Public–private partnerships (PPPs) in health care

  • Share

A better way for health care and life sciences to join forces

The health care and life sciences sectors’ shared mission of improving the quality and longevity of patients’ lives has kept them consistently at the forefront of innovation. Despite this common purpose and drive, it has been difficult for public health care organizations to partner with private life sciences companies in sustained and meaningful ways.

Historically, public–private partnerships (PPPs) have focused on the creation of health care infrastructure, including the establishment of hospital buildings and care delivery models. To date, there are few convincing examples demonstrating how the approach could be used to finance the delivery of innovative treatments for high cost diseases such as cancer, diabetes and hepatitis C.

More progress has been made in the R&D arena, where PPPs have been used in several cases as platforms to accelerate innovation, for instance in the areas of pharma–led vaccine delivery and diagnostics programs in emerging markets.

In Europe, we have seen some examples of small–scale PPPs and PPP–hybrid models focused purely on service provision, altering the way in which the participating public organizations receive and pay for health care services.

These early experiments are signposts of a broader trend. Globally, health care systems are motivated to improve the quality of the care process in a variety of ways, including:

  • Enabling access to care providers
  • Streamlining and targeting treatments
  • Ensuring the affordability of innovative, curative treatments
  • Innovative clinical governance pathways

Pharmaceutical and medtech companies, meantime, have responded to the increasing reimbursement challenges by shifting their business models. Pharmaceutical companies, for instance, have largely moved away from traditional, primary care–focused business models supported by billion–dollar blockbuster products to developing specialty products for niche diseases where the gravity of condition has historically meant greater pricing flexibility.

While this shift is entirely rational in an economic sense, it may fall short of satisfying individual pharma companies’ growth objectives. It also fails to satisfy the overall needs of society, as changes that improve the health of the overall population will have a bigger impact than costly advances targeted to a smaller segment of individuals.

In this environment, where the fulcrum of cost and innovation assessments is value, there is an absolute need for new, collaborative models that spread not just the costs but the development risks in a way that allows all parties to share in the benefits that come with better health outcomes and improved wellness. These models may require innovative funding mechanisms and/or value–based contracting tied to patient-centric real-world data.

Our top recommendations


Improve your understanding of the market and the players within it.

Many organizations lack understanding of the market, as they do not have the right tools and processes in place. At EY, in-depth analytics — embodied through bespoke analytics suites — form the underlying basis of all of our work in health care and life sciences.


Start your journey properly.

Communicate internally and outline the risks and benefits of longer-term sustainable structures such as the PPP (or less complex structures to start with) as a means of fulfilling your needs.


Embrace innovative financing and contracting.

As pressures on health care increase, we believe there will be opportunities for life sciences companies to earn returns for their investors by financing important programs aimed at improving population health. PPPs are a sensible mechanism health care players can use to broker relationships with groups that have not traditionally been their partners.


Partner with research companies.

The demand for value in health care treatment and care delivery is only going to increase as quality standards improve across EMEIA — especially in Africa and emerging states in the EU. This will mean more coordinated efforts are required to increase the speed, quantity and quality of different health services. Some of our recent work in the area of chronic disease management showed that patient outcomes improved when there was greater pharmaceutical involvement.


Explore real-world data solutions.

Payers generate a huge amount of real–world data, but accessing it, understanding it and using it to change patient behavior remains a challenge. Future models oriented toward real-world data will have to include formalized structures that take into account the complex needs of different stakeholders, as well as privacy and security of data.


Make health digital.

New digitally enabled tools represent a powerful mechanism for bending the cost curve while simultaneously demonstrating patient value. Going forward, we anticipate PPPs will be one mechanism that technology businesses and life sciences and health care companies could use to assemble the diverse know-how required to accelerate the implementation of digital-health solutions.

Download the full report