This document considers seven questions regarding the appropriate roles of the public and private sectors:

1. How is the pharmaceutical market organized and what makes it different from other markets?

2. What are the essential responsibilities of the state in the pharmaceutical sector?

3. What is the current public-private mix in pharmaceutical markets?

4. Can market mechanisms help to improve efficiency and ensure access to essential drugs in the public sector?

5. What mechanisms best promote the availability, affordability and rational use of drugs in the private sector?

6. What role should the government play in the manufacture of pharmaceuticals?

7. What capacities are needed to manage changing roles and how can these capacities be enhanced?

The questions are considered in order. Section 2 considers the nature of pharmaceutical markets. From this analysis it is clear that pharmaceutical markets differ from markets for most other goods and services and that, in order for them to operate effectively, government intervention is required. Section 3 describes the essential state responsibilities in the pharmaceutical sector. Section 4 describes the current global pattern of the public-private mix in pharmaceutical markets. Section 5 looks at private mechanisms for public drug supply. Section 6 reviews mechanisms for meeting health needs through the private sector. Finally, Section 7 explores the arguments and evidence on the role of the state in pharmaceutical manufacturing. In Section 8 the document considers the implications of reform in public-private roles for government, and in particular government capacity to manage new roles and the process of change. Section 9 presents conclusions.

The remainder of this section considers further the context of public-private roles in the pharmaceutical sector and the principles that help assess those roles.