|Questions and Answers for the Strategic Fund|
1. Q/ What is the Strategic Fund?
A/ The Strategic Fund is a mechanism created in the year 2000 by the Pan American Health Organization (PAHO) to facilitate the acquisition of strategic public health supplies in the different Member States. Through technical support in procurement, the Fund promotes the continuous availability of quality strategic supplies at low cost. The Strategic Fund helps to build capacity in drug supply management and procurement programming and planning at the national level. The Strategic Fund is also known as the Regional Revolving Fund for Strategic Public Health Supplies.back to top
2. Q/ Why is the Strategic Fund important?
A/ Access to public health essential medicines is a global priority. The emergence and re-emergence of transmissible diseases, the increasing mobility of populations across borders, and the need to reduce mortality and morbidity rates in the Region makes it vital that the Member States are able to access essential public health supplies. According to PAHO, the cost of medicines can represent up to 35% of national health budgets in Member States. In some countries, the cost of medicines can represent 50% - 60% of household health cost. In many cases, medicines are unaffordable and inaccessible for much of the population.
In addition, PAHO Member States face other important challenges in improving access in public health essential supplies. Some of these challenges include or are related to: the selection of quality products; limited public financing for medicines acquisition; insufficient information on product prices; intellectual property rights. Moreover, little attention has been paid to supply management systems and effective programming and planning that facilitates the continuous availability of public health supplies.
In this context, the Strategic Fund becomes an important initiative for the Region. The Strategic Fund links planning processes in strategic public health supplies with acquisition processes, promoting the availability of pharmaceutical supplies and quality medicines.
Through the Strategic Fund Member States can not only acquire public health supplies that meet PAHO/WHO quality standards, but also can avail of technical support in programming and planning processes. The Strategic Fund also assists Member States in the acquisition of public health supplies in emergency cases.
3. Q/ What are the advantages for Member States in participating in the Strategic Fund?
A/ The main benefit for a Member States participating in the Strategic Fund is PAHO technical support in procurement planning and programming to ensure continuous availability of essential public health supplies. In this way, national capacity in Member States to meet needs and acquire supplies is developed.
The Strategic Fund also guarantees the acquisition of quality essential public health supplies through a transparent process. In addition, the Strategic Fund uses prequalified suppliers who meet PAHO/WHO quality standards.
Member States also benefit from the PAHO Strategic Fund by purchasing essential public health supplies at low cost. The Strategic Fund negotiates with different international suppliers and offers supply alternatives when possible to Member States. Likewise, the Strategic Fund offers price estimates for products based on the average price of purchase orders executed or quotes offered by suppliers. As a result, Member States can additionally avail of a price reference list for key key products, which can be used in consultation during the procurement decision-making process.
A/ The objectives of the Strategic Fund are:
To encourage member states to improve planning capabilities in the acquisition and use of supplies;
To promote the implementation of appropriate quality assurance procedures in the acquisition of supplies;
To further the continuous availability of supplies within PAHO Member States;
To facilitate the acquisition of strategic public health supplies by PAHO member states at reduced cost by taking advantage of the potential savings offered by economies of scale;
To strengthen member states' public health programs and the application of pertinent PAHO/WHO normative mandates.
5. Q/ Does the Strategic Fund only focus on procurement of medicines?
A/ Even if the main purpose of the Strategic Fund is to facilitate access to essential medicines and priority public health supplies to countries throughout the Region, this is not its only function. The Fund offers important technical support to participating countries in several ways:
• Focusing technical support to countries in procurement planning and supply management.
• Ensuring the supply of quality products through the application of quality assurance norms in pharmaceutical procurement.
• Facilitating communication and coordination between suppliers and participating countries to improve product availability and affordability.
The Strategic Fund is an important regional reference for product prices. It improves coordination between PAHO Member States and global procurement initiatives such as the Global Drug Facility, The Green Light Committee, The Aids Medicines and Diagnostics Services (AMDS), and The Malaria Medicines Service (MMS).
6. Q/ What is the difference between the Strategic Fund and the EPI Vaccine Revolving Fund?
A/ The Vaccine Revolving Fund is a mechanism for the acquisition of vaccines and related supplies. The Strategic Fund focuses on other essential public health supplies. The Strategic Fund was established based on the successful experience of the Vaccine Revolving Fund.
7.Q/ How does the Strategic Fund work?
A/ Member States review needs (technical and otherwise) in the procurement of essential public health supplies. PAHO, through the Strategic Fund, offers technical support in procurement planning and supply management. Thereafter, the Member State can purchase through the Strategic Fund. Products required by the Member State should meet the criteria defined for a strategic public health supply and should be included in the Strategic Fund Product List. Strategic Fund suppliers are prequalified by PAHO/WHO and are selected based on the quality of their products and prices offered, and performance history. The Strategic Fund negotiates with different international suppliers to obtain low product prices. All products offered through the Fund meet PAHO/WHO quality standards.
The Fund is capitalized through the allocation of a portion of the 3% procurement service charge to the Fund's capital account. As countries purchase through the Fund, the purchasing power of the Fund will increase resulting in lower product prices for participating countries.
To place an order the Member State transfers funds to PAHO and requests PAHO to purchase required products. The products are then shipped from suppliers to the country.
Member States and/or the Principle Recipients (PR) participating in the Strategic Fund deposit funds with PAHO in order to purchase products through the Fund. Once the payment is received, PAHO deposits the funds in a separate Member State Account from which supplier invoices are paid. Any balances are retained in this account for future procurement by the Member States, or refunded as required.
For some exceptions, as a procurement mechanism, the Strategic Fund allows participating members to utilize a common fund for payment of authorized purchases of essential public health commodities. Members make reimbursement to the fund for the cost of each purchase within a specified period of time.
8. Q/ What countries are currently participating in the Strategic Fund?
A/ 23 Member States have signed an agreement with PAHO to participate in the Strategic Fund:
Argentina, Barbados ,Belize ,Bolivia, Brazil, Chile, Colombia, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Nicaragua, Panama, Paraguay, Peru, Suriname, Trinidad and Tobago, Turks and Caicos, Uruguay and Venezuela.
9. Q/ What is a "Strategic Public Health Supply"?
A/ A Strategic Public Health Supply is a product that satisfies the following criteria:
• is listed, recognized and recommended by a WHO Expert Committee or Working Group (e.g. Essential Medicines, WHOPES recommended compounds, HIV Diagnostics etc).
• is included in WHO recommended protocols or diagnostic algorhythms and is considered highly effective in disease treatment or prevention.
• when continuously available, significantly contributes to improvements in mortality rates and patient quality of life, and/or minimizes possibilities of drug resistance in treatment.
• is subject to particular challenges in areas of product sourcing, pricing, forecasting, and purchasing.
• economies of scale are achievable as volumes purchased increase.
10. Q/ What kinds of products are included in the list of Strategic Fund Products List?
A/ Medicines related to HIV/AIDS:
• Medicines for HIV/AIDS opportunistic infections
• Antiretroviral medicines
• Anti-Chagas medicines
• Antituberculosis medicines
• Anthelmintics medicines
• Antimalarial medicines
11. Q/ What technical support do Member States receive when they subscribe to the Strategic Fund?
A/ In procurement and supply management, the following are some of the ways in which the Member States receive technical support by participating in the Strategic Fund:
• Development and review of procurement plans
• Capacity building in needs estimation, forecasting, purchasing, financing and pricing, and issues relating to intellectual property rights
• Procurement through the Fund mechanism
• Supply chain assessment, support and monitoring
• Linkages with other Global Procurement mechanisms
In quality assurance and procurement, Member States receive technical support in:
• Supplier prequalification
• Quality control of medicines
• Technical support in procurement quality assurance
Moreover, the Strategic Fund:
• Facilitates dialogue between suppliers and Member States
• Provides reference prices
• Facilitates the acquisition of products in emergency situations
A/ The quality of the supplies purchased through the Strategic Fund is ensured by:
1. Pre-qualification of suppliers to ensure that supplies meet the quality criteria established by PAHO/WHO
2. Quality Management in Procurement
3. Support in quality control of products at the national level.
13. Q/ What role does PAHO play in the management of the Strategic Fund?
A/ Technical and administrative units in PAHO perform specific functions to ensure operations of the Fund.
Procurement and Supplies Management (PRO)
• manages the procurement process and facilitates the shipment of products to consignees
• reviews and authorizes the payment of supplier invoices.
Area of Health Surveillance, Disease Prevention and Control (HSD)
• Provides technical support in medicines and supplies used in the management and control of vector borne diseases such as tuberculosis, malaria, chagas, and leishmaniasis
Area of Family and Community Health (FCH)
• Provides technical support in medicines and diagnostics management in HIV/AIDS, child and adolescent, and maternal health
Area of Technology, Healthcare and Research (THR)
• Provides technical support in supply management, quality, and rational use of essential medicines and health technologies
Financial Resources Management (FRM)
• manages deposits to the Member State accounts
• makes payments to suppliers
• maintains the Fund accounts
• prepares financial statements/ invoices for purchases as necessary
• provides financial statements to Member States
Office of the Legal Counsel (LEG)
• drafts country agreements
• approves bid documents
• supports procurement contractual agreements
• provides other legal services.
Planning, Budget, and Resource Coordination (PBR)
• Supports the development of the Fund, its orientation, and operation in accordance with Mandates of the PAHO Governing Bodies.
14. Q/ What are the perspectives for the Strategic Fund in the future?
A/ The Strategic Fund has been structured through a series of internal (within PAHO) and external partnerships to maximize support to participating countries.
The PAHO Working Group is an internal body that was established in 2004 by the Director of PAHO to support and implement activities of the Strategic Fund. It is composed of technical and administrative units at PAHO and meets at least twice a year to review actions and progress of the Fund.
The Strategic Fund, as part of the PAHO general work program in Medicines is being developed through the Project of Essential Medicines and Biologicals within the Area of Technology, Health Care and Research, PAHO Washington DC.
Technical staff in medicines, procurement officers, financial staff, legal personnel, and project management staff in PAHO dedicate time to supporting activities of the Strategic Fund.
The Working Group under the coordination of the Medicine Project team implements the work program through partnerships established in the region.
Key partners include (but are not limited to):
COHAN Columbia (Hospitals Cooperative, Antioquia)
BDS (Barbados Drug Service)
ENSP (Fiocruz, Brazil; PAHO/WHO Collaborating Center in Pharmaceutical Policies)
MSH (Management Sciences for Health)
GDF (Global Drug Facility)/ GLC (Green Light Committee)
Global Fund (Particularly Principal Recipients)
15. Q/ How can Member States participate in the Strategic Fund?
A/ Member States may participate in the Fund by entering into an agreement directly with PAHO. The intention of this agreement is to commit participating Member States to abide by the requirements set out for procurement through the fund, as well as to provide and promote technical cooperation necessary to fulfill the objectives of the fund.
16. Q/ Can Global Fund Principal Recipients participate in the Strategic Fund?
A/ The Principal Recipients (PR) of projects financed by the Global Fund against AIDS, Tuberculosis, and Malaria (GFATM), may also use the Strategic Fund for procurement of Strategic Fund products by signing a Memorandum of Understanding (MOU) with PAHO.
17. Q/ How can countries acquire medicinal products through the Strategic Fund?
A/ The Ministry of Health or Principal Recipient will work directly with the PAHO country office in the selection of products and product forecasting. The request for procurement is sent to PAHO Country Office. Once received, the Strategic Fund will consolidate requests from different countries. Prices offered by suppliers are issued to the Member State through the PAHO Country Office. To place an order the Member State transfers funds to PAHO and requests PAHO to purchase required products. The products are then shipped from suppliers to the country.
18. Q/ How do Member States pay for medical supplies?
A/ The financial management of the Strategic Fund is governed by PAHO Financial Rules and Regulations. Member States and/or the Principle Recipients (PR) participating in the Strategic Fund deposit funds with PAHO in order to purchase products through the Fund. Once the payment is received, PAHO deposits the funds in a separate Member State Account from which supplier invoices are paid. Any balances are retained in this account for future procurement by the Member States, or refunded as required.
19. Q/ Where can I find more information about the Strategic Fund?
A/ The technical document: "Operating Principles for the Regional Revolving Fund for Strategic Public Health Supplies", provides more information on the Strategic Fund.
The document can be downloaded from the Internet at: Web page Strategic Fund
Regional Office for the Americas of the World Health Organization