Public–Private Partnerships: Life-Saving Mechanisms of Action

How do life-saving biopharmaceuticals reach people who can't afford to pay for them? Often, it is through public–private partnerships that link companies with governments and international institutions, such as the World Health Organization. In some instances, not-for-profit companies also are involved. These collaborations bring together organizations that sometimes are adversaries in endeavors that have great societal and scientific benefit. They also can further the business goals of the participants.

Art Canter

In biopharmaceuticals, many of the public–private and cross-sector alliances focus on public health responses to diseases of poverty, such as malaria and tuberculosis. Others distribute preventative vaccines. Most simply, the public sector provides money that the patients cannot. The private sector provides the drug and other technical support at significantly reduced prices, sometimes without making a profit at all. In addition to getting access to the medicines, there can also be an economic development benefit in the communities being served when local residents get jobs distributing and administering the medicines or otherwise participating in the network of activity it takes to produce and use a drug.

Jan Twombly

One such alliance is the Novartis Malaria Initiative, which began in the mid 1990s as a partnership with the Chinese Academy of Military Medical Sciences under Novartis predecessor Ciba-Geigy. The Novartis Malaria Initiative is a network of strategic supplier partnerships that extend from China to Kenya that have enabled Novartis to meet skyrocketing demand, diversify supply sources, and reduce the cost of manufacturing by >50%. It has saved an estimated 800,000 lives to date, created economic opportunity in Africa, and helped its Chinese partners implement internationally recognized good manufacturing practices (GMPs). This complex, multi-sector, global alliance has earned Novartis formal recognition for its social responsibility.

Public–private partnerships also are used to help attract companies to specific locations. Tax credits, investment, infrastructure, and access to technology all are incentives that governments use to attract companies to their locale. In turn, the local economy benefits through the creation of jobs, funding for innovative research, and increased business activity. What makes these partnerships possible is that none of the individual entities could achieve the purpose on their own, and each participant benefits from the results in a unique way.

Aligning this diverse range of interests makes managing public–private partnerships quite challenging. In two-party collaborations, gaining alignment among internal stakeholders, then between the partners is a significant component of an alliance professional's job. Complexity increases exponentially as new participants are added to the public–private partnership and it becomes a collaborative network. Alliances and collaborative networks seem deceptively simple, but it takes a tremendous amount of diplomatic and strategic skill to achieve an objective that all partners can buy into. The principles of alliance management can guide leaders in deploying policies, processes, and tools that will reduce complexity and achieve great value.

Despite the management challenges, cross-sector collaborative networks, including public–private partnerships, effectively are tackling complex problems such as diseases of poverty. So far, the major biotechs have not had a big presence.

Collaborative networks of cross-sector alliances are a necessary and desirable component of societal response to complex problems. They stretch the management abilities of the best and require innovation on many levels to succeed. It remains to be seen what role biologics may have in treating other neglected diseases and public health concerns. If the major biotech firms find value in participating in public health-oriented public–private partnerships, alliance professionals stand ready to provide innovative management practices along side of innovative therapies.

Art Canter is the president and CEO of the Association of Strategic Alliance Professionals, acanter@strategic-alliances.org and Jan Twombly is the president of The Rhythm of Business, Inc. and a member of the executive committee of the Association of Strategic Alliance Professionals, jan@rhythmofbusiness.com