Global Contraceptive Commodity Gap Analysis - Summary
Publication date: 2016
1GLOBAL CONTRACEPTIVE COMMODITY GAP ANALYSIS Global Contraceptive Commodity Gap Analysis Summary NOVEMBER 2016 Acknowledgements The Reproductive Health Supplies Coalition extends its thanks to the authors of this Global Contraceptive Commodity Gap Analysis: Nina Miller, Michelle Weinberger, Emily Sonneveldt, Mindy Scibilia, Maggie Murphy, and Alexis Heaton. We also express our gratitude to the Analysis Advisory Committee and the many partners and stakeholders, listed on pages 11 and 12, who contributed their time, opinions, and data to shape the contents of this report. Of special note is FP2020, which generously contributed their 2016 core indicator estimates in advance of the publication of their 2016 Annual Report. Finally, we thank Coalition Secretariat member Lucian Alexe for his skillful design and layout of this publication. 1GLOBAL CONTRACEPTIVE COMMODITY GAP ANALYSIS ® What will it take to ensure commodity security for the unprecedented number of women who will rely on modern methods of contraception in the year 2020? ® As we move closer to achieving the FP2020 goal, can we quantify the gap between the amount of contraceptive supplies currently consumed and the quantities that will be needed in 2020? ® How much is currently spent on contraceptive supplies, and how much additional spending will be required to keep pace with demand? ® Do international donors, governments, and the private sector contribute equal shares of total spending on contraceptive supplies? ® If donors fail to increase, or at least maintain, their spending on contraceptive supplies, what additional burden will be placed on countries’ domestic resources and on individuals? Global Contraceptive Commodity Gap Analysis The political commitment to expanding access to family planning has never been so strong or so widespread. Universal access to sexual and reproductive health care services, including for family planning, is one of the targets of the Social Development Goals. Ninety-three governments, donors, civil society organizations, and other partners have made formal commitments to the FP2020 initiative.1 In this environment it is imperative that we address these critical questions. We cannot expand access to family planning without producing and providing larger quantities of high quality contraceptive supplies that will meet women’s diverse needs and preferences. None of the questions lend themselves to simple answers. Fortunately, our community has developed a rich array of methodologies and data sources. Unfortunately, they can lead to a proliferation of seemingly conflicting findings and confusing, or even contradictory, messages. Therefore, in taking up the challenge of projecting and quantifying the growing demand for contraceptive supplies, we turned to the convening power of the Reproductive Health Supplies Coalition (RHSC) to think strategically about the value these methodologies offer and the ways they may be sequenced or juxtaposed to provide greater insights. We engaged in wide ranging consultations with 43 donors, manufacturers, advocates, and technical experts, representing 24 agencies and organizations. The result is RHSC’s groundbreaking Global Contraceptive Commodity Gap Analysis (CGA). Our analysis brings together Track20’s2 innovative approach to measuring the number of contraceptive users3 and modeling changes in method mix; contraceptive prevalence projections from the United Nations Population Division4; public sector product price research by the Guttmacher Institute5; donor spending data collected by UNFPA6 and NIDI7; Avenir Health’s8 approach to measuring total spending on contraceptive supplies; and insights from an analysis of country-produced quantification reports provided by CHAI9 and JSI10. The findings we present comprise individual estimates11 for 135 low- and middle-income countries.12 In addition, we highlight important findings for the subset of 69 FP2020 focus countries. To ensure that our analysis uses the most up-to-date information available, FP2020 shared its 2016 data with us in advance of the publication of its annual report.13 The wealth of expertise in the global family planning community, the prospect of new analyses and data that will become available in the coming months, the limitations of what we were able to include in this report, and, most importantly, the urgent need to ensure contraceptive commodity security, all point to the importance of the CGA as an annual exercise. 2GLOBAL CONTRACEPTIVE COMMODITY GAP ANALYSIS What will it take to ensure commodity security for the unprecedented number of women who will rely on modern methods of contraception14 in the year 2020? What is the gap between the amount of supplies currently consumed and the quantities that will be needed in 2020? The answers to these questions depend on the assumptions one makes about growth in the number of contraceptive users and changes in method mix between now and 2020. We posit two scenarios that take us from 2016 to the year 2020. Scenario A assumes that each country will persist in its current growth pattern. Scenario B envisions the achievement of FP2020’s flagship goal, namely 120 million more users of contraception in 2020 than there were in 2012.15 It also includes increases in contraceptive use across the other 66 countries in our analysis. Our calculation of the quantity and cost of the contraceptive supplies consumed by women is based on the number of users of each method. Interviews with individual women generate the data on contraceptive use collected by DHS16, MICs17, PMA202018 and national and subnational health, socio-economic, and fertility surveys. All of these sources contribute to our estimates of the number of users of each method. We also know that over time, changes in method preferences and availability shift. Therefore, both scenarios build in annual changes to method mix that rely on patterns observed from these same surveys. The graphs on the following page show the change in the number of users of each method over time under Scenarios A and B. Users of contraception in 2016 452.7M IN 135 LMI COUNTRIES Including 300.3M IN 69 FP2020 COUNTRIES 2020 SCENARIO A 490.3M IN 135 LMI COUNTRIES 334M IN 69 FP2020 COUNTRIES 2020 SCENARIO B 549.9M IN 135 LMI COUNTRIES 390.1M IN 69 FP2020 COUNTRIES There are currently 452.7 million women who rely on modern methods of contraception living in the 135 LMI countries. They include both married and unmarried women, served by both the public and the private sectors. 3GLOBAL CONTRACEPTIVE COMMODITY GAP ANALYSIS 0 2016 20 40 60 80 100 120 140 160 180 millions millions SHIFT IN METHOD MIX FROM 2016 TO 2020 The total number of contraceptive users increases over time, but not all methods gain equally and in fact in some scenarios suggest relative declines in use. Each scenario projects changes in method mix for the set of 135 LMI countries and subset of 69 FP2020 focus countries. 4GLOBAL CONTRACEPTIVE COMMODITY GAP ANALYSIS The amount of supplies required by women is a starting point for governments to forecast the need for products. The forecast is adjusted to account for plans to expand or contract services, policy changes that increase access or introduce new methods, or the introduction of new products. The forecast is then used to develop a procurement plan, taking into account the quantity required to fill supply pipelines and maintain adequate inventory levels, from central warehouses to individual service delivery points. The procurement plan also takes into account the amount of supplies already present or on order, as well as wastage or “leakage” of supplies at various levels. Constraints on funding, price incentives, and preferences by donors or the government itself for particular methods or products may also influence a government’s determination of what supplies it will purchase. To help distinguish between these very different concepts, we define the amount of supplies that individuals can “consume” as the consumption quantity, and its cost as the consumption cost. We refer to the amount of supplies that countries request as the procurement quantity, and its cost as the procurement cost. We used established methodologies to calculate the quantity of contraceptive commodities and associated clinical supplies that women will consume on an annual basis. We multiplied these quantities by product prices to determine the total cost of the supplies.19 Because of cost differences and the variable duration of protection, the relative contribution of any single method to the total method mix does not equate with its relative contribution to total costs. For example, in the adjacent figure, the left column shows the current (2016) contraceptive method mix among the 69 FP2020 countries. In the right column, we show what that mix equates to in terms of relative cost. Note that while injectables make up only 19 percent of the total method mix, they account for 44 percent of the total spend. 0 20 40 60 80 100 38% 3% 5% 1% 44% 36% 8% 3% 9% 19% 15% 15% 1% 1% METHOD USE 2016 METHOD COST 2016 Sterilization Sterilization Implants Implants IUDs IUDs Injectables 69 FP2020 Focus Countries Injectables Pills Pills Condoms (male) Condoms (male) OtherOther METHOD MIX VS RELATIVE CONSUMPTION COST In 2016, the total cost of all supplies consumed by users of contraception in the 135 LMI countries is $1.352 billion. If current growth patterns continue to 2020, as anticipated under Scenario A, this cost will increase by $173 million to reach $1.525 billion. 5GLOBAL CONTRACEPTIVE COMMODITY GAP ANALYSIS How much is currently spent on contraceptive supplies, and how much additional spending will be required to keep pace with demand? Do international donors, governments, and the private sector contribute equal shares of total spending on contraceptive supplies? To address these questions, we produced an estimate of total spending on supplies across the 135 LMI countries, and within that, spending amongst the subset of 69 FP2020 countries.20 We divide the amount spent across three categories: public sector spending by donors21, public sector spending by governments22, and private sector spending23. Public sector spending by donors captures direct spending on supplies, monetary contributions used to underwrite supply procurement, in–kind contributions of supplies, basket funds provided by donors and used by governments to procure supplies, and World Bank loan funds used to procure supplies. Public sector spending by governments is comprised of spending by the governments of the 135 LMI countries using internally generated revenue. Private sector spending consists mainly of out-of-pocket spending by individuals purchasing their own supplies, and a smaller amount representing employer-provided health services. Data from NIDI informed this category, and where gaps in data were present, we inferred private sector spending by extracting from the DHS and other household surveys the number of users of each method of contraception who indicated they received services and supplies from a private sector provider. The quantity of supplies these users would consume in a year was then costed using commodity prices appropriate to each method in each country. Our spending baseline is set for 2014, since that is the most recent year for which we have sufficient data. In 2014, the 135 LMI countries saw donors contribute 25% of spending on supplies, while governments (using internally generated revenue) contributed 17% and the private sector 58%. In the same year, the 69 FP2020 focus countries saw donors contribute 30%, governments 15%, and the private sector 54% of spending on supplies. To calculate the amount of additional funding for supplies required under Scenarios A and B, we compared the amount spent in 201424 to our estimated consumption cost of supplies for each year from 2016 to 202025. By maintaining the percentages of total spending attributed to each type of spender, we estimate the required additional funding from each spending source. If the FP2020 goal is achieved, 390.1 million users of contraception living in 69 focus countries will consume supplies costing a total of $1.259 billion. This is $437.4 million more than was spent on supplies in the 69 countries in 2014. In 2014, $1.203 billion was spent on contraceptive supplies across the 135 LMI countries. In the 69 FP2020 focus countries, the total spent on supplies was $821.8 million. 6GLOBAL CONTRACEPTIVE COMMODITY GAP ANALYSIS The figures on the next page look at the financial consequences of Scenario A and B for the 135 LMI countries and 69 FP2020 focus countries. The blue pie chart on the left represents total spending on supplies in 2014, divided by each type of spender. The pie charts to the right represent the consumption costs in 2020 under Scenario A and Scenario B. They show what each spender would need to contribute in 2020 if 2014 spending allocations remained the same. The charts also illustrate the consequences of spenders failing to keep pace with growth in demand. Should FP2020 reach its goal of 120 million additional contraceptive users (Scenario B), for example, but donors did not increase their spending on supplies above the 2014 amount, it could lead to a gap of $132.2 million that would need to be filled either by governments or by users themselves. 7GLOBAL CONTRACEPTIVE COMMODITY GAP ANALYSIS $1.2BN TOTAL SPENDING IN 2014 $1.5BN IN 2020 DONOR $305.5M (25%) DONOR $387.2M (25%) GOVERNMENTS $202.9M (17%) GOVERNMENTS $257.2M (17%) PRIVATE SECTOR $694.9M (58%) PRIVATE SECTOR $880.9M (58%) DONOR $442.8M (25%) GOVERNMENTS $294.1M (17%) PRIVATE SECTOR $1BN (58%) $822M TOTAL SPENDING IN 2014 DONOR $248.4M (30%) DONOR $318.9M (30%) GOVERNMENTS $126.3M (15%) GOVERNMENTS $162.1M (15%) PRIVATE SECTOR $447.1M (55%) PRIVATE SECTOR $574M (55%) DONOR $380.6M (30%) GOVERNMENTS $193.5M (15%) PRIVATE SECTOR $685.1M (55%) A A $1.74BN IN 2020 B B PUBLIC SECTOR TOTAL 42% PUBLIC SECTOR TOTAL 45% $1.055BN IN 2020 $1.259BN IN 2020 13 5 LM I C O U NT RI ES 69 F P2 02 0 CO U NT RI ES GROWTH IN REQUIRED SPENDING: SCENARIOS A VERSUS B 8GLOBAL CONTRACEPTIVE COMMODITY GAP ANALYSIS Our ability to predict procurement quantities and costs is more circumscribed. For various reasons, visibility into government quantification reports that contain forecasts and procurement plans is very limited. In this analysis, therefore, we used data from the available quantification reports to project aggregate procurement quantities and costs for the years 2016 through 2020 for the eleven countries participating in the Global Financing Facility26, a subset of 20 countries that we examined. It is our hope that subsequent iterations of this CGA will benefit from insights found in quantification reports from a larger number of countries. The quantification report analysis determined that the 2016 procurement cost, for the public sector only, in the eleven GFF countries is $170.1 million (including freight). Total public sector spending on supplies in these eleven countries was $130 million in 2014, so already in 2016, we see a gap of $40.1 million. As shown below, by 2020, the procurement cost will increase by 67% to $284.6 million, which presents a gap of $154.7 million. 300 250 200 150 100 50 2016 201720152014 2018 2019 2020 $130M spent by the public sector on supplies in 2014 $170M $228M $262M $235M $285M Millions US Dollars +$154.7M (119%) from 2014 spending PROJECTED GROWTH OF PROCUREMENT COSTS IN THE 11 GFF COUNTRIES 9GLOBAL CONTRACEPTIVE COMMODITY GAP ANALYSIS The following tables present our topline findings for both the 135 LMI and 69 FP2020 countries under Scenario A and Scenario B. NOW 135 LMI COUNTRIES 2020 135 LMI COUNTRIES NOW 69 FP2020 COUNTRIES 2020 69 FP2020 COUNTRIES USERS of all methods of contraception 452.7M users in 2016 490.3M users in 2020 +37.6M more than 2016 + 8% increase 300.3M users in 2016 334M users in 2020 + 33.7M more than 2016 + 11% increase COST of consumption of supplies, all methods $1.352BN cost in 2016 $1.525BN cost in 2020 + $173.2M more than 2016 + 12% increase $895.9M cost in 2016 $1.055BN cost in 2020 + $159.1M more than 2016 + 17% increase SPENDING on supplies; all sources $1.203BN spent in 2014 $1.525BN needed in 2020 + $322.1M more than 2014 + 27% increase $821.8M spent in 2014 $1.055BN needed in 2020 + $233.3M more than 2014 + 28% increase —by donors funds from aid agencies, NGOs, basket funds, loans $305.5M (25% in 2014) $387.2M needed in 2020 + $81.7M more than 2014 $248.4M (30% in 2014) $318.9M needed in 2020 + $70.5M more than 2014 —by governments using internally generated revenue $202.9M (17% in 2014) $257.2M needed in 2020 + $54.3M more than 2014 $126.3M (15% in 2014) $162.1M needed in 2020 + $35.8M more than 2014 —by private sector mostly spending by individuals $694.9M (58% in 2014) $880.9M needed in 2020 + $186M more than 2014 $447.1M (54% in 2014) $574M needed in 2020 + $126.9M more than 2014 SCENARIO A: Each country persists in its current growth pattern 10GLOBAL CONTRACEPTIVE COMMODITY GAP ANALYSIS NOW 135 LMI COUNTRIES 2020 135 LMI COUNTRIES NOW 69 FP2020 COUNTRIES 2020 69 FP2020 COUNTRIES USERS of all methods of contraception 452.7M users in 2016 549.9M users in 2020 +97.1M more than 2016 + 21%% increase 300.3M users in 2016 390.1M users in 2020 + 89.8M more than 2016 + 29% increase COST of consumption of supplies, all methods $1.352BN cost in 2016 $1.744BN cost in 2020 + $392.4M more than 2016 + 29% increase $895.9M cost in 2016 $1.259BN cost in 2020 + $363.2M more than 2016 + 40% increase SPENDING on supplies; all sources $1.203BN spent in 2014 $1.744BN needed in 2020 + $541.2M more than 2014 + 45% increase $821.8M spent in 2014 $1.259BN needed in 2020 + $437.4M more than 2014 + 53% increase —by donors funds from aid agencies, NGOs, basket funds, loans $305.5M (25% in 2014) $442.8M needed in 2020 + $137.3M more than 2014 $248.4M (30% in 2014) $380.6M needed in 2020 + $132.2M more than 2014 —by governments using internally generated revenue $202.9M (17% in 2014) $294.1M needed in 2020 + $91.2M more than 2014 $126.3M (15% in 2014) $193.5M needed in 2020 + $67.2M more than 2014 —by private sector mostly spending by individuals $694.9M (58% in 2014) $1.007BN needed in 2020 + $312.6M more than 2014 $447.1M (54% in 2014) $685.1M needed in 2020 + $238M more than 2014 SCENARIO B: Growth in all countries accelerates as FP2020 goal is achieved 11GLOBAL CONTRACEPTIVE COMMODITY GAP ANALYSIS The Development of the CGA Project The Reproductive Health Supplies Coalition envisioned this commodity gap analysis as a means of bringing together diverse data sources and methodologies related to contraceptive supply security for the purpose of producing actionable information for a broad range of stakeholders. To determine what data sources and methodologies to draw from, and which stakeholders to consult about their information needs, RHSC convened a small group of advisors to provide formative guidance. A stakeholder consultation for the CGA project was conducted in March and April of 2016. It comprised interviews with 30 individuals from 19 agencies and organizations. Following the stakeholder consultation, RHSC convened a group of technical experts to discuss the range and potential of available data sources and methodologies that might contribute to the CGA project. CGA PROJECT ADVISORY GROUP Ian Askew, World Health Organization Erik Beekink, NIDI John Bongaarts, Population Council Win Brown, Bill & Melinda Gates Foundation Jacqui Darroch, Guttmacher Institute John Stover, Avenir Health CGA PROJECT STAKEHOLDER CONSULTATION: MANUFACTURERS, DONORS, ADVOCATES, AND TECHNICAL EXPERTS Advance Family Planning Beth Frederik Avenir Health -Track20 Emily Sonneveldt, Michelle Weinberger Bayer Klaus Brill CIFF Steven Chapman CHAI Ryan Fu, Mindy Scibilia, Ashley Nguyen Guttmacher Institute Gustavo Suarez Helm-Fresenius Ed Oosterman International Consortium for EC Elizabeth Westley John Snow, Inc. Alexis Heaton, Laila Akhlagi, Sara Laaff Marie Stopes International Aisha Dasgupta Merck/MSD Maggie Kohn Mylan Venkatesh Iyer Norad Nina Strom Pfizer Eleanor Levine RHSC Secretariat Anita Despshande, Ellen Tompsett UK DFID Meena Gandhi United Nations Population Division Vladimira Kantorova UNFPA Renee van de Weerdt, Jennie Greaney USAID Mark Rilling, Denise Harrison, Coite Manuel, Kevin Pilz 12GLOBAL CONTRACEPTIVE COMMODITY GAP ANALYSIS CGA PROJECT TECHNICAL EXPERTS MEETING Avenir Health John Stover, Michelle Weinberger CHAI Mindy Scibiilia, Ryan Fu, Ashley Nguyen Deliver Project Jim Rosen Engender Health Leah Jarvis Guttmacher Institute Jacqui Darroch John Snow, Inc. Alexis Heaton, Emma Stewart Netherlands Interdisciplinary Demographics Institute Erik Beekink, Patricia Hernandez, Karen Vrijberg Population Council Saumya Ramarao RHSC John Skibiak, Nina Miller (consultant) UNFPA Jennie Greaney United Nations Population Division Vladimia Kantorova Several individuals who did not participate in the stakeholder consultation or technical experts meeting provided shared data and expertise during the implementation of this project. They include: Maggie Murphy of John Snow, Inc., John Ross of Avenir Health, and Kabir Ahmed and Sandra Novo of UNFPA 3GLOBAL CONTRACEPTIVE COMMODITY GAP ANALYSIS 1. See www.familyplanning2020.org for more information. 2. See www.track20.org for more information. 3. The Family Planning Estimation Tool (FPET) was designed to produce annual estimates of CPR and other indicators using statistical modeling that incorporates survey data and service statistics. Technical Brief: Family Planning Estimation Tool https://goo.gl/OK0im2. 4. United Nations, Department of Economic and Social Affairs, Population Division (2016). Model-based Estimates and Projections of Family Planning Indicators 2016. New York: United Nations. 5. Jacqueline E. Darroch, Singh S., Weissman E. Adding it Up: The Costs and Benefits of Investing in Sexual and Reproductive Health in 2014-Estimation Methodology. Guttmacher Institute, 2016. 6. See www.unfpa.org for more information. 7. See www.nidi.nl for more information. 8. See www.avenirhealth.org for more information. 9. See www.clintonhealthaccess.org for more information. 10. See www.jsi.com for more information. 11. All figures have been rounded to the nearest hundred-thousandth. Percentages may not add up to 100 due to rounding. 12. 135 countries categorized as low-income or middle-income by the World Bank as of July 2016. China, which the World Bank categorizes as middle-income, is not included in the scope of our analysis. 13. In deference to FP2020’s forthcoming report, we refrain from showing discrete totals of the number of users of contraception in the 69 FP2020 focus countries for the year 2016. 14. Our method mix is comprised of the six most prevalent methods of contraception and a seventh miscellaneous category: sterilization (female and male), implants, IUDs, injectables, pills, male condoms (contraceptive use only), and “other” (emergency contraception, female condoms, Standard Days Method, LAM, diaphragms, and contraceptive foams and jellies). Traditional methods of contraception are excluded from our analysis. 15. 2012 is the year the London Summit on Family Planning, which launched the FP2020 initiative, took place. 16. Demographic and Health Surveys 17. Multiple Indicator Cluster surveys 18. See www.PMA2020.org for more information. 19. Our calculation of supply costs represents the product quantity multiplied by the current product price (including the commodity and associated clinical supplies). Costs such as freight, potential price changes due to new products or changes in unit prices offered by manufactures, and inflation in future years are not included. 20. Our spending analysis comprises all spending on contraceptive supplies that transpired in the year 2014, which is the most recent year with sufficient available data for 135 countries. 21. Public sector spending by donors includes direct spending on supplies, contributions used to underwrite procurement, in-kind contributions of supplies, basket funds used by governments to procure supplies, and World Bank loan funds used to procure supplies. Donors include aid agencies, social marketing groups and international non-governmental organizations, and philanthropic entities. Data from UNFPA Supplies, NIDI, and the Deliver Project (CS Indicators) were used to inform this category. 22. Public sector spending by governments is comprised exclusively of expenditures made by the governments of the 135 LMI countries using internally generated (non-donor, non-basket fund, and non-World Bank loan) revenue. Data from the Deliver Project (CS Indicators) were used to inform this category. 23. Data from NIDI informed this category, and we inferred private sector spending by extracting from the DHS and other household surveys to estimate the number of users of each method of contraception who received services and supplies from a private sector provider. The quantity of supplies these users would consume in a year was then costed using commodity prices appropriate to each method in each country (provided by the Guttmacher Institute). 24. Note that spending on contraceptive supplies across 135 countries in the year 2014 purchased the quantities that individual users consumed as well as additional quantities procured by institutional purchasers to keep public sector supply pipelines at optimal stock levels. Spending figures exclude the cost of freight. 25. All figures showing the cost of supplies consumed by users are valued at current prices. Future changes to commodity prices and inflation are not included in our calculations. 26. The Global Financing Facility is a multi-stakeholder partnership that supports country-led efforts to improve the health of women, children, and adolescents. The eleven countries currently participating in the GFF are: Bangladesh, Cameroon, DR Congo, Ethiopia, Kenya, Liberia, Mozambique, Nigeria, Senegal, Tanzania, and Uganda. For more information, visit www.globalfinancingfacility.org Endnotes 4GLOBAL CONTRACEPTIVE COMMODITY GAP ANALYSIS The Reproductive Health Supplies Coalition The Coalition is a global partnership of public, private, and non-governmental organizations dedicated to ensuring that everyone in low- and middle-income countries can access and use affordable, high-quality supplies for their better reproductive health. It brings together agencies and groups with critical roles in providing contraceptives and other reproductive health supplies. These include multilateral and bilateral organizations, private foundations, governments, civil society, and private sector representatives. Rue Marie-Thérèse 21 1000 Brussels Belgium Tel: +32 2 210 0222 Fax: +32 2 219 3363 E-mail: firstname.lastname@example.org
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