The New PAHO Revolving Fund: From Award to Access
José Luis Cárdenas Tomažič / Daniel López Lizama
Adapted from the Spanish column originally published in El Economista on October 16th, 2026 (Del control sanitario al valor sanitario: la nueva agenda de MedTech en América Latina)
On September 29, the Ministers of Health of the 35 Member States of the Pan American Health Organization (PAHO) approved the integration of the Revolving Fund for Access to Vaccines and the Strategic Fund into a single Regional Revolving Fund. The decision attracted relatively little attention despite the scale of the mechanism: in 2025, the two funds procured US$914.6 million in products and supplied 41 countries and territories.[1][2]
The reform brings together substantial financial capacity and expands the scope of one of the Americas’ leading public-sector health procurement mechanisms. But scale alone does not create access. The challenge will be to turn aggregated demand into attractive tenders, contract awards into purchase orders, and those orders into products that are available to patients when they need them. Achieving this will require predictable rules, a diverse supplier base, and national capacities to plan, finance, and execute procurement.
A Fund Much Broader Than Is Commonly Assumed
The two funds were established with different mandates. Since 1977, the Revolving Fund has supported immunization programs across the region. The Strategic Fund was created between 1999 and 2000 to facilitate access to medicines and health supplies for HIV, tuberculosis, malaria, and other public health priorities. Since then, its portfolio has expanded considerably.[3][4]
PAHO’s product list, updated in May 2026, shows that the Fund now covers several therapeutic areas associated with a high clinical burden and significant budgetary pressure. It includes diabetes medicines such as metformin, empagliflozin, and insulins; antihypertensives and statins for cardiovascular disease; chemotherapy agents and biologic treatments such as trastuzumab and rituximab; hematology and supportive-care products including erythropoietin and filgrastim; as well as diagnostics, devices, and technologies for rare diseases.[5]
The inclusion of biologic medicines adds another important dimension. The catalogue does not make it possible to determine whether each product offered is an originator biologic or a biosimilar, but it includes active substances for which biosimilar competition already exists internationally. Such competition can broaden supply alternatives and help reduce costs, provided that it operates under clearly defined regulatory and quality requirements.[5]
This evolution changes the nature of the mechanism. It is no longer simply a matter of purchasing large volumes of relatively standardized products. The integrated Fund will have to manage categories with different evidence, regulatory, pricing, logistics, manufacturing-capacity, and supply-risk profiles. Understanding these differences will be as important as aggregating demand.
Why the Merger Matters
The evolution of both portfolios made a rigid financial separation between vaccines, medicines, and other health technologies increasingly less useful. It also exposed an asymmetry. The Revolving Fund’s line of credit stood at US$310 million and, according to information presented by PAHO, approximately 20% went unused each year. By contrast, the Strategic Fund’s US$50 million credit line was insufficient to meet procurement needs for high-cost medicines.[6]
The main financial advantage of integration lies not in creating new resources, but in making better use of those already available. Applying that 20% to the US$310 million credit line suggests that the previously unused margin amounted, indicatively, to approximately US$62 million. This is neither a saving nor an official projection of additional expenditure. Rather, it is an estimate of credit capacity that could be deployed more flexibly to finance other technologies. The mechanism promoted by PAHO and the Inter-American Development Bank, announced at up to US$1 billion, serves a different purpose by expanding the financing options available to countries.[6][7]
The reform also does not increase the general fee charged by PAHO on each procurement transaction, which remains at 4.25%. PAHO notes, however, that published prices are indicative, depend on availability, and do not include all logistics components. When budgeting for procurement, countries must also take freight, insurance, and the applicable fee into account.[3][8] A reference price is not the same as the final cost, and a contract award does not yet amount to a purchase.
The Distance Between Contract Award and Access
Publicly available information provides insight into how much the Funds procure, which products they offer, and their reference prices. It provides less information, however, on the proportion of awarded lines that ultimately translate into purchase orders. This is a fundamental distinction: a regional tender identifies prices and suppliers, but actual procurement still depends on each country’s budgetary, regulatory, and administrative decisions.[3]
The gap can be even greater for high-cost medicines and biologic products. Introducing an insulin, monoclonal antibody, or therapy for a rare disease requires identifying patient populations, estimating volumes, assessing budget impact, ensuring appropriate regulatory conditions, and preparing the necessary logistics. On the supply side, manufacturers need sufficiently reliable signals to reserve capacity, maintain pricing, and commit to delivery timelines. These relationships need to be measured before conclusions can be drawn about the causes of low conversion.
The Fund’s success should therefore not be assessed solely by the prices obtained or the number of products awarded. What matters is the proportion of awarded lines that receive purchase orders, the percentage of projected volume that is actually purchased, the time required for the first order to be placed, and whether products arrive within agreed timelines. A regional price that does not translate into procurement may still provide a useful benchmark, but it is not yet access.
An Opportunity That Should Integrate, Not Displace
For companies already operating in Latin America, regional demand aggregation can offer greater predictability and help justify additional investments in manufacturing capacity, regulatory registrations, distribution, and continuity of supply. It can also broaden participation by manufacturers with a more limited presence in the region, provided they meet equivalent quality requirements and assume clear responsibilities throughout the supply cycle. The opportunity is not to bypass national capabilities, but to better connect regional scale with each country’s regulatory and health systems.
For countries with large healthcare markets and well-established regulatory capabilities, such as Mexico, Brazil, Argentina, Colombia, and Chile, the new Fund raises a question that goes beyond procurement: how to combine national and regional mechanisms when the latter can offer better conditions in terms of price, availability, or continuity of supply. There is no single answer. It will depend on the product, the competitive landscape, the health need, and implementation capacity.
The same balance applies to regional production. Since 2024, certain products manufactured in Latin America and the Caribbean have been eligible for a 2.5 percentage-point reduction in PAHO’s procurement fee. In 2025, this measure generated savings of approximately US$1.2 million for purchasing countries.[9] The incentive should not merely favor a particular geographic origin, but help build regional suppliers capable of competing on quality, price, scale, and continuity of supply.
Five Conditions for Sustainable Participation
During the regional debate, countries called for improved demand forecasting and a more diverse supplier base. PAHO also acknowledged the need to strengthen its capacity to ensure quality while working with a larger number of suppliers.[6] Against this background, sustainable industry participation requires five conditions:
1. Visibility into demand, capacity, and supply risks. Countries need more reliable forecasts, while manufacturers can provide information on production capacity, delivery lead times, and supply risks. This reciprocity improves planning and reduces uncertainty for both sides.
2. Category-specific approaches. An antihypertensive, an insulin, a monoclonal antibody, and a therapy for a rare disease cannot be managed using the same assumptions regarding demand, price, evidence, and logistics. Proposals should take into account the clinical, budgetary, and regulatory context of each technology.
3. Clear rules for competition among alternatives. The expansion into biologics creates an opportunity for both originators and biosimilars, but requires comparable criteria for quality, interchangeability where applicable, supply capacity, and total cost. Competition should broaden available options without lowering standards or disregarding national responsibilities.
4. Quality and supply performance throughout the entire cycle. Eligibility should not rest solely on the regulatory dossier. Manufacturing capacity, delivery times, supply continuity, logistics conditions, and actual performance once a purchase order has been issued also matter.[8]
5. Integrity and traceability in tenders. A Fund operating at greater scale and with a larger number of suppliers requires governance rules proportionate to that scale.
The Opportunity Created by the Reform
The integration consolidates regional purchasing power at a time when health systems need to expand access without compromising quality, competition, or sustainability. It also creates an opportunity to make better use of financial capacity, strengthen regional production, and incorporate suppliers capable of delivering value across very different product categories.
For countries, the challenge will be to translate health needs into demand that can actually be financed and procured. For suppliers, it will be to understand which products have a genuine opportunity, what requirements they must meet, and how to sustain supply across diverse markets. Between the two lies a space for analysis and coordination that will be critical to determining whether the reform delivers results.
Success will depend not only on the size of the Fund or the prices it is able to secure through tenders, but on its ability to turn forecasts into demand, awards into orders, and orders into available treatments. That conversion could make the new Revolving Fund more than an administrative reform: a regional platform for effective access.
References
1. PAHO. PAHO Member States approve strengthening of the Regional Revolving Funds. Press release, September 29, 2026.
2. PAHO. Financial Report of the Director and Report of the External Auditor for 2025. Document OD376, 2026.
3. PAHO. PAHO Strategic Fund: Products, Prices and Technical Cooperation.
4. PAHO. Report on the Charge Assessed for the Procurement of Public Health Supplies. Document CD61/16, 2024.
5. PAHO. Strategic Fund Product List and Reference Prices, updated May 28, 2026.
6. PAHO. Annual Report of the President of the Executive Committee. Document CD63/2, 2026, paragraphs 94 and 97–99.
7. IDB and PAHO. Financing mechanism to expand access to strategic health goods, based on information cited in documents CD63/2 and CD63/9.
8. PAHO. Quality Assurance of Health Technologies Procured through the Regional Revolving Funds.
9. PAHO. Review of the Charge Assessed for the Procurement of Public Health Supplies. Resolution CD61.R14, 2024; and Report on the Charge Assessed, document CE178/24, 2026.
