Thailand Law Journal 2009 Spring Issue 1 Volume 12

MSF observed that the interests of the private sector become less and less coincident with MSF's interests as communities become poorer and diseases less marketable. This led to the humanitarian aid organization's decision to take its own drug supply requirements out of the hands of the market. [FN136] In this way, DNDi is something of a mirror image of BVGH. MSF's incomparable knowledge of the global medical relief environment positions the NGO's satellite organization strategically to set public health research and development agendas and facilitate the flow of information upstream to drug developers.

MSF's humanitarian presence in developing countries has permitted it to hand-pick an “all-star team” of public sector contributors to a vibrant public sector partnership. At the outset of the initiative, the DNDi founding partners initiated regional networks of contracted collaborators that will be managed by project leaders. This initial support is expected to lead to permanent DNDi networks in Asia, Latin America, and Africa, wherein participation of disease endemic countries and South-South collaboration may be ensured. [FN137] In order to confine the early scope of the initiative, DNDi is focusing primarily on kinetoplastid diseases-African trypanosomiasis, Chagas disease, and visceral leishmaniasis-as the networks develop and strengthen. [FN138] The promise of these networks may be contrasted with the tendency of other PPPs to include token members of developing country governments on their boards of directors. Other PPPs are criticized as insufficiently incorporating the input of disease-endemic countries. [FN139]

Through the operation of these networks, DNDi has already identified organizations with complementary competencies developed by countries and companies which have historically adapted to economic and political circumstances. [FN140] For example, public organizations in Malaysia have developed toxicology expertise as they have needed to combat environmental deterioration due to pollution. [FN141] India's Central Drug Research Institute is capable of vertically-integrated pharmaceutical development with capacity for robotic screening, bioassays, a 12,000-volume compound library, and over 1000 scientists. The organization has also internalized capacity for clinical trial management in South Africa and high-quality fixed-dose drug combination manufacturing in Brazil. As well, Cipla has agreed to produce any drug DNDi needs and sell it at its cost. [FN142]

The primary criticism of a public-only partnership is that the necessary capacity for successful drug development does not reside in the public sector. [FN143] Since the private pharmaceutical sector is the dominant contributor of lead identification and optimization services to drug development activities, DNDi may be at a disadvantage attempting to construct leads through only public capacity. For this reason, DNDi has worked out a series of agreements with the private sector, including GlaxoSmithKline and the Japanese government in agreement with regional industry, to screen its compound libraries for efficacy against particular diseases. [FN144] By minimizing private sector involvement, DNDi can best streamline the efforts of the more culturally homogeneous public sector to achieve its ambitious task.

Whereas BVGH sidesteps public sector failures and attempts to address market failures, DNDi is able to sidestep the private sector and focus its efforts squarely on the public interest. Its potential success lies in the potential for the expertise of geographically-dispersed fragmented partners to be synergistically directed toward the development of much-needed drugs. By minimizing contact with the private sector, transaction costs of collaboration can be minimized. MSF's unilateral mandate situates the organization well to negotiate with public partners from different regions without the political hindrances which individual governments and multilateral agencies deal with.

Most crucially, DNDi focuses squarely on the public sector's lack of drug development capability and attempts to create capacity through the lowering of public-public transaction costs. Since all parties seek a common end (with no intermediate profit motive), cultural barriers are minimized. The value offered by DNDi is the facilitation of virtual drug development knowledge networks in the South and the special selection of public sector organizations with uniquely-valuable resources and capabilities. To the extent that this public sector failure is overcome, DNDi will improve the success of its founding organization, MSF, in the administration of humanitarian medical relief in impoverished regions.

V. Conclusion

Public-private partnerships for drug and vaccine development have been popular beneficiaries of funds earmarked toward regenerating product pipelines for neglected diseases. These partnerships have been borne out of the market and public sector failures which led to the deterioration of development pipelines in the first place. In that respect, PPPs must be constructed explicitly to overcome the failures which necessitated their existence. All PPPs base their business models on the provision of value to partners in exchange for participation in their drug development activities. In this paper, I have provided a framework through which to evaluate the value proffered by partnerships. Does the partnership's structure allow it to overcome or sidestep traditional failures? Has the partnership found a way to add value such that public or private failure might be overcome? Has this value been captured?

The answers to these questions are critical, and it is imperative that current partnerships operate with them in mind to ensure the vitality of public-private partnership as an alternative for international public good provision. Partnerships' intermediate success has not been sufficient to induce a level of private sector participation commensurate with the relative degrees of severity of the diseases involved. In fact, of IAVI, DNDI, MMV, and the TB Alliance, only approximately $300 million of the $1.7 billion estimate of cumulative required resources sought by the PPPs have been pledged. [FN145] Sixty percent of the total is contributed by the Gates Foundation, demonstrating that governments have not yet fit PPPs into their traditional funding categories. [FN146] Still, it is fair to say that the quantity of resources mobilized toward the effective containment of neglected diseases is at a peak.

Private foundations and governments alike constantly seek ways to maximize the effectiveness of donated resources. These new PPPs represent a bridge between opposing but complementary paradigms seeking to overcome the same obstructions to human health. Our greatest prospect for success lies in organizations designed to account for the complementary capabilities of both paradigms. In this way, the overlap in interests between public and private is best harnessed. In order for this potential to continue to be exploited, these early partnerships must demonstrate success sufficient to grease the wheels for future investment.

More broadly, though, the promise of balanced public-private partnership transcends drug and vaccine development. For every international public good, there exists a unique combination of public and private failures to be overcome. Though alternatives to collaborative provision exist, our ability to surmount previously-established public and private failures will pace the rate of innovation in traditionally-neglected product areas. For the residents of impoverished and marginalized towns, the success of public-private partnerships is immensely important today. However, as the international public interest manifests itself in decades to come, the salutary effects of the effective concatenation of public and private will accrue to the benefit of all.

It is important to understand, though, that PD-PPPs are not a panacea. Market and government failures are not axiomatic; rather, they are emanations of the abject poverty with which they are inextricably linked. Discourse around PPPs must be placed within its proper context, as one aspect of the quintessential challenge of reducing global inequity. Key participants in efforts to alleviate poverty must learn to incorporate PPPs into their decision-making systems as they develop organizational policy. In this way, macrocosmic public-private collaboration may be achieved which emulates and encourages the success of this new breed of drug development public-private partnership.

[FN136]. Drugs for Neglected Diseases initiative, DNDi Business Plan (2003) [unpublished].

[FN137]. Ibid.

[FN138]. Ibid. at 4.

[FN139]. Kettler & Towse, supra note 77.

[FN140]. Interview of Dr. James Orbinski, former President of MSF (11 August 2004).

[FN141]. Universiti Sains Malaysia, Centre for Marine and Coastal Studies, “Scientific Research Group: Marine Pollution and Toxicology,” available online: http://www.usm.my/cemacs/Webpg%20Pollution%20Research.htm.

[FN142]. Drugs for Neglected Diseases Initiative, DNDi Newsletter No. 2, (January 2003) at 2.

[FN143]. Kettler & Towse, supra note 77, at 19.

[FN144]. Interview with Dr. James Orbinski, former President of MSF (11 August 2004).

[FN145]. A. Towse & O. Renowden, “Estimates of the Medium Term Financial Resource Needs for Development of Pharmaceuticals to Combat Neglected Diseases” (April 2004) Office of Health Economics Consulting, Draft Report for the Initiative on Public-Private Partnerships for Health [unpublished].

[FN146]. Commission on Intellectual Property Rights, Innovation, and Public Health, Public Health: Innovation and Intellectual Property Rights, (Geneva: March 2006), available online: http:// www.who.int/intellectualproperty/documents/thereport/en/index.html.

This article is published with the kind permission of Nathaniel Lipkus. The article originally appeared in Michigan State University Journal of Medicine & Law, Spring 2006 issue.