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Pooled Procurement: An Underutilized Tool in Pandemic Preparedness and Response

31st May 2023

The COVID-19 pandemic has underscored the importance of a strong, proactive, and coordinated global response to health crises. One strategy that could significantly enhance this response is pooled procurement—a process by which multiple entities come together to purchase medical supplies in bulk. Despite its many potential benefits, however, pooled procurement has been underutilized. This blog post aims to explore the role of pooled procurement in global pandemic preparedness and response, drawing on lessons learned from recent health emergencies.

Pooled Procurement: The Basics

Pooled procurement is a strategic approach to procurement where multiple buyers unite to purchase commodities, such as vaccines or therapeutics. The primary benefits of this arrangement are lower prices due to economies of scale, improved quality controls, quicker delivery, and reduced transaction costs. These considerations become even more critical during health emergencies, when quick, cost-effective, and equitable access to medical countermeasures is needed.

Lessons from COVID-19 and Monkeypox

The global response to COVID-19 provides both a case study in the potential benefits of pooled procurement and a warning about its pitfalls. COVAX, a global pooled procurement mechanism, was established to ensure equitable access to COVID-19 vaccines. However, the bilateral deals between countries and pharmaceutical companies diluted the impact of this initiative, leading to inequitable distribution of vaccines.

The response to recent outbreaks of monkeypox—a rare but potentially serious viral illness—also highlights the potential benefits and challenges of pooled procurement. Effective responses to these outbreaks have relied on a rapid, coordinated international response, including the sharing of resources and expertise. But, like with COVID-19, there have been challenges in ensuring equitable access to necessary countermeasures, suggesting that more can be done to optimize pooled procurement.

Suitability of Pooled Procurement for Various Medical Countermeasures

Pooled procurement is not a one-size-fits-all solution. Its suitability varies depending on the specific medical countermeasures required, their availability, and the capacity of individual countries to negotiate favorable terms independently. However, for many essential countermeasures—such as vaccines, antiviral drugs, and protective equipment—pooled procurement can offer substantial benefits.

Reinforcing Existing Procurement Platforms

Existing procurement platforms like COVAX and the Pan American Health Organization’s Revolving Fund could be reinforced to optimize pooled procurement. This could involve improving transparency, enhancing negotiation capabilities, and building stronger relationships with manufacturers. It could also involve expanding the range of products procured through these platforms to include a broader array of medical countermeasures.

New Procurement Mechanisms

While reinforcing existing platforms is crucial, there may also be a need for new procurement mechanisms. These could be tailored to specific regions or types of medical countermeasures, or they could be designed to address specific challenges identified during recent health emergencies.

Optimal Governance for Pooled Procurement

The governance of pooled procurement mechanisms is critical to their effectiveness. Optimal governance arrangements could include a mix of global health bodies, national governments, and potentially private sector stakeholders. Key considerations should include:

  • Transparency: Decision-making processes should be transparent to ensure accountability and trust among participating entities. Transparency is also key to attracting and maintaining a broad base of participants, which is essential for achieving economies of scale.
  • Equitable representation: Governance arrangements should ensure that all participants, irrespective of their size or purchasing power, have a say in decision-making processes. This can help to prevent inequities and ensure that the needs of all participants are considered.
  • Expertise:The governance structure should include individuals or entities with the necessary technical and sector-specific knowledge. This could involve expertise in procurement, legal matters, health systems, pharmaceuticals, logistics, and more. This is crucial for making informed decisions and managing complex procurement processes effectively.

Conflict of Interest Management: It’s essential to have mechanisms in place to identify, declare, and manage potential conflicts of interest. This will maintain the integrity of the procurement process and prevent undue influence or bias in decision-making.

Efficiency: An optimal governance structure should promote efficiency in all its operations. This includes swift decision-making, minimizing administrative costs, and ensuring timely delivery of procured items. Efficiency can help maximize the value obtained from pooled resources and can be crucial in scenarios where timing is vital, such as in health emergencies.

Risk Management: A robust risk management framework should be integrated into the governance structure. This would involve identifying potential risks, assessing their potential impact, and establishing mitigation strategies. Risks could include supply chain disruptions, price volatility, or changes in demand for certain goods or services.

Collaboration and Partnership: The governance should foster a collaborative environment where participants feel their interests are being addressed. It should also promote partnerships with other entities that can bring in additional expertise, funding, or other resources.

Stability and Continuity: The governance structure should ensure stability and continuity, even in the face of changes in leadership or membership. This might involve having staggered terms for leadership positions, succession plans, and institutional memory preservation strategies.

Monitoring and Evaluation: Regular monitoring and evaluation should be built into the governance structure to assess the performance and impact of the pooled procurement mechanism. This can provide valuable feedback for continuous improvement and ensure the mechanism is delivering on its intended goals.

By considering these factors, a pooled procurement mechanism can have a governance structure that is robust, transparent, and effective in managing pooled resources to the benefit of all participants.