as a model for other innovative types of partnerships with the private sector.
– Caroline Poterio Martinez
Source: USAID Blog