Cindi Cisek | Palladium - Apr 12 2019
Best Laid Plans: How Public Policy can Hinder Private Sector Investment in Family Planning

Source: Enabling Sustainable Health Equity (ESHE) Project

When it comes to family planning, government policy is intended to increase access to products and services in the most cost-effective and sustainable way. But what happens when policy unwittingly creates challenges – even disincentives – instead? Palladium’s Cindi Cisek explores the role of public policy in market development for family planning products.

Free Isn’t Always Best

The Kenyan government’s goal is to make family planning easier to access. One of the ways they do this is by allowing for-profit private-sector health providers to access free, public-sector products for their clients.

While this should mean readily available products for those who need them most, there are two issues:

First, there is little monitoring to ensure that products are reaching the intended audiences, or that private providers are offering them for free. This can lead to wide-spread leakage of donor-funded products intended for free distribution through government clinics being sold to the general public through private pharmacies.

The introduction of these free products into the market creates an inefficiency in the supply chain, leaving private pharmaceutical importers and distributors with no incentive to invest in family planning products and services. This hinders the innovation and investment that could lead to the introduction of new, affordable contraceptive options, and prevents a sustainable market from developing.

Zambia has a similar policy, offering free family planning products to private-sector service providers with little monitoring or oversight. As a result, even those who can pay do not, creating an inefficient targeting of donor resources and hampering sustainability.

Likewise in Uganda, massive distribution of free condoms often fails to target those who cannot afford to pay, undermining the growth of the market and impacting the value that people place on condoms.

“I have witnessed how free condoms are distributed at social events because it is believed that people are likely to indulge in risky sexual behavior,” explains Robert Kigula, formerly National Sales Manager at the Uganda Health Marketing Group, a non-profit focused on strategic health communication and accelerating health market growth in Uganda.

“Unfortunately, they are not used but end up wasted and littering the ground after the event. We need to re-think strategically about the distribution of these condoms and whether they are reaching the intended audiences.”

The distribution of free family planning products into the market often leaves private pharmaceutical importers with little incentive to invest. Source: ESHE
The distribution of free family planning products into the market often leaves private pharmaceutical importers with little incentive to invest. Source: ESHE

Public Policy that Promotes Private Sector Investment

What should public policy do, then, to adequately address the need for family planning products without hampering the growth of emerging markets?

1. Target government and donor resources to those most in need, while allowing the private sector to serve those with the ability to pay. For this to happen, governments need to address policies that inhibit efficient and effective market development.

2. Strengthen legislation and regulation, reducing corruption so that the leakage of family planning products is minimised and products reach their intended beneficiaries.

3. “Right-size” the free distribution of health products by better understanding the size of public, NGO, and for-profit markets.

4. Engage early and often with the private sector to discuss public health priorities, policy and regulatory constraints, private sector interests, and any other impediments to market growth.

These solutions reflect a Total Market Approach that recognises the role of each player: government, NGO, and private sector. By doing so, policies can be developed to support those in need while fostering the private sector’s investment and innovation toward sustainable markets. We need to look at supply chain successes and failures with a critical lens, and address the longstanding barriers to market development, including the targeting of donor- and government-subsidized commodities to ensure they are reaching those who need them most.

In family planning, the key is to balance free access to products like contraceptives and condoms while creating the conditions for private sector partners to invest in the market and serve those who can pay.

Palladium managed the implementation of the UK aid funded Enabling Sustainable Health Equity (ESHE) project from 2013-2018. Download the report for more information.