International solidarity levy on air tickets

2009-02-27 10:36:26

UNITAID is a drug purchasing facility aimed at combating the major pandemic diseases af-fecting part of the developing world. UNITAID buys the necessary drugs and diagnostics and negotiates significant reductions the prices of pharmaceutical firms. It has a budget of over $300 million.

UNITAID is an international purchasing facility for pharmaceutical drugs whose operation is similar to that of a central buying organisation. Its purpose is to combat the major pandemic diseases affecting part of the developing world by improving access to high quality treatments for the general population in developing countries. UNITAID buys the necessary drugs and diagnostics. It takes advantage of its buying power and manner of financing to negotiate sig-nificant reductions in the prices of pharmaceutical firms. It channels over 80% of its funds into low-income countries.

A mechanism unlike any other

The major pandemic diseases – AIDS, tuberculosis and malaria – which strike developing countries, sub-Saharan Africa in particular, constitute a major challenge for the Millennium Development Goals. Faced with these pandemic diseases, the countries and their populations that are suffering from them lack in most cases the resources needed to hold back their spread. It is therefore necessary for the richest nations to provide an effective response to this block-age of access to treatment.

Since its launch in September 2006, UNITAID has sought to reinforce long-term access, at negotiated prices for those in most need, to high quality treatments against AIDS, tuberculosis and malaria. The pooling of long-term resources enables the lowest possible prices to be ob-tained from producers. UNITAID has already devoted over $500 million to 80 beneficiary countries, most of them in the low income bracket. A cut in the prices of second-line antiret-rovirals for AIDS (25% to 50% according to the income level of the country) and paediatric treatments (40%) has been obtained in partnership with the Clinton Foundation.

A facility with funding guaranteed by an innovative financing mechanism

The UNITAID central purchasing facility had a budget of over $380 million for 2006-2007. This is financed largely from two sources.

Firstly, the donor countries, alongside the Gates Foundation, provide budget contributions based on multi-year commitments.

Secondly, almost a half the available funding comes from a solidarity contribution levied on air tickets. This is already applied in 11 countries and it has enabled France for example to generate an extra €160 million in conventional aid. This contribution, which is levied on the airline ticket prices charged to passengers taking off from airports in the territories of the countries imple-menting the scheme, has had no effect on air traffic and provides a stable source of finance. The contributions levied at national level are then coordinated internationally for allocation, for the most part, to the UNITAID international purchasing facility .

Promotion of the tax on air tickets remains a priority for the Leading Group, which launched in Conakry a task force of African countries to convince the greatest number of States on the continent to implement this solidarity levy in accordance with their own characteristics.

Please visit Unitaid’s website for further information

Leading Group on Innovative Financing for Development