What Will Happen to Global Health?

The donor cash crunch

The most celebrated cuts to development assistance have come from the US. Elon Musk said that he had put USAID, the country’s principal development agency, “through the woodchipper”. Musk, distressed as he will be to hear it, was emulating not originating: European funders have instituted massive cuts to their development assistance since COVID. The UK, for example, has gone from spending 0.7% of its gross national income on development to effectively spending about 0.2% after a February 2025 announcement (the official figure is higher, but a third of the money goes to pay for the expenses of refugees within the United Kingdom). By 2027, The Netherlands will spend about a third of what it did in 2022.

Some countries are going the other way: Italy has increased its ODA spending modestly under a right-far-right coalition government — its sensible, albeit unproven, rationale is that improving conditions in source countries will reduce the flow of immigrants. Spain’s socialist government has an ambitious programme focussed on a feminist foreign policy. Ireland’s centre-right — centre-left coalition government is pledged to meet the UN’s 0.7% of GDP target by next year. However, these are exceptions, and it seems likely that the largest European spender on health, Germany, will cut its spending under a new government led by the Christian Democrats.

As the flows reduce, recipient countries may ask to have what remains focussed on areas where there are opportunities for patronage — the currency of governments everywhere. If aid is to be used to achieve donor foreign policy objectives, these requests are likely to be granted. Health spending offers fewer opportunities for building domestic gratitude than do other aid pots such as governance, defence and infrastructure.

We do not yet know how these cuts in development assistance will affect Gavi, The Global Fund and other very efficient providers of specialised health services. On the one hand, there will be less money overall and what there is may be used to build bilateral ties for the advantage of donors. On the other hand, these organisations, and Gavi especially, consistently rank near the top of evaluations of impact and have very low transaction costs. They may, therefore, be the last to get cut.

Africa will miss the money, not the interference

The cuts will be felt, especially in areas where development assistance has really worked. HIV, for example, has gone from being a devastating plague that threatened the future of eastern and southern Africa to being a manageable life-long illness that barely registers on the radar of planning ministries. That could be undone if supplies of medicines are interrupted, or clinics are no longer open reliably.

Even in HIV, though, African models may be better than plans written by Americans who are trapped by the world’s most expensive and least efficient health system. For example, South Africa started the Centralised Chronic Medicines Dispensing and Distribution (CCMDD) programme in 2014. It allows any clinically stable patients to collect pre-packed medicines from convenient pick-up points, including private pharmacies, community organizations, and clinic-based fast lanes. Eligible patients only need to visit clinics every six months for review instead of monthly.

The CCMDD programme represents a level of ease and convenience unimaginable to many Americans. For example, people living with HIV in Mississippi must navigate a mind-numbing bureaucracy to establish their eligibility for the AIDS Drug Assistance Program in that state. They must then pick up their medicines from a participating retail pharmacy, which cannot be identified online, and which may or may not be reimbursed promptly by the Mississippi State Department of Health.

The differences are reflected in outcomes. More than 94% of South Africans on antiretroviral treatment (ART) who knew their HIV status were virally suppressed in 2022, and 81% of all people aged 15 years and older living with HIV in South Africa were virally suppressed in 2022, despite the pandemic disruptions. Being virally suppressed generally means that HIV will not progress and that the person living with the virus cannot pass on the infection. By contrast, only 44% of people living with HIV in Mississippi were virally suppressed in 2018 — more recent data do not seem to be available, which must make tracking progress tricky.

Mississippi blames COVID and its low salaries for the lack of recent data, which suggests no dramatic improvement will likely be recorded whenever data are published. CDC data from 2022 showed that among all people diagnosed with HIV in 48 states and the District of Columbia, 65% had achieved viral suppression. Shouldn’t someone be funding a transfer of technical expertise from South Africa to the US?

We once asked over a hundred senior Africans working in HIV about outside experts. We used a clever market research methodology that allowed us to see if they knew European and American experts (they did), if they liked many of them (they did), and if they thought many had things to teach Africa (they definitely did not).

USAID has always been an America-first programme

The HIV example highlights the biggest failing of USAID: it usually sent US people and US goods, even when others were much better suited to provide relevant expertise. It was sometimes as much about helping the comfortable in the USA as it was about helping the struggling in Africa and Asia. High-cost, subsidised US farmers benefitted from its US food aid spending; uncompetitive airlines such as United got to sell high-priced tickets because people using USAID money could only fly US airlines; most USAID recipients had to buy US-made cars, such as er… Tesla, unless they got special permission to buy their favourite Toyota AWD tanks. A few years ago in Mozambique, bewildered local officials showed me extremely prescriptive and entirely irrational targeting plans drawn up in the Obama era by highly paid Washington consultants who had never been to Mozambique and who mostly did not speak Portuguese — their ideas about who was at risk in which Mozambican counties were, at least, original.

Virtually no US development assistance qualifies for recognition by the Development Assistance Committee of the Organisation for Economic Cooperation & Development because the DAC requires that all qualifying ODA buy the best-value goods and services, and US entities ostentatiously refuse to do so. Chemonics, a for-profit US consulting group, received over 10 percent of USAID’s total budget in 2023.

The DAC also requires development assistance to go to countries that need it; Europe and Eurasia received 40 percent of USAID funding in 2023 — a good chunk to Ukraine, but much to rich US allies. This is congressionally mandated, as are many individual programmes, often inserted by influential legislators during budget reconciliation negotiations.

I once talked under policy research rules to a senior USAID official about which vaccines might be supported by USAID in the future. Suddenly he asked me what I thought of USAID’s malaria prevention programmes in Armenia. I was embarrassed: I have worked in Armenia, but I had no idea there was any malaria there — I thought it got too cold in winter for mosquitoes to survive. I decided to admit my ignorance. “There isn’t any malaria in Armenia,” he said. “Which means that Armenian travellers to malaria-endemic areas are the best educated in the world. A California congressman with a lot of Armenians in his district wrote Armenia into multiple programs, including malaria, so we have no choice.” I could never verify what the official told me. Still, his point was clear: USAID often had to do things not because its expert and committed staff wanted to but because US political considerations required it to.

European development assistance usually qualifies for DAC recognition, but you still have to question how useful some of it is. Germany gives almost €2 billion a year to the state-owned Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). Still, because it is a not-for-profit company, GIZ is “not required to disclose their financial statements, use of funds, or their partners,” according to NGO Monitor.

It’s impossible to know how much of GIZ’s €2 billion stays in Germany because GIZ won’t say. “This decentralized system makes it nearly impossible to follow the flow of taxpayer money, or to provide the oversight necessary to prevent diversion of aid…[The] multiplicity of German funding frameworks for NGOs results in ‘double-dipping’” — in which an organization is funded by more than one framework, often for very similar activities, for the same timeframe, NGO Monitor adds. (NGO Monitor is a fairly right-wing source with a distinct agenda, but GIZ is at the bottom of the “good” category on the International AID Transparency Index, whereas the African and Asian Development Banks are high in the “very good” category).

GIZ will not disappear, although the centre-right parties have been sceptical about some of its past activities. German aid will, though, be more tightly aligned with geostrategic and migration policy considerations and, encouragingly, will probably keep its focus on women’s rights and on reproductive health.

Where will the money come from?

If the old model is disappearing, we cannot look to most low and lower-middle-income national governments radically increasing their own spending on health from current expenditure. After COVID, many are facing strong economic headwinds. Twenty African countries are now at risk of debt distress or default; 32 spend more on servicing debt than investing in healthcare. In Asia, countries such as the Maldives, Pakistan, and Sri Lanka are in debt distress, too. Many owe a lot to China, which shows much less inclination to write off debts than did Western countries during the last crisis. Many others fund vanity projects instead of necessities — €30 million to subsidise losses at Uganda Airlines, for example, even as Ugandans die because PEPFAR halted activities.

However, a change driven by the Organisation for Economic Cooperation and Development — a club of rich countries — may help. The OECD is working to reclassify spending on prevention as an investment — just like spending on bridges or fibre-optic cables. Money used to strengthen health systems or to prevent disease might no longer come out of the day-to-day budget but instead, be amortized over all the years of benefit it promises to produce. It should be feasible because prevention is typically about 5% of health spending, while curative care takes up the lion’s share.

If that were to happen, pharma companies and others might be invited to make some of their reimbursement contingent on benefits being realised over that longer time frame. Government-backed investment funds such as Germany’s KfW and the UK’s BII should also consider this kind of investment.

The banks are coming

The same broad trend of thought guides the World Bank and many regional development banks. Some of that spending seems influenced by the vagaries of what is on the political agenda this month — billions set aside by the World Bank Group for investment in regional manufacturing of medicines and vaccines, for example. Most of that money has gone unused because there just isn’t that much that’s worth investing in or even ready for spending.

However, there is a lot of solid thinking too. In its 2022–2030 Strategy for Investment in Quality Health Infrastructure, the African Development Bank (AfDB) highlighted the potential gains on offer. “Poor health outcomes reflect a lack of access to quality health services: a third of Africans live more than two hours away from health services, and there are severe shortages in hospital beds, medical equipment, and drugs. The economic costs of health challenges are severe. It is estimated that Africa loses $2.4 trillion in annual output due to poor health,” it said.

The money has started to flow. Late in 2024, Tanzania obtained a $75 million loan from the AfDB to build skills and capabilities in preventing and treating cardiovascular disease. I might rather that the money went into primary care, but I’m not a Tanzanian politician who needs to plan for the future and get re-elected; the accountability of elected leaders is key to a continuing flow of health investments.

The AfDB is also working on primary care. It and the European Investment Bank, the Islamic Development Bank and the WHO launched an investment platform in 2023 that will make an initial €1.5 billion available to low- and low-and-middle-income countries in concessional loans and grants to expand the reach and scope of their primary health care services, especially for the most vulnerable and underserved populations and communities.

Dealing with investment banks requires a different skill set to dealing with donors, be they states or philanthropies. I’m glad I now work somewhere with colleagues who are used to investor relations and thinking like investors.

First, banks can’t afford to do little things. Traditional development donors like pilot projects, a small army of PhDs writing up the results, and then step-by-step expansion. The transaction costs of this approach are much too high for financial institutions which want to act at scale and refine as they go. You need a big partner with big ambitions: I think of an African Christian Health Association that was ready to work on a roll-out of diabetes screening and treatment through all of their cooperating churches nationwide.

Second, banks are much more transparent: you need to make the numbers add up and show how you are contributing to their stated goals. This means being able to model the overall fiscal impact of health interventions, something that is beyond health technology assessment authorities in many advanced economies. Partners need good economists and robust investment cases.

Third, development banks need sovereign backing for projects. Foundations and the grantees of development agencies often work around national governments, not with them. Public affairs is difficult after all — I know as it makes up about half of my life. Governments don’t need to be the implementers or the underwriters, but they must be enthusiastic endorsers. That requires good communication focused on the concerns of elected representatives, officials, and ministers.

Life sciences companies need to think like banks

Banks are essential for people who lack ready cash. That, though, is not a problem for the pharmaceutical industry, which tends to have access to a lot of cash and problems deploying it in a way that builds long-term shareholder value. This is where middle-income countries start to look very attractive.

Our collective position as a family of industries (immunisation, diagnostics, treatment) is that spending on health today creates value in the medium and long term. Longer, healthier, and more fulfilled lives build prosperity, we tell anyone who will listen. It may be time to put shareholder assets where our mouths are.

The conventional model is that health systems pay for health goods as they use them. That is unaffordable for middle-income countries and discounting goods to an affordable price creates resentment in high-income markets. The solution is to get paid as benefits accrue and to vary the payment depending on the benefits. That has been impossibly risky and difficult until recently. However, while health systems and professionals squabble over who gets to control integrated electronic patient records in rich countries, many lower-middle-income countries are just getting on with it.

Kenya has a national e-Health strategy and has launched tibERbu, a system to provide a single point of information for doctors and nurses to access patient digital records during hospital visits. It’s complemented by primary care initiatives too.

India dwarfs everybody else: by December 16, 2024, 462.5 million health records were linked with Ayushman Bharat Health Accounts (Ayushman Bharat is the government’s national health initiative). By that date, 542,132 healthcare professionals and 355,072 health facilities were registered with the Ayushman Bharat Digital Mission. This is the basis for tracking impact in a way that will be beyond the capacity of Europeans and North Americans for some time to come.

Two years before its 2022 acquisition (for almost $29 billion) of US health records company Cerner, Oracle rolled out an ambitious programme with the Tony Blair Institute for Global Change, “to deliver cloud technology to digitize and unify national health data starting with the management of vaccinations [in Africa]. The Oracle Health Management System creates an electronic health record in a cloud database for every person as they are vaccinated. This highly secure system can be quickly configured to interoperate with each country’s existing technology and meet its most stringent data sovereignty requirements. Participating countries will have access and support for the system, free of charge, for the next ten years.”

Their idea is to own the system for electronic health records in many African countries. Oracle is a responsible company but not a wildly generous one; it sees a long-term market because it knows that one day this century, most of the babies born in the world will be African.

If you are in a life sciences company, tell me with a straight face that you cannot prove the impact of your products in this emerging ecosystem. Of course, there are risks: you might not get paid, or your products might not have the impact that you thought they would, but if there are no risks, there are few gains. Experimenting in Ghana, India and Kenya will be great practice for when you are called to do it in France and the USA, as you will be soon — Italy and the UK already have a few pay-for-performance deals, although they are restricted to high-cost medicines used by specialist centres because of the relatively primitive capacity to track outcomes elsewhere.

In the past decade, several large pharma companies have withdrawn from most of sub-Saharan Africa and even from emerging South Asian markets. That may come to look very short-sighted as the global economic centre of gravity continues to shift south and east.

Don’t forget the realities of geopolitics

Development assistance is not dead. The existing model was born in the 1960s as a weapon in the Cold War. Newly independent nations benefited from Soviet-bloc technical and financial assistance, and the West wanted to limit it. The excesses of that time — the Congolese space programme, for example — have tainted the image of aid ever since.

The current US administration is even more worried about China than European leaders, which is saying quite something. The Americans and the Europeans will spend to limit Chinese and, in the case of the Europeans, Russian influence; they will not be entirely calm about growing Indian soft power either. This spending may be more ideological and lower quality than spending by UK DFID or USAID used to be. There may be less of it in total, but it will still be substantial and, if more of it actually leaves the US, it will stretch further.

Project 2025, the blueprint supposedly guiding the Trump Administration, makes some very sensible recommendations for a new model of USAID, although you have to look past bizarre rants on abortion, climate change and transgender rights to get to them. If Project 2025 is still being referred to, expect a drive to integrate health programmes into unified delivery structures in countries. Expect also a focus on families, women and children.

Project 2025 says, entirely reasonably, “USAID far more often counts on expensive and ineffective large contracts and grants to carry out its programs. It justifies these practices based on speed and a lower administrative burden on its institutional capacity … Shifting from giant U.S.-based implementers has proved difficult to achieve, however, given intense internal bureaucratic resistance; opposition from the aid industrial complex; and foot-dragging from progressives, who view local NGOs — especially faith-based NGOs prominent in Africa and Latin America — as obstacles to promoting abortion, gender radicalism, climate extremism, and other woke ideas.

The President’s Emergency Plan for AIDS Relief (PEPFAR) has shown that localization at scale is possible within a short time span … Countries with strong health institutions and sound public health practices responded quickly to and recovered more rapidly from the COVID-19 pandemic. This demonstrates the importance of localization, by which USAID helps governments and the private sector in developing countries to strengthen their own ability to address needed training, services, accountability, and organizational capacity.”

The emphasis on faith-based groups will likely be the most palatable part of a not-bad agenda. I’ve been part, I think, of every Christian Connections in International Health (CCIH) global meeting for the past decade; our company is an associate member of CCIH. I’m theologically far more liberal than most of the African Christian health groups and Western Christian charities that make up CCIH, but I have an enormous respect for its work and its potential. Look at one example: the Cameroon Baptist Convention is supported by a minority religious community in Cameroon, and its headquarters are in the troubled Anglophone area of the country.

The last time I visited a CBC facility, you couldn’t move for posters asking if you had had your daughter immunized against cancer. Its introduction of HPV vaccines through its health system was so wildly successful that the national government felt obliged to start its own programme. My (non-Baptist) colleague in Yaoundé is excited every time she talks to CBC about other possible cooperation because they are so enthusiastic and committed.

Companies and organisations must be flexible and pragmatic to take advantage of the development assistance programmes that come next. They won’t need to become Republicans or Baptists or bankers but they will need to be open-minded enough to work with them. Maybe most difficult, they must ignore a few well-meaning civil society groups that tell them that purity matters more than delivering services. They will also have to communicate about what they are doing openly and compellingly.

It will be easier to live with new aid initiatives from European countries, although many of those, like Italy’s, will focus on limiting immigration to the EU and provoke some of the same backlash.

Watch and be ready

Global health is not dead and not even dying. Look for partners, consultants, and employees who are ready to make the most of a future that may seem unfamiliar and occasionally inhospitable. We have all been too comfortable for too long.