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Valuing Industry Contributions to Public-Private Partnerships for Health Product Development
Kettler, Hannah White, Karen Jordan, Scott
Kettler, Hannah
White, Karen
Jordan, Scott
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Abstract
"In order to estimate the value of industry contributions, it is necessary to distinguish between those that are compensated and those that are made in kind. Compensated contributions by industry are those in which a PPP pays industry for goods or services in a contractual agreement or business deal. The contributions made to PPPs by industry in return for a payment are the ones most likely to be reported in press releases and financial statements. These contractual arrangements are the same as transactions that occur between two business entities under normal market conditions, with two key exceptions: in some cases, industry provides goods and services to PPPs at cheaper rates than it would charge a pharmaceutical or biotech company for the same market transaction; in other cases, industry makes outright in-kind contributions for which it expects no monetary compensation. For industry, the motivation may include a sense of corporate social responsibility and a willingness to act in the interest of the “public good”. It may also be based on expectations of positive public relations — a motive often referred to as “enlightened self- interest”1. Regardless of the motivation for such actions, these in-kind contributions represent value to the PPPs, even though it is often difficult to measure in financial terms. In-kind contributions, such as hours worked, technologies made available or contract work completed, are easier to value than in-kind contributions such as the presence of an influential scientist or CEO on an advisory board or the fact that work by experienced private companies gets done more quickly and effectively than if PPPs had to rely solely on public sector organizations with limited experience of drug development."(pg 2)
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2003-05
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294 0286094
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With permission of the license/copyright holder