Ideas to Action:

Independent research for global prosperity


A little over a year ago, I wrote about Andrew Witty, CEO of GlaxoSmithKline (GSK), and his evolving business model, highlighting this Big Pharma CEO as a savvy businessman who is looking at future markets in the developing world, while also helping to solve big global health challenges. News this week confirms that GSK is fulfilling its 2009 pledge to offer 20% of its 2010 profits earned in least developed countries (LDCs) back to these countries to help boost their health work forces. The Guardian’s Sarah Boseley has an interesting piece with details on how £3.5 million will be redirected from the company’s 2010 profits to different LDCs through large international NGOs, focusing mainly on health work force development:

It will be spent on recruiting, training and retaining healthcare workers, who are so badly needed in every developing country. For the first time, GSK is going to channel all the money through three large and reputable organisations - Save the Children, Amref and Care International UK - rather than work with smaller NGOs in each of the 37 out of 48 LDCs where it does business, as it did to begin with. "Everything we started we feel good about," Witty told me. "We're looking for a more efficient and more industrialised way of doing things."

While international NGOs (iNGOs) will help disburse the money quickly for project activities, efficiency is still only one element of aid for global health and development.  The entry of Big Pharma in this arena—beyond the provision of technologies such as vaccines, drugs, diagnostics, etc.—is good news, but we must ask questions about whether these new and emerging global health resources (big or small) will be used effectively to help solve the big global health challenges we face today—infectious diseases, non-communicable diseases, and health system strengthening (infrastructure, health work force, financing, etc.).  Big Pharma should engage with the aid and development community in thinking through these questions to show that they are putting their money to good use beyond corporate social responsibility and brand building, especially since this is GSK’s stated objective: to help shape a better global health world while making a profit.

Additional and new financing for health is always welcome, but we are learning from over five decades of aid experience that there are ways of providing resources (or not) that can increase the chances of better and longer term outcomes.  Here are two key questions about GSK financing for health work force development at the top of my mind and my thoughts on how GSK could rethink this part of their giving back strategy:

Is project financing the best use of GSK resources?

GSK’s press release explains that these new resources will support projects in LDCs:

Projects currently underway include expanding a group of nurse-run clinics in Rwanda to improve access to quality basic healthcare and essential medicines and a community health infrastructure project in Cambodia which is supporting the renovation of a clinical training centre for midwives to help reduce the number of women and infants who die during childbirth. These projects will be incorporated into the partnership and will continue as planned. As a result of today’s agreement, new projects will begin shortly in Rwanda, Ethiopia and the Democratic Republic of Congo. Funding for future projects has also been authorised in Yemen, Niger, Sierra Leone, Angola, Zambia, Bangladesh, Nepal and Cambodia. The aim is that by 2012, a project will be underway in every profit-making LDC.

Is project financing the best way to provide resources for health work force development?  Research my HIV/AIDS Monitor colleagues and I did in Africa shows that countries like Uganda, Mozambique, and Zambia are struggling to grow and sustain a strong health work force that can respond to a range of health priorities, including AIDS, TB, Malaria, and high maternal and child mortality. We found that both resources and new approaches are needed  to create a sustainable and dynamic health work force cycle—development of new workers (pre-training), recruitment, in-service training, and retention of workers. Can GSK contribute to the creation and maintenance of a work force rather than to specific projects? When GSK-funded projects end, where will the health workers go?

This might be a stretch, but one idea for making GSK and other private sector financing for health systems more effective and responsive to a country’s priorities is for GSK to explore the possibility of developing a health financing pool of private sector resources for health work force development. A country could use this pool of money to finance the direct training and hiring of public health workers to respond to its identified health priorities. This wouldn’t allow GSK to demonstrate its direct contribution in a country every year for its annual report, but its resources might be more effectively used to address a major public sector financing problem without directly influencing a country’s prioritization of health problems.

Whether financing is project-based or not, can GSK get the most out of these resources by incentivizing health workers to improve performance? A recent book by Marko Vujicic et al, Working in Health: Financing and Managing the Public Sector Health Workforce, concludes that available resources could be used more effectively to incentivize health worker performance. There is growing evidence for performance based funding, including a CGD book on everything you wanted to know about performance incentives for health. Donors have traditionally paid for inputs such as salaries of health professionals, medical equipment, and infrastructure, with the assumption that these would lead to better results. In contrast, performance incentives can start with results—for example, more children immunized, more women with access to family planning—and allow health workers and managers of facilities to decide how to use resources to achieve these results.

Bottom line: New private sector resources could be used to incentivize health worker performance by paying for results rather than for projects.

Are international NGOs the best channels to deliver resources to countries?

While all three international NGOs selected to channel GSK resources are reputable organizations, I worry that GSK hasn’t been following the debate about channeling aid through large iNGOs.  The U.S. government is rethinking its strategy of working through a network of iNGOs to deliver global health resources and is focusing on building local long term capacity in countries.  While the emergency response of PEPFAR 1 could justify the use of international channels to quickly deliver aid to AIDS affected countries, it is certainly trying a new approach moving forward (see here, page 32-33); local organizations, rather than iNGOS, become key implementers with technical assistance from iNGOs as needed.  While we don’t yet have the answers to many of these questions about aid and the development of local capacity, I’m hoping that GSK is leaning towards providing resources for technical assistance as needed from the iNGOs and that the bulk of resources are flowing to local organizations.

Bottom Line:  New private sector resources could be provided to local organizations, with technical assistance from iNGOs, to manage and use for health work force development with a specific focus—targeting resources to increase provider performance and not just numbers of health professionals.

In her post, Boseley asks whether other big companies should follow suit, particularly because this approach—greater profit and greater good—is a win-win situation for them. I think that GSK is on to something and other companies will follow. But GSK, as the first in line, is in a unique position to combine lessons from the aid industry with its own private sector industrial efficiency and wisdom to lead the way for effective (locally derived and implemented, outcome based) private sector investment in global health and development.  What do you think?