The America First Global Health Strategy and Pooled Procurement

Overview

The State Department’s recently released “America First Global Health Strategy” – the first roadmap for what comes next for U.S. global health engagement – charts a path of declining U.S. support over time as recipient countries increasingly take on financial responsibility for programs. It includes a focus on health commodities, as frontline services, stating that the U.S. will continue to support 100% of their costs in FY 2026, with declining funding thereafter as countries are required to provide progressively higher co-investment. To support this transition, the U.S. will establish or contribute to one or more pooled procurement mechanisms, marking a departure from current practice where most commodities have been provided by the U.S. through its own stand-alone, managed channels, with limited support to external pooled procurement entities. Whether the U.S. chooses to create a new pooled procurement mechanism or shift to existing ones will be a key decision point going forward. To help inform this decision, we reviewed eight global and regional pooled procurement mechanisms to identify their key characteristics, including their operational longevity, geographic reach, range of products offered, whether the U.S. already uses to mechanism, and other components.¹ As this review shows, there are several existing pooled procurement platforms with significant longevity, broad geographic reach, offering a range of commodities, allowing access to countries that have transitioned off donor support, and in which the U.S. already participates to varying extents. There are also others with a narrower scope or in which the U.S. does not participate. Summary measures are provided in Table 1. Detailed information is provided in an Appendix.

Note: In most cases, these mechanisms also provide diagnostics, supplies, and devices. See Appendix for more details.

Introduction

The State Department’s recently released “America First Global Health Strategy” offers the first roadmap for what comes next for U.S. global health engagement, following months of significant uncertainty and disruption. The strategy focuses on a subset of U.S. global health areas – HIV, TB, malaria, polio, and global health security – and is largely anchored to time-bound, bilateral agreements that aim to move most partner countries toward full self-reliance. A key feature of the strategy is its emphasis on health commodities, noting that the U.S. spends approximately $1.3 billion per year directly on commodities for HIV, TB, malaria, and polio (with some additional funding provided to several multilateral organizations). According to the strategy, the U.S. will continue covering 100% of these commodity costs in FY 2026, with declining funding thereafter, as countries are required to provide progressively higher co-investment. To support this transition, the U.S. intends to establish or contribute to one or more pooled procurement mechanisms. Pooled procurement refers to the consolidation of demand across multiple buyers with the goal of obtaining lower prices, reduced transaction and administrative costs, streamlined quality assurance, and more predictable markets, all of which can help improve better access. It is one tool in a larger “market shaping” toolbox that may include other activities such as demand forecasting, market analysis, and technical assistance, among others.²

Shifting to pooled procurement for health commodities would mark a departure from current U.S. practice which has historically been carried out through U.S. stand-alone and managed supply chain contracts (with only some funding provided to external pooled procurement mechanisms both directly and indirectly). Until recently, this work was overseen and managed by the now-dissolved USAID. Procurement responsibilities have since moved to the State Department, which has not carried out large-scale health commodity procurement before (see Table 2 and Box 1). Whether the U.S. chooses to create a new pooled procurement mechanism or shift to existing ones will be a key decision point going forward (the recently announced partnership between the U.S., the Global Fund, and Gilead to provide Lenacapavir – a long acting medication for pre-exposure HIV prevention – to a subset of countries, in which the U.S. will support procurement for its implementing partners through the Global Fund’s platform, offers a potential new model in this area). To help inform this decision, we reviewed eight pooled procurement mechanisms operating at the global and regional levels to identify their key characteristics. For each mechanism, we examined years of operation, governance, financing models, geographic scope, product portfolios, eligibility, price transparency, annual expenditures, and other components.

Characteristics of Existing Mechanisms

The landscape of existing pooled procurement mechanisms is diverse, with variations in geographic scope, product lines, eligibility, financing, governance, and other characteristics.

1. Years Operational/Longevity. Most pooled procurement mechanisms examined have significant longevity, having been operating for decades. Five of the eight have 20+ years of operational experience, with established systems for vendor management, quality assurance, audits and oversight, forecasting, and broader market shaping practices. UNICEF is the oldest, having operated pooled procurement for more than six decades, followed by PAHO, with close to five decades. Gavi and the Global Fund began pooled procurement in the early 2000s, at or soon after each organization was established. The OECS-PP mechanism, while small, has also been operating for years. The exception is the AU’s Medical Supplies Platform which was created in 2020 as a COVID-19 emergency response mechanism but has since expanded to include other commodities and is slated to serve as the procurement platform for the recently proposed African Pooled Procurement Mechanism (APPM).
2. Geographic Reach. Five of the mechanisms have a global reach while the remaining three are regional. Gavi, GDF, the Global Fund, UNICEF and UNFPA are global procurement mechanisms, encompassing the countries also reached by the U.S. through its bilateral programs. These mechanisms enable countries and non-governmental organizations from all regions to procure supported products (though some have eligibility limits by income and other factors – see below). PAHO, AMSP, and OECS PP are available to their regional members.
3. Governance/Type of Organization. Five ofthe mechanisms examined are part of inter-governmental bodies, with governance provided by member states (UNICEF, UNFPA, PAHO, AMSP, OECS PP), three of which are part of the United Nations system (UNICEF, UNFPA, and PAHO). Gavi and the Global Fund are unique in that they are independent public/private partnerships with governance by multi-stakeholder boards that include public and private sector representatives as well as civil society. The GDF, as part of the Stop TB Partnership, is a hybrid model, hosted by the UN with some UN oversight, but a multi-stakeholder board of public, private, and civil society members. The U.S. is currently part of the governance structure of all these institutions except for the AMSP and OECS PP, which are for their regional members only.
4. Eligibility: Eligibility to access pooled procurement mechanisms varies, reflecting organizational missions, policies, membership, and other factors. The inter-governmental mechanisms primarily serve member states, either globally (UNICEF, UNFPA) or regionally (PAHO, AMSP, OECS PP). Gavi and the Global Fund, while global, limit eligibility to countries based on income and, in the case of the Global Fund, epidemiologic criteria, but they also make pooled procurement available to formerly eligible countries using their own or other funds. Several of these mechanisms also allow certain other designated entities (NGOs, private organizations, etc.) to use their pooled procurement system, usually on behalf of an eligible country.
5. Product Portfolio: The product portfolios of these mechanisms range from specialized to broad. Broad portfolios, providing products for a range of health areas, are offered by UNICEF, PAHO, and the OECS PP. More specialized portfolios are offered by the Global Fund (HIV, TB, malaria), the GDF (TB), Gavi (vaccines) and UNFPA (reproductive health). AMSP intends to expand but offers a more limited portfolio currently. All provide related supplies and equipment in addition to commodities and several also offer procurement services. There has also been a move to expand the range of commodities offered over time. For example, PAHO has added commodities to address non-communicable diseases in recent years³ and wambo.org, the Global Fund’s electronic pooled procurement platform, also offers access to select catalog platforms from other organizations, making it the only pooled procurement mechanism to do so.⁴
6. Financing: The pooled procurement mechanisms examined have different financing models, ranging from being fully self-financed to relying primarily on donor support. PAHO and the OECS PP are self-financed, with member states paying for products. Gavi, GDF, and the Global Fund depend almost entirely on donor funding to enable them to procure commodities for eligible countries or entities, although they allow eligible countries and other entities to use their own funds to procure through their systems. UNICEF and UNFPA, while also relying heavily on donor funding, also allow member states and others to use their own funding to purchase commodities.
7. Pre-Financing/Lines of Credit. UNICEF, UNFPA and PAHO each offer pre-financing lines of credit to address liquidity and other constraints that can prevent countries from meeting pre-payment requirements to procure commodities. UNICEF’s Vaccine Independence Initiative offers a flexible credit line to bridge temporary short-term funding gaps for vaccines and other commodities, and its Middle-Income Countries’ Financing Facility (MFF), supported by Gavi, offers pre-financing for middle-income countries no longer receiving donor support. UNFPA’s Reproductive Health Bridging Fund is a revolving fund that allows for short-term, interest-free bridge financing for eligible countries to access supplies without needing to pre-pay. Similarly, PAHO’s Regional Revolving Funds (RRF) offer an interest-free line of credit to member states for commodities. The Global Fund is currently assessing the possibility of implementing such a mechanism to address the pre-payment barriers that some countries may face when using their own funds to purchase commodities.⁵
8. Price Negotiation/Transparency and Quality Assurance. A key feature of the pooled procurement mechanisms examined is their ability to negotiate price, due to their aggregation of demand across multiple countries/buyers, volume guarantees, and, in some cases, advance market commitments for new products (allowing the price at entry to be lower than it would otherwise). As part of this effort, all but one of the mechanisms (OECS PP) provide public pricing data and product catalogs, promoting market transparency and predictability. All also provide varying levels of quality assurance, particularly those with the greatest longevity, including supplier pre-qualification, product eligibility criteria (e.g., only products that are pre-qualified by WHO or designated regulatory authorities) and product testing and support throughout the supply chain, including after products reach countries.
9. Inter-connectedness Across Mechanisms. While the mechanisms examined here are separate, operating with their own rules and procedures, several are interconnected. For example, most of Gavi’s vaccines are procured for Gavi by UNICEF (Gavi eligible countries in the PAHO region can procure through PAHO); the Global Fund’s TB products are procured through the GDF; and PAHO’s antiretroviral (ARV) products are procured using Global Fund negotiated prices. This inter-connectedness is done to leverage market share (e.g., PAHO using the Global Fund for ARVs); reflect geographic proximity (Gavi-eligible countries in the PAHO region); and/or due to the presence of existing mechanisms already (UNICEF procurement of vaccines pre-dated the creation of Gavi by decades and the GDF was created before the Global Fund).
10. Expenditures & Fees. Estimated expenditures on health products vary widely across mechanisms, reflecting differences in scale—from smaller, regionally focused platforms to large global procurement operations exceeding billions annually. The largest procurement mechanisms, as measured by spending, are UNICEF ($3 billion), the Global Fund ($2.5 billion), and Gavi ($1.8 billion). Because of the inter-connectedness across mechanisms, however, the annual expenditure estimates cannot be totaled. For example, while UNICEF spends the most on procurement each year, the majority of this is financed by Gavi for vaccines. In addition, TB commodities purchased by the Global Fund are included in its total procurement expenditure amount as well as in the GDF total. While there are also administrative costs for participating in pooled procurement mechanisms that are important to consider, there are limited publicly available data on fee schedules (exceptions are UNICEF and PAHO⁶).

Looking Ahead

As this review shows, there are several existing pooled procurement platforms with significant longevity, broad geographic reach, offering a range of commodities, allowing access to countries that have transitioned off donor support, and in which the U.S. already participates to varying extents. Looking ahead, key considerations for U.S. policymakers may include:

• Further assessing the current commodity portfolios of existing mechanisms as compared to the U.S. commodity portfolio;
• Identifying the different ways in which the U.S. government could choose to participate in these mechanisms (e.g., purchasing directly through them for some or all commodities, funding countries to purchase through them, or some combination);
• Examining the barriers to direct country participation in global pooled procurement mechanisms (e.g., pre-payment requirements, regulatory barriers) and ways to mitigate these barriers; and
• Assessing the growing move to create regional pooled procurement mechanisms, particularly in Africa, and whether and how the U.S. might choose to support these efforts.