2. NEWS
22 Aug 2004

The Global Fund has launched a web-based Price Reporting Mechanism. This enables recipients of Global Fund grants to provide data on the prices they have paid and the product quality and supplier performance they have received when using their grants for procurement purposes. The data on produce prices is then made publicly available so that anyone interested can compare who has paid how much for which products.

The Price Reporting Mechanism is available at

www.theglobalfund.org/en/funds_raised/price_reporting/default.asp.

The existence of the Mechanism produces several benefits. First, it means that countries that are preparing Global Fund proposals can develop a better sense of how much to budget for product procurement. Second, it means that grant-recipients who are negotiating procurement contracts with vendors can do so from a strengthened position as a result of knowing what others have paid. Third, it means that grant recipients will be less tempted to enter into contracts on poor terms that have secret kick-back provisions (so long as they are required to report full details of their purchases). Finally, it means that all stakeholders can be better informed on how Global Fund money is being used.

At present, visitors to the web site can see prices paid by 17 countries in 128 purchases of anti-retroviral drugs costing a total of $4.8 million. Examples of prices paid found include:

  • Five countries purchasing 400mg doses of Indinavir (IDV) between August 2003 and July 2004 paid between $0.25 and $0.30 per dose when purchasing from two different manufacturers in India, and paid $0.28 per dose when purchasing from one manufacturer in the United States.
  • Eight countries purchasing 200mg doses of Nevirapine (NVP) between August 2003 and July 2004 paid between $0.11 and $0.36 per dose when purchasing from four different manufacturers in India and Cuba, and paid $3.43 per dose when purchasing from one manufacturer in the United States.

The site warns that care must be taken to consider all factors before drawing conclusions from the price comparisons. Factors to consider include:

  • Whether the country making the purchase is a least developed country. (Some such countries are able to access lower prices.)
  • Whether the purchase is part of a multi-country agreement established by third parties such as the Clinton Foundation.
  • Whether the purchase is from the manufacturer or from a procurement agent.
  • Whether the purchase is large enough to benefit from a volume discount.
  • Whether the purchase benefits from a price reduction because payment is made in advance of delivery, or suffers from a price increase because payment is made after 30 to 60 days or using a letter of credit.
  • Whether the price is increased because immediate delivery is required.

The default report provided at the web site is the Purchase Price Report. This can be sorted by the various columns and can also be downloaded into a spreadsheet for further analysis. Other reports available provide Quality Related Information, Procurement Agent Information, Supplier and Delivery Information, and Financial Information. A detailed manual explains all the options.

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