Abstract:
BACKGROUND : Public–private partnerships (PPPs), widely used as a means of leveraging the skills, expertise and resources
of the private sector to mutual advantage, were similarly adopted by South Africa to support public sector delivery. This
study has evaluated one such partnership, namely the Biovac Institute, which was established in 2003 to cover vaccine
research and development, manufacturing, and supply. The initiative was highly unusual given that it attempted to
combine all three aspects in a single PPP.
METHODS : The research has followed a concurrent mixed methods approach. In the quantitative study, data for prices
and product volumes were extracted from secondary data sources and used to calculate the economic cost and valuefor-
money of the PPP. Simultaneously, a qualitative study was undertaken in which a number of key stakeholders were
interviewed using a semi-structured questionnaire on their perceptions of the PPP’s value.
RESULTS : The institute earns a premium on the procurement cost of a broad range of vaccines required by the South
African National Department of Health for its immunisation programme, the net value of which was US$85.7 million
over the period 2010 to 2014. These funds were used to finance the institute’s operations, including vaccine research,
distribution and quality control. Capital expenditure to support the establishment of facilities for laboratory testing,
packaging and labelling, filling, formulation and, finally, active pharmaceutical ingredient manufacture, approximately
US$40 million in total, had to be secured through loans and grants. According to the respondents in the qualitative
survey, the principal benefit of the PPP has been the uninterrupted supply of vaccines and the ability to respond
quickly to vaccine shortages. The main disadvantages appear to have been a slow and ineffectual establishment of a
vaccine manufacturing centre and, initially, a limited ability to negotiate highly competitive vaccine prices.
CONCLUSIONS : Overall, it is concluded that a positive value-for-money has been achieved and the institute has been of
significant public benefit. Relationships of this nature can be used to achieve public health goals, but need to be realistic
about timeframes, costs and the limitations of relational governance in ensuring that complex programmatic outcomes
are achieved. It is recommended that a more incremental approach, with clearer contractual goals, penalties and
incentives, is adopted in attempting initiatives aimed at the localisation of manufacturing technology by leveraging public
procurement.
