As countries face tightening fiscal constraints and sharp reductions in health aid, the global health community is confronting a hard truth: a critical piece of the financing that supported decades of progress is rapidly eroding. At a side event during the 78th World Health Assembly, the Alliance for Health Policy and Systems Research – co-sponsored by the governments of Ethiopia, Japan, Norway and the Philippines – brought together health leaders and researchers to explore not only the consequences of this shift, but also what can be done about it.
The discussion focused on charting a path forward: how countries can respond, what role domestic financing and global cooperation should play, and how research and evidence can support tough decisions in real time.
From sudden cuts to system shocks: the crisis in real terms
“What has been quite shocking is the speed and scale of the cutbacks,” said Helen Clark, Chair of the Alliance Board, as she opened the meeting. “We were beginning to talk about a post-aid era – but you don’t expect it to be dropped on you within six months. The adjustment costs are very, very difficult.”
For Ethiopia, the consequences were immediate. “The initial blow was to implementing partners,” said Dr Muluken Argaw Haile of the Ministry of Health, noting that “large portions of technical assistance and commodity procurement were disrupted.” He noted that in 2019, about one third of the total health budget was supported by foreign aid. The government is now reprioritizing essential interventions and negotiating increased allocations with the Ministry of Finance, but gaps remain. “Even that will not be enough,” he added.
In the Philippines, the announcement that long-time development partners were stepping back created both funding and coordination gaps. “We couldn’t believe our ears,” said Dr Albert Domingo. “Suddenly you’re not sure who is still funding what – and who you’re supposed to talk to.” Yet the crisis also prompted a closer look at domestic fiscal space. “We’ve always had the resources,” he said. “We are not a rich country, but our utilization rates have hovered around 60 to 70% of the approved health budget.” That’s largely due to a sixfold increase in the budget since 2013, much of it driven by health taxes.
Domestic financing and the promise – and politics – of health taxes
With traditional aid in retreat, many countries are turning to domestic resource mobilization. Building on a conversation convened earlier in the week by the Alliance and partners, health taxes became a focal point – not just as a way to raise revenue, but to protect population health.
“Taxing tobacco reduces demand and gives the revenue a boost… it’s time to dust off the evidence,” urged Helen Clark.
Dr Domingo agreed: “Taxes protect the vulnerable – women and children are the most price sensitive. If you raise prices on tobacco and sugary drinks, they’re the first to stop buying.”
But several participants noted the political complexity. Daniel Thornton, Director of Coordinated Resource Mobilization at WHO, asked from the audience about their political feasibility – noting that South Africa had recently backed away from increasing value-added tax due to political pushback. Japan’s Dr Satoshi Ezoe concurred, recalling that the introduction of a national consumption tax nearly 30 years ago caused major political upheaval.
Coordinating smarter, more equitable global support
Dr Cathrine Lofthus, Secretary-General at Norway’s Ministry of Health and Care Services, emphasized the need for more coherent and efficient global health funding. “The Lusaka Agenda captures the consensus of a truly global process,” she said, highlighting its call for stronger primary health care, catalytic support for domestic financing and reduced fragmentation.
While the Agenda predates the current cuts, she noted, “it was already clear that we needed to use resources in a more efficient way and support country ownership.” Norway is investing in tools to support priority-setting, health information systems, and common metrics – including partnerships with countries like Ethiopia to strengthen institutional capacity.
Clark also called for a broader rethink of how the global community finances collective action. “One of the big issues will be whether there can be a new approach to funding for global common goods in the health area,” she said, citing ongoing debates around pandemic preparedness and global public investment. “Global public goods have to be financed – whether it’s climate, whether it’s pandemics – and we need effective instruments for that, which we don’t really have at the present time.”
Research and real-time evidence: the role of learning in a crisis
Speakers across the panel underscored the importance of evidence-informed decision-making – and of research that is timely, specific and grounded in context.
“We don’t need frameworks – we need to know how many Filipino lives will be saved by every peso added to alcohol tax” said Domingo, adding “and we need it in two months”. For Ethiopia, building research institutions is only part of the solution. “We need the capacity for these prioritization exercises to be done frequently, not just as a one-time project,” said Dr Haile.
As panel moderator Zubin Shroff of the Alliance noted, many of the challenges being faced – from fragmented systems to hard funding choices – cut across income levels. That only strengthens the case for learning and collaboration between countries.
Japan is now launching a new UHC Knowledge Hub in Tokyo to help share policy solutions. “We want to learn from each other how to mobilize additional resources for health – not just rely on traditional aid,” said Ezoe.
A new kind of solidarity
As the event closed, Alliance Executive Director Dr Kumanan Rasanathan reflected on the stakes. “We’ve talked a lot about taxes today. But we’re also talking about changes and cuts that are leading to deaths – as we speak.”
His message was clear: the response cannot wait. Countries are already taking action – reviewing budgets, reprioritizing services, exploring new sources of funding. The task now is to support that work: with research, with smarter financing, and with genuine solidarity.