The case for regional public health goods in the Pacific

Public health goods and services are increasingly provided at the global and regional level, in recognition of health problems transcending national boundaries. The Pacific can benefit from the increased provision of regional public health goods, as Pacific nations face similar health problems and inefficiencies due to limited economies of scale.

A regional public health good provides public health benefits to two or more nations in a well-defined region. If purely public, a good’s benefits would be available to the entire region at no additional cost per person or nation that utilizes the good. An example is the discovery of a cure for a disease. However, not all public health goods need to be purely public; surveillance and response networks that charge membership fees benefit the countries within the network while maximizing cost efficiencies.

In the Pacific, regional public health goods currently being provided include regional health meetings, infectious disease surveillance, and communicable and non-communicable disease control. The Secretariat of the Pacific Community (SPC) and Pacific Islands Forum Secretariat (PIF) preside over many of these goods and financing tends to be from traditional aid donors such as Australia, multilateral institutions and the Asian Development Bank (ADB).

There are some issues with the current provision and targeting of regional public health goods in the Pacific. The Pacific’s regional institutions tend to focus on regional cooperation rather than the provision of services, regional health meetings are duplicated and add to workloads, and funding is not proportional to the burden of disease in the region. Additionally, many of these goods are unsustainable without alternative financing mechanisms. Collective action is also a perennial challenge due to existing national rivalries and lack of support for increased regionalism in certain areas.

While the Pacific Plan outlines broad priorities for increased regional coordination, the Pacific needs to develop specific regional health initiatives that focus on under-funded, high-priority areas. Advantageous areas for enhanced regional provision include disease surveillance and response, group drug procurement and health systems strengthening.

A WHO representative recently praised the Pacific Public Health Surveillance Network (PPHSN), an informal alert network of 22 Pacific countries. However, PPHSN needs more sustainable financing as it is currently funded through WHO and SPC. CAREC, a surveillance network in the Caribbean, serves as an institutional and financial model for PPHSN. CAREC was initiated as a PAHO regional center and transitioned to complete regional ownership in 2012 as CARPHA, the Caribbean Regional Public Health Agency. CARPHA addresses all of the agreed health priority conditions of the member states’ populations. Through a multilateral agreement, PPHSN can transition into a formal regionally-owned network like CAREC and secure financing through quota contributions of member states. In addition to restructuring PPHSN, Pacific nations should strengthen regional surveillance of non-communicable disease in order to address the high burden of non-communicable disease in the region.

Group drug procurement in Latin America and the Caribbean has resulted in cost savings for Ministries of Health, strengthened quality control and new market opportunities for pharmaceutical companies. For small island countries, it is easier to implement a pooled procurement scheme because their procurement systems tend to be centralized. Seven Pacific countries started procuring drugs through Fiji’s bulk-purchasing scheme in 1999. Despite as much as a 96% reduction in drug prices, this effort was never scaled-up. Pacific nations hesitated due to concerns over sovereignty, financing and the potential failure of creating a new system. However, the Pacific should reconsider pooled drug procurement due to the long-term benefits. Regional meetings of Health Ministers, increased evidence on the effectiveness of pooled procurement in the Pacific context and testing pooled procurement of a few select drugs may increase political will for this initiative. Financing could be based on the PAHO model, where SPC or PIF pays for the drugs using a common fund and member countries reimburse the institution once the goods are received in-country.

The loss of HCW resources to developed countries puts a strain on the Pacific’s health systems. However, if a regional nurse training facility were created to provide high-quality certified nurses, nurses could earn higher salaries abroad and send remittances home, increasing the tax base. Some skilled nurses would remain in the region and improve service delivery and quality of care. The ADB conducted a study in 2005 on the cost-benefit ratio of a regional nurse training facility and found that the benefits exceeded the costs by six times. Although PIF expressed interest in a standardized regional nurse training program following this study, the lack of financing and buy-in from national governments, education providers and other stakeholders resulted in stalled progress in this area.

Although there are difficulties in implementing and garnering support for regional public goods in the Pacific, donors can encourage greater regional and sub-regional cooperation and service provision in health. ADB has already committed to increasing regional cooperation and integration lending operations to 30% by 2020, and other donors should follow suit. In addition to increased availability of funds, funding should be appropriately targeted. What type of financing is needed – loans, grants, technical assistance – and who the recipient should be – a regional body vs. a singular country – are important questions to consider when financing regional public health goods. Funding for regional bodies tends to be focused on quality assurance, guidelines, standards and training, as one of their primary roles is to enhance the capacity of individual state ministries and government, whereas a single country may be the best recipient for service provision.

Farley Cleghorn is Senior Vice President and Chief Technical Officer at Futures Group. Catherine Barker is an Intern at Futures Group. This blog post is based on their presentation at the 2014 AAIDP Workshop.

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Farley Cleghorn

Farley Cleghorn is Senior Vice President and Chief Technical Officer at Futures Group.

Catherine Barker

Catherine Barker is an Intern at Futures Group.

1 Comment

  • Farley and Catherine,

    I’m interested in your support for bulk procurement of drugs. As you point out, it isn’t a new initiative, having been the subject of many meetings/discussions in the 1990s and 2000s. A proposal for bulk procurement of drugs prepared by WHO was actually rejected by Pacific island Health Ministers at the 2009 Madang meeting, on the grounds that there was limited evidence regarding its benefits.

    My understanding was that one of the barriers to bulk procurement of drugs in the region is that PICs already purchase drugs at low prices, meaning that the economy of scale benefits of bulk procurement, in terms of price reductions, would be limited. That argument was made by a 2009 WHO study into bulk drug procurement – “Feasibility study on pooled procurement for Pacific island countries” – which found that “current prices (in PICs) are quite competitive and already very low”. It also cited previous work that had found prices for a basket of pharmaceutical products in Solomon Islands and Vanuatu were competitive with international prices, being 90% those paid in the eastern Caribbean (where a bulk procurement scheme is operated by the Organization of the Eastern Caribbean States). The report was still supportive of bulk procurement, but on the ground of quality assurance and reduced administration costs, rather than discounts achieved through bulk procurement.

    I’d be interested in your views. Do you consider non-financial benefits from bulk procurement as more important than cost savings associated with economies of scale? Do you know of any more recent work that has examined the cost-benefits of bulk procurement in the Pacific?

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