Synopsis of the Literature Review for WG 4:

Funding and Donor Roles:

Health systems funding and donors’ roles in access to medicines in India, South Africa and Uganda.

There is a tremendous gap between developed and developing countries with respect to health spending and health needs. Developing countries account for over 80% of the global population and 90% of the global disease burden, but only 20% of global GDP and merely 12% of all health spending. Over 50% of the spending in poor countries comes from out-of-pocket payments by consumers of care. In addition, most poor countries are unable to provide their citizens with a basic package of essential health services. In this context most of developing countries rely on donors to finance the health sector.

In the past most donor aid was allocated to disease specific projects rather than to broad based investments in health systems, infrastructure and human resources. Although sector-wide approaches have introduced some benefits, donors still need to reduce the volatility, improve the predictability, and improve the longevity of aid. They also need to ensure that a larger proportion of aid is used to reduce health systems’ fragmentation and improve coordination.

Although multinational HIV/AIDS treatment programs have been one of greatest public health successes of late, diminishing resource commitments by major donors have raised uncertainty about the future of access to antiretroviral therapy.


Health expenditure in India is approximately 5% of the GDP. In some vertical public health programmes, a large proportion of expenditure is funded by international donor agencies. But in general, tracing the funding for the various programs is problematic since data are scattered.

HIV/AIDS efforts are bundled under the National AIDS Control Organization (NACO). The majority of NACO funding comes from Government funds through annual budget allocations. UN agencies and international donors provide additional funding and technical assistance.

For Malaria, the contribution of the national government is about 30% while external agencies (Global Fund, UNITAID, PMI, World Bank) give around 50%. The government expenditure for malaria has been increasing consistently over the past five years, while external funding has been subject to variations. Most of the resources are spent on preventive care, with only a small percentage actually being spent on anti-malarial drugs. Of the total cost, 19% is covered from out-of-pocket expenditure.

India provides TB care mostly through the Revised National Tuberculosis Control Programme, and is focused on spreading Directly Observed Therapy (DOTS). There are a number of external agencies supporting the TB programme in India. However, no information was available on the differences in the procurement policies of these funding agencies, and their impact on access to medicines.

Under the National Mental Health Program, pilot projects have been undertaken to look at the feasibility of extending mental health services. The primary sources of mental health financing are tax collections, out-of-pocket expenditure and private insurance. There is very little data available on financing of mental health programmes in India, and most psychotherapeutic medicines are prescribed and provided in other ways.

The pilot phase for the National Programme for Prevention and Control of Diabetes, Cardiovascular Diseases and Strokes was only launched in January 2008. Information on the extent and financing of metformin is not currently available.


Financing of the health sector is drawn from a mix of sector support plans. The Government of Uganda has cited increasing programme funding from donors and the need to increase funding to other sectors as reasons for lowered government health support. Between 50-70% of the Ministry of Health budget for drugs and services is provided by donor organizations (USAID, Global Fund, IDA, UK, Ireland, Sweden, GAVI, Belgium and UNFPA). It is important to note that international procurements of drugs by donors impact upon the national health policy, acquisition and distribution of medicines. In the last decennium a sector wide approach was promoted as a way to improve coordination between the government and development partners. All donor funding is overseen by the Ministry of Finance and Economic Development, which then allocates money to each sector. Problems like volatility and unpredictability of donor funding, budget distortions, donor funds not aligned to domestic priorities have often been experienced in Uganda.

South Africa 

South Africa’s health system is two tiered consisting of a tax-funded public sector delivering health services to the majority of the population, and a private sector providing health services to approximately 20% of the population and financed through private health insurance and out-of-pocket payments. South Africa spends 8% of its GDP on health. Private health spending accounts for over 60% of the total health expenditure while public expenditure is at 40%. About 78% of the total private spending is sourced from private health insurance contributions and 17.5% from out-of-pocket expenditures.

The main source of funds for HIV/AIDS programs is general tax revenue. HIV/AIDS interventions are primarily financed via three main mechanisms: the budgetary allocation to the Department of Health, the Equitable Share allocation to provincial government and the conditional grant for the National Integrated Programme. External funders have been pivotal in financing HIV/AIDS programs through various Global Health Initiatives. The main ones are Global Fund, World Bank and PEPFAR. The challenges in South Africa’s health system are lack of co-ordination between donor activities at national and sub-national levels; lack of support towards human resource development; lack of sustainability of these funds in the long run for ART programs and lack of absorptive capacity in the health system.

South Africa adopted the DOTS strategy. Procurement of TB drugs is done by a tendering approach. For tender approval, the specific drug must meet the WHO’s drug pre-qualification criteria.


Information is lacking on the interplay of donors and funding. AMASA research should focus on collecting data on health sector funding. The search did not yield specific information on selected tracer drugs. Therefore further research should concentrate on collecting specific data relating to the tracer medicines

HIV/AIDS programs have, over the recent years, been receiving increased funding. The related information is therefore far more abundant compared to other health areas. However, due to the absence of a mechanism to monitor and aggregate the contributions from the wide range of funders, the exact amount of funding coming from foreign donors is unknown in most cases.


This synopsis is a result of the collaboration within WG4, under the coordination of the WG4 coordinators: Jan de Maeseneer and Maarten Declercq.

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