While the public health world is focused on the pandemic agenda and centralization of management, few understand the financialization of health and the transition to commercial-based approaches that have underpinned this. Health must pay, if the corporate world is to contribute. Hiding this within terms such as ‘innovative financing’ has enabled such approaches to be sold as a virtue rather than simply bowing to corporate power. The public health world needs to look deeper, rather than obediently accept each private sector interest as a public good.

What Is Innovative Financing?

Innovative financing gained prominence “as a means to provide additional financing for global health” following the 2002 International Conference on Financing for Development in Monterrey (Mexico). Since then, it has become somewhat of a buzzword, finding prominence at events like the World Economic Forum (WEF) and within the negotiations on the Pandemic Agreement. As a general definition, innovative finance is understood to encompass a heterogeneous group of “financing mechanisms and solutions that mobilise, govern, or distribute funds beyond ODA” (overseas development assistance), which its advocates argue “increase the volume, efficiency, and effectiveness of financial flows.”

In global health, the push to break human well-being down into quantitative monetary terms has raised concerns about the role of financial actors, motives, institutions, and markets on the resource management and operation of health systems and outcomes. This is often referred to as ‘the financialization of health’. It includes the rise of public-private partnerships (PPPs), the use of bond and equity markets for health financing, the overemphasis on health products, and the ‘commodification of health.’

The latter refers to the transformation of healthcare to a tradeable and saleable asset for investors. The concern with the financialization of global health, and its role for pandemic prevention, preparedness, and response (PPPR), is how it influences which health services are available and who can access them. This influence can often operate outside the control of local legislators and/or can be imposed through global financial mechanisms and their conditionalities. …

Despite a highly biomedical focus, innovative financing mechanisms have historically underperformed, failing to deliver on their promise of effectiveness and ‘value-for-money.’ Naturally, for these mechanisms to work, they need to offer attractive investment opportunities to secure private sector buy-in. However, the impetus to attract investors at all costs has also proved to undermine the value they purport to provide to their intended beneficiaries. Vaccine bonds constitute a low-risk, high-profit investment opportunity for private sector actors, only because government donors and the public shoulder all the risk over long-term commitment timeframes.

Likewise, the lack of transparency highlighted by critics of the IFFIm and the Gavi COVAX AMC has raised serious concerns that private investors and vaccine manufacturers reap disproportionate benefits at the expense of donors and beneficiaries. Contrary to the promise of innovative financing solutions to be conducive to effective and efficient use of global health funds, there is compelling evidence that these mechanisms are a bad deal for donors and beneficiaries.

It is also unclear how these mechanisms are supposed to cater to the interests of low-income countries when they don’t get a seat at the table. Namely, those on the receiving end are not present when financial and strategic decisions about global health priorities and the distribution of resources are made, nor when vaccine prices and contracts are negotiated with manufacturers. Therefore, the governance and decision-making processes embedded in innovative financing blatantly undermine the normative principles of public health, purportedly codified into the Pandemic Agreement. Specifically, to promote equity in access to healthcare and health products.

In addition to being inconsistent with this ambition, innovative finance has so far fallen short of providing financing solutions compatible with a holistic public health approach for advancing PPPR. While innovative financing initiatives such as (RED) seem to offer promise in terms of leveraging private capital to finance PPPR and catalyse additional investments from private sector partners, their time-limited use in the context of advancing PPPR and relatively small sums raised leaves many unanswered questions regarding the prospect to scale up such initiatives, as well as their sustainability and long-term potential to promote health policies that are locally owned.

In other words, innovative financing looks to be yet more false advertising for global health financing reform, where its ‘huge untapped potential’ mainly lies with how to further promote vested interests at the expense of comprehensive global public health.