UNITAID’s Financing and Spending Approaches9
Brenda Waning, UNITAID, WHO, presented two different functional characteristics of UNITAID: that the organization is itself funded through an innovative mechanism (the air ticket levy) and that the organization then spends those funds in an innovative way.
Innovative Funding Mechanism
The air ticket funding mechanism involves application of progressive levies10 to all flights departing from contributing countries, levies from 9 of which represent 80 percent of UNITAID’s funding11 (the other 20 percent comes from various sources12). Air ticket levies have several advantages, including that they
• are equitable, predictable, and untied;
• are cost-effective to collect;
• do not affect airline profitability or sales; and
• have the unique characteristic of constituting a South-to-South cooperation.
Innovative Spending Approach
UNITAID’s strategy for innovative spending consists of a market-only approach to increase access to the commodities used to prevent, diagnose, and treat TB, HIV, and malaria. Market conditions for those products are analyzed to expose their underlying causes and to seek opportunities to apply leverage and resources effectively. Although, as Waning noted, differences among individual markets can make it difficult to draw comparisons (e.g., between first-line ARVs and MDR SLDs), UNITAID’s experience in
9 This subsection is based on the presentation by Brenda Waning, Coordinator, Market Dynamics, UNITAID, WHO.
10 Ranging from 1 euro for a domestic ticket to 40 euros for an international business class ticket.
11 Cameroon, Chile, Democratic Republic of the Congo, France, Korea, Madagascar, Mali, Mauritius, and Niger.
12 BMGF, Brazil, Cyprus, Luxembourg, Norway from a carbons emissions tax, Spain, and the United Kingdom. Waning quoted a leading group on innovative financing for development as strongly recommending an increase in the number of countries that pledge to UNITAID.