HIV and tuberculosis (TB) programmes in the country are projected to face a combined funding gap of approximately USD 2.4 million over the next three years as international development assistance continues to decline and the country prepares to transition towards greater domestic financing of essential public health programmes.
The funding challenge comes amid a steady reduction in Official Development Assistance (ODA) to Bhutan’s health sector and the gradual phase-out of support from the Global Fund, which has long been a key financier of the country’s HIV, TB and malaria programmes.
According to the Ministry of Health (MoH), external assistance has declined sharply over recent years. ODA accounted for 23.78 percent of Bhutan’s total health expenditure in fiscal year 2020-21, falling to 14.56 percent in 2021-22 before dropping further to 9.32 percent in 2022-23.
While the downward trend is clear, the ministry said it is still difficult to estimate the precise value of future aid reductions during the remainder of the 13th Five-Year Plan because of continued uncertainty surrounding global development financing.
“The findings from the next round of National Health Accounts assessments will provide a clearer understanding of the evolving trend of ODA support to Bhutan’s health sector and inform future planning and resource mobilisation efforts,” the ministry said.
The ministry is currently conducting the next National Health Accounts assessment covering fiscal years 2023-24, 2024-25 and 2025-26 to better understand changes in external financing and guide future policy decisions.
The anticipated funding gap is closely linked to Bhutan’s transition away from Global Fund assistance as the country progresses towards greater financial self-reliance.
The ministry said funding under Global Fund Grant Cycle 7 (GC7: 2024-2026) has already been reduced from USD 3.53 million to USD 3.10 million.
Under Grant Cycle 8 (GC8: 2027-2030), Bhutan will begin the final phase of donor transition. While malaria will continue to receive transitional support, GC8 will represent the last Global Fund allocation for HIV and TB programmes, requiring the Royal Government to assume increasing financial responsibility.
“These changes primarily affect HIV, TB, malaria and related health systems strengthening activities,” the ministry said.
Officials added that Bhutan has been preparing for the transition over several years by progressively increasing domestic co-financing commitments, which have risen from 15 percent to 25 percent since 2024.
The National HIV/AIDS and Sexually Transmitted Infections Control Programme (NACP) is expected to face a cumulative funding gap of USD 1.38 million between 2027 and 2029, while annual shortfalls are projected at USD 487,634 in 2027, USD 442,457 in 2028, and USD 448,883 in 2029, averaging nearly USD 460,000 each year.
Although Bhutan will receive USD 647,156 for HIV activities under GC8—equivalent to approximately USD 209,866 annually—the allocation is expected to finance only about 77 percent of programme requirements during 2027, leaving the government to bridge the remaining gap.
To sustain HIV services, the ministry has adopted a targeted Strategic Swap financing approach. Under the arrangement, Global Fund resources will focus on community outreach, field implementation and laboratory diagnostics, while the Royal Government will gradually assume responsibility for procuring antiretroviral (ARV) medicines and financing health facility operations.
The government is expected to contribute USD 241,090.89 (approximately Nu 21.6 million) over the three-year period—about USD 80,363 annually—raising Bhutan’s co-financing contribution to 27.7 percent.
The ministry said the strategy would help preserve the gains achieved through HIV prevention, treatment and care while ensuring uninterrupted access to lifesaving medicines.
The National Tuberculosis Control Programme (NTCP) is also expected to experience financial pressure during the transition period. According to the ministry, TB interventions will require approximately USD 7.93 million throughout the 13th Five-Year Plan, including USD 4.8 million between 2026 and 2028.
Despite increasing domestic allocations, projected funding gaps remain significant, reaching USD 449,458 in 2026, USD 220,326 in 2027, and USD 353,432 in 2028, for a cumulative shortfall of about USD 1.02 million. Domestic financing for TB is expected to increase steadily from around USD 1.23 million in 2026 to USD 1.35 million by 2028.
The ministry said the remaining gap will be addressed through increased government financing, fulfillment of Global Fund co-financing commitments and support from development partners, including the World Health Organization (WHO), STAC, and The Union, which are expected to provide grants totaling approximately USD 469,305.
Health officials added that TB services will remain fully integrated into Bhutan’s broader public health system to ensure uninterrupted diagnosis, treatment and patient care.
Although Bhutan has successfully eliminated malaria, maintaining that achievement remains a major priority as donor support declines. The ministry said the malaria programme currently relies on the Global Fund for about half of its total financing, making the transition particularly challenging.
“The withdrawal and transition of this funding will be a challenge for the programme in sustaining the pace of surveillance and maintaining the competency of health workers, both of which are critical to holding the gains made so far,” the ministry said.
Bhutan is now implementing its Prevention of Re-establishment (PoR) strategy, which focuses on maintaining intensive surveillance, rapid diagnosis and prompt treatment to prevent imported malaria cases from re-establishing local transmission.
Border districts remain particularly vulnerable due to cross-border population movement, while the planned Gelephu Mindfulness City is expected to increase the movement of migrant workers, heightening the importance of strong surveillance systems.
The ministry said collaboration with regional partners, including WHO, the South-East Asia Regional Centre for Malaria (SRCMF) and the Asia Pacific Leaders Malaria Alliance/Asia Pacific Malaria Elimination Network (APLMA/APMEN), will continue to strengthen Bhutan’s malaria prevention efforts.
To ensure long-term sustainability, malaria medicines and diagnostic tools have already been incorporated into Bhutan’s national essential medicines list, enabling the government to gradually assume procurement responsibilities. A costed National Strategic Plan for Prevention of Re-establishment has also been endorsed to guide future interventions.
As international development assistance continues to decline, the MoH is implementing a broader strategy to strengthen domestic financing and reduce dependence on external aid.
The ministry plans to expand government financing for malaria interventions, utilize the Health Trust Fund to procure essential medicines and diagnostic supplies, strengthen cross-border disease surveillance, and explore innovative financing mechanisms, including climate and environmental funding, One Health initiatives and regional partnerships.
Officials stressed that continued investment in surveillance systems, laboratory diagnostics, medicines, logistics and skilled health workers remains essential to safeguarding Bhutan’s public health achievements.
“These interventions cannot be compromised at any cost since the cost of malaria resurgence would be far more expensive for the government to bear,” the ministry said.
Despite the expected reduction in donor support, the ministry expressed confidence that increased domestic investment, stronger co-financing commitments and the integration of disease-control programmes into the national health system will enable Bhutan to maintain essential HIV, TB and malaria services while successfully navigating the transition towards greater financial self-reliance.
Nidup Lhamo, Thimphu
