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Public-Private Partnerships: Beneficial or Undermining?

Author(s): Louis J. Currat1
Affiliation(s): 1Former Executive Secretary, Global Forum for Health Research, Geneva, Switzerland
Key issues: Many infectious diseases affecting the developing world are potentially treatable in the longer term. However, economic disincentives have resulted in underinvestment in medical research for new vaccines and medicines targeted at these diseases. Thus, of the more than 1200 drugs that reached the global market in the past three decades, only an estimated two to three per cent were for tropical infectious diseases that primarily affect the poor. Worse yet, three million children die each year from diseases that could have been prevented with existing vaccines (for example vaccines against hepatitis B and Haemophilus influenzae type b), underlining the huge economic, social and cultural obstacles existing between the availability of products and their accessibility by poor populations. The main reasons for this situation are that, on the one hand, high costs and inadequate commercial returns have resulted in the withdrawal of the private commercial sector from investments in tropical disease research and commercialization of health products for the poor populations of developing countries. On the other hand, the public sector has concentrated its financing on basic health research and generally lacks the expertise, mechanisms and resources to discover, develop, register and commercialize new products. In other words, there is a disconnection (or several) in the pipeline for producing, developing, and delivering health products to the poor between the public and private commercial sectors and these disconnections may be different for different diseases.
Meeting challenges: How to reconnect and/or reinforce this pipeline? The solution has to come from joint undertakings of the public and private sectors. In many cases, the initiative to launch a public/private partnership is likely to come from the public sector, as the sector is ultimately responsible for ensuring that the poor have access to health products. It may also come from civil society organizations, pursuing a global health objective with private resources. Examples also exist where the initiative was taken by the private commercial sector.
Conclusion (max 400 words): When are PPPs needed? In short, one could say that the larger the disconnection in the product discovery/delivery pipeline between the public sector and the private commercial sector, the higher the rationale for launching a PPP. Are PPPs the only strategy to reconnect and reinforce the discovery/delivery pipeline? No, the public sector may decide to use push and pull interventions to help correct the structural problem of under-investment in the diseases of developing countries. If the disconnection is particularly large, it may choose to use push and pull interventions together with support to specific PPPs in order to speed up the impact on the health of poor populations. Do PPPs always work and are they always cost effective? With good management, the benefit/cost ratio of PPPs may be very high, i.e. the benefits of joint action may be much larger than what each institution could obtain separately for the same amount of time and resources invested. In cases where the overall estimated benefits become limited, while the costs remain high, it is justified to stop the investment in the partnership. To illustrate these points, the presentation will draw upon a few examples of actual PPPs.

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