This article reviews Klarman’s classic article ‘The case for public intervention in financing health and medical services’. Government intervention still plays an essential role in most public health actions but the links between public health expenditure and health improvement are tenuous and econometric analyses have yielded widely divergent results, leading us to the highly consensual formula that ‘it is not enough merely to increase expenditure on health’. Contemporary analyses agree that efforts to strengthen health systems or to control neglected diseases are underfunded. Increased expenditure on health will be a source of employment for the surplus workforce of the manufacturing sector and the health industry will be the driving force of tomorrow’s economy.
Public-Private Mix
Diseases that dominate the health of most African populations, such as AIDS, malaria, and tuberculosis, have always received a small proportion of the global financial support available for medical science and health interventions. Of the 1393 new drugs approved in the 25 years before 2000, only 13 were specifically indicated for tropical diseases. Health-related public-private partnership organisations have been supported for decades by the traditional public-sector research funding bodies. These major public-sector funding bodies are located in developed countries and, although the situation is changing, direct access to funding has historically been very difficult (or legally impossible) for researchers from developing countries. As a result, even where developing-country researchers have received research funds from such agencies, most of the funding has been channeled through host country institutions. This creates a dependency relationship, as well as multiple bureaucratic hierarchies in administering such grants.
It is a myth that health in Africa is financed primarily by the public sector. About 36% of funding in Africa is from out-of-pocket payments, with 7% from other private sources and 27% from donors. Only 30% of African health care funding is public funding. In addition, 32% of healthcare access for rural Africans comes from the private sector, and 46% of doctors in sub-Saharan Africa work in the private sector. The for-profit private sector provides significant care for sub-Saharan Africans, across income groups, and this is expected to double by 2016. Since there are not enough resources in the public sector and governments cannot rely forever on development partners (donors) funds, Public/private partnership can help expand the pool of human resources.
Pharmaceutical pricing policies are designed with national objectives in mind, but are the transnational implications always taken into account? This study notes that specific characteristics of the pharmaceutical market have given rise to current pharmaceutical prices. Market-based or ‘free’ pricing is common for products not subsidised by coverage schemes. Price regulation exists in most countries but does not necessarily result in lower prices because prices are determined by the respective market powers of the parties involved. Many other types of policies, other than those directly related to pricing, affect the pharmaceutical market and even if policy makers hold common objectives, they may weight them differently when trade-offs are required. More investment incentives for research and development are needed.
This Guidance Note is based on the proceedings of the meeting and offers policymakers and researchers the latest evidence on private-provider networks and franchises, lessons learned in the field, and policy recommendations on how to mobilise private-provider networks and health franchises to help address reproductive health care needs in developing countries. Recent evidence from sub-Saharan Africa indicates that about a third of all family planning methods are obtained through the private sector. For the poor, these expenses can be substantial, even catastrophic. Although specific public policy efforts regarding the private sector largely depend on individual country context, three broad approaches may be useful in guiding discussions: (i) Expanding healthcare access by engaging a range of private sector providers; (ii) Harnessing and organising existing private sector providers into a cohesive network to improve quality and ensure equity; (iii) Shifting the burden of public financing of private healthcare sector among those able to pay for its services.
The UN Secretary-General’s report ‘Delivering on the Global Partnerships for Achieving the Millennium Development Goals’ highlights large gaps in the availability of medicines in the public and private sectors, as well as a wide variation in prices which render essential medicines unaffordable to poor people. The report describes progress towards achieving MDG8 (develop a global partnership for development) and its related targets in the areas of essential medicines, official development assistance, trade, external debt and technology. In cooperation with pharmaceutical companies, access to affordable essential medicines in developing countries was measured using nine indicators and data collected by WHO and its partners. The report found that, in the public sector, generic medicines are only available in 34.9% of facilities, at on average cost 250% more than the international reference price. In the private sector, those same medicines are available in 63.2% of facilities, but cost about 650% more than the international reference price. While policies that promote access such as generic substitution are in place in many countries, more national and international effort is needed to improve the availability and affordability of medicines.
West African people should establish a medical anti-counterfeiting task force to promote local herbal medicines by protecting indigenous knowledge and genetic property. This is according to the communiqué from a workshop held in Accra, Ghana from 21-23 July 2008. A survey conducted by WHO between January 1999 and October 2000 found 60% of counterfeiting incidents occurred in developing countries and 40% in industrialised nations. To protect the local medical industries, the task force will prepare a mechanism for reporting counterfeit issues, including its harmful effect on local economy and health and launch awareness creation programmes as well as advising governments and local companies on ways to increase the use of security features on their products including medicines, cosmetics and medical devices. According to President Kufuor, this protection of intellectual property rights for local medical industries will sustain socioeconomic development that depends on investment and the growth of local industries, entrepreneurs and innovators who are willing to invest the capital needed to create brands and copyrights and to deploy money into research and development necessary to produce products which are accorded IP rights.
Data from every part of the world show that those that are least well off have shorter life expectancies and heavier burdens of disease than those that are relatively wealthy. Subsequently, public–private partnerships (PPPs) have gained growing popularity as mechanisms for increasing access to essential drugs. This series of papers examines the characteristics of PPPs that aim to improve the health of the world’s poorest people. The authors contribute to the debate about the future role of PPPs and provide pointers to key areas for urgent attention to sustain and increase the momentum to reach the goals towards which PPPs are striving. Issues highlighted include the roles of different actors in partnerships involving public sector and philanthropic donors, the private sector, nongovernmental organizations, communities and researchers in developed and developing countries.
India's government could become the country's only purchaser of patented drugs and medical devices, under new proposals currently being discussed by ministers. While other nations operate central medicines buying for their public health care systems, this would be the first instance of a government also becoming the sole supplier for private health care providers, and could set a precedent for African countries.
Data from every part of the world shows that those who are least well off have shorter life expectancies and heavier burdens of disease than those who are relatively wealthy. Subsequently, public-private partnerships (PPPs) have gained growing popularity as mechanisms for increasing access to essential drugs. This series of chapters examines the characteristics of PPPs that aim to improve the health of the world’s poorest people. The authors contribute to the debate about the future role of PPPs and provide pointers to key areas for urgent attention to sustain and increase the momentum to reach the goals towards which PPPs are striving. Issues highlighted include the roles of different actors in partnerships involving public sector and philanthropic donors, the private sector, nongovernmental organisations, communities and researchers in developed and developing countries. The picture that emerges is multifaceted and complex. The PPP approach has evidently focused attention on some neglected areas and has galvanised action that is bringing new resources and innovative solutions to address some health problems. But many challenges remain if their promise is to be fulfilled, including greater and more sustainable financing over the longer term and better mechanisms for coordination. The authors highlight that the ethical imperative of reducing health inequities - closing the gap between the health of the poorest and those who are better off - demands the utmost collective effort.