The Global Health Funding Crisis: Navigating the Abrupt Decline in Donor Aid

The global health system has long been built on a model of strong international partnership. Programmes supported by PEPFAR, the Global Fund, Gavi, and the World Bank have saved millions of lives by expanding access to vaccines, HIV treatment, and essential healthcare services while reducing deaths from tuberculosis, malaria, and other preventable diseases.

That model is now being tested.

Development Assistance for Health (DAH) declined by 21% between 2024 and 2025, from $49.6 billion to $39.1 billion, with IHME projecting a further decline to $36.2 billion by 2030. Rather than a short-term funding gap, these figures point to a fundamental shift in how global health will be financed in the years ahead.

This isn’t a new phenomenon. The world invested more than $880 billion in DAH between 1990 and 2019, and that funding has never been evenly distributed: in low-income countries, DAH still accounts for around 29% of per-capita health expenditure, compared with just 3% in middle-income countries. That imbalance is why the current contraction hits some countries far harder than others.

The challenge is no longer simply about replacing lost donor resources. It is about redesigning the global health system for a future where countries are expected to finance, manage, and strengthen their own health systems. At the same time, international partners play a more catalytic role.

Why is global health funding declining?

Several factors are driving the current funding contraction.

Governments that have traditionally financed global health programmes are facing growing fiscal pressures, competing domestic priorities, and rising public debt. At the same time, the global health landscape has become more complex. Countries are no longer responding only to infectious diseases; they must also address non-communicable diseases, ageing populations, climate-related health threats, and pandemic preparedness.

These competing demands are stretching limited resources across a wider range of priorities.

The clearest example is the United States, historically the largest single donor to global health. The administration’s America First Global Health Strategy (2025) set out a deliberate shift away from open-ended bilateral health financing toward narrower, more transactional partnerships.

The effects are already visible in the numbers: the FY2026 budget request cut bilateral PEPFAR funding by $1.9 billion, down to $2.9 billion, and total PEPFAR funding (bilateral programming plus contributions to the Global Fund and UNAIDS) fell to $6.0 billion, its lowest level in years. U.S. contributions to the Global Fund dropped to $1.25 billion in FY2026, $400 million below the prior year and $750 million below their FY2023 peak.

Through the Transforming the Global Health Ecosystem Report, Dr Kaberuka and his co-authors argue that the decline in donor funding reflects a broader transformation in global health governance. Rather than relying indefinitely on external financing, countries are increasingly expected to strengthen domestic investment and build health systems that remain resilient even when international priorities shift.

Which programmes are most at risk?

The reduction in development assistance for health has significant implications for disease-specific programmes that have historically relied on external support.

Funding provided through PEPFAR, the Global Fund, and Gavi has been instrumental in reducing HIV/AIDS deaths, expanding vaccination coverage, and controlling tuberculosis and malaria. Together, these institutions, along with the World Bank, account for more than 80% of total development assistance for health in many low-income countries.

As donor funding declines, there is growing concern that essential services could be disrupted, particularly in countries where domestic financing remains limited. KFF’s analysis of 29 countries with signed U.S. bilateral health agreements found that combined U.S. and Global Fund funding reductions between 2026 and 2029 total an estimated $4.3 billion, a 24% drop from prior levels, with the U.S. responsible for roughly 77% of that decline.

The report also highlights wider risks beyond infectious diseases. Humanitarian programmes, epidemic preparedness, health research, and innovation may all face increased financial pressure if funding continues to contract.

Without careful planning, decades of progress could begin to reverse.

What happens if funding keeps falling?

The consequences extend beyond individual health programmes.

Reduced external financing may slow progress towards universal health coverage, delay investments in primary healthcare, and limit countries’ ability to respond to future disease outbreaks.

However, the report argues that the funding crisis also presents an opportunity.

Rather than attempting to restore the donor-dependent model of the past, governments can use this moment to build more resilient systems based on domestic financing, stronger public financial management, regional collaboration, and more efficient institutions.

International partners will remain essential, but their role is expected to evolve from long-term financiers of national health systems to strategic partners supporting innovation, technical expertise, global public goods, and countries facing exceptional challenges.

Preparing for a post-aid future

The future of global health will depend less on the volume of international aid and more on how effectively countries mobilise and invest their own resources.

This means strengthening tax systems, improving public financial management, attracting investment through development banks, and integrating health into national economic planning.

It also requires a shift in mindset. Health can no longer be viewed solely as a social service dependent on external support. It must become a national development priority that contributes directly to economic growth, human capital, and resilience.

The global health funding crisis is therefore not simply about shrinking budgets. It marks the beginning of a new era in which countries have greater ownership of their health systems while international institutions focus on enabling long-term sustainability rather than maintaining dependence.

The transition will not be easy, but it offers an opportunity to create stronger, more self-reliant health systems that are better equipped to meet the challenges of the coming decades.

Frequently asked questions

Why did global health funding decline in 2025?

Development Assistance for Health fell by 21% between 2024 and 2025 due to fiscal pressures among donor governments, shifting geopolitical priorities, and growing demands on public spending.

What is Development Assistance for Health (DAH)?

Development Assistance for Health (DAH) refers to international funding provided by governments, multilateral organisations, and philanthropic institutions to support health programmes in low- and middle-income countries.

Which diseases are most affected by donor funding cuts?

Programmes addressing HIV/AIDS, tuberculosis, malaria, childhood immunisation, and humanitarian health responses are among those most vulnerable to declining donor support.

Will global health funding recover?

The report suggests that while international funding will continue to play an important role, countries should not expect a return to previous levels of donor assistance. Instead, future health systems will increasingly rely on domestic financing, regional leadership, and strategic international partnerships.

Based on research by Muhammad Ali Pate, Donald Kaberuka, and Peter Piot, published in “Transforming the Global Health Ecosystem: Lessons Learned and a Vision for the Future.“