The devil's in the detail: an appraisal of the use of innovative financing mechanisms for pandemic prevention, preparedness and response.

Abstract

This is the first published study examining whether, and to what degree, innovative financing could effectively support the financing needs of the global pandemic prevention, preparedness and response (PPPR) agenda.

Background: What is already known? In the context of global health, innovative financing encompasses a range of financial instruments that supplement international development assistance and other traditional sources of financing, with the intention of mobilising additional resources and channelling them more effectively. Examples including Advance Market Commitments (AMCs), Advance Purchase Commitments (APCs), vaccine bonds and pandemic bonds, have been used in the past to address major disease outbreaks, such as the Ebola and Covid-19 crises. Following the Covid-19 outbreak, innovative financing has been proposed as a major vehicle to fund PPPR.

Results: What are the new findings? Despite recent pronouncements that innovative financing has 'huge untapped potential' for PPPR, there is little evidence within the literature to support such claims. This has been confirmed by our examination of four innovative financing mechanisms and their historical use in response to disease outbreaks. Our findings suggest that flaws and trade-offs in the design and application of these mechanisms have resulted in failure to deliver on their promise, raising concerns regarding their prospective use in financing PPPR. Although innovative financing could play a role, existing mechanisms in health have not generated the scale of funds proposed. In addition, the amounts generated have historically focused on specific interventions, which threaten to enhance fragmentation (disjointed financing of health) and alignment failures (not well integrated within overall national strategic plans) with and within PPPR.

Conclusions: What do the new findings imply? Our findings reveal a set of innovative financing tools shrouded in unsubstantiated claims to success and effectiveness that look to have underwhelming promise of 'value for money' in global health. This stems from evidence suggesting design flaws, inadequate application, lack of transparency, private sector profiteering and associated opportunity costs. Thus, contrary to popular claims, they may not be the 'silver bullet' for bridging PPPR financing gaps and addressing costly, complex and multifaceted PPPR interventions.