The authors identify two types of capital for foreign investment: capital of type K and capital of type N. While capital of type K is used in production of all the sectors of the economy, capital of type N is specific to the healthcare sector. Their analysis finds that an FDI of capital of type N although it raises the human capital formation may lower social welfare. On the contrary, an inflow of foreign capital of type K is likely to be welfare-improving. Although these effects crucially hinge on different structural factors e.g. the degree of
labour market imperfection, trade-related and technological factors these can at least question the desirability of allowing the entry of foreign capital in the healthcare sector directly.
Public-Private Mix
Is Direct FDI in Healthcare Desirable in a Developing Economy?
Chaudhuri S, Mukhopadhyay U: MPRA Paper No. 41007, September 2012
Does anti-malarial drug knowledge predict anti-malarial dispensing practice in drug outlets? A survey of medicine retailers in western Kenya
Rusk A, Smith N, Menya D, Obala A, Simiyu C, Khwa-Otsyula B and O'Meara W: Malaria Journal 11:263, 6 August 2012
To investigate medicine retailer knowledge about anti-malarials and their dispensing practices, a survey was conducted of all retail drug outlets that sell anti-malarial medications and serve residents of the Webuye Health and Demographic Surveillance Site in the Bungoma East District of western Kenya. Results indicated that most (65%) of the medicine retailers surveyed were able to identify artemether-lumefantrine (AL) as first-line anti-malarial therapy for uncomplicated malaria recommended by the Kenyan Ministry of Health. Retailers who correctly identified this treatment were also more likely to recommend AL to adult and paediatric customers. Retailer training and education were found to be correlated with anti-malarial drug knowledge, which in turn was correlated with dispensing practices. While the Kenya Ministry of Health (MoH) guidelines were found to influence retailer drug stocking and dispensing behaviours, the authors argue that knowing the MoH recommended anti-malarial medication does not always ensure it is recommended or dispensed to customers. Retailer training and education are both areas that could be improved. Considering the influence that patient demand has on retailer behaviour, future interventions focusing on community education may positively influence appropriate dispensing of anti-malarials.
Thinking forward: The quicksand of appeasing the food industry
Brownell KD: PLoS Medicine 9(7): 3 July 2012
In addressing the problem of global obesity, our greatest failure may be collaboration with and appeasement of the food industry, argues the author of this article. She warns against current initial steps in this direction in the form of so-called ‘public–private partnerships' with health organisations, ‘healthy eating’ campaigns and corporate social responsibility initiatives. These occur at the same time as the private sector food and beverage sectors fight against meaningful change such as limits on marketing food to children, taxes on products such as sugared beverages, and regulation of nutritional labelling. The food industry distorts science, creates front groups to do its bidding, compromises scientists, professional organisations and community groups with contributions, and blocks needed public health policies in the service of shareholder, the author notes. This is normal ‘business as usual’. While respectful dialogue with industry is desirable, she argues that there must be recognition that this will bring small victories only and that to take the obesity problem seriously will require courage, leaders who will not back down in the face of harsh industry tactics, and regulation with purpose.
Untangling the web of anti-retroviral price reductions
Campaign for Essential Medicines: Médecins Sans Frontières, 17 July 2011
In this report, Médecins Sans Frontières (MSF) notes that middle-income countries with large numbers of people living with HIV, such as South Africa, will no longer benefit from preferential pricing when buying antiretroviral drugs from large pharmaceutical companies. According to the report, pharmaceutical firm ViiV Healthcare - owned by Pfizer and GlaxoSmithKline - no longer offers reduced prices to middle-income countries, even when their programmes are fully funded by the Global Fund to fight HIV, Tuberculosis and Malaria. Merck has also ceased to offer discounted prices to all lower middle- and upper middle-income countries, proposing instead to negotiate discounts on a case-by-case basis. Previously, Merck offered middle-income countries discounts that were still up to ten times the price of generic versions. MSF warns that drug company discount programmes are not a long-term solution, and urges governments to start using Trade-related Aspects of Intellectual Property Rights (TRIPS) measures to override patents.
Protecting breastfeeding
Baby Milk Action: 19 May 2012
Despite the positive health effects of breast feeding, and adverse health effects of breastmilk substitutes, particularly in conditions of poverty, Nestlé is reported by Baby Milk Action to be continuing promotion of the use of formula. The authors report that Nestlé has backtracked on a past commitment not to advertise formula brands in ‘high risk’ developing countries. The authors report that the World Health Organisation's Guidelines for the safe preparation, storage and handling of powdered infant formula are not adequately included on labels of its products, that health workers in India are being included in sponsored events, and that it is pushing in Philippines, as part of an industry alliance, for a weakening of current law in this area. The World Health Assembly (WHA) has called for companies to bring their activities at every level into line with the International Code on Marketing of Breastmilk Substitutes and subsequent WHA Resolutions.
Activists call on NCD Alliance to protect public health from private interests
Rundall P: Baby Milk Action, 19 May 2012
In the run up to the 65th World Health Assembly (21-26 May 2012) the NCD Alliance, a major international alliance of organisations working in the field of non-communicable diseases (NCDs) revised its statement calling on its Member States to support the creation of a Global Platform on NCDs. After the Conflict of Interest Coalition expressed its concerns to the Alliance over private sector involvement in health policy and planning in such a platform, the Alliance added the clause ‘with appropriate safeguards for public interest over private profit’ and issued a new statement in May 2012. Rundall argues that this amendment does not adequately address the need for a clear differentiation between policy, norms and standards development and involvement in implementation. She warns that lack of clarity will play into the hands of those who favour slow, industry-friendly, voluntary approaches rather than legally binding measures that hold the private sector accountable for their practices.
Concern over role of private sector in policy development
Conflict of Interest Coalition: February 2012
In this Statement of Concern, the Conflict of Interest Coalition calls for the development of a Code of Conduct and Ethical Framework to guide private sector involvement in public health policy development. The Coalition seeks clarity on the nature of recent government ‘partnerships’ with the private sector, and argues that public-private partnerships run the risk of counteracting efforts to protect and improve public health. The proposed framework should help protect the integrity of the United Nations’ public policy decision-making, to ensure it is transparent and to identify, safeguard against and manage potential conflicts of interest. The Statement argues that a clear distinction must be made between business-interest not-for-profit organisations (BINGOs) and public interest non-governmental organisations (PINGOs) and a clear differentiation between policy and norms and standards development and appropriate involvement in implementation. The Coalition calls on the World Health Organisation (WHO) to develop guidance for Member States to identify conflicts and eliminate those that are not permissible. WHO should perform thorough risk/benefit analyses on partnerships and provide surveillance on those considered acceptable.
Launch of the East African Community Regional Pharmaceutical Manufacturing Plan of Action (2012-2016)
African Medicines Regulatory Harmonisation Newsletter 7:4, March 2012
On 6 December 2011, the East African Community Regional Pharmaceutical Manufacturing Plan of Action was launched in Arusha, Tanzania. The Plan of Action will guide the region towards evolving an efficient and effective pharmaceutical manufacturing industry that can supply national, regional and international markets with quality efficacious medicines. A number of recommendations were made at the end of the meeting. Participants agreed that, following discussion on the baseline survey, the draft report and the relevant questionnaire will be sent to national associations and regulatory authorities for corrections and further input, and then to national pharmaceutical manufacturers associations for input. They called on EAC Partner States to mobilise the necessary resources to ensure successful implementation of the Plan of Action. It was resolved that the EAC Secretariat will be responsible for putting in place clear coordination and management structures for the implementation, monitoring and evaluation of the plan.
The cupboard is full: Public finance for public services in the global South
Lipschutz RD and Romano ST: Municipal Services Project, Briefing Note No 2, 2012
Governments around the world argue that there is no money for badly needed public services. But the author of this briefing note disagrees, pointing to evidence that large pools of public monies exist for investment in public infrastructure, with public pension funds and sovereign wealth funds being two examples. Currently, these funds are being directed toward large-scale, capital-intensive, high-return projects aimed primarily at well-off urban residents and the private sector. Lessons from the financial crisis show that such funds could actually realise greater long-term returns from investment in public service provision, the authors argue, while avoiding the politically controversial and contradictory practice of using public sector funds to support privatisation. They make the case for using public pension funds and sovereign wealth funds for socially responsible investments in the global South, in support of essential public services.
Private funding: An emerging trend in humanitarian donorship
Stoianova V: Global Humanitarian Assistance, April 2012
Private external funders (donors) are growing steadily more important to global aid, contributing one-quarter of the estimated US$73.9 billion spent on emergency assistance from 2006 to 2010, according to this report. Trusts, foundations, businesses and individuals are the main sources of private funding, with non-governmental organisations (NGOs) depend on these sources for 57% of their financial support, while UN agencies depend on it for only 8%. There are also wide variations: for example, Médecins Sans Frontières (MSF) gets roughly 90% of its funding from private sources but the Norwegian Refugee Council receives only 2%. While many agencies are courting private funders, the lack of tracking creates a significant information gap in both co-ordinating and evaluating this source of funds.