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Viewpoint (December 2003)

Author: Dr. Harvey E. Bale, Director General of the International Federation of Pharmaceutical Manufacturers Associations, IFPMA.

What Are the Gains From Public-Private Partnerships for Health?

Health status of poor populations in developing countries has attracted significant attention of key policy makers, international community, different advocacy groups, and public opinion.

The problem is complex and multifaceted because of multiple links between health and different components of the natural, social, political and economic environment. Over time, key stakeholders have realised that in order to improve health outcomes in developing countries, a large-scale mobilisation of resources, capacities and skills is required, which go beyond the capabilities of any individual player from the public or private sector. 

Such broad collaboration, if it is to be effective and sustainable, needs to be based on a set of specific principles such as mutual trust and respect, shared objectives and responsibilities, and true, long-term commitment. Public-Private Partnerships (PPPs) combine these principles, enabling partners with different, often hostile philosophies and missions to work together to achieve one common goal. PPPs have now become a distinctive feature of the global healthcare landscape, offering veritable solutions to complex health problems of developing world and thus contributing to the attainment of the Millennium Development Goals. The pharmaceutical industry has played a pivotal role in establishing numerous PPPs, providing strategic resources, but also acting as an integrator, bringing together players from different environments and settings.

The Pharmaceutical Industry in Public-Private Partnerships

The pharmaceutical companies are among the pioneers and the unquestionable leaders of voluntary private sector contributions, which significantly complement public funds devoted to improve health outcomes in developing countries. Since 1998, ten major companies in membership of the Partnership for Quality Medical Donations (PQMD) have donated products worth $2.7 billion. It should be noted that product donations constitute only a portion of total contributions made by the pharmaceutical companies. In general, three categories of PPPs may be distinguished which imply different types of contributions, as summarised in Table 1 below.

*Table 1. Different Contributions of Pharmaceutical Companies to PPPs

Product-Based PPP
  • Guaranteed, large-scale supply of quality, innovative medicines and vaccines
  • Donations or discounted pricing of products
  • Experience in management of product in clinical situation
  • Distribution implementation, surveillance 
  • Training for healthcare professionals
Product-Development PPP
  • Unique skills, expertise and know-how on all levels of pharmaceutical R&D value chain (from research/discovery to manufacturing/delivery)
  • Proven track record of discovered and developed medicines
  • Sophisticated technologies and equipment
  • Highly-qualified human resources
  • Compound libraries
  • Successful and efficient model of R&D
System/Issues-Based PPP
  • Experience (e.g. quality of pharmaceuticals, regulatory approval process, healthcare systems)
  • Very specific knowledge and expertise (functional and scientific)

Involvement of the pharmaceutical companies in PPPs also differs subject to "representation". This means that in some PPPs it is the entire pharmaceutical industry partnering with other actors, while in other cases these are individual (or groups of) companies collaborating with multiple partners. In the former case, IFPMA has served as a "bridge" between the pharmaceutical companies and other organisations from the public and private sector, initiating or facilitating constructive dialogues among key policy and decision makers, which led to the establishment of highly successful PPPs. Examples of such initiatives include Global Alliance for Vaccines and Immunization (GAVI) and Medicines for Malaria Venture (MMV) which are among the most successful PPPs to date.

Practically all vaccine-producing pharmaceutical companies are involved in GAVI, and their collaborative effort with numerous partners representing the international community (WHO, UNICEF), technical experts in the field of immunisation (US Centers for Disease Control and Prevention - CDC, Children's Vaccines Programme - PATH), and the donors' community (the Gates Foundation, key bilateral aid agencies) have produced spectacular results. Since its establishment in 1999, GAVI has supplied vaccines to over 30 million children, and its total commitments through 2004 have reached $1.2 billion.

MMV is another promising example of a partnership whereby the pharmaceutical industry is represented both in the governing structures (Board of Directors, Scientific Advisory Board) and on the operational level (11 biopharmaceutical companies, including 3 from developing countries). By developing and sustaining close collaboration among partners from international organisations, donors, public academic institutions, research institutes and pharmaceutical companies, MMV as a "virtual R&D organisation" has managed to create the largest antimalarial drug research portfolio since World War II, with 15 projects in its pipeline.

There are many other successful PPPs in which individual companies collaborate with different partners in order to deliver health-related interventions where needed. In most cases such partnerships have not developed their institutional independence (such as MMV or GAVI) but nevertheless they have proven a vital component of efforts to improve health status in developing countries. A spectacular example comes from the Accelerating Access Initiative (AAI) - a PPP established in 2000 to help increase access to HIV/AIDS care and treatment in developing countries. This joint initiative between five UN organisations and six pharmaceutical companies aims at improving access to affordable HIV-related medicines, and its key component consists of substantial price reductions offered by the companies involved. This country-led process, which responds to the priorities and needs identified at the national level, has benefited over 75,000 HIV-infected Africans, making for the most important contribution to improving access to HIV/AIDS medicines in Africa so far. 

It should be noted that great majority of PPPs engage individual companies rather than the entire industry. Certainly, this fact should not be considered as disadvantageous and it simply reflects the competitive nature of the pharmaceutical industry. Pharmaceutical companies significantly differ one from another in their disease focus, strategies, philosophies, etc. This implies that each company has its own vision regarding its societal roles and responsibilities, and consequently developing an industry-wide position may encounter certain level of disinterest or opposition. Most importantly, only a limited number of the pharmaceutical companies have adequate strategic resources within a given therapeutic area (i.e. products, relevant R&D expertise, etc.). Given a narrow focus of PPPs, this should be considered as a "natural" limitation of the number of potential industry partners in such initiatives.

Value of Public-Private Partnerships for Health 

PPPs are widely recognised as a vital contribution to improving health outcomes in resource-poor settings, and the World Health Organisation itself is involved in at least 16 such collaborative initiatives with the pharmaceutical companies and other actors. The particular feature of PPPs is that they embody the principle of "win-win" solutions, i.e. they create benefits both to contributors and recipients. This provides for an important impetus for organisations from different settings and with divergent values to be mobilised around one common objective which is, broadly speaking, health improvement in developing countries.

PPPs are also unique for their capacity of risk and responsibility sharing. Since health problems of developing countries may not be sufficiently addressed by the "western" model of healthcare, i.e. the one based on developed healthcare infrastructure, existing efficient markets for medicines, intellectual property protection to secure innovation, etc., there is a need for some complementary interventions. In the case of pharmaceuticals this implies the responsibility of public sector to compensate for the lack of the market mechanism, on which the pharmaceutical industry depends. PPPs enable such responsibility sharing whereby the public (or donors') funds are combined with skills and expertise of the pharmaceutical companies, thus harnessing innovation for the benefit of the poor. This is exactly the case of MMV and other product-development PPPs, which can employ state-of-the-art pharmaceutical technologies and laboratories, and best industry and academic researchers to conduct R&D into diseases primarily affecting developing countries. Similar logic underpins the PPPs targeting access to medicines and vaccines, such as GAVI, which also trigger innovation in less "economic" therapeutic areas by offering a guarantee of large-scale purchases of new products designed for developing countries.

Positive experience from existing PPPs proves that public-private collaboration is not only possible but also it generates substantial benefits which would be difficult to produce by either public or private sector working in isolation. The pharmaceutical industry, by virtue of its unique role in public health, has been one of the central components of such initiatives. Due to its invaluable contributions and strong commitment many of the challenges facing developing countries have been addressed, and the increasing tendency among the companies to be involved in PPPs creates good prospects for the future. 

Dr. Harvey E. Bale


Further Reading

  • IFPMA, Building Healthier Societies Through Partnership, International Federation of Pharmaceutical Manufacturers Associations, Geneva 2003.  
  • Kettler H., Towse A., Public Private Partnerships for Research and Development: Medicines and Vaccines for Diseases of Poverty. Office of Health Economics, London 2002.  
  • Kettler H., White K., Valuing Industry Contributions to Public-Private Partnerships for Health Product Development. Initiative for Public Private Partnerships for Health, Global Forum for Health Research, Geneva, May 2003.  
  • Reich M.A, Public-Private Partnerships for Public Health. Harvard University Press, Cambridge 2002.  
  • Widdus R., Holm K., Chacko S., Currat L., Towards better defining 'public-private partnerships' for health. Initiative on Public Private Partnerships for Health, Global Forum for Health Research, Geneva 2001.  


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