Periodic Review ccm request template

Please complete this section only if procurement of Pharmaceutical and Health Products is planned in the next Phase/Implementation Period. Otherwise, continue to section 6.2 “Financial Proposal”.

The Central Procurement Unit (CPU) has been established and took the responsibility for the management of all pharmaceutical contracts. To date, thirteen pharmaceutical contracts have been awarded including the contract for antiretroviral drugs in the beginning of December 2012. Major savings have been demonstrated through improved processes and price negotiations. Continuing from phase 1, the CPU will procure ARVs for scale up of the ART programme, and will continue to strengthen supply chain management for pharmaceuticals and health products. For a full list of pharmaceuticals to be procured refer to PSM plan, NDOH Annex 3.

Risks: The major risk identified in phase 1 was that of potential stock outs possibly due to limited supplies and poor forecasting. To address this challenge, strong capacity building measures around forecasting and stock management have been put in place.

6.2 Financial Proposal

6.2.1 Resources available to finance the grant/SSF after cut-off date

Line h includes funds brought forward from phase 1 to fund extension.

6.2.2 Summary funding request from cut-off date to end of next Phase/Implementation Period

6.2.3 CCM Budget Request for the next Phase/Implementation Period

Please explain how lessons learned from the current Phase/Implementation Period have been factored into this funding request (e.g. budget reallocations, under-spending leading to more realistic budget estimates, reflection of price changes).

Implementation of the grant in phase 1 was negatively impacted by the delay in signing of the grant by the GF Secretariat. By the time the grant was gained almost six months had passed since the official start date. Subsequently disbursements were also delayed. For the phase 2 discussions with the GF on grant documents have started early, and it is anticipated that this will assist in shortening the grant negotiation process and enable the grant to start on time i.e. October 2013.

One of the major issues that affected the grant was timely fulfillment of conditions set out in the grant agreement. This resulted in a number of conditions precedents not being met timeously, which delayed the flow of funds.

The grant was also affected by the budget overruns in overheads and under spending in training activities. The budget overruns were due to the change of policies after signing of the agreements with the sub-recipients and under spending in training is linked to delay in approval of the training plans. Since most of the training activities were co or multi-funded, SRs and SSRs were compelled to implement the training activities in order to meet the requirements of other funders and when the training plans finally got approved most training activities had to be reviewed. The review processes contributed to delays in both processing disbursements and implementation of activities. The early interaction with Global Fund, which is facilitated by the CCM, will assist to minimize conditions precedents. In cases where these are deemed necessary, they will be monitored closely to ensure they are fulfilled in time.

Since all most grant activities in phase 2 will be implemented by NDOH, grant management will be easier. The NDOH has gained experience in managing the grants and will employ the experience in managing internal programmes. The budgeting and grant management processes will be refined with technical support from development partners.

The SAG has historically scaled up ART at substantially lower costs than many other countries in the region. In December 2012, SA achieved a massive R2.2-billion cost reduction in the R5.9-billion tender which awarded to three pharmaceutical companies for single-dose antiretroviral (ARV) drugs for the government's HIV treatment campaign for a period of two years. The majority of South Africans on state-sponsored ARV treatment for HIV would, from April 2013, need only one tablet instead of the current three per day. The country had managed to reduce the cost of the tender - for a single dose of the triple combination of Tenofovir, emtricabine and efavirenz by 38%, a massive saving of R2.2 billion. This new tender has moved from an original cost of R8.1-billion to R5.9-billion for two years and this savings means SAG will be able to treat more patients. The use of single fixed-dose combinations enhances adherence, which is critical to the success of the ART programme - it ensures the probability of reaching undetectable viral loads and reducing at the risk of transmission to the infant to a minimum, and minimizes the opportunity for treatment failure, which results in progression into the more costly 2nd line regimens. As drug costs continue to decline, our country expects our second-generation approach to become even more cost effective during the lifetime of this grant.

Despite the funding disbursement interruptions and delays, the programme managed to implement the prevention and treatment programmes to acceptable levels (overall B1 rating). Most programmes would have performed exceptionally well if the funding was consistent, however indicators reflect good performance in relation to the funds allocated to activities. The overall good performance can be attributed to co-funding mainly the use of voted government funds for NDOH programmes and use of organizational and other funders’ funds for non-government SRs. For government in particular, due to the fact that the activities were priority interventions e.g. ART, the activities continued in spite of the delay in disbursements. Implementers also had to apply effective strategies in implementing programmes.

Does the budget request reflect the average programmatic performance in the current Phase/Implementation Period? If not, please provide an explanation.

As the areas relating to underperformance in the provision of antiretroviral drugs in the previous grant have now been cleared and the GF CCM will monitor future progress closely, it is anticipated that the budget is in line with performance. Also this programme does not include work with any civil society Sub Recipients, another area of underperformance in the Phase 1.

The detailed budget for the NDOH is attached as NDOH Annex 4.