metadata: authors: 0: author: Lewis, Maureen
1: author: Kenney, Genevieve
docna: 0: docna: The private sector and family planning in
            developing countries
docty: Policy Research Working Paper
subtopic: Health Care Services Industry,State Owned Enterprise Reform,Public Sector Administrative & Civil
            Service Reform,Disease Control & Prevention,Reproductive Health,Privatization,Family Planning Research,Energy Privatization,Democratic Government,Economics and Finance of Public
            Institution Development,Public Sector Administrative and Civil
            Service Reform,De Facto Governments
teratopic: Health, Nutrition and Population
abstracts: cdata!: While a private sector exists in every
            society, the nature of its involvement in family planning
            service delivery varies widely across countries. This paper
            reviews the role of the private sector in family planning
            and discusses how much more of the demand for contraception
            can be met through the private sector, thereby reducing
            government's subsidies for contraception. Following the
            introduction, section 2 discusses the characteristics of
            private sector supply, with a strong emphasis on for-profit
            producers and distributors of contraceptives. Section 3
            describes the distribution of users across sources and
            addresses the issue of pricing at public, for-profit and NGO
            sources of family planning services. In section 4 the
            experience to date with private sector approaches is
            outlined to provide a sense of what has been and is
            currently going on in public and and donor efforts to
            harness and collaborate with the private sector. Section 5
            presents alternative means for government and donors to
            promote private sector activity in family planning, and
            suggests some of the costs of a greater private sector role.
            The final section summarizes and concludes the paper.
repnme: repnme: The private sector and family planning in
            developing countries
display_title: The private sector and family
            planning in developing countries
listing_relative_url: /research/1988/09/700661/private-sector-family-planning-developing-countries
topicv3: Privatization m1327236 1283,Family Planning m1327501 1452,Contraceptives m1327726 1453,Health m1504661 3480,Condoms m1504697 3617
publishtoextweb_dt: 2010-07-01T00:00:00Z
historic_topic: Health, Nutrition and Population
origu: Policy Plan & Prog Review Dept
no_of_pages: 174
model_extractions: |PP<br>Title|R Working Paper Series<br>Author|Date|Contact|
|---|---|---|---|
|WPS75 Welfare Dominance and the Design of<br>Excise Taxation in the Cote d'lvoire|Shlomo Yitzhaki<br>Wayne Thirsk|August 1988|A. Shalia<br>60359|
|WPS76 On the Shadow Price of a Tax<br>Inspector|Shlomo Yitzhaki<br>Yitzhak Vakneen|||
|WPS77 Incentive<br>Policies and Agricultural<br>Performance in Sub-Saharan<br>Africa|Bela Balassa|August 1988|N. Campbell<br>33769|
|WPS78 Economists, Institutions<br>and Trade<br>Restrictions: A Review Article|J. Michael Finger|September 1988|<br>N. Artis<br>33731|
|WPS79 Quantitative<br>Appraisal of<br>Adjustment<br>Lending|Bela Balassa|August 1988|N. Campbell<br>33769|
|WPS80 Emerging Issues of Privatization<br>and the Public Sector|Samuel Paul|September 1988|<br>E. Madrona<br>61711|
|WPS81 Reaching People at 1he Periphery:<br>Can the World Bank's Population,<br>Health, and Nutrition Opera ions<br>Do Better?|Richard Heaver|September 1988|<br>S. Ainsworth<br>31091|
|WPS82 Microeconomic<br>Theory of the House-<br>hold and Nutrition Programs|Dov Chernichovsky<br>Linda Zangwill|September 1988|<br>S. Ainsworth<br>31091|
|WP;83 Welfare Costs of U.S. Quotas in<br>Textiles, Steel, and Autos|Jaime de Melo<br>David Tarr|September 1988|<br>C. Cabana<br>61539|
|WPS84 Black Markets for Foreign Exchange,<br>Real Exchange Rates and Inflation:<br>Overnight vs. Gradual Reform in<br>Sub-Saharan<br>Africa|Brian Pinto|September 1988|<br>S. Fallon<br>61680|
|WPS85 Wage Responsiveness<br>and Labor Market<br>Disequilibrium|Ramon E. Lopez<br>Luis A. Riveros|September 1988|<br>L. Riveros<br>61762|
July 1988 3686-01 The Private Sector and Family Planning in Developing Countries: Its Role, Achievements and Potential Maureen A. Levis Genevieve Kenney The findings, interpretations and conclusions of this study are those of * the authors and should not be attributed to The Urban Institute or the World Bank, its affiliate organizations, Executive Board or member countries.
# ACKNOVLEDGEMENT

We would like to thank the World Bank for financial support in the preparation of this study. In addition, ve are grateful to a number of individuals and institutions that have assisted us in completing this paper. John Akin, Nancy Birdsall and Randy Bulatao of the Vorld Bank conceptualized the task and assisted us in finanlizing the structure of the paper. Randy Bulatao and Carolyn Cantlay read through the entire document and provided us vith helpful comments and suggestio.w7. GALald Bailey and Harry Cross of the Agency for International Development revieved parts of the paper, and assisted us in identifying additional information and data sources. We are also indebted to the many corporntions that met vith us, participated in long telephone conversations, and completed our questionnaire. Lastly but most importantly, Barbara W'llis produced this paper and suffered through innumerable adjustments and changes. We ove her one.
# TABLE OF CONTENTS

|Page<br>EXECUrIVE SUMHARY .......................<br>see<br>.........<br>....<br>iv|
|---|
|I.INTRODUCTiON....................<br>. *............<br>*..<br>1<br>The Role of Government in Family Planning Provision ..............<br>6<br>The Economics of Private Sector Family Planning Delivery .........<br>8<br>Using the Private Sector to Meet Family Planning Needs..........<br>10<br>Study Outline.............................<br>**..<br>..........<br>*****...*.12|
|IT. CHARACTERISTICS<br>OF THE FOR-PROFIT<br>PRIVATE<br>SECTOR<br>IN FAMILY PLANNING .......<br>.........................<br>.....................<br>13<br>Production<br>.........<br>13|
|Incentives/Disincentives<br>for Production and Marketing ..<br>.....<br>....<br>20|
|Locationof ContraceptiveMarkets<br>..............<br>24|
|Government Regulations<br>and Contraceptive<br>Supplies......<br>...<br>25<br>Macroeconomic.<br>Constraints<br>..............................<br>......<br>25<br>Advertising<br>Constraints<br>.......<br>..<br>....<br>.......<br>26<br>LegalConstraints......<br>.<br>29<br>Public and Private<br>Sector Relationships<br>and Roles<br>.<br>31<br>Contraceptive<br>SocialMarketing<br>...<br>34<br>Private Health<br>Care Providers<br>.<br>...<br>38<br>Private Physicians. ...<br>...<br>....................<br>...<br>38|
|Other<br>Health Providerso.......................................<br>38|
|III. DEMAND FOR PRIVATE SECTOR PRODUCTS<br>........<br>..........<br>43|
|Source of Contraceptives<br>in Developing Countries<br>...<br>......<br>44<br>All Methods.......<br>1.......<br>...........<br>44<br>Clinical vs. NonclinicalMethods..........................<br>46|
|Socioeconomic<br>Characteristics<br>and Contraceptive<br>Source..........<br>49<br>Location............................<br>50<br>Age<br>......<br>.......<br>.....<br>.....<br>........<br>52<br>Education.......................<br>....<br>55<br>Income.........<br>.....<br>......<br>....<br>0#0*60|
|Pricing<br>..<br>000<br>....<br>63<br>Vhat Consumers Pay for Contraceptives<br>.<br>.<br>.<br>64<br>Price Levels for Resupply Methods in Public,<br>NGO and Private Outlets..<br>..<br>......<br>...<br>68<br>Conclusion..<br>......<br>....<br>72|

ii
|IV. PROMOTING THE PRIVATE SECTOR: ALTERNATIVE APPROACHES...............<br>78|
|---|
|Family Planning as an Employee Benefit ........... ...............<br>90<br>Company Programs ...**.**<br>.........<br>.<br>................................<br>90<br>International<br>Assistance ................. .....................<br>92|
|Social Marketing of Contraceptives<br>...............**..**...........<br>94|
|Promoting Private Sector Activity in Family Planning .... ........<br>95|
|Privatization<br>and Goverrnment<br>Incentives to the<br>Private Sector<br>................................................<br>98|
|Salient Characteristics<br>of Private Sector Projects ..........**.**.. 99|
|Who pays for Contraceptives?<br>..................................<br>106|
|Conclusion .....................................................<br>109|
|V. HOW TO PROMOTE PRIVATE ACTIVITY..........<br>.........................<br>111|
|Role of Government Policy and Action in the<br>Private Health Sector ..............<br>........................... 112|
|Private Sector Options and their Applicability<br>Across Countries<br>...........................<br>113|
|Information/Technical<br>Assistance<br>..................<br>116|
|Financing Assistance<br>.<br>.....................<br>117|
|Public-Private<br>Collaborafion<br>................................<br>117|
|Privatization<br>............................<br>118|
|Economic Policy Changes<br>........................<br>*............<br>;. 119|
|Promoting Private Actions .<br>....................................<br>119|
|Alternative Financing Options for Family Planning<br>.............<br>121|
|Government<br>Regulations<br>........................<br>122|
|Conclusion<br>.....<br>......................<br>123|
|VI. CONCLUSIONS AND RECOMMENDATIONS ................................... 125|
|Unansvered Questions and Areas for Future Activity ..........**.**. 127<br>Evaluation ..................................................<br>128<br>Determinants of Private Sector Use...<br>........................<br>130<br> <br>|
|Costs and Cost Effectiveness.........<br>........................<br>131|
|REFERENCES .............................................................<br>133|
|APPENDIX ...............................................................<br>141|

iii
LIST OF TABLES

|Table II.1:|Manufacturers'<br>Sites for Contraceptive<br>Production<br>by<br>Method<br>...........................................|Page<br>.........<br>14|
|---|---|---|
|Table I11.1:|Contraceptive<br>Methods<br>by Source<br>Among Current<br>Users for<br>Selected Countries....<br>. .......<br>. ............<br>.e<br>..|45|
|Table III.2:|Contraceptive<br>Methods<br>by Source<br>among Current<br>Users By<br>Clinical<br>and Nonclinical<br>Methods<br>for Selected<br>Countries.|.. 47|
|Table III.3:!|Contraceptive<br>Methods<br>by Source by Location<br>for Selected<br>Countries<br>.<br>......<br>...<br>.......<br>.*...<br>.......|51|
|Table 11I.4:|Source of Contraceptives,<br>by Age, for Selected<br>Countries<br>..........<br>..<br>. .<br>.<br>.0.....................|.. 53|
|Table III.5:|Source of Contraceptives,<br>by Residence<br>and Age, for<br>Selected Countries.......<br>..<br>...................<br>.|54|
|Table III.6:|Source of Contraceptives,<br>by Vomen's<br>Education,<br>for<br>Selected Countries.....<br>..<br>...<br>.............|<br>56|
|Table III.7:|Source of Contraceptives,<br>by Vomen's<br>Education<br>and Area of<br>Residence,<br>for Selected<br>Countries<br>......................|...<br>57|
|Table III.8:|Source of Contraceptives<br>by Husband's<br>Employment<br>Status,<br>Husband's<br>Occupation and Area of Residence<br>.........<br>.......|61|
|Table III.9:|Household<br>Income,<br>Location,<br>and Source of Contraceptives<br>for Jamaica and Thailand.........<br>..<br>..............<br>.|<br>62|
|Table III.10:|Distribution<br>of Average<br>Price Paid for Contraceptives<br>by<br>Areaof Residence for Jamaica and Thailand<br>...............|. 65|
|Table III.11:|Distribution<br>of Prices Paid by Method for Jamaica<br>and<br>Thailand<br>.............................................|...........<br>67|
|Table III.12:|Prices Charged for Contraceptives<br>at Private<br>Pharmacies<br>in<br>Selected<br>Eastern<br>Caribbean Countries<br>..................|....<br>69|
|Table III.13:|Prices Changed for Contraceptives<br>at Family Planning<br>Association<br>in Selected<br>Eastern<br>Caribbean<br>Countries<br>......|. 71|
|Table III.A1:|Average<br>Price of Contraceptives,<br>1986<br>.....|.........<br>76|
|Table III.A2:|Average<br>Price of Contraceptives<br>from Private<br>Sector<br>Sources in Selected Developing Countries<br>..................|77|
|Table IV.1:|Summary<br>of Experiments<br>in Private<br>Sector Dei4very<br>of<br>Family Planning<br>.<br>............................|80|
|Table IV.2:|Financial<br>Characteristics<br>of Private<br>Family Planning<br>Delivery Experiments...........<br>........<br>.|100|
|Table V.1:|Summary<br>of Options<br>for Promoting<br>Increased<br>Demand for and<br>Supply of Private<br>Family Planning<br>Services ..........<br>iv<br>0|......<br>114|
EXECITVE **SMLORY** While a private sector exists in every society, the nature of its involvement in family planning service delivery, varies widely across countries. This paper reviews the role of the private sector in family planning and discusses how much more of the demand for cr't- ception can be met through the private sector, thereby reducing goveromer subsidies for contraception.

Government has historically ta.. n a leading role in the provision of family planning in developing countries based on the rationales of the negative externalities of high population growth, the unaffordability or inaccessibility of private contraceptive services, the lack of monetization of certain groups, and the lack of information on contraception of populations outside the sphere of private sector providers. Shifts in income, accessioility and monetization have mitigated to some extent the applicability of these rationales for public subsidies for family planning in developing countries.

Public family planning investment is meant to reach: (1) those who cannot afford the commercial contraceptive prices or the medical attention that accompanies some forms of contraception; or (2) those who are deterred from contraception because of a lack of information, motivation or income. The danger of expansive public programs is that they are difficult to scale back for political reasons, and government then becomes the providet for anyone choosing to obtain subsidized contraceptives, even those who would and could buy from the commercial sector.

Reductions in government resources for family planning and rising demand for services has placed an increasing number of governments in the position of having to select what services or populations to subsidize. Government will need to reduce and modify its role by targeting subsidies, and regulating the delivery of services through private channels if it is to afford to meet the needs of low income couples. Indeed from an economic efficiency perspective, government should not be subsidizing consumers or providers where either would act identically without government intervention. Some evidence exists which suggests that private sector delivery of health and family planning is less costly because it is more efficient, having fewer employees and lower operating costs per patient. Government can harness the private sector to achieve the same ends by stimulating private sector investment through incentives, and ensuring quality control through regulation.

# **Private Investment in Family Planning**

The private sector is already involved in multiple facets of family planning from research and development to production to distribution and delivery. There is very little public production of contraceptive products, although private production is increasingly occurring in developing countries. Private production is divided between the pharmaceutical industry's wanufacture of medical products (e.g., oral contraceptives, spermicides) and production of nonmedical supplies (condoms). Oral contraceptives are produced in marny developing countries under direct licenses to one of the developed countries' pharmaceutical corporations. The volume of production to meet even minimal vi
efficiency in the production of nonmedical products is so high (700,000 condoms per year and one million IUDs), however, that a large domestic or international market must exist to warrant the establishment of a production plant in a given country.

A number of factors affect the profitability of the private contraceptive market. Among the most important are household income levels and consumer demand for family planning. Government policy on earnings repatriation, the likelihood of devaluation, the possibility of nationalization, tax and tariff levels, as well as policies regarding patent protection, product pricing, advertising of contraceptives and FDA-equivalent screening affect the attractiveness of for-profit investment in family planning.

Aiother critically important element in private delivery of family planning is the role of the government in delivering family planning. Private sales of contraceptives often decline dramatically with the introduction of public services. Recent experience from Kenya and Nigeria irdicates that private markets can be all but eliminated with the establishment of strong public programs, particularly where prevalence is low. In other countries, like Indonesia and Thailand, the success of public programs may have effectively stifled the growth of the private sector in spite of a growing ability and willingness of contraceptive users to pay for services.

# Public **and** Private Collaboration

Public and private collaboration is often seen by the contraceptive industry as the only means of retaining a presence in some markets, although collaboration such as that in Nigeria where government provides che commodities and the private distribution networks distribute for both public and private sources-show promise For a more mutually beneficial arrangement. Contraceptive social marketing (CSM) programs where subsidized products are distributed by the private sector with heavy advertising and promotion supported by the government or donors appears to be an attractive and productive arrangement, especially where the commercial market is small. Evaluation of the relative importance of CSM's components and net impact have not been well studied, however.

# Sources **and Pricing** of Contraceptives

Private providers of family planning services include private physicians and midwives (either in solo practice, at clinics or hospitals) and pharmacists. Among private providers of family planning, pharmacies are the most important source. While many women receive their first contraceptives from physicians or public clinics, resupply is commonly sought at pharmacies. Some evidence suggests that there is little difference in the relative effectiveness of different suppiiers of contraception in terms of the reliability of supplies and the accuracy of information offered potential acceptors.

The major source of contraceptives for couples in developing countries varies by method and country. The private sector (for-profits and NGOs) is currently serving the majority of contraceptors in the developing world who vii
rely on resupply methods. Government-is typically the most important supplier of clinical methods, especially in Asia and parts of Latin America, and is heavily relied upon in rur&l areas in some countries.

In terms of location, government is a major provider in urban areas of Asia and Africa, and in rural areas outside of Africa, while NGos are major providers in rural Africa. Older women are more likely to use public clinics, possibly because they were introduced and have strong ties to the clinics. As would be predicted, income and education are correlated with greater reliance on commercial suppliers.

The level of reliance on government sources tends to vary more by country than across location within countries. Asian countries such as Thailand, Bangladesh and Sri Lanka are heavily government dependent, while in countries like Lebanon and Egypt government is a minor player. NGOs are particularly active in a few countries, especially in Africa and in some parts of South America, and in others play no role at all.

The reasons for the discrepancies in degree of reliance on private sources across countries is difficult to explain. Differences in public program quality, investment and scope obviously will play a role, as will the existence of incentives and disincentives to private investment in family planning. These characteristics are probably as important as income levels in helping to explain country differences, otherwise users in a country like Bolivia would be more reliant on government than they are, while users in Thailand and Tunisia would more frequently use private sources.

The subsidies users receive also vary markedly across countries. The limited available information suggests that government subeidies benefit a large segment of the user population in Jamaica and Thailaid. Given the income l1'els of these two countries, it is not clear that the current subsidy level is required to keep contraceptive use high. The amount and extent of subsidy that is needed cannot be determined, but as household incomes rise, in general, public subsidies should be phased down as household ability and willingness to pay for family planning services increases.

The pricing of contraceptives varies across brands for the same products, and identical brands are priced differently across countries, even in regions with strong socioeconomic similarities and geographic proximity. Thus there is evidence that commercial providers charge what the market will bear in any given context. NGO prices tend to be significantly lower than commercial prices, and in many countries NGOs offer free services, as do most government programs.

# Efforts to Stimulate Growth of the Private Sector

The review of experience with private sector projects includes the following kinds of projects: (1) those that offer family planning as an employee benefit; (2) social marketing projects; and (3) those that promote private sector investment in family planning. Forty one projects are reviewed based on published documentation. Few have been carefully evaluated.

viii
The employee benefit programs that covered family planning services began in the 1950s in Indian factories. These were generated by management as a means of socializing and increasing the well being of employees. Such programs emerged elsewhere, particularly in Asia, offering incentives such as life insurance to recipients of sterilization, paid leave and health care for acceptors, and preferences in access to factory-offered services such as loans. At the same time, some factories introduced disincentives such as limiting access to services after the third or fourth child, limiting maternity leave for high parity women, and in some cases firing employees with continued high fertility.

Since the initial Indian programs, most efforts in this area have been assisted by the International Labor Organization in collaboration with the United Nations Fund for Population Activities and international NGOs. In general these projects offer free contraceptive services and supplies paid for by donors or employers.

T'.e social marketing of contraceptives has been ongoing for wel. -rer two decades. These programs subsidize contraceptive commodities prior to distribution aita often use existing distribution systems to reach contraceptors. Recent CSM innovations to harness the private sector more intensively include training and supplying itinerant traders in Ghana to deliver commodities in outlying communities, and an existing commercial, brand-specific marketing regime in the Dominican Republic in collaboration with a major pharmaceutical firm. The private sector's distribution and retail establishments have also been used to deliver contraceptives in other countries to supply a new, subsidized product to the commercially available products.

Promotion of self sufficient private sector activity and investment is a relatively new concept and two USAID projects are experimenting with alternative approaches. These have involved the following kinds of efforts: using cost benefit analysis to convince private companies to add family planning to employee benefits without any outside subsidy for commodities as in Peru and Zaire; taking the investment risk of newly established family planning clinics for a limited period, and offering MD training and access to contraceptive commodities at cost in Mexico; working with NGOs to improve their management and financial standing in Thailand and Indonesia; and, assessing the private market for sterilization in Jakarta. These projects typically do not involve donated contraceptives, but assist providers lower their costs for both operations and commodities. The experiments are establishing the structure for self sufficiency from the start, and typically target low income households although not the poorest groups.

Most of the private sector projects track users from the onset of the project, but almost all fail tcG account for substitution away from other sources. The effectiveness and efficiency of most of these programs is not known, although some evidence on the .rwer fertility or higher contraceptive prevalence of beneficiaries relative .o the rest of the country or baseline users has been shown in some of the early projects. The higher income and education of these target or beneficiary populations will have a bearing on acceptance and on the generalizability of success to other groups. Moreover, only the most recent projects determine the demand for contraceptive services within the plant or community prior to the establishment of a program. One company measured the net financial benefit of the family planning program and ix
estimated a scvings in employee benefits of $189.85 per averted birth, and a total savings of about $59,190 b-tween-1972 and 1976 not counting the cost of contraceptives.

Other important elements in harnessing the private sector include removing barriers to private investment, and contracting out elements of public programs to lower cost private providers. Taiwan reimburses private physicians for IUD insertions and sterilization, and Korea reimburses for sterilization. The Korean government offers tax exemption for employers who offer family planning, and the Malaysian government has stipulated that maternity leave is not mandatory for women who already have three or more surviving children. The relative savings from these initiatives is not knownl, but offer areas for possible action as an alternative to direct public provision. Incentives are central to encouraging the private sector to help achieve public objectives.

# Issues **that** Need to be Addressed

The outstanding issues regarding the efficiency and effectiveness of these private-oriented programs, who uses them, how much they are subsidized or need to be, and the possible adverse effects of an unchecked private sector role remain to be addressed. These issues are key to reaching public and donor objectives through identifying appropriate types of public-private collaboration, and through developing incentives for private sector investment in family planning.

Other options exist to promote the demand for private services such as insurance coverage for family planning, means testing for subsidized products and adoption of public reimbursement systems. At the same time, assistance to private investors in management, access to loan capital, tax relief and reductions of impediments could enhance the attractiveness of investments in this area and increase the number and kinds of sources for contraception. Government can also promote a greater private sector role through adoption of a reimbursement, voucher, or capitation arrangement for family planning services, contracting out and privatizing services, and expanding social marketing initiatives.

The major gaps include the following: First, a striking lack of evaluation of private and public sector investments and the performance of each in achieving their objectives and at what cost currently exists. Second, the determinants of private sector use are very poorly understood but are key to understanding how to target subsidies and design appropriate programs. Third, the cost and cost effectiveness of programs is unknown and yet they are the basis upon which the rationale for promoting the private sector must rest. Last, the limitations of the private sector in meeting contraceptive demand as well as the necessary oversight and regulatory function of government in ensuring ethical and proper performance by private entities are not well understood or specified.

Thus some experimentation and evidence exists on the role and importance of the private sector. What needs to be determined is what elements work and at what cost, how to achieve objectives most efficiently, and how much of the market the private sector can effectively serve.

**x**

**u1.fp:0Xee sum**
# I. INRODUCrION

A private sector exists in every society, although donors and governments Lhve often overlooked the fact in family planning. Traditional healers and midvives outside the private sector have provided family planning advice and services to women throughout history. As a public health intervention, and under the prevailing view that the private sector is inadequate to the social goal of promoting reductions in birth rates in developing countries as well as the suspicion of private sector motives, famity planning has evolved as a heavily public intervention. Whether that pattern is or was appropriate is open to question, but to date the issue has received little critical evaluation.

The first issue of importance is the definition of the private sector and privatization. The private sector consists of nongovernment actors that produce, distribute, or retail contraceptives or family planning services through various means. These private groups encompass both nongovernmental organizations (NGOs) as well as private firms, shops, or distribution networks; however, these two entities, NGOs and for-profit groups, are quite distinct in their objectives, operation, and benchmarks of success. The range of private family planning providers includes private physicians, private hospitals, clinics, dispensaries or outlets, private family planning associations, nonprofit health providers, pharmacies, shops selling contraceptives, vending machines, and traditional healers. The delivery mechanisms for contraceptives include an additional method that is both public and private: social marketing. The importance of social marketing in the provision of contraceptive services is _SUC!._ that it needs to be included here as another method of reaching contracepting couples. These three modes of delivery, forprofit, NGO and social marketing, while all are non-public are quite different: **ai.t:aaly Planninj Paper** (whole?
2

- the for-profit sector functtons entirely outside the public sector, relies exclusively on market forces, and returns on investment. For-profit firms invest in producing or distributing contraceptives and family planning services in response to consumer demand, and are dependen; upon adequate financial returns for survival. Investment in family planning indicates that the investment is potentially profitable. The for-profit sector is necessarily affected by government through regulation and legal constraints. The for-profit sector may also be affected by large procurement or distribution contracts negotiated vith international donors or governments that affect production, cost and ultimately pricing decisions. Consumer demand, pricing, political and economic stability, and regular and reliable access to supply inputs are key elements in determining profitability; vithout these, returns may be inadequate to attract or keep private investors. Excessive governmental oversight can also be discouraging to private entrepreneurs because it raises the cost of doing business add therefore of the product to consumers, in this case contraceptives and-family planning services.

- the nongovernmental organizations, although not purely market driven (and sometimes not at all affected by markets), typically offer a product for a specified price; subsidies from external sources often supplement revenues, vhich modifies the nature, incentives, and operation of NGO activities. Altruism and charity drive some NGOs and the need to cover costs or ensure efficiency of operation are generally not binding constraints although some cost recovery is typically expected. In many cases, the objectives of NGOs and governments are very similar in the family planning area: increasing prevalence. Effectiveness in achieving this objective is therefore the major measure of success, although the net effect of program success is typically assessed vithout evaluating the impact (e.g., reductions) occurring at other sources of contraceptive services. Thus the financial constraints of for-profits do not define the activities of NGOs.

- social marketing is a hybrid of public and private investments that uses market incentives to distribute and market supplies and services through private channels, but provides a public subsidy up-front that covers some of the cost of contraceptives and up to the total cost of advertising, management, and administration.1

1. See Binnendijk (1985), Behrman (1985), Levis (1985), Chester (1986) and Sheon et al. (1987) for additional details on social marketing of contraceptives in developing countries.

**a1.tp:FaaLly** Plarzing **Paper** **_(whol.)_**
3 Privatization means "to turn over a Federal (i.e., public) activity, or part of a Federal activity, to a non-Federal entityl, and] alloving Government to provide services vithout necessarily producing them" (PPSS, 1984). Privatization of public services such as family planning is different from private activity that occurs in response to market forces. Privatizat!ln means that the government hires the private sector for a discrete task or set of tasks. This can take the form of contracting out, monopoly franchises, management contracts, or vouchers.

For example, government can contract vith a family planning clinic or organization to provide family planning services in its hospitals (contracting out); or allov a private family planning group to provide all contraceptive services in a given area and not allow other providers to operate legally (monopoly franchise);2 Similarly, the public sector can provide services but contract out elements such as billing or accounts to a private organization (management contract); and, as an alternative to providing services directly, government could provide couples in need of family planning subsidies with vouchers that reimburse private providers for providing voucher holders vith contraceptive services at lov or zero price.

Equally important to the definition of the private sector and family planning is vhat it is not. Private sector activity does not include paying private entities to undertake tasks or activities that vould be undertaken anyway vithout government intervention or investment. For example, paying companies to undertake feasibility studies is a questionable endeavor vhere the benefits have clear financial benefits to a firm, management is avare of the 2. This is less typical in femily planning, but in other public services such as electricity and vater supply vhere economies of scale are particularly important, monopoly francnises are more common in both the developed and developing countries.

**ul.fp:reanly PLanni"n Pap.er** jole)
4 benefits, and the firm could and would carry out the study even if donor funding vere not available. In this case the public sector is subsidizing a private entity for a task from which the company vill profit. The subsidy<sup>is therefore</sup> unnecessary, an inappropriate use of government resources, and does nothing to promote private enterprise.

Supporting studies that demonstrate the value of providing family<sup>planning</sup> to employees, or of adding contraceptives to the range of products offered by purveyors of pharmaceutical products provides firms or entrepreneurs with information about a product not previously offered to consumers. It is quite different than either subsidizing an already planned activity or paying a firm to undertake a feasibility study vhere the benefits to them are already clear. The point of private sector promotion in family planning is to encourage private individuals, companies, and groups to invest in an area that has historically been dominated by the public sector. In ensuring broad access to free family planning services, donors and governments have assumed avay the role of the private sector for all but the highest income groups. This pattern may have produced disincentives to private activity in family planning that might have flourished othervise. If so, government is extending subsidies beyond the target group of those who require a subsidy to afford contraception. Moreover, crowding out the private sector reduces consumer options and the number of outlets for family planning services. In other vords, government can make private investment sufficiently difficult that expansion Is unprofitable.

It can be argued that subsidization may have undermined the private sector. Social marketing efforts, vhich have not received careful evaluation, may vell have cut into private provision of contraceptives at commercial outlets and in effect have subsidized couples vho neither need the subsidy nor make a decision to contracept based on the availability of a less expensive product. There is

**l.tP:Veully PlaUning** **_PapOr_** (whol*)
5 some evidence to suggest that government subsidies crowded out private investment in the Dominican Republic's social marketing effort.

The private sector is already an active participant in family planning through its production and distribution of contraceptives. Multinational companies that produce contraceptives are represented in virtually all developing countries. Their presence suggests an existing or potential market for contraceptive products, which means that some critical proportion of the population has the income and the need for privately provided contraceptives. The qu' cion is, how much of the potential demand can be satisfied by the private market? How sensitive are various segments of the population to contraceptive prices? Are there location and price tradeoffs? Hcr big is the market for contraceptive products priced at marginal cost or above? Can private providers price discriminate sufficiet.tly to meet the demand of high as well as moderate income couples? In other words, how much can the private sector do to meet the demand for contraceptives? Is there an economic rationale for subsidizing the initial development of private distribution systems? The issue of this paper is to explore the current role of the private sector in family planning and assess how much more the private sector can take on that will relieve the government from having to provide services. In so doing many of these topics are touched on but fev of the empirical questions are satisfactorily answered.

The Role of Government in Family Planning Provision The historical rationale for public involvement in family planning provision is based on the negative externalities associated with high rates of population growth, and therefore the divergence between social and private al.fp:raaily Planning **Paper** (wholo.
6 benofits of large families; the low incomes and level of monetization in most developing countries; and, the lack of adequate information regarding contraception.

Although of externalities provide major rationale for government intervention in providing family planning is still valid, although the recent National Academy of Sciences review of existing evidence on the consequences of high fertility suggests that the private benefits of family planning use exceed the social benefits (NAS, 1986). The report points out, however, that "vhen negative externatlities exist, a minimum policy prescription vould include the subsidized provision of family planning services" (NAS, 1986:84). Incomes and monetization have developed rapidly since the 1960s and no longer provide a logical basis for government's subsidization of services in most countries. The information gap calls for improving couples' information; provision of contraceptive services as a vehicle for information dissemination suggests that family planning is a merit good. Merit goods are goods or services that while not demanded are perceived by government as important to improving quality of life. Moreover, merit goods are consumed in insufficient quantities, and government must provide consumers vith incentives (e.g., subsidized products, easier access) to raise their consumption. Government subsidies serve to alter consumer preferences over the long term through the satisfaction of merit vants (e.g., contraceptive services), and in effect provide information through experience (Levis, 1981). Therefore, public subsidies caun promote consumption of merit goods, since consumption provides information.

As a merit good, family planning is promoted to encourage couples to use a product for their enhanced private vell being. Increased consumption of a meri good (family planning) may also increase social velfare through lower fertility that reduces the negative externalities associated vith high rates of population

**Ul.fp:raly** Planning **paper f'Ao1e**
7 grovth. If family planning is subsidized because it is defined as a merit good, subsidies should be phased out once the value of contraception becomes apparent and is Internalized by the the target population. The private market then becomes the appropriate sources of contraceptive services. The continued effort to address the social benefit of family planning due to negative externalities associated with high fertility requires the continued presence of government services.

As a practical matter, it is unclear how relevant any of these criteria are (or were, ir some instances) to a number of developing countries. These rationales huaie fueled the expansion of subsidies to family planning by donors, governments, NGOs, and other groups, without ever testing whether the private sector could handle the production, distribution, and marketing of contraceptives to any segment of the market other than the very vell off.

Subsidies are considered essential under the assumptions outlined above. Although the reasoning early on may have been sound, much of the developing world has come a long way over the past few decades, and the private sector-has grown and matured. Meanwhile, incomes have risen and a middle class has emerged in a number of countries, calling into question the need for the subsidies they may receive through government provided or subsidized family planning services.

Family planning is viewed as a social good, a service that the population should have access to in order to control fertility. In most developing countries there is an added benefit to investing in family planning, and that is the reduction in health care costs related to both maternity (for unplanned births) and treatment of botched abortions. Because health care, particularly inpatient care, is typically free in developing countries, government bears the cost of both services. Thus family planning can serve to lover those costs.

**a1.fp:maully Planning Papet Iihbole**
8 As the demand for family planning and incomes rise, government's role should shift accordingly to promote and regulate the private sector to serve those able and villing to pay for services. Government can then concentrate resources on those for vhom family planning is a merit goods or those who cannot afford private prices.

The basic premise regarding government's role is that neither consumers nor providers should be subsidized where either would act identically vithout government's intervention.

The Economics of Private Sector Family Planning Delive2y The private sector has played a central role in family planning from the development of contraceptive methods, to their manufacture, to their delivery. In the developing vorld, delivery of contraceptives has meant establishing or building on distribution netvorks to physicians, clinics and retail outlets that provide family planning services. Low marginal costs of distribution where pharmaceutical companies are already operating has alloved piggybacking on existing networks to distribute contraceptives.

The desire to maximize profits, vhich drives for-profit firms, results in: designing packaging, information and products that respond to consumer preferences, maximum efficiency of operation to keep costs at a minimum, and charging the price that maximizes profits--the one that equals marginal costs under conditions of perfect competition.3 The pricing implied by profit maximization suggests that the for-profit sector cannot meet the contraceptive needs of low income households.

3. Under monopoly conditions, price exceeds the level where marginal revenue equals marginal cost; however, contraceptive monopolies are becoming less common as markets expand and the number of providers increases in response.

**ml.fp:Vanily** Plannuinzg **Papet** f
9 Because for-profit entities invest in family planning to earn<sup>profits, their</sup> Incentive to keep costs to a minimum are very<sup>strong. Evidence from the U.S. and</sup> elsevhere indicates the consistently lover costs of private versus public health care service costs (see Levis, 1987 for a summary<sup>of these). Because it is</sup> similar to and often delivered vith health care,<sup>family planning costs are likely</sup> to shov a similar pattern; hovever, family planning<sup>specific data are not</sup> available. Private services are more efficiently<sup>run, have fever employees, and</sup> lover operating costs per patient served. Thus<sup>private manufacture and delivery</sup> are preferable to public. Hence government's regulation of the private sector and privatization of contraceptive service delivery will be more efficient, that is, costs will be lover, other things equal.<sup>4</sup> For-profit entities set prices at vhat the market vill bear.<sup>So to maximize</sup> profits in the family planning business, the number<sup>of users and the price are</sup> traded off. Thus unlike government vith a social<sup>objective of maximizing the</sup> number of continuing users, private investors vill raise<sup>the price to where their</sup> returns vill be highest even though that may mean a<sup>decrease in the number of</sup> users. If lovering the price raises the number of<sup>consumers but reduces</sup> earnings, then private entities vill prefer to raise prices; Earnings from contraceptive sales are the incentive vhich retains private companies in the market. If profits are too lov or nonexistent,<sup>then no private</sup> firm vould remain, unless the long term potential of the contraceptive market vas perceived as valuable. Thus the operating climate for<sup>private business is</sup> critical to continued operation of for-profit<sup>investors. A number of operating</sup> impediments, from restricted marketing of ethical products (prescription drugs, for example) to price controls to foreign exchange<sup>controls, vill impede private</sup> 4. This assumes, hovever, that government can effectively oversee<sup>and regulate</sup> the private sector.

**E.1fpPasuily** Plarning **Paper** wholo)
10 activity. These public sector restrictions raise the cost of doing business thereby discouraging investment, and ultimately raising costs to consumers.

Using the Private Sector to Meet Pamily Planning Needs The arguments for a greater private sector role in delivering family planning--that government need not provide for all users, and the greater efficiency of.private versus public providers--should also include the argument by Cross (1986) that government will not be able to afford to meet all demand given projected rises in the size of the reproductive aged population in the developing vorld in the next decade, and the increasingly constrained government budgets. If the private sector is not stimulated, growing demand will not be able to be met. Moreover, without government efforts to reduce barriers to for-profit investments in family planning, services may be too costly for many users.

Government has a key role in both stimulating private activity and in reducing extraneous costs (e.g., price controls, tariffs, exchange rate controls) for private investment. Only government can ensure a conducive investment climate, and it is through government incentives and removal of disincentives that private investment can flourish. This issue is discussed in detail in Section V belov.

The private sector can meet family planning demand through direct marketing, contracts with government (e.g., privatization), or partnerships with the public sector. As discussed belov, the first and last are the most common forms of private activity. Privatization is most commonly achieved through grants to NGOs vhose philosophies are often similar to governments'. Moreover, such grants are to continue existing NGO operations, they are not directed to carrying out a specific activity for the public sector. Greater efforts to expand direct

**In.fp:Wtly Piluandy Paper bwhol1e**
11 private sector provision and harness the (potential) efficiency of privatization, particularly among for-profit entities, should be priorities.

As already mentioned, the for-profit sector is an efficient producer and distributor of contraceptives and family planning services. NGOs are a hybrid betveen public and for-profit entities. Vithout the need to generate profits and often driven by social objectives to do good, NGOs are probably less efficient than the private sector, but their commitment to social goals may serve to motivate employees and raise their efficiency above that of government. The absolute or relative efficiency of NGOs is simply not known, however.5 And although its pricing strategies may make services more accessible, population coverage is often spotty, many NGOs are not able to expand rapidly enough either geographically or in numbers served, and its lack of incentive to trade off users and costs can raise the cost of operation considerably. Moreover, to the extent that they rely-on government for support, they too will be victims of budget constraints and cut backs. Thus although NGOs are and should be a fixture of family planning provision, they have already been assisted in the past, and; more importantly, cannot take on the entire supply burden anticipated for the coming decades. Thus it is essential that some efforts be made by governments and donors to promote greater for-profit involvement in family planning delivery. This paper focuses on the for-profits, although where relevant and possible NGOs are included.

5. Levis (1985) addresses this issue, concluding that there is a dearth of knowledge and documented experience, vhich prevents any conclusions on the efficiency or general effectiveness of NGOs.

**w1.fp: Faily** Pleming Paer (whole)
12

# Study Outline

The paper is divided into six sections. The next section, Section II, discusses the characteristics of private sector supply, vith a strong emphasis on for-profit producers and distributors of contraceptives. Section III describes the distribution of users across sources and addresses the issue of pricing at public, for-profit, and NGO sources of family planning services. In Section IV the experience to date with private sector approaches is outlined to provide a sense of vhat has been and is currently going on in public and donor efforts to harness and collaborate vith the private sector. Section V presents alternative means for government and donors to promote private sector activity in family planning, and suggests some of the costs of a greater private sector role. The final section summarizes and concludes the paper.

**s.1.fp9amly ulfnlag Papr tilole**
13

# II. CHARACTRISTICS **OP THE** FOR-PRO'IT PRIVATE **SECTOR** IN PAMILY **PLANNING0**

This section addresses the issues surrounding the supply of contraceptive products and services. Demand and utilization vill be discussed in the next section. Private sector involvement in family planning spans the gamut including research and development into nev or improved contraceptive products and technologies; production and packaging of contraceptive products; the distribution of products to government and commercial outlets; and, the direct provision of services through, retailers, private clinics and hospitals. The information and analysis presented in this section come from extant data sources and from discussions vith executives of multinational pharmaceutical firms that produce or market their products in the developing world. All evidence presented here is derived from the indicated source or obtained from confrential interviews.

# Production

Producers can be categorized into two general groups. The first group is pharmaceutical manufactures that produce a line of ethical/medical prescription products in addition to contraceptives; the second group consists of firms specializing in non-medical contraceptive methods like the condom. This demarcation is not exact because some of the former firms produce ethical and non-ethical contraceptive products. Table II.1 contains a list of the major multinational producers that export to the developing vorrd, along with the location of their corporate headquarters, countries where production facilities are located, and the range of products produced.

In general, producers are American and European multinational corporations that have local subsidiaries or direct licensing agreements with local 6. Nongovernmental organization characteristics are provided in Levis (1985). **al.tp:asily Plarning Paper** (lbolel
14

# Table II.1

# Manufacturers and Their Production Sites for Contraceptives by Method

|Manufacturers|Partial List<br>of Production<br>Sites in<br>Developing World|Contraceptive<br>Products<br> <br>Marketed|Notes|
|---|---|---|---|
|Organon<br>(Holland)|Mexico, Brazil,<br>Venezuela,<br>Argentina,<br>Indonesia,<br>Korea, Pakistan,<br>Bangladesh,<br>India, Thailand|Several Oral<br>Contraceptives,<br>IUDs,<br>injectable,<br>implants,|Purpo-ted to be one of<br>the...rgest suppliers to<br>the commercial market in<br>developing countries.<br>Has very export-oriented<br>policies with emphasis on<br>research and development.|
|Schering Ag<br>Vest Germany|Ir Almost every<br>majt marketing<br>coustry, e.g.,<br>Brazil, Mexico,<br>Venezuela,<br>Thailand|Oral<br>Contraceptives<br>injectable,<br>IUDs|Is purported to be one of<br>the largest supplier to<br>commercial markets in the<br>developing world.|
|Syntex<br>(U.S.)|Mexico, Brazil|Oral<br>Contraceptives<br>injectable|Von USAID procurement<br>contracts of 100 million<br>pill cycles per year<br>until early 1980s when<br>procurement fell by<br>approximately<br>one half<br>due to phase out of dona-<br>tions to Indonesia. Vas<br>alwarded<br>to CSM procure-<br>ment contract for orals<br>for the next four years|
|Vyeth<br>(U.S.)|In almost every<br>major marketing<br>country, e.g.,<br>The Philippines,<br>Pakistan, Peru,<br>India, Turkey,<br>South Korea,<br>Chile, Colombia,<br>Argentina,<br>Uruguay, Mexico,<br>Brazil|Oral<br>Contraceptives<br> <br> <br>|One of the largest<br>suppliers to public<br>sector programs in the<br>developing world. Von<br>USAID contract to supply<br>orals to the public<br>sector for 1988 to 1993.<br>The contract specifies a<br>minimum of 30 million<br>pill cycles; 1988<br>supplies are expected to<br>be 56 million cycles.|
15 Table II.1 (cont'd)

|Manufacturers|Partial List<br>of Production<br>Sites In<br>Developing Vorld|Contraceptive<br>Products<br>Mxrketed|Notes|
|---|---|---|---|
|Ortho<br>(U.S.)|Mexico, Brazil,<br>Argentina|Oral Contracep-<br>tives, spermi-<br>cides, foaming<br>tablets,<br>Jellies, foams,|<br>Has USAID contract to<br>supply foaming tablets<br>(Conceptrol)<br>to the<br>developing world.|
|Ansell Inc.<br>(Australia)|Malaysia,<br>Thailand|Condom|Has been sole winner of<br>USAID procurement<br>contracts for last 4-5<br>years due to large produ-<br>ction capacity in the<br>U.S. Supplied about 400<br>million condoms last<br>year.|
|London Rubber<br>Industries<br>(Durex)<br>(Great Britain)|Philippinesb|Condom,<br>Diaphragm|Durex product used in<br>some CSM programs.<br>Dominate commercial<br>condom markets of Africa.|
|Sagami Rubber<br>Industry<br>(Japan)|Malaysiab|Condom|Because of size of<br>domestic market for<br>condoms, Japan has<br>greatest production<br>capacity. Of the three<br>large Japanese producers,<br>Sagami is the largest<br>international<br>supplier of<br>condoms.|
|Eisai Co., Ltd.<br>(Japan)||Foaming Tablet|Neo Sampoon, Eisai's<br>foaming tablet, is the<br>major spermicide donated<br>by international<br>donors<br>and is used in many<br>social marketing efforts.|
|Holland Rantos<br>Corp. (Holland)||Diaphragm||
|Finishing<br>Enterprises<br>(U.S.)||IUD|Supplied 2.6 million<br>Copper T's to USAID last<br>year. Sold to UNFPA as<br>well.|

- a. Most production of oral contraceptives in the developing world relies on importing the active ingredient.

- b. Data are not available but given the worldwide pattern of condom production,<sup>it is</sup> likely that these firms also have pro4uction facilities in India and South<sup>Korea.</sup>
16 affiliates In developing countries. While production operations are located all around the vorld, the bulk of production still takes place in the developed vorld. This is not the case for all firms. For example, Schering Ag does most of its manufacturing in developing countries, especially in the newly industrialized countries. Manufacturers hoping to vin USAID procurement contracts (which can be sizeable) have an incentive to locate production within the United States because, except for rare circumstances, the commodities provided as a part of the contracts must be produced in the United States. Production takes place worldwide mainly through subsidiaries of multinational corporations and to a lesser degree by independent producers.

Vhile both multinational corporations and local manufactures are involved in the production of contraceptive products, the former play a dominant role due to the important technological component in ethical contraceptive production and the strong economies of scale in the production of many contraceptive products. These multinational firms handle most of the research and development for contraceptive products although, private-public sector collaboration takes place through agreements vith organizations like The Population Council, PIACT, W.H.O., and Family Health International that have been predominantly funded by USAID. There are several reasons that production facilities are located in the developing vorld.

First, some pharmaceutical companies believe that they will have an advantage over other competitors in local markets if they locate production domestically. Local production has a big impact on public sector sales; even bigger than its impact on commercial sales according to another pharmaceutical firm. Second, developing country governments, like Ind6nesia, that purchase a high volume of contraceptive products annually to supply their public sector family planning component find it advantageous to purchase locally because

**a1.fp:Fauly** **_Plan1q_ Paper ('iwle)**
17 foreign exchange is at a premium. Thus these countries may be willing to offer a firm incentives like tax breaks or purchase commitments to induce it to produce locally. Third, some countries, like India, have such restrictive import policies (marketing is forbidden unless there is local production) that it becomes imperative to produce vithin a country if a co.npany wishes to do business In that market. Fourth, in some of the newly industrializing countries where chemical and pharmaceutical industries are burgeoning, costs of delivering products vithin the country as well as to the other countries in the region are lover than the costs of producing further away and bearing high transportation costs.

The production of condoms for export to the developing world is handled minly by three companies--an Australian owned firm with major production facilities in the United States, Ansell Inc.; a British concern, London Rubber Industries; and, a Japanese firm, Sagami Rubber. These companies have subsidized/joint venture agreements with several third world countries. In addition, independent production takes place on a sizeable scale in India, China, and South Korea.<sup>7</sup> while condoms are produced in 20 countries worldwide, almost all of the condom production takes place in Japan, the United States, China, the United Kingdom, India and South Korea. One third of the condom production capacity is located in the developing world. Within the developing world, the People's Republic of China has the largest production capacity. Other developing countries with large production capacity are Malaysia, Brazil, Argentina, and hexico vith capacities of one million, 700,000, 500,000 and 60,000 gross respectively (where one gross is 144 condoms) (Sherris et. al, 1982).

7. The technology for mass-producing condoms is interchangeable with that of latex gloves and given overcapacity in the former and shortages of the (Footnote 7 Continued on Next Page ml.9p:adly **P1laning** Paper **Nthol.)**
18 Due to the capital intensive nature of condom production and significant economies of scale In production, efficient factories must produce on the order of 70 million condoms annually--vhich means there 'iould have to be 700,M00 couples using the condom for contraception (assuming 100 condoms per one couple year of protection) vithin the domestic market .o ensure profitability (assuming no exports) (Sherris et. al, 1982). This is one reason that production is concentrated in a fev countries. While condom production is capital intensive, the packaging of condoms, which constitutes about one half of the vholesale price, is a labor-intensive process. Local packaging of imported condoms occurs in Bangladesh, Thailand and El Salvador and in other countries as part of their social marketing programs. Increasingly, the packaging of contraceptives is shifting tovard the developing vorld, and, social marketing programs almost alvays have a local packaging component.

Host production of diaphragms is located in the United States and the United Kingdom; Ortho, London Rubber Company and Holland-Rantos Company supply to family planning programs (Sherris et. al, 1984). Although, vere demand for the product higher in the developing world vhere it accounts for a miniscule share of contraceptive users, diaphragms could be economically produced in developing countries in a less capital intensive vay than it is produced vithin the developed vorld.

Production of oral contraceptives takes place throughout the developing vorld vith plants in Mexico, Brazil, the Philippines, Indonesia, Pakistan, India Bangladesh to name a fev countries. This list suggests the diversity of production location, although African countries are notably missing from the (Footnote 7 Continued from Previous Page) latter, some of the condom capacity may be transferred to latex gloves, given rising demand due to the threat of AIDS.

**Al.tp:FaaLly Plaming** Paper **EW'Io1**
19 list. No oral contraception production currently takes place in sub-saharan Africa outside of South Africa although there are plans for plant location in one or two countries. As mentioned earlier, factories in the developing world are usually subsidiaries of multinational corporations due to the sophisticated nature of oral contraceptive production.

Vhen oral contraceptives are produced in the developing world, the "active ingredient" (the synthetic hormones) is usually produced by the home factory and imported except in cases such as Indonesia vhere special arrangements have been made to manufacture the active ingredient locally and supply it to the government for use in the domestic production of orals. The conversion of the active ingredient into progestin, compounding, tabletting and packaging complete the production process. Some countries, like Mexico, have the basic raw material for the production of orals (and the lov-wage labor force to extract the raw material) and have domestic production of the active ingredient and thus have no need to import the active ingredients (Sollins and Belsky, 1970). The socially marketed oral contraceptives, like condoms, are often repackaged in-country. Injectables like Depo Provera are produced in Belgium and in a few Latin American and Asian countries (Liskin et. al, 1983). Depo Provera cannot be exported from the United States because it has not gained approval of the US Food and Drug Administration (FDA). The implants developed by The Population Council, Norplant, are produced in Scandinavia.

IUDs and IUD inserters are produced in China, India, and Mexico. IUDs have been produced in India for more than a decade and Copper T devices have been produced in Mexico and are scheduled to be produced in Brazil, China, India, and Indonesia (Liskin et. al, 1982). Finishing Enterprises, an American firm, produces the Copper T's that are purchased in bulk by USAID. Last year, USAID purchased 2.6 million Copper T's. PROMED, an independent Brazilian firm, also produces Copper T's.

**u1.tp:?atily Pluaunig Paper** (whole)
20 It is estimated that to be efficient, a plant must produce one million IUDs per year. Vith joint production and the sharing of fixed costs of production, this number can decline (Liskin et. al, 1982). A sizeable industrial labor force seems to be an important consideration in location decisions by-multinationals. Because some IUD technology has resulted from private and public collaboration, the chosen licensed distributors of the product are often held to price restrictions set by the developing agency. For example, the Population Council, when arranging for production and distribution of its IUDs will sometimes set limits on prices that can be charged. This has resulted in large disparities between private and public sector prices and has been said to lead to reduced incentives to promote products vhere prices are set artificially low.

Vaginal spermicides are produced by many of the multinational pharmaceutical firms. In the developing vorld, one of the most popular of these products is a foaming tablet, due perhaps to its robustness in tropical conditions and its ease of use. The Neo Sampoon foaming tablet has been the most widely used; it is manufactured by a Japanese firm and has been used as a social marketing product and marketed under other names. Neo Sampoon was the main spermicide donated to developing country governments by all donor agencies until recently when USAID started to donate a comparable American brand to its recipient countries. The vaginal suppositories produced in Colombia together with Neo Sampoon attained sales levels on a par vith condom sales but fell short of oral contraceptive sales (Sherris et. al, 1984).

# Incentives/Disincentives for Production and Marketing

The economic, social and political environment of a particular country influence the decisions of individual private firms with regard to production,. marketing and pricing of contraceptive products in that country. The incentives

**mL.-:Veuly Plainug** Paper (vbol*l
21 and disincentives affecting each of these decisions will be discussed in turn, in spite of the fact that they are clearly intereependent. Clearly history also plays an important role in influencing production and marketing location and success. For example, The London Rubber Company has been a major exporter of condoms to anglophone Africa due its long standing involvement in the region (Black, 1973).

There are certain attributes of domestic markets that affect the potential market for all private producers, vhile there are others that affect producers differentially. Among the key factors that affect all firms, are the income levels of the population in a particular country, the consumer demand for contraception, whether contraceptives are reimbursed through the social security system or through private health insurance schemes, tariffs and taxes on imported products and pharmaceuticals, exchange controls, the distribution and retail outlet networks, speed of approval for ethical prescription products by local FDA equivalents, and restrictions on advertising and marketing.

Additionally, the size and skills mix of the labor force influences the economic feasibility of domestic production. The concentration of production in the newly industrialized countries is partly a reflection of their developed industrial labor forces.

Macroeconomic conditions also affect earnings and viability of production facilities in developing countries. According to one multinational corporation, as the Mexican economy has declined over the last few years, multinational contraceptives producers in Mexico have suffered serious financial losses. Demand for contraceptives dropped off with declines in income, and with the sharply devalued peso the value of repatriated earnings declined precipitously. This almost led to plant shut downs.

**m1.fp:ranily** Planning **_Paper_** lwhol.)
22 Government pricing policies vith r_espec **t** o contraceptives can dissuade companies from producing in certain countries. Where government has set price ceilings on contraceptive products during periods of high inflation, it can be impossible to meet costs as the revenue received for the product remains constant vhile costs rise. Yhen contraceptive prices are set by the government, underlying changes in costs can not alvays be translated into higher prices, vhich leads to unprofitable market situations and disincentives to continued production, much less new investment.

A country's tariff structure influences whether local production is likely to be profitable. Production incentives vill depend on the tariffs on both finished contraceptive products and on imported inputs to contraceptive production. Hany countries have tariffs on imported contraceptive products, vit the objective of raising revenue, reducing imports to conserve foreign exchange, and/or protecting/encouraging domestic production. This situation can backfire, hovever. Ghana had a 50 percent tariff on imported condoms and a lengthy licensing process to provide protection to its domestic rubber industry. Hovever, this has not stimulated a domestic condom industry--to date no multinational has located a condom factory there and thus the tariff serves to raise the commercial price of condoms and may discourage firms from marketing their product vithin the country (Black, 1973). In Turkey, high tariffs on condoms have led to videspread smuggling of condoms. In Colombia, in the early 1970s, import duties, exchange controls and other legal importation requirements vere so burdensome that almost all condoms vere smuggled into the country and ha prices that greatly exceeded prevailing international prices (Arthur D. Little, 1972).

Higher tariffs on imported contraceptives can, hovever, serve to induce firms to locate plants vithin countries vhere the private market is estimated to

**A.fp:tdauly Flming Paper** (who1le
23 be large and potential profits are gre3lt. In 1972, some multinationals did the tabletting and packaging of orals in the Philippines due reportedly to the relatively higher import duties on finished than less processed products (Arthur D. Little, 1972).

Hovever, some countries also have tariffs on imported raw material inputs that increase the cost of production in that country. This can be a real deterrent, especially to oral contraceptive production. One rav input into oral contraceptive production is not found in many countries (Sollins and Belsky, 1980), and if it has to be imported and is subject to a tariff, the domestic costs of production will rise. Reportedly one of the fev countries at this time vithout tariffs on either the imported rav material or oral contraceptives is the Philippines.

Very damaging to private production of contraceptives is government restrictions on foreign exchange movements and the repatriation of earnings. Governments that restrict the repatriation of earnings reduce incentives for multinational corporations to locate plants vithin developing countries. Vhile some firms have been able to reduce the impact of such disincentives by svapping costs and earnings on a vorldvide basis, or by reinvesting domestically, these restrictions have served as a deterrent to private sector expansion in some developing countries.

Another deterrent to domestic production is the risk of the government either creating a subsidized competing factory or purchasing from other sources. A multinational built a plant in India with the understanding that the public sector vould purchase its output only to have the public sect or subsequently set up its own plant. Further, the threat of nationalization is said to have deterred firms from locating production in countries where that threat is real.

**_mJ.tp:Pa"ly_ Plamzin Paper** Nbole)
24

# Location of Contraceptive Markets

For firms that lack production facilities vithin a particular country, the decision to market products and make investments in that country depends on the size and potential profitability of sales to both public and private sectors. Because so many couples in much of the developing vorld rely on the public sector for contraceptives, sales to the public sector are quite important to pharmaceutical producers (the public/private sector breakdown is given in Table III.1). Private companies vie to vin contracts from USAID, UNFPA, other international donors or local governments to supply the public sector clinics.

Some firms have argued that they just meet marginal costs when supplying to donors and governments at vell belov vholesale market prices and that they do not cover research and investment costs on these transactions. In part, the economies of scale in production allov them to sell to public entities at a reduced rate. Other firms say that they are able to defray their fixed costs through commercial sales. Further, some firms take a longer run viev and believe that the pay off to investments made in developing country markets over the past fev decades vill occur in the coming years as these markets grow and are committed to long available products. Other firms have stated that it becomes difficult to "break into" a nev market vhen other firms are already vellestablished.

Firms that supply contraceptives to the public sector may have advantages over competitors at gaining a foot-hold in the private sector. There is evidence from the last round of the Contraceptive Prevalence Surveys (CPS) that in some countries, vhile most vomen obtain their initial supply of the pill from a clinic, they are most likely to have obtained their pill resupply from a pharmacy (Tunisia CPS, 1983). Thus the type of oral contraceptives (color, size, brand and hormone mixture) provided in the public sector are likely to be in greater

**al.tp:Vaiy Planlinq** Paper **Iwbol.)**
25 demand in the private sector, other things equal, than other pills on the market. Evidence that users remain loyal to a product comes from the Eastern Caribbean vhere new, public free-pill programs are being launched. Potential users are undermining the potential successes of the nev program by rejecting the USAID supplied orals in favor of the long standing pharmaceutical products marketed commercially by Schering Ag.

Some private firms also complain that some of their commodities that are sold at concessionary prices to the public sector have found their vay into retail outlets where they compete unfairly with the firm's commercial products as they carry deep discounts. Problems have been reported specifically in Thailand and Costa Rica. Firms feel that this direct competition in the commercial sector greatly undermines their commercial sales.

# Government Regulations and Contraceptive Sgupplies

Government imposes a wide range of restrictions on contraceptive marketing and distribution. The private sector provision: of family planning is affected not only by the macroeconomic context but also by policies on pharmaceuticals, and policies specifically aimed at controlling the contraceptive market.

Kacroeconomic Constraints. A number of macroeconomic factors are important in determining marketing success. The government's pricing, tariff, and taxation policies influence the profitability of commercial sales, as already mentioned. High tariffs, taxes, and price ceilings reduce the margin that private producers can gain by exporting and can result in significant black markets for contraceptives to circumvent high cost restrictions. Price ceilings, particularly prevalent in Latin America, erode profitability in the face of rapid inf lation and devaluations.

**n1.fp:Faally** Plarainq **Pape** twhole)

.
26 Exchange controls and limitations on the repatriation of earnings reduce the incentives of both importers to import contraceptives and exporters to export contraceptives, thus reducing the size of the commercial market. Importers are allocated a limited amount of foreign exchange and will ci.ose to<sup>purchase the</sup> imported products that enjoy the highest mark up. Because other pharmaceutical products enjoy greater profit margins in some African countries, importers may not place a high premium on importing contraceptive products when foreign exchange is scarce and may lead to erratic and lover supplies of imported contraceptive products in Nigeria (Black, 1972, 1973).

When exporting products to different countries, producers prefer to realize their profits in hard currency. Multinationals produce and maintain research, marketing and managerial expertise at their home bases, vhose costs must be at least partially met by repatriated profits (unless profits generated from domestic sales totally defray these costs). Further, investment opportunities may nat be lucrative enough in these developing countries, so that repatriation restrictions are strong investment disincentives.

Advertising Constraints. Due to the sensitive and private nature of contraception, governments often forbid active advertising for family planning products. Further, advertising on ethical products is often restricted. In other countries, no brand name advertisement is permitted, making only general message promotion legal. This can lead to reduced demand due to lack of information and thus to reduced earnings opportunities for commercial sales. While the demand for contraceptive products depends to some extent on the income level and socioeconomic status of a population, an avareness and interest in family planning among couples of reproductive age also affects demand. To the extent that marketing and advertising can raise awareness and increase willingness to pay for contraception because of better information about the contraceptive

**l.fpW:antly KLaing Paper (tAoi*)**
27 market, restrictions on advertising and marketing limit the growth of the private sector.

In some countries, exceptions have been made to these rules, especially in the interests of contraceptive socia' marketing programs. Most social marketing programs have a promotional component. These promotional activities vary from point of purchase displays, radio, print or television ads and messages, to staged eventstgeared to draw attention to the benefits of child spacing and family planning. Some private firms have used magazine advertisements in some developing countries although there is little e-idence of private advertising of family planning products in the developing world. An advertisement for a vaginal suppository in Colombia vhich did not apparently directly refer to family planning but instead emphasized feminine hygiene (Arthur D. Little, 1972) reportedly did better than a competing, non-advertised product, but it also had a much lover price (Sherris, 1984).

For-profit firms believe that direct brand advertising and marketing of family planning through the mass media may not be a profitable venture in (some) developing countries. They believe that while they would bear the costs of the campaign, the benefits vould likely be spread across all commercial firms and might also lead to increased demand for contraception from the public sector, especially in countries where modern methods of contraception are not widely known or used. They believe that vhile loyalty to their brand might be enhanced by raising the demand for contraceptive products, they vould be underwriting a rise in the overall level of contraceptive demand including that of their competitors and the free service. To the extent that this is private gains fall short of the private costs, subsidization vould be necessary to make advertising profitable. No study exists in the developing world that carefully documents the effect of easing advertising restrictions or the effect of private brand

**m1.tp:Family Plamdng Paper** (%&ol)
28 advertising on the demand for other brands. Further, some firms believe that the size of an advertising program may have to be so large to have an impact that it vould require an investment that is larger than any one firm vould undertake on its own.

Some pharmaceutical firms that market ethical products have detailers that market the product line to local physicians and pharmacists. The detailers use informative (on contraindications and product attributes) and promotional material to inform doctors about their products. This form of marketing is common throughout the vorld. Free samples are sometimes provided to encourage restocking. One firm gives samples to both public and private physicians under the assumption that MDs vho prescribe one product in their public practice will use the same product in their private practice as vell. Other firms restrict their activity to stocking commercial outlets.

Detailing and sampling can be a very expensive undertaking for firms and accounted for an estimated 50 percent of the retail price of oral contraceptives in the Philippines, Iran and Colombia in 1971 (Arthur D. Little, 1972). One major recommendation of that study was for detailing, sampling and promotion of family planning to be handled by the government or a nonprofit entity so that costs could be lovered. Although there is no more recent published data on the cost of detailing and sampling, it is unlikely that the high reported share of the retail price absorbed by detailing and sampling in the 1972 study is still relevant today. One firm argues that detail costs are very high vhen a product is relatively nev, but that they decline thereafter, so that the findings In 1972 might be reflecting the novelty of the product at the time.

Evidence on the effect of receiving contraceptive literature along vith contraceptive purchases at drugstores is that sales of contraceptive products rise. Pamphlets vere given to 60 drugstores that described the proper use and ul.tpffmfily Plming **Paper 'wdole)**
29 effectiveness of condoms, suppositories, and oral contraceptives and could be distributed to customers making contraceptive purchases (Bailey and Zambrano, date). Sales data on these three products were collected before<sup>and after the</sup> introduction of the pamphlets at 60 drugstores. The pamphlets<sup>were introduced at</sup> only 30 of the drugstores and the other 30 vere paired with the<sup>30 experimental</sup> drugstores as a way of measuring substitution toward the experimental drugstores. Comparing the sales at the experimental drugstores before and after the pamphlets vere added, the researchers found that sales of condoms and<sup>suppositories</sup> increased significantly while pill sales increased only slightly. The control drugstores experienced no significant change in sales over this period.

Analysis of the sales of the paired control drugstores<sup>indicated that in 2</sup> of 16, 4 of 10 and 6 of 11 pairs, sales of suppositories, oral contraceptives and condoms respectively fell but that overall, there vas only a net decrease in the condom sales of the control drugstores. Because the data are<sup>strictly from</sup> retail sales, it is difficult to evaluate how much switching<sup>across methods or</sup> across supply sources occurred and therefore, it is difficult<sup>to conclude vhat</sup> the net impact this sort of program has on overall contraceptive use and births prevented, but it does seem that the use of pamphlets can increase<sup>use of condoms</sup> and suppositories. This suggests that retailers could play a bigger<sup>role in</sup> providing contraceptives if they gave customers method-specific information.

Legal Constraints. Obtaining product approval from the<sup>local country's Food</sup> and Drug Administration equivalent is a precondition for -being able to sell a product in most local markets. This can be a long process,<sup>especially for nev</sup> products. In many countries, havirg A,;rican, British, or Svedish<sup>FDA approval</sup> suffices. Social marketing programs have been able to expedite the approval process for socially marketed products, but products destined strictly for commercial outlets may face long delays gaining approval. Delays have been

**Ml.fp:Pauily Pladnnq** Pap*r **fwol*)**
30 experienced recently In getting injectables on the market in some developing countries, for example, because they have failed to gain USFDA approval. Firms complain that it can be difficult to add nev orals to the market vith different compounds even though they may be more appropriate for some vomen.

Commercial sales may also be hindered by laws governing the distribution of contraceptive products and provision of services. These laws designate personnel vho are authorized to provide contraceptive services and they specify vhere these services can be provided. Many countries -require that oral contraceptives be purchased only vith a prescription from a physician (Isaacs et. al, 1984). Despite the potential quality benefits of a prescription requirement, it serves to reduce access. This requirement is not enforced across all countries.

Physician to population ratios are almost alvays lover than pharmacy or midvife to population ratios, especially in rural areas, so that requiring a prescription to purchase orals vill make obtaining contraceptives more costly and difficult. Given that travel time represents an economic cost and serves to deter use, the more outlets from vhich contraceptive products can be purchased, the lover vill be the cost of obtaining contraceptives for users, other things equal. Indeed, the social marketing programs specifically seeks to increase the points of access as vell as the affordability of nonclinical family planning methods.

Another deterrent to private contraceptive marketing in developing countries is absence of patent protection, vhich reduces potential profits from commercial sales of patented products. In Mexico, the absence of patent protection reportefly led to lov prices and to nearly 30 brands of oral contraceptives (many of them duplicates under different names) available on the commercial market at the same time (Sollins and Belsky, 1970). Questions have been raised about the quality of some of the locally manufactured imitations, but demand did appear to grov under the competitive supply conditions. **_m.lfpt:faily P1F1w_ Pap.r ('bole)**
31 While the absence of patent protection can often stimnulate domestic production, the net **impact** on the size of the comercial sector is not clear a priori. The competition and resulting low prices may attract consumers while variable quality may deter use. The size of the market may not be very different although the share accorded each producer is likely to be affected. Without patent protection, local firms are unlikely to have sufficient incentive in the long run to invest in research and development and to develop nev products and multinationals may find a chaotic market that is consequently unprofitable.

# Public and Private Sector Relationships and Roles

The effect that the public family planning system has on the size of the comercial sector has not been examined scientifically across countries or over time vithin one country. Past analyses of the role of the commercial sector (Sollins and Belsky, 1970; Arthur D. Little, 1972) have focused on the condom and the pill because they have been the most important commercial products in developing countries. In the 1970 study of Sollins and Belsky, the commercial sector vas shown to have a larger share of the condom and oral market in 5 of the 6 countries studied, while this pattern prevailed in 2 of the 3 markets analyzed by Arthur D. Little. Analysis presented in Section III of more recent data reinforces the method dominance of the pill and condom in private sector family planning provision in the developing world. Vaginal spermicides have been groving increasingly important in the developing vorld, vhich suggest an even broader role for the commercial sector as these methods are inexpensive and conducive to commercial distribution. IUD insertions and sterilizations have traditionally been provided by the public sector in developing countries, although higher income women have obtained these services from private doctors or clinics. Of course, private voluntary organi-

**ul.fp:Vamly Pmluay Papr 11i.1**
32 zations have been key providers of these services in some parts of the vorld, like Latin America.

The common perception is that the public and the commercial sectors serve different clientele. Public sector users are thought to be less educated and have lover incomes than their commercial counterparts. Thus, expanding services offered through the public sector should not have an impact on commercial sales. Hovever, there is reported evidence from private providers that in some countries, as the public sector expands, the commercial sector shrinks. Recent experience in Kenya has been cited as a particularly dramatic case where a public program has almost eliminated the private market and multinationals have pulled back significantly. This seems especially true in countries vhere contraceptive prevalence is lov. Further, as already mentioned, the public sector supplies can find their way into commercial outlets offering unfair competition to the commercially distributed products and cutting down on commercial sales.

The introduction of free government services in Nigeria, for example, vas folloved by large reductions in the commercial sales of one firm. Vhile some of the reduction in demand might have been related to Nigeria's economic downturn, the total number of acceptors did not change. The increased availability of free contraceptives caused this firm to close down its subsidiary.

According to extensive discussion vith managers and distributors, each firm's success in marketing and selling its contraceptive line in a particular country seems to depend on a number of factors. A firm's relationship with the government in that country, hovever, seems to be a key influence on the firm's long term success in the private market.

For instance, in Nigeria, Sterling Nigeria, (a subsidiary of Sterling Drug), established a cooperative relationship vith the government by handling the distribution of donated contraceptive products to regional public sector family

**Uldp:Faly Pimi" Paper** (tbo1l}
33 planning clinics. This has placed that firm in a position to break into the market in other vays. Sterling is reportedly contemplating construction of a condom factory in Nigeria. Because Sterling is distributing contraceptives to private clinics and pharmacies throughout the country, it may have an advantage over other commercial producers in the future.

In the 1970's, USAID donated millions of pill cycles per year to Indonesia. Because USAID' vas phasing out the free commodities and moving Indonesia into a loan category, the Indonesian government vas concerned about ensuring future oral contraceptive supplies at a lov cost. A private American pharmaceutical company provided technical assistance to the BKKBN (the Indonesian Family Planning Association) to set up a plant to produce oral contraceptives. This firm vas well-positioned vithin Indonesia because its product had been supplied by USAID for many years.

The distribution of contraceptives is handled in developing countries by public and private distribution networks--the latter are sometimes truly local operations vhile other times they are subsidiaries of multinational pharmaceutical companies. Private distribution networks of vholesalers reach both private and public outlets. Most pharmaceutical companies that sell contraceptive products in a country also sell a broader line of pharmaceutical products and **have** either developed their own distribution network or rely on and use existing vholesale networks.

The public sector has relied on private vholesaler distribution netvorks In the developing world to transport contraceptive products. In Nigeria, as already mentioned, a private firm distributes contraceptives to public sector clinics vith no apparent complaints from the government. In Tunisia, hovever, until 1983, the private vholesaler network of grossistes or repartiteurs distributed subsidized government contraceptives to pharmacies along vith their other

**inL.fVaudly P1azm1 Papr i.lol.**
34 pharmaceutical products. The National-Office of Family Planning in Tunisia (the OYPP) believed that it vas too difficult to account for stocks of contraceptives moving through the private wholesaler system and that there vere too many stock disruptions, so they set up their own distribution system to deliver contraceptives to family planning clinics and pharmacies.

A recent study (Ronco Consulting Corp., 1986) has taken a preliminary look at the relative costs of delivery for the ONFP and the private distributors and has concluded that the private distributors have lover costs than the ONFP due to more efficient delivery operations. The study results vere tentative because the cost estimates vere taken from different years, the sample of ONFP and private distributor operations vas small, and assumptions had to be made about valuing products delivered through the ONPFP. Thus, distribution to commercial outlets has been handled by government and for-profit entities with different results. Vhile most contraceptive social marketing programs entail the sale of subsidized contraceptives at for-profit outlets, some use private transport networks vhile others rely on an in-house distribution staff. The governments that have taken over all or part of the distribution have claimed that relying on private distribution led to inadequate sales or shortages. On the other hand, the government distribution may be less cost effective.

# Contraceptive Social Karketing

The presence and slant of a contraceptive social marketing (CSM) program can affect commercial sales in either direction. Social marketing entails the subsidized distribution of contraceptives through the private sector along vith market research and advertising in an attempt to raise awareness of and villingness to pay for contraception. The private sector's distribution networks are used to expand the points of access to contraceptives. There are many social aI.Xpffamly Plargo Paper (wbole
35 marketing models that vary by type of management structure employed to handle the project, type of products marketed, type of distribution methods used, and by retail outlets chosen as points of purchase.

Five recent reviev articles summarizing CSH experiences were cited in the introduction to this study. The most recent (Sheon, Schellstede and Derr, 1987) indicates that CSM has been tried in almost 30 countries and that about one third of these countries currently has a CSH program. Programs in Colombia, Jamaica, Bangladesh, Egypt, and Nepal covered more than twenty percent of contracepting couples in 1984 according to Binnendijk (1986). These may be overstatements, however, because they are generated from program data and not from demand studies. Because program data rely on vholesale level volumes and because of vastage and disappearance of CSH products beyond that point, the retail volumes are likely to be lower.

Social marketing programs often aim to exploit existing distribution networks to expand points of purchase and reach more potential contraceptive users. A current example of hov private networks can be used is the SOMARC project in Zimbabve, launched in 1986, seeking broader distribution of the condom. A commercial distributor, Geddes Ltd. that already distributes deodorants to supermarkets is going to distribute condoms to petrol stations, bars, supermarkets, and bottle stores.

The condom has been the most common socially marketed product, vith oral contraceptives, vaginal spermicides, injectables and IUDs following in order of number of programs that have used them. The first CSH program had its inception in 1967 in India vith Nirodh, the name chosen for the socially marketed condom. Not only has there been increasing product diversification in socially marketing attempts, but programs have tried to reach self-sufficiency and have added more brands of the same product; high and low dose pills or lubricated and unlubri-

**ml.tpsffadly** PluainJ **Paper** ('bole
36 cated condoms, for example. Vhen the **Sri** Lankan program gained financial selfsufficiency (excluding donatad commodities) It came through higher prices and lover sales. Indeed, the proportion of married vomen of reproductive age coverec through CSH declined (Chester, 1986).

Each one of the reviev articles concludes that insufficient evaluation has been undertaken on the consequences and cost-effectiveness of CSM programs and that the impact that CSM has on the comercial and public sectors has not been adequately analyzed. The presence of a CSK program can be detrimental or beneficial to the comercial sector depending upon effectiveness of the program at raising overall demand for contraceptives and the degree of substitution that occurs avay from the comercial sector tovard the socially marketed products that are subsidized.

Private firms believe that they can gain from the consciousness raising achieved by the advertising and promotion components of social marketing and through enhanced avareness that contraceptives can be obtained at retail outlet However, some firms have noticed a strong correlation between the establishment of social marketing products, and large reductions in commercial sales in some countries.

The received visdom is that in countries vhere contraceptive prevalence is lov, the CSM program is likely to have a positive impact on contraceptive use overall with little substitution away from other sources (Sherris et. al, 1985). The Bangladeshi program is cited as a successful model and the fact that both government and CSN provision (the role of the unsubsidized commercial sector is insignificant in Oangladesh) of condoms, foaming tablets and oral contraceptives grev over a nine year period. Further, in the case of oral contraceptives, wherE the commercial sector does cover a substantial proportion of users, there is evidence that the increases in CSh program sales vas not associated with decreases in pill use **from** other sources (Schellstede, 1986). **n.fp:irly Plumirg Paper (biol*l**
37 Bangladeshi surveys in 1983 and 1985 asked pill users the brand name(s) of their oral contraceptive. This survey found that pill use increased for all brands from government, CSH and commercial sources. The proportion using both CSH and commercial pills increased while the proportion using government pills decreased. Vhile it is difficult to ascertain vhat would have happened to the volume of commercial sales in the absence of the socially marketing effort, this suggests that they vere at least not hindered by the CSH program and may have been helped by it.

Contraceptive social marketing in countries xn which contraceptive prevalence is high and where the commercial sector plays a more important role may have less of an overall impact on contraceptive prevalence because of substitution avay from government and commercial sources. Further, there is some evi4ence that vhen higher income groups are targeted, as they were in Colombia, there may be greater substitution avay from commercial products (Binnendijk, 1985).

In Sri Lanka, the Preethi condom vas launched as a socially marketed product in 1973. A survey of Preethi users one year and one half after the advent of the program suggested that 65 percent vere new contraceptors. The remaining 35 percent was divided among those who had used oral contraceptives, IUDs, traditional method and other condom brands (Davis and Louis, 1977). An estimated four percent had switched to the Preethi brand from another condom brand.

Evidence from the Dominican Republic suggests that commercial sales can decline substantially after a socially marketed product is introduced. The SOMARC project together vith the Dominican Republic government chose to market Hicrogynon, a Schering Ag brand of oral contraceptives as the social marketing product. The commercial price of Microgynon was cut in half and it was promoted through local advertising channels. After the launch of Microgynon as the social

**fl.tfp:Paily** Plamning **Papr 'dOwle)**
38 marketing product, Schering experienced a decline in its commercial sales of other oral contraceptives. Overall, however, Schering's sales have increased ten fold. The net returns are higher because of the high volume generated by the lover price even though their other commercial products have suffered.

This particular social marketing strategy has the effect of placing a single private company in a strong position in the family planning market for decades come. While the private sector is being used to increase contraceptive prevalence, private sector competition may have been undermined. While the cos of promoting an already existing and vell-accepted product are likely to be lover than the costs of promoting and gaining acceptance for a new product, the longlasting advantage given to one firm has troubling implications on the free mark and competition among firms, and may afford that firm great bargaining pover in that market in the future.

SOKARC is considering providing generic advertising geared tovard increasi contraceptive sales to lov income households in Panama. SOKARC vould handle th advertising and promotion. It is not clear if the commercial firms vould lover their prices or provide nev contraceptives at lower prices. This type of experiment deserves careful evaluation to test the hypotheses of the for-profit contraceptive companies vith respect to the benefits of subsidized advertising.

# Private Health Care Providers

Private Physicians. Private physicians constitute the primary source of contraceptive services for vomen in the developed vorld. In the developing vorld, hovever, the public sector and pharmacies are the most important sources of contraceptive services, folloved by private clinics. A recent reviev article (Tsui and Donaldson, 1987) presents an overviev of the role that private physicians and clinics have played in family planning in the developing vorld.

**l.p:1FWaly** P1lavAin **Papet (v*ili**
39 There seems to be little study of hov to mobilize the u eAoployed or underemployed physicians that abound in some parts of the Middle East and Latin America who are potentially valuable providers of family planning.

Information generated through the Contraceptive Prevalence Surveys and summarized in Tsui and Donaldson (1987) produced rural/urban breakdowns by source of contraception. The average percent across 22 of the more recent surveys of rural users obtaining supplies from private clinics is 13 percent vhile for urban contraceptive users the figure was 18 percent. The three CPS countries where the private clinics seem to be providing services for the largest proportion of users vere Korea, The Dominican Republic, and Bolivia. Private clinics were serving over thirty five percent of users in both rural and urban areas in those countries.

The issue of vhether contraceptive users in a particular country shift from the public sector to the private sector over time or whether shifts occur vithin the private sector between private clinics and other private sources of supply as not been addressed in any depth. Tsui and Donaldson (1987) indicate that there is evidence from Mexico that vhile private physicians and public clinics are primary initial providers of contraceptive services, pharmacies become the primary points of resupply. Further, the 1983 CPS in Tunisia asked current contracepting women where they originally obtained their current method and vhere they obtained their most recent supply. Private Doctors provided the original supply of the pill, condom and vaginal method to eight, seven and fourteen percent of women using that method respectively, while they provided the most recent supply to only four, four and seven percent respectively. The net gainers seem to be the pharmacists vho were much more likely to have provided the most recent supply of these methods than to have provided the initial supply.

**ml.fp:Faily** Plonniy Paper (wbole)
40 Jones (1984) probes the distribution of contraceptive methods provided by private physicians or clinics in a subset of developing countries from the World Fertility Survey. An erratic pattern emerged from this data. In the Dominican Republic, three quarters of all sterilizations and one fifth IUD insertions vere performed by private physicians. Private clinics provided relatively more injectables than other methods in Peru, Costa Rica, and Panama while they covered a significant proportion of pill users in Haiti and Malaysia.

Other Health Providers. One of the major research questions in the area of private physicians has been to what extent do the quality of services suffer when non-physicians handle family planning tasks that have traditionally been in the hands of physicians. This question may be emphasized because of its practicality--when physicians are in short supply and many couples do not have access to their services, what are the consequences of allowing more abundantly available health personnel to take over some of their responsibilities.

Traditional midwives (i.e., unlicensed midwives or birth attendants) are major health care providers in the developing world. They are particularly dominant in the delivery of babies. Many projects have attempted to broaden the role played by midvives so that they either refer couples to clinics or dispense contraceptives directly to clients. A recent review of these projects (SimpsonsHebert et. al, 1980) concludes that the results are mixed.

Traditional midwives seem to be more effective providers of family planning services when they distribute contraceptives compared to when they only do referrals. A Nicaraguan program allowed midwives to purchase contraceptives and other medical supplies at subsidized prices and then sell them to their clients. A study in the program area indicated that use of oral contraceptives had douibled after two years. Further, there is evidence that the incentives for trained midwives to actively recruit family planners depends upon the economic returns to

**al.fp:Pauily Planning** Paper **(whol.I**
41 them--in relatively morp iuccessful programs in Malaysian and Nicaraguan, midvives received compensation, in the former from the program, in the latter, from clients. Since many traditional oidwives receive remuneration from deliveries, to an extent, family planning acceptance reduces their potential business. Many different remuneration methods have been tried, but the Malaysian program is the only one in vhich midvives are paid based on their recruitment of family planninig acceptors which is verified by supervisors. No pro4ects have recompensed midvives on the basis of continuation rates or paid them based on the amount she forgoes from not attending a birth attributable to a couple year of protection.

A study by Bailey et. al (1982) examined the pattern on side effects, continuation and pregnancy rates associated vith obtaining oral contraceptives from pharmacists, private physicians, and the public sector. They found no significant differences between the continuation and pregnancy rates that prevailed for women vho had initially obtained their orals from one of the three sources. No systematic differenc **e** merged in terms of side effects either. In fact, they found that for one subgroup, older, higher parity vomen, continuation rates vere higher for pharmacy users than for those vho had obtained their supplies from either of the two other sources. They concluded that this subgroup, either vere more highly motivated contraceptors or had interacted more vith their pharmacist.

The family planning services of nurses and physicians vere compared in a Bogota study (Einhorn and Trias, 1978). Vhile there vas no difference in the continuation or pregnancy rates or in the incidence of side effects of vomen vho had seen a nurse compared to vomen vho had seen physicians, the array of methods chosen by these two groups of vomen vas quite different. Those vho sav physicians vere generally prescr4bed more effective methods (the pill, IUD, or

**Al.fp:tamdly Planning Paper Nbole)**
42 sterilization) than those who saw nurses. Physicians inserted relatively more IUDs than the nurses while the nurses compensated by having more users of contraceptive foam. Nurses prescribed the less effective methods on an intermediate basis; their clients tended to return to the clinic for anothe: visit at which time many began taking oral contraceptives.

The effectiveness of IUD insertions by midwives was compared to that of physicians in 'Turkey and the Philippines (Eren, Ramos and Gray, 1983). The authors found no difference in the IUD expulsion rate of women attended to by midvives compared to physicians. They did find that a higher proportion of women experiencing expulsions inserted by midwives chose to have reinsertions compared to the vomen vhose expulsed IUDs had been inserted by physicians. The authors hypothesize that there may have been a higher level of trust felt toward midwives than doctors.

The incentives and impediments for private sector growth in family planning production and distribution are manifold. While anecdotal evidence abounds on policies that are thought to constrain private sector growth, there is little hard evidence on how much change would result from changes in different policies.

**ml.tp:rmily** Planng **Paper** Ewholo.
43

# III. DEMAND FOR PRIVATE SECTOR PRODUCTS

The traditional assumption that commercial delivery of contraceptives serves the urban, upper classes and sets charges that are only affordable to that segment of the market has never been examined. There is very little information on the source of contraceptive services, or vhat users pay in developing countries, because most survey work has focused on utilization patterns and trends. Hov consumers get their services, vho pays for it, and the availability and effectiveness of alternative sources of services are issues that have not been addressed in any depth. Donors and developing country governments have concentrated on developing public programs, and assessing their ability to gain and retain users. The source of contraceptive services has only recently become an issue as donors and governments seek to expand available resources for family planning and health.

How important private sector sources are or could be to contraceptive use is a difficult issue to address. for instance, the existence, effectiveness and funding of government family planning programs that heavily subsidize family planning services may siphon potential consumers avay from private sources. In this case, the extent of reliance on private sources may be more a function of dramatic price differentials than the inability of the private sector to meet the contracepting needs of couples. Vithout price and access to information, as vell as family planning source data, the achievements and potential of the private sector cannot be accurately assessed.

Nev data make it possible to assemble some information regarding vhere couples obtain contraceptives, and therefore allow some conclusions on the effective demand for private family planning services. The following sections review existing data on source of contraceptives, and, where possible, control

**SI.fps:Va1y PlUnng** Paper **('bol.P**
44 for additioual factors. The data are taken largely from USAID's Contraceptive Prevalence Surveys (CPS) and Demographic and Health Surveys (DHS), although information from more modest efforts are included vhere possible. It should be pointed out, however, that this effort is very preliminary and draws only on accessible data and undertakes little analysis.

Source of Contraceptives in Developing Countries All Methods. In theory, individuals can obtain contraceptives from a range of sources. The availability of various sourc-s differs across countries and regions, and neither the quality nor convenience of sources can be generalized. More important to the task at hand, many potential sources are not clearly distinguished in data collection, vhich makes comparisons even more difficult. For example, some countries have data on use of NGO sources vhile others have lumped these into an "other" or "private" category. None of the surveys make it possible to distinguish between users of a social marketing and a commercial product.8 Table III.1 provides figures on contraceptive method source among current users for those countries for vhich 1980s data are available. Where data exist for multiple years, the most recent year is used. Contraceptive prevalence in each of the countries is listed to indicate vhat proportion of vomen of reproductive age in the country contracepts at all. The data in the table suggest no particular pattern to sources of family planning. Some very poor countries rely heavily on government facilities, like Nepal (73.9 percent), Pakistan (66.8) and El Salvador (81.5), while in other countries--such as Paraguay (100 percent), Bolivia (93 percent) and Egypt (69.4 percent)--couples 8. CSM programs nave been successfully established in Bangladesh, Colombia, Dominican Republic, Eastern Caribbean, Egypt, El Salvador, Honduras, India, Jamaica, Nepal, Mexico, Sri Lanka, and Thailand.

**al.fpt?auily** Pluming Paper (whole)
45

**Table** ZZ2.1

**Contraceptive Mthod.** by Source AMag Current Usors for Selectd Counttrieu

|Country(Year)|Cantraceptive<br>trevance<br>vovrNrnt<br>Nationde|-<br>(Percent)|Commerciala<br>(Percent)|no<br> <br>(Percent)|0th.rb<br>(Percent)|
|---|---|---|---|---|---|
|Africa<br>||||||
|Kenya**(1984)**|17|51.3|*.4|32|1.1|
|<br>Liberia (19866|6|31.1|1.3|49.2|2.3|
|<br>Senegal (1986)|12|4S.0|50.0|-|5.0|
|<br>aire(1984)||64.1|28.7|3.6|3.5|
|<br>Zimbabwe(1984)|**36**|**42.6**|9.2|46.2|2.0|
|Asia||||||
|Bangladesh<br>(1935)|25|||||
|<br>**Korea**(1965)|70|58.0c|42.0c|||
|Wepalt(19l)d's|15|73.9|2.7|20.4|2.9|
|<br>Pakistan (1965)|9|66.6|26.5|-|6.7|
|Sri<br>Lanka (1967)|55|64.4|7.9|2.9|4.6|
|Thailand**( 1 984 )e**|65|76.0|19.7|0.7|1.6|
|Latin Amrica||||||
|SaM-dros 7 19S5)|37|34.4|33.6|21.6|10 4|
|Belse<br>(1965)|37|36.0|30.0|-|30 0|
|Dolivia(1983)|26|7.0|93.0|-|-|
|Drtail (1986)|65|15.0|65.02|||
|<br>Colombia**( 1986 )e**|**66**|34.0|43.6|2 1 <sup>.</sup>6 <sup>h</sup>|1.1|
|<br>Costa Rica(1955)|66|66.0|21.5|<br>22.1|1.4|
|<br>DominicanRepublic (1|966)<br>46|44.0|44.0|4.0|4.0|
|<br>Ecuador(1967)|<br>40|37.4|39.2|15.4|6.5|
|ElSalvador (1967)|46|49.7|36.1|-|12.2|
|Guatemla(1983)|25|31.8|16.1|30.3|11.7|
|<br>Haiti(1983)|7i|32.9|67.1|-|-|
|<br>Honduras<br>(1984)|35|27.9|22.0|.32.9|2.4|
|Jamica (1963)|51|66.9|30.2|-|2.9|
|Mexico(1978)|48J|15.6|77.4|0.0|6.4|
|<br>Panama (1979)|63|6S.9|23.4|-|10.7|
|<br>Paraguy<br>In.d.)|36|-|100.0|-||
|<br>Peru(1966)|41|56.0|33.0|-|11.0|
|NearCast||||||
|Egypt**(1984)e**|30|30.0|69.4|1.3|1.1|
|<br>tLbanon (1984)|53|1.2<br>|40.0|56.6|-|
|Morocco (1 984)e|26|**5$.4**|40.0|-|1.6|
|<br>Tunisia(1983)|41|77.7|21.4|-|0.6|

Source: CPS CHS: **Bogue et** *I. (1967): U.S. (1967).

- a. icludes private physicians, hoapitals. pharmacies, nd any other private, non-MO. b. Unspeciied source, may encoepas tuOt wben private, nonprofit$ **are** not **a** category, and my include coercial **where** it **Is** not **a sparate** catetgry.

- C. Source allocation date **are** for 1979. d. Based on nonusers **as vell as users. .** includes currently mrried winen oly.

- f. Thirty percent uncertain **as** to ource of contraceptives. g. Source allocation data **are** tor 1963. h. Preotailia only. t. Oly 40 percent of usrs **use** modern contraceptive **mthods.** j. Prevalence data ist tre 1962.

VP: Table 12t.1
46 are more likely to rely on commercial sources. Countries vith long standing government programs, particularly those in Asia, tend to have big public programs that reach a large segment of the population. This reflects some combination of sound programs and established clients, vho have no desire or incentive to pay market prices for contraceptives. The Egypt program is also a long standing, vell supported endeavor, but serves only about 28 percent of users, and couples rely much more heavily on commercial sources.

NGOs include religious groups, many of vhich are active in family planning delivery in Africa, family planning associations (such as Colombia's Profamilia), and other charitable organizations. While NGOs vere included as a separate category in some countries' surveys, it vas not separated in a number of them. Moreover in some countries like Zaire, there is likely to be confusion among respondents between public and NGO sources since government and private voluntary groups vork in tandem, vith government financing some of the services and commodities and the NGOs delivering services. Thus although some countries differentiate, comparisons are limited because of the confusion in definition. The limitations not vithstanding, NGOs appear to play an important role in much of Africa, in NepaJ, Lebanon and a fev Latin American countries. Clinical vs. Nonclinical Methods. Government is more Important as a provider (or, less frequently, a financer) of clinical contraception, that is male and female sterilization and IUDs. Table III.2 summarizes the clinical/ nonclinical breakdowns for the countries for vhich data are avallable. Government is far more responsible for clinical as opposed to nonclinical methods.

**ul.tp:Faly** Plawd" **Papg** ({whole)
47

# Table III.2

# Contraceptive Methods b7 Source among Current Users by Clinical and Nonclinical Methods for Selected Countries

|Country (Year)|Government<br>(Percent)|<br>Commerciala<br> <br>(Percent)|<br>_NGO_<br>(Percent)|Otherb<br> <br>(Percent)|
|---|---|---|---|---|
|Africa<br>|||||
|Liberia<br>|||||
|Clinical<br>|57.0<br>|8.1<br>|33.7|1.2|
|Nonclinical|23.6|21.3|52.5|2.7|
|Asia|||||
|laingladesh<br>(1983)|||||
|Clinicald|92.0|1.0|--|7.0|
|Nonclinicale|42.0|56.0|--|4.0|
|Korea (1985)|||||
|Clinical|83.0|0.0|--|17.0|
|Nonclinical<br> <br>|13.0|83.0|--|4.0|
|Thailand<br>(198 4)C|||||
|Clinical|91.9|6.9|0.2|1.0|
|Nonclinical<br>|64.5|32.2|1.1|2.1|
|Nepal (1981)|||||
|Clinical|84.2|0.0|15.8|0.0|
|Nonclinical|49.9|6.4|38.9|4.8|
|Pakistan (1985)|||||
|Clinical<br>|96.7|0.0|--|3.3|
|Nonclinical|42.6|48.7|--|8.7|
|Sri Lanka (1987)|||||
|Clinical<br>|91.8|2.1-|3.2|2.9|
|Nonclinical|57.0|29.2|1.9|11.9|
|Latin America|||||
|Barbados (1985)|||||
|Clinical|77.7|12.7|6.7|3.0|
|Nonclinical|6.9|44.6|33.7|14.8|
|Brazil (1986)|||||
|Clinical|52.5|42.7|0.0|4.2|
|Nonclinical<br>|5.1|82.5|1.4|11.0|
|Colombia (1986)C|||||
|Clinical|54.2|14.5|30.1|1.2|
|Nonclinical|17.3|64.7|16.2|1.7|
|Dominican Republic|||||
|Clinical|46.4|53.1|0.2|0.3|
|Nonclinical|35.6|282|164|198|
|Ecuador||.|.|.|
|Clinical<br>|46.8|34.9|18.3|0.0|
|Nonclinical|24.6|47.1|11.5|16.8|
|E1 Salvador (1987)|||||
|Clinical|64.2|31.1|--|4.7|
|Nonclinical|22.6|50.9|--|26.4|
|Peru (1987)|||||
|Clinical<br>|64.5|30.7|--|4.7|
|Nonclinical|45.1|36.5.|__|18.4|

**rP. 3686-t3-2**
48 Table III.2 Cont'd

|Country (Year)|Government<br>(Percent)|Commerciala<br>(Percent)|<br>NGO<br>(Percent)|Otherb<br>(Percent)|
|---|---|---|---|---|
|Near East<br>Lcbnon (1984)|||||
|Clinical|1.2|46.4|52.4|0.0|
|Nonclinical<br>Egypt (1984)c<br>Clinical|0.6<br>45.4|78.5<br>50.5|20.6<br>3.0|0.0<br>1.1|
|Nonclinical<br>Horocco<br>(1984)C|19.1|19.4|0.5|1.0|
|Clinical|71.1|27.3|--|1.7|
|Nonclinical|55.6|42.6|--|1.9|

# Source: CPS; DHS; ESCAP (1987).

- a. Includes private physicians, hospitals, pharmacies, and any other private, non-NGO.

- b. Unspecified source, may encompas* NGOs when private, nonprofits are not a category, and **may** include commercial vhere it is not a separate category.

- co IUD and male and female sterilization.

**PP. 3686-tSR**
49 The pattern is reversed for nonclinical methods. In every country but the Dominican Republic, comercial providers are the most important source for resupply nethods. The discrepancy between clinical and nonclinical methods provision Is consistent and quite large for most countries. In some countries the difference in the proportion in each category is dramatic. For instance, in Korea, government finances 83 percent of all clinical methods but only 13 percent of nonclinical methods. Thus the aggregated figures in Table III.1 are strongly influenced by the distribution of methods vithin each country.

The breakdowns for NGOs vary across countries vith no consistent pattern emerging. In some countries (e.g., Nepal, Sri Lanka, Liberia and Barbados) NGOs are a more important source of resupply methods; hovever, in countries like Lebanon, Colombia and Liberia, they are a key source of clinical method supply. Thus although comercial outlets dominate the resupply methods, and government is the major provider of clinical contraceptive methods, NGOs appear to be the flexible provider that fills the supply gaps. Alternatively, NGOs may be the subsidized competitor to the commercial sector that can claim users because of their lov or zero prices. Available data do not allow a resolution of this controversy.

# Socioeconomic Characteristics and Contraceptive Source

Vho uses public and private services is even less vell understood than the aggregate distribution of users across sources. This subsection revievs the available country-specific data on contraceptive source and location of residence; voman's age; voman's education; and, household's/husband's income/ employment. Ideally these variables should be analyzed jointly to control for each set of factors. Thus, this preliminary description merely sets the parameters of possible indepth analysis, vhich could shed more light on the

**al.w:saily Plamin Ptar**
50 question of vho uses vhat services. Akin and Schvartz (1988) have undertaken a sultivariate analysis for Thailand and Jamaica that controls for most of the determinants of contraceptive source choice, and the results of this analysis are drawn upon in each of the subsections to place the importance of each variable in some context.

Location. Government is usually the most important contraceptive supplier for rural'vomen. Table III.3 summarizes source of contraception by urban and rural location. In every country but Zimbabwe, government serves a majority of rural contraceptive users. In the Asian and African countries included in the table, government is also the predominant source of contraceptives in the urban areas. In Latin America and the Near East, commercial sources serve close to half or more of all urban users. NGOs outside of Africa are more important as contraceptive providers to urban areas, vhereas the African NGOs are more likely to meet the modern contraceptive needs of rural households.

More focused evidence from Chogoria Hospital in rural Kenya indicates the relative success of NGO programs in family planning. Although the full costs of the program are not known, Chogoria achieved a contraceptive prevalence among married vomen of reproductive age of 34 in 1984, as opposed to the 10 percent figure for the nation as a vhole that emergel from the 1984 Kenya Contraceptive Prevalence Survey. Family planning services are free at both government health posts and Chogoria Hospital's 26 clinics (Chogoria Hospital Annual Report, 1986).

Government is fulfilling an important function of meeting the contraceptive needs of rural vomen outside of Africa. If commercial sources are in short supply in rural sections of these countries, then public investment may be critical to use. Hovever, the available data do not allov any firm conclusions, although on average incomes tend to be lover in rural areas and therefore subsidies are likely to be more needed and varranted.

a1.fp:VavAly **Planning Pap t (Ao1o)**
51 Table III.3 Contraceptive Hethods by Source by Location for Selected Countries

|Government<br>Country<br>(Year)<br>(Percent)<br>-|Commercial<br> <br>(Percent)|a<br>_NGO_<br> <br>(Percent)|Otherb<br> <br>(Percent)|
|---|---|---|---|
|Africa<br>Zimbabve<br>(1984)||||
|Urban<br>47.9|10.8|39.2<br>|2.1<br>|
|Rural<br>37.8|0.7|53.6|1.4|
|Zaire (1984)||||
|Urban<br>56.5|37.1|2.4|4.0|
|Rural<br>86.0|4.7|7.0|2.3|
|Asia||||
|WTepal<br>(1981)||||
|Urban<br>64.3|7.3|28.4<br>|0.0<br>|
|Rural<br>75.4|1.0|21.9|1.7|
|Korea (1979)||||
|Urban<br>39.4|59.2|0.0|1.4|
|<br>Rural<br>73.9|22.2|0.0|3.8|
|Pakistan<br>(1985)||||
|Urban<br>63.9|30.2|--|6.0|
|Rural<br>82.8|11.4|--|5.8|
|Sri Lanka (1982)||||
|Urban<br>66.3|14.0|18.7|1.0|
|Rural<br>82.5|6.9|9.6|1.1|
|Thailand<br>(1984)c||||
|Urtan<br>65.9|30.7|0.7|2.6|
|Rural<br>80.9|17.1|0.7|1.3|
|Latin<br>America||||
|Colombia<br>(1 9 8 6)C||||
|Urban<br>27.2|45.4<br>|26.0<br>|1.4<br>|
|Rural<br>58.2|32.2|8.4|1.3|
|Ecuador (1987)||||
|Urban<br>37.6|51.6|8.4|1.9|
|Rural<br>42.4|51.0|4.3|2.3|
|Honduras<br>(1984)||||
|Urban<br>57.8|34.9|3.6|3.6|
|Rural<br>68.2|19.7|7.6|4.5|
|Mear East||||
|<br>Egypt (1984)c||||
|<br>Urban<br>24.8|72.4|1.8|1.1|
|Rural<br>34.2|64.1|0.5|1.1|
|Morocco (1984)c||||
|Urban<br>50.9|47.6|--|1.5|
|Rural<br>69.2|28.5|--|2.4|

Source: CPS; DHS.

- a. Includes private physicians, hospitals, pharmacies, and any other private, non-NGO.

- b. Unspecified source, may encompass NGOs when private, nonprofits are not a category, and may include commercial vhere it is not a separate category.

- c. IUD and male and female sterilization.
**52**

**4gAe** Table III4 reports on the age-contraceptive source relationship for four countries. The figures shov an inverse relationship between three age groupings and use of free government services. Except in Thailand, the difference between those over and under **age** 35 is the most important distinction, vith those over 35 much **more** likely to use public contraceptive services than their younger counterparts. It **may** be that those vho choose to contracept in the over 35 age group vere first served in government family planning programs; however, without information that allovs us to control for education and income, it is difficult to attribute any other socioeconomic factors to the consistently greater reliance of vomen over 35 on public sources. The pattern of reliance on NGOs is less systematic. In all cases but Colombia, a modest proportion of contraceptives are obtained **at** NGO outlets; in the Colombian case, NGO use parallels that of the government sector, vith older women more likely to use NGO than comercial products.

Akin and Schwartz (1988) in their logistic regression results for Thailand and Jamaica found that younger vomen in both countries vere more likely to obtain free (e.g., government) contraceptives than older vomen. This suggests that the relationship is more complex and other factors, for vhich the regression analysis could control, play an important role in both affecting the decision to obtain free contraceptives and mitigating the simple observed inverse relationship between use of government services (the only ones that are free) and age.

Vhen the age groupings in Table 111.5 are divided into urban and rural, a similar pattern emerges. The exception is urban Morocco, vhere the youngest vomen are more likely to use government contraceptive sources than are those aged 25 to 34, although this may be due to a small sample size. One striking fact across all four countries is the discrepancy between urban and rural. Urban women are much more likely to use commercial sources. Whether this is du **ml.fp:Femly P1ai^a Pape {A@1S**
53

# Table III.4

Source of Contraceptives, by Age, for Selected Countries

||||Source of Co|ntracepti|vesa|
|---|---|---|---|---|---|
|Country|Contracepti<br>Prevalence|ve<br>Government<br>(Percent)|conuercial<br> <br>(Percent)|b NGO<br>(Percent|OtherC<br>) (Percent)|
|Colombia<br>(1986)||||||
|All Women|40.8|34.0|42.5|22.1|1.4|
|15-24|32.8|25.1|54.3|19.6|0.9|
|25-34|50.3|29.0|48.1|21.7|1.2|
|35+|36.9|45.9|28.1|24.1|1.9|
|Egypt (1984)||||||
|All Women|28.7|28.2|69.4|1.3|1.1|
|15-24|12.4|23.9|75.4|0.4|0.4|
|25-34|34.6|24.6|72.9|1.5|1.0|
|35+|33.1|32.8|64.4|1.4|1.4|
|Morocco (1984)||||||
|AllWomen|21.2|58.3|39.9|-|1.8|
|15-24|16.6|55.1|42.6|-|2.3|
|25-34|25.5|56.3|42.3|-|1.3|
|35+|19.7|62.2|35.7|-|2.1|
|Thailand<br>(1984)||||||
|All Women|54.0|78.0|19.7|0.7|1.6|
|15-24|42.1|68.2|27.8|0.9|3.1|
|25-34<br>|61.2<br>|77.6<br>|20.3<br>|0.9<br>|1.3<br>|
|35+|52.8|82.7|15.7|0.4|1.2|

Source: CPS; DHS

- a. Sample is currently married women. b. Includes private physicians, hospitals, pL;rmacies, and any other private, non-NGO.

- c. Unspecified source, may encompass NGOs when private, nonprofits are not a category, and may include commercial where it is not a separate category. Other also includes don't know and not stated.

- **VP:** Table **X11.4**
54

# Table III.5

Source of Contraceptives, by Residence and Age, for Selected Countries

|Country<br>Location<br>Age|Contraceptive<br>Prevalence|Government<br>(Percent)|Source of Con<br> <br>Commercialb<br> <br>(Percent)|traceptive<br> <br>NGO<br>(Percent|sa<br>Otherc<br>) (Percen|
|---|---|---|---|---|---|
|Colombia (1986)||||||
|Urban||||||
|15-24|34.4|19.1|54.1|26.1|0.6|
|<br>25-34|<br>57.8|<br>23.2|51.4|24.4|1.0|
|<br>35+|40.6|37.4|32.0|28.1|2.5|
|Rural||||||
|15-24|39.4|40.3|54.8|3.2|1.6|
|<br>25-34|31.7|55.7|33.0|9.1|2.3|
|35+|39.4|73.0|15.7|11.2|0.0|
|Egypt (1984)||||||
|Urban||||||
|15-24|23.7|20.3|79.7|0.0|0.0|
|<br>25-34|49.0|21.4|75.7|2.1|0.8|
|35+|43.7|29.1|67.5|1.9|1.5|
|Rural||||||
|15-24|7.5|28.7|69.6|0.9|0.9|
|25-34|22.6|30.5|67.9|0.5|1.2|
|35.|23.0|39.6|58.7|0.5|1.2|
|Morocco (1984)||||||
|Urban||||||
|15-24|31.1|55.1|44.0|--|0.9|
|25-34|39.2|46.9|51.7|--|1.5|
|35+|29.0|54.2|44.0|--|1.9|
|Rural||||||
|15-24|10.1|55.0|40.6|--|4.4|
|25-34|16.2|71.9|26.8|--|1.4|
|35+|13.7|73.0|24.5|--|2.4|
|Thailand (1984)||||||
|Urban||||||
|15-24|50.7|43.8|52.4|0.0|3.8|
|25-34|60.9|59.8|35.4|1.0|3.9|
|<br>35+|63.7|81.2|17.3|0.7|0.7|
|Rural||||||
|15-24|40.6|73.7|22.3|1.1|3.0|
|25-34|61.2|81.7|16.8|0.8|0.7|
|35+|50.6|83.0|15.3|0.3|1.4|

# Source: CPS; DHS

- a. Sample is currently married vomen.

- b. Includes private physicians, hospitals, pharmacies, and any other private, non-NGO.

- c. Unspecified source, may encompass NGOs when private,<sup>nonprofits are not a</sup> category, and may include commercial vhere it is not a separate<sup>category.</sup> Other also includes don't know and not stated.
55 to higher incomes, more acnessible supply alternatives, or lover quality public facilities cannot be determined with existing data. The widest variation across age groups and between locations can be seen in Colombia where the difference in the proportion of urban vomen 15 to 24 using public sources versus rural women over age 35 is a 51ipercentage point difference. This suggests a very heterogeneous supply system for contraceptive services, and reliance on a range of contraceptive sources across the country.

In Colombia, NG0 sources are far more important in urban than in rural areas, and in the former they serve more women under age 35 than does the government. And although those 35 and over are more likely to rely on NGOs in rural areas, this is not the case in urban areas.

Rducation. Table III.6 summarizes the relationship between educational attainment and source of contraceptives for the same four countries as well as Sri Lanka and Jamaica. As expected, education and use of commercial sources are directly related. Hovever, in Jamaica, vhere there is a separate breakdovn for college, secondary school graduates are slightly more likely to use commercial outlets than women who have gone to college.

The most striking results in Table 111.6 are the proportion of women who rely on private outlets across countries. In Thailand, where per capita income in 1984 vas $860, vomen vere most likely to use a government source for contraceptive services. In contrast, Egyptians vith a per capita income of $720 rely most heavily on private sources. Even among Egyptian women with no education, fever than a third use government services.

Dividing level of education into urban and rural in Table III.7 results in a somewhat different pattern of contraceptive source. The constant inverse relationship between educational attainment and use of government services is veakened, especially among rural vomen. For instance in rural Morocco, only 69.6 percent of uneducated women use public services, vhile 100 percent of those mI.tp:faaily **Planning** P p **r (bwoleo**
56

# Table III.6

Source of Contraceptives, by Vomenrs Education, for Selected Countriesa

|||Source of Co|ntraceptives||
|---|---|---|---|---|
|Country<br>Education|Government<br>(Percent)|Commercialb<br>(Percent)|<br>NGO<br>(Percent)|Otherc<br> <br>(Percent)|
|Colombia (1986)|||||
|None|64.6|15.4|16.9|3.1|
|< Primary|44.5|34.5|19.9|1.1|
|Primary Comp.<br>|36.6<br>|34.4|27.2|1.8|
|Secondary +|19.2|57.6|22.0|1.2|
|Egypt (1984)|||||
|None<br>|32.2|65.5|1.2|1.0|
|< Primary<br>|32.6|64.7|1.5|1.3|
|Primary Comp.<br>|24.7<br>|72.2|1.3|1.9|
|Secondary +|15.7|82.2|1.4|0.7|
|Jamaica (1984)|||||
|<Primary<br>|90.0|10.0|--|--|
|Primary<br>Comp.|59.3|27.3|__|9<sup>.</sup>4<sup>d</sup>|
|Secondary|50.0|.50.0|__|__|
|College|53.9|46.2|--|--|
|Morocco (1984)|||||
|None|64.2|33.8|--|2.0|
|<Primary|52.1|45.7|--|2.2|
|Primary<br>Comp.<br>|40.3|58.4|--|1.2|
|Secondary +|29.7|70.3|--|0.0|
|Sri Lanka (1982)|||||
|None|94.5|5.5|-|-|
|Primary<br>Comp.|87.8|11.5|--|0.7|
|Secondary +|68.1|30.5|--|1.4|
|Thailand (1984)|||||
|None|77.2|20.5|0.4|1.9|
|< Primary<br>|80.5|17.6|0.6|1.3|
|Primary Comp.|63.1|31.2|2.1|3.5|
|Secondary +|62.8|33.1|0.9|3.1|

# Source: CPS; DHS; Akin (1984)

- a. Sample is married women for all but Jamaica, which is all vomen.

- b. Includes private physicians, hospitals, pharmacies, and any other private, non-NGO.

- c. Unspecified source, may encompass NGOs vhen private, nonprofits are not a. category, and may include commercial where it is not a separate category. Other also includes don't know and not stated.

- d. Includes NGOs.

> **PP: Table 11.6**
57

# Table II.7

# Source of Contraceptives, by Vomee'z Education and Area of Residence, for Selected Countries

|Contr||Source of Co|ntraceptives|a|
|---|---|---|---|---|
|uy<br>Location<br>Education|Governrmen<br>(Percent)|t Co.mercial<br> <br>(Percent)|b<br>**NGO**<br> <br>(Percent)|Otherc<br>(Percent)|
|Egypt (1984)|||||
|Urban|||||
|None|28.5|68.5|1.9|1.1|
|<Primary|29.8|66.7|2.3|0.8|
|Primary<br>Comp.<br>|26.8<br>|69.9|1.6|1.6|
|Secondary +|15.6|82.4|1.4|0.6|
|Rural|||||
|None<br>|36.2<br>|62.2|0.5|1.1|
|<Primary|36.6|61.9|0.4|1.1|
|Primary<br>Comp.|17.1|80.0|0.0|2.9|
|Secondary<br>+|16.4|80.6|1.5|1.5|
|Colombia<br>(1986)|||||
|Urban|||||
|None|50.0|15.6|31.3|3.1|
|< Pr,mary<br>|37.0|34.7|27.3|0.9|
|Primary<br>Comp.|32.6|36.3|28.9|2.1|
|Secondary<br>+|17.5|57.9|23.4|1.2|
|Rural|||||
|None|78.8|15.2|3.0|3.0|
|< Primary|55.5|34.2|8.9|1.4|
|Primary<br>Comp.<br>|58.8<br>|23.5|17.6|0.0|
|Secondary<br>+|46.2|53.8|0.0|0.0|
|Morocco (1984)|||||
|Urban|||||
|None|58.7|39.7|--|1.6|
|< Primary|51.1|46.0|**--**|2.8|
|Primary Comp.|36.6|62.1|**--**|1.4|
|Secondary<br>+|28.9|71.1|**--**|0.0|
|Rural|||||
|None|69.6|27.9|--|2.5|
|< Primary|55.6|44.4|**--**|0.0|
|Primary Comp.|76.9|23.1|**--**|0.0|
|Secondary +|100.0|0.0|**--**|0.0|

FP: Table **111.7**
58

# Table III.7 (continued)

|||Source of Con|traceptivesa||
|---|---|---|---|---|
|Country<br>Location<br>Education|Government<br>(Percent)|Commercialb<br>(Percent)|<br>NGO<br>(Percent)|OtherC<br> <br>(Percent)|
|Thailand (1984)|||||
|Urban<br>None|76.1|23.9|0.0|0.0|
|<Primary|71.4|26.8|0.0|1.8|
|Primary Comp.|55.2|37.9|3.4|3.4|
|Secondary +|56.7|37.5|1.4|4.3|
|Rural<br>None|77.5|19.7|0.5|2.3|
|<Primary|81.9|16.2|0.7|1.2|
|Primary Comp.|68.7|26.5|1.2|3.6|
|Secondary +|74.1|25.0|0.0|0.9|

# Source: CPS; DHS

- a. Sample is currently married women.

- b. Includes private physicians, hospitals, pharmacies, and any other private, non-NGO.

- C. Unspecified source, may encompass NGOs when private, nonprofits are not a category, and may include commercial where it is not a separate category. Other also includes don't knov and not stated.

**nP: Yabl.** 11.7
59 with at least a secondary education obtain contraceptives at public outlets. In rural Colombia, Profamilia (the predominant NGO source, the family planning association) is increasingly important as a source of contraception as education rise, but those vith at least secondary schooling switch to commercial sources and abandon the NGO source entirely. The increase in the proportion using commercial outlets jumps by over 100 percent between completed primary and secondary plus. In contrast, because 80 percent of Egyptian women who have completed primary school use commercial sources, the increases among those with any additional education is negligible.

These findings with regard to education are corroborated by Akin and Schwartz (1988) in their multivariate analyses in both Jara ca and Thailand. Thus even with controls for other characteristics, education remains a powerful determinant of private sector use. What is not reflected in the more sophisticated analysis, however, is the level of reliance on public and private sources. Although increasing education generally means greater likelihood that a voman will purchase contraceptives, vhat the foregoing tables suggest is that the level of reliance varies greatly. Well managed and funded government programs such as Thailand's will capture a large segment of the market and retain them, whereas presumably less well organized or newer programs, such as those in Egypt, cannot reach even the uneducated population very effectively. Another explanation may be that Egyptian women prefer not to use public outlets for contraceptive services, even if using private sources involves paygng for contraceptives.

Thus, in the aggregate, more education will mean less reliance on public outlets, but there are variations by location within a country and the average proportion who use private sources may even be more important than the differences in education. The average reliance on the private sector may have a al.tp:Fasly Planning **Paper** (whole)
60 great deal to do with the quality of public programs rather than merely vith the extent and convenience of commercial supplies. Comparisons of Thailand and Egypt suggest that this might be the case.

Income. As income rises, the need for public subsidies is reduced, and private providers become more affordable. In general, private sources are considered more convenient, vith typically faster service, better ambiance, and greater professional attention. Despite these amenities, consumption patterns across countries is quite disparate. Table III.8 summarizes the relationship between employment status and husband's occupation--as proxies for income--and source of contraceptives in urban and rural areas. The predicted inverse relationship betveen job categories and employment status emerges for both Egypt and Morocco. Hovever, the levels of use of government facilities in Morocco is almost double that of Egypt in all categories. In both countries, unemployed households are only slightly more likely to use government sources than those at the bottom of the skills ladder, suggesting that these groups are not very different in their preferences across contraceptive sources, and may be very similar because they move between the two categories over time.

Table III.9 shows the relationship between income groups and source of contraceptive services for urban Jamaica, and urban and rural Thailand. In neither country is there a consistent inverse relationship between income and use of government sources; and in Thailand, this is true in both urban and rural areas. In urban areas those vith the highest incomes are the most likely to take advantage of commercial sources, but this is not true in rural areas vhere the lovest income households are the least likely to use government services. These data suggest that in Jamaica and Thailand the distribution of government subsidies is quite even across income groups, and government is subsidizing the contraception of most income earners, including a third or more of those who

**at.fp:fetlly Plaing Pawr ('dialw.**
61 Table III.8

# Source of Contraceptives by Husband's Employment Status, Husband's Occupation and Area of Residence

|Country,<br>Employment<br>Status,<br>Husband's<br>Occupation|Governmen<br>(Percent)|t Commercial<br>(Percent)|a_NGO_<br>(Percent|Otherb<br>) (Percent)|
|---|---|---|---|---|
|EGYPT|||||
|All women|||||
|Employed:<br> <br>|||||
|Professional<br>Technical|||||
|or Managerial|20.0|78.4|1.3|.3|
|Clerical,<br>Sales and Service|<br>26.6|70.1|2.3|1.0|
|Agriculture<br>and Unskilled|31.6|66.1|.9|1.4|
|<br>Unemployed|30.4|68.4|.6|0.6|
|Urban<br>|||||
|Employed|||||
|Professional<br>Technical|||||
|or Managerial|17.6|80.6|1.4|0.3|
|<br>Clerical,<br>Sales and Service|<br>22.2|74.1|2.7|1.0|
|Agriculture<br>and Unskilled|29.6|67.7|1.4|1.3|
|Unemployed|29.5|68.6|1.0|1.0|
|Rural|||||
|Employed:|||||
|Professional<br>Technical<br>|||||
|or Managerial<br>|27.9|70.9|1.2|0.0|
|Clerical,<br>Sales and Service|<br>36.7|61.1|1.3|0.9|
|Agriculture<br>and Unskilled|34.1|64.1|0.2|1.6|
|Unemployed|32.1|67.9|0.0|0.0|
|MOROCCO|||||
|All Vomen|||||
|Employed:|||||
|Professional,<br>Technical|||||
|or Managerial|43.9|55.1||0.9|
|Clerical,<br>Sales and Service|<br>53.5|44.7||1.8|
|Agriculture<br>and Unskilled<br>|66.8<br>|30.6<br>||2.6<br>|
|Unemployed|67.2|32.8||0.0|
|Urban|||||
|Employed:|||||
|Professional<br>Technical|||||
|or Managerial<br> <br>|42.3<br>|56.6||1.1|
|Clerical,<br>Sales and Service|<br>51.5|47.2||.6|
|<br>Agriculture<br>and Unskilled<br>|<br>53.1<br>|<br>43.5<br>||3.5<br>|
|Unemployed|54.1|45.9||0.0|
|Rural|||||
|Emloed:|||||
|py<br>Professional<br>Technical<br>|||||
|or Managerial|53.8|46.2||0.0|
|<br>Clerical,<br>Sales and Service<br> <br>|<br> <br>59.4<br>|<br>37.0<br>||3.6<br>|
|Agriculture<br>and Unskilled|73.0|24.8||2.2|
|Unemployed|76.3|23.7||0.0|

# Source: CPS; DHS

a. Includes private physicians, hospitals, pharmacies, and any other private, non-NGO. b. Unspecified source, may encompass NW"s when private, nonporfits are not a category, and may include commercial vhere it s not a separate category.
62

# Table 111.9

# Household Income, Location, and Source of Contraceptives for Jamaica and Thailand

||Goverment<br>(Percent)|)w0<br> <br>(Percent)|Private<br> <br>(Percent)|Other<br> <br>(Percent)|
|---|---|---|---|---|
|Monthly Income|||||
|Urban-Thailand|||||
|<$130|63.2|1.5|33.8|1.5|
|$130-174|67.6|1.2|30.6|0.6|
|$174-261|65.0|0.6|32.5|1.9|
|$261-522|57.4|2.1|38.3|2.1|
|>$522|41.9|2.3|46.5|9.3|
|weekly Income|||||
|Urban-Jamaica|||||
|<$12.25|75.0|-|25.0|0.0|
|$12.26-18.36|68.4|-|15.8|15.8|
|$18.37-24.50|78.6|-|14.3|7.1|
|$24-50-40.82|79.1|-|14.0|7.0|
|>$40.82|66.7|-|33.3|0.0|
|Rural-<br>Thailand|||||
|<$130|74.3|0.0|21.6|4.1|
|$130-174|88.9|0.0|11.1|0.0|
|$175-261|76.8|2.3|20.9|0.0|
|$262-522|75.0|0.0|18.8|6.3|

# Source: Akin (1984).

a. 1984 exchange rate for Thailand was: U.S. $1 - 23 Baht.

- b. 1984 exchange rate for Jamaica was: U.S. $1 J $4.9
63 earn vell over the 1984 average per capita income in each country ($1,150 in Jamaica and $860 in Thailand).

This brief analysis has highlighted some of the major factors vhich are hypothesized to affect household choice of contraceptive source. Although imperfect, it provides some sense of the characteristics of public program users across countries. Greater specificity in analysis of existing data is varranted, as is more targeted and inter-disciplinary data collection that can address the range of unanswered questions regarding both the need and motivation for using public programs. For example, since only outcome data are available, supply factors are ignored. Supply may vell correlate with variables like women's education, vhich makes interpretation of the data difficult and comparisons across countries tentative. A nascent commercial sector may explain heavy reliance on government and vice versa. Older women's greater reliance on public sources may reflect supply constraints rather than the price of private clinical methods. Without more detailed information, these simple cross tabulations can convey little more than relationships betveen two components of a larger dynamic. In addition, none of the existing data can satisfactorily explain the wide differences in contraceptive source preferences between Egypt and Thailand, and none of the data can help to explain who must rely on contraceptive subsidies to afford family planning.

# Pricing

The cash price of contraceptives varies widely and comparisons are difficult. Bogue et al. (1987) provides private sector prices by contraceptive method for Latin American countries (Table IIIA.1). These figures, however, are average prices across all brands. Schearer (1985) has estimated a single price or price range for contraceptives from commercial sources for a number of

**_.1.fp:Vaaily_ P1.anhng Paer** (%dole
64 countries (Table IIIA.2). Although useful for general comparison, neither compares prices in public (vhere they exist) programs, nor gives a sense of the range of prices for s1milar products. This subsection discusses both hov much users pay for specific services in Jamaica and Thailand, and then compares public, NGO and pharmacy prices for the same products within the Eastern Caribbean.

Prices vary across methods and across the products offered for each method. For instance, in most markets there are a number of different brands each vith different prices and packaging, and sometimes vith a significantly different product. Public programs typically offer a more limited choice of contraceptives, usually a single product for each method. The supplies of NGO programs cannot be generalized, since some like Profamilia in Colombia offer a full range of contraceptive products, vhile those in some of the Eastern Caribbean countries, for example, only offer a single condom or oral contraceptive.

What Consumers Pay for Contraceptives. In both Jamaica and Thailand, public, NGO and private contraceptives are available in both urban and rural areas, but as is typically the case, a broader range of services and outlets are available in urban areas. Table III.10 shovs the distribution of prices paid for contraceptives in urban and rural areas of Jamaica and Thailand.<sup>9</sup> Jamaicans in urban areas are far more likely to receive free contraceptives and are far more heavily subsidized than urban Thais. In rural areas about the same proportion receive free family planning services, but the distribution among those vho pay indicates that on average rural Thais spend more for contraceptives than do Jamaicans. Given the proportion in each country served by government programs (see Table III.1), these results suggest that Thailand's public 9. It should be noted that prices are averaged across methods, so the distribution of methods vill affect the relative levels.

Il.tp:Famlly Plaming **Paper** Nbol*)
65

## Table III.10

# Distribution of Average Price Paid for Contraceptives by Area of Residence for Jamaica and Thailand (1984 U.S. Dollars)

|Price Ran¶jesa|Urban|Rural|
|---|---|---|
|Jamaica|||
|Free|50.4|45.5|
|S.01-.20|17.0|10.1|
|$.21-.50|17.8|27.0|
|$.51-2.00|8.8|9.5|
|>$2.00|6.0|7.9|
|Thailand|||
|Free|29.3|46.8|
|$0-$.47|11.3|13.2|
|$.48-$1.10|15.4|8.8|
|$1.11-$4.26|14.1|12.2|
|>$4.26|29.9|19.0|

Source: Akin, 1984.

a. See Table 111.9 for exchange rates used for conversions.

**n.Tabe 111.10**
66 programs charge nominal fees for contraceptives. In Jamaica, all government family planning services are free.

Table III.11 provides additional detail for both countries on the distribution of prices paid, by method. Male sterilization in Thailand and IUDs in both countries are most frequently obtained from free sources. Since clinical methods are far more costly than resupply methods, this reliance on subsidized services makes financial sense from both individuals' and societies perspective. Vhat is surprising is the small proportion of female sterilizations that art obtained for free in Thailand, as it too is very expensive. Given the distribution of expenditure for female sterilization in Thailand, it is clear that the vast majority of vomen pay for their own operation, vith little or no subsidy from the government. This also suggests a strong demand for tubal ligation in the country.

Condoms are heavily subsidized in Jamaica, with 74 percent receiving them for free and 96 percent for under $.20 apiece.<sup>10</sup> No user pays more than S-50 per condom. In Thailand, 30 percent receive free condoms and 80 percent pay less than $.47 for the product. Twenty percent of users spend over $1.10 per condom, suggesting a broad market in Thailand. In both countries, the pill is the least subsidized and by far the most popular form of resupply contraception. In Jamaica, only about 18 percent receive free oral contraceptives, vhile 34 percent do in Thailand. The level of subsidy. however, is, on average, much higher for orals contraceptive users in Jamaica when compared to Thailand. In Jamaica, 75 percent of oral users pay less than $.47; in Thailand 58 percent pay under $.50. This again suggests that public programs in Thailand subsidize family planning, but may require some form of copayment from users, othervise private products are very inexpensive.

10. All quoted prices are in U.S. dollars. **fl.fp:rFaly** Planning **Paper (*o1.i**
67

## Table 111.11

# Distribution of Prices Paid by Method for Jamaica and Thailand (1984 U.S. Dollars)

|Price Rangesa|Condom|IUD|Met<br>Injection|hod<br>Pill|Male<br>Sterili-<br>zation|Female<br>Sterili-<br>zation|
|---|---|---|---|---|---|---|
|Jamaica|||||||
|Sample Size|(77)|(43)|(194)|(303)|N/A|N/A|
|Free|74.0|93.0|72.2|18.2|N/A|N/A|
|<.20|22.1|0.0|3.1|24.1|N/A|N/A|
|$.21-.50|3.9|0.0|15.5|32.7|N/A|N/A|
|S.51-2.00|0.0|7.0|0.0|18.2|N/A|N/A|
|> $2.00|0.0|0.0|9.3|6.9|N/A|N/A|
|Thailand|||||||
|Sample Size|(40)|(49)|<br>(101)|(298)|(36)|(343)|
|Free|30.0|65.3|12.9|33.6|75.0|31.2|
|<$.47|50.0|0.0|<br>3.0*|24.2|0.0|0.0|
|$.48-$1.10|0.0|10.2|31.7|29.5|0.0|0.3*|
|$1.11-$4.26|20.0|8.2|50.5|12.8|5.6|3.8|
|> $4.26|0.0|16.3|2.0*|0.0|19.4|64.7|
|Total|100.0|100.0|<br>100.0|100.0|100.0|100.0|

# Source: Akin (1984).

a. See Table 111.9 for exchange rates used for conversion. ***** Fewer than S cases.

**T. able 111.11**
68 According to these survey results, subsidies for contraception are very high In both countries, and therefore the average<sup>price paid for contraception</sup> is lov for all users. Urban subsidies are slightly higher<sup>in Jamaica as</sup> compared to rural subsidies, but in Thailand, urban subsidies<sup>are definitely</sup> lower (see Table III.10). Subsidies are most common<sup>for clinical methods</sup> (except for female sterilization in Thailand), and least common for oral contraceptives.

Price Levels for Resupeply Kethods in Public, NGO and Private Outlets. In the Eastern Caribbean countries, a single currency and<sup>similar history bind the</sup> small island nations. Despite their cultural and economic<sup>similarities,</sup> there are distinct differences in the prices charged at family<sup>planning associations</sup> aad private pharmacies, both across brands and across countries for the same brands. First, all government family planning services<sup>are free. Nonetheless,</sup> a number of public programs have complained that they<sup>cannot "compete vith the</sup> private sector" as they are receiving free commodities from USAID, vhich only supplies U.S. products. The commercial sector is dominated by Schering Ag products; user loyalty is preventing the free contraceptives from attracting users avay from existing commercial products, and either there are few new acceptors or they follow user recommendations in shunning a new product.11 Table III.12 compares the prices of contraceptives for Dominica, Grenada, and St. Lucia for seven different oral contraceptives, colidoms, injections, Neo Sampoon, and foam tablets. The data vere collected from a local<sup>pharmacy in the</sup> capital city of each country; in St. Lucia, three pharmacies vere visited and all reported identical prices. Data for all methods are<sup>not available for each</sup> of the three countries, hovever, a fev comparisons are possible.

11.. The government programs on the islands are relatively nev having<sup>only come</sup> into operation in the past fev years.

**.tp:waaly** PFlming **Papec (wh1el**
69

# Table I11.12

# Prices Charged for Contraceptives at Private Pharmacies in Selected Eastern Caribbean Countries (1986 U.S. Dollars)

|Method|Dominica|Grenada|St. Lucia|
|---|---|---|---|
|Orals||||
|Eugynon|$4.63/cycle||$3.06-4.56a/cycle|
|Microgyneni|2.93/cycle|$2.57/cycle|3.33/cycle|
|Logynon||2.46/cycle|3.70/cycle|
|Trinoridiol|2.78/cycle|2.41/cycle||
|Neogynon||2.57/cycle|3.37/cycle|
|Diane|8.13/cycle||8.13/cycle|
|Perle|||1.09/cycle|
|Condoms|.09@|.35@b|.04 or .12|
|Injection|7.22@|||
|Neo Sampoon|1.85 for 20|||
|Other Foam Tablets||2.07 for 12||

Source: Data collected by The Urban Institute.

- a. Price range reflects price of high-low dose pills.

- b. These were high quality Sheik condoms, which explains some of the price differential.
7" The price of the same brand contraceptive such as Hicrogynon, probably the most popular pill in the region, ranges from $2.57 in Grenada to $3.33 in St. Lucia, 30 percent higher in St. Lucia. Orals are cheapest in Grenada for all brands, except Diane, which is the same price on both islands that carry the product, and is more than twice as expensive as any other method. Diane is available only with a prescription. Perle, at less than a third the price of other orals in St. Lucia, is the social marketing product distributed through a USAID funded project.

Condom prices vary widely based on quality and consumer villingness to pay It is hard to compare these prices since each country carried different brands. The available products at the time of the survey vere quite different, buit no information vas available on typical periods.12 The data on injections and foam tablets are only available for.a single country, and these are useful in comparing NGO and private prices for similar contraceptive products. Table III.13 summarizes the prices charged by local family planning associations (FPA) in Antigua, St. Lucia and Grenada for the methods each offers. In St. Lucia, the FPA's industry-based program offers a vider range of products and higher prices than its family planning center, thus there are four columns in the table.

As in the case of the for-profit sector:, pr- es of contraceptives vary considerably across islands. Ironically, the Grenada FPA has the highest prices for oral contraceptives, although its pharmacies had the lovest commercial prices among the countries for vhich data were available. In the St. Lucia industry-based program, a number of brand name products are offered at concessionary prices, although only one of the three oral contraceptives is priced 12. Shopkeepers indicated lov demand for condoms among local couples.

Ml.tp:Fafily Planning **Paper** (whole)
71

# Table III.13

# Prices Changed for Contraceptivis at Family Planning Association in Selected Eastern Caribbean Countries (1986 U.S. Dollars)

|Method|Antigua|St. Lu<br>FPProgram|cia<br>Industry|Grenada|
|---|---|---|---|---|
|Orals|$.37/cycle|<br>$.37/cycle|.74/cycle||
|Eugynon|||.56/cycle||
|Microgynen|||1.11/cycle||
|Neogynon|||.74/cycle||
|Condoms|.12@|free|.04@|.05@|
|Injection|3.70|(some charge)|||
|Neo Sampoon|||.93 for 20|.74 for 20|
|other Foam Tabl|ets||.46/vial|.74,/vial|
|Diaphragm|5.56|||7.41|
|Jelly|1.85/tube|||2.85/tube|
|IUD||||7.41|

Source: Data collected by The Urban Institute.
72 above that of Grenada's family planning program. Diaphragms are almost two dollars more in Grenada than in Antigua, and Jelly is $1.00 mork in Grenada. Condoms are free in St. Lucia's family planning program and is highest at $.12 a piece in Antigua.

Price differentials between pharmacies and FPA commodities are difficult to compare because only two of the countries are the same. Comparisons of oral contraceptive prices, however, shows dramatic variations, vith commercial products priced at 5 to 10 times as much as family planning association products. Condoms are closer in price, except in St. Lucia where FPA condoms are free. Foam tablets are roughly 5 times as expensive in pharmacies as in the FPA in Grenada.

Comparing FPA and commercial prices across countries, injections at the Antigua FPA and Neo Sampoon In St. Lucia' industry-based program are about half the price of similar pharmacy products in Dominica.

These tables provide some idea of how identical products are priced differently in a single, well defined location. The pricing patterns reflect the expressed objective of the pharmaceutical companies to charge what the market will bear and their ability to adjust prfi.s to consumer income and willingness to pay for contraceptives. Similarly, as assumed, NGOs price their products well below market. The biggest differential is in-oral contraceptives, but all FPA products and methods are considerably more affordable.

# Conclusion

The private sector (for-profits and NGOs) is currently serving the majority of contraceptors in the developing world vho rely on resupply methods. Government is typically the most important supplier of clinical methods, especially in Asia and parts of Latin America, and is relied upon heavily in rural areas in some countries. Ul.fp:ramly Planning **Paper** (,hol.)
73 The level of reliance on government sources varies even more across countries than across groups within countries. The Asian countries such as Thailand, Bangladesh and Sri Lanka are heavily government dependent, while in countries like Lebanon and Egypt government is a minor player. NGOs are particularly active in a few countries, and in others play no role at all. In 10 of the 31 countries in the sample, 20 percent or more of all users rely on NGO sources for contraceptive services. African countries rely most heavily on NGOs, and Asian countries least heavily. No systematic pattern of NGO users is possible because of the disparate nature and objectives of the various NGO groups. For instance, the religious missionaries in Africa are more active in rural areas vhereas a number of the the family planning associations (e.g., Colombia's Profamilia) are predominantly urban-based programs. Thus gen2ralizations must be made on a country-specific level.

The reasons for the discrepancies ia sources across countries is difficult to explain with available data. Differences in public program quality, investmeent and scope obviously will play a role, as will the existence of incentives and disincentives to private investment in family planning. These characteristics are probably as important as income levels in helping to explain country differences, otherwise a country like Bolivia would be reliant on government while users in Thailand and Tunisia vould more frequently use commercial sources.

The prices users pay also vary. The limited information available for this study suggests that government subsidies reach a large segment of the user population in Jamaica and Thailand. Given the income levels of these tvo countries, it is not clear that the degree of apparent consumer subsidy is required to keep contraceptive levels up. The amount and extent of subsidy that is needed cannot be determined from the available information, but as household

**a.fp:ramily** Plzaning **Paper** gwheoi.
74 incomes rise, public subsidies should become less necessary and a greater reliance on private sources should be warranted. In neither country does this seem to be happening.

Although the data allow a focus on Jamaica and Thailand, the issue of whom to subsidize for how much is relevant to most countries with large government programs. Public investment is meant to reach: (1) those who cannot afford the commercial contraceptive prices or the medical attention that accompanies some forms of contraception; or (2) those who are deterred from contraception because of a lack of information, motivation or income. The danger of expansive public programs is that they are difficult to scale back for political reasons, and government then becomes the provider for anyone choosing to obtain subsidized contraceptives even those who vould and could buy from the commercial sector.

The pricing of contraceptives varies across brands for the same products, and identical brands are priced differently across countries, even in regions with strong socioeconomic similarities and geographic proximity. Thus there is evidence that commercial providers charge vhat the market vill bear in any given context. NGO prices tend to be significantly lover than commercial prices, and in many countries they offer free services.

The implications of thes' patterns and the means of enhalicing the role of the commercial sector in delivering family planning is discussed in Section V. It is important to point oit here, however, that a basic tenet, that will be increasingly important to governments receiving less funding and reduced donor assistance (especially in contraceptives), is that those vho can pay for services should, so that government can concentrate on reaching those who need subsidies.

The results of this analysis suggest that the commercial and NGO sectors are and can be important partners in the provision of family planning. Given **U1.9t-Family PIaming Paper (wh1e)**
75 the disparity in reliance on private sources, there is additional scope for private activity in a number of countries that currently have large public programs, especially among the for-profits. Further analysis of the data presented here is crucial to a better understanding of who uses what contraceptive sources and vhy, and thorefore what groups are being subsidized. Even this preliminary look, hovever, suggests that promoting greater consumer reliance on the private sector could reduce government's burden vhile continuing to ensure access to contraception.

**In.fP:faa1I Plaiug** Paper 'bole)
# TARLE III.A-l

## Average Prico of ContraceOptivOe. 1906 Iin U.S. dollars)

|Country|Pills(per<br>Cycle)|IUD Iper<br>insertion)|Injoetions|teral.<br>St.riliaation|Halo<br>Storilisation|Condom<br>(por chdoa)|Other<br>ISpermicide<br>and othecr p-r<br>intoecourser|Radical<br>Viita|
|---|---|---|---|---|---|---|---|---|
|Barbados|1.75|33.75|S.75|240.00|1S0.00|.2S|.25|10.00|
|**seose**|1.75|25.00|6.00|50.00|100.00|.30|50|10.00|
|Bolivia|2.08|40.00|2.2S|3.00|100.00|.26|.25|7.00|
|Colombia|.60|S.00|7.50|300.00|42.00|.25|2S|4.78|
|Costa Rica|3.40|20.00|9.00|666.00|100.00|.28|.28|15.00|
|Dominican?epuL'.:|<br>3.00|50.00|-|66.00|6S.00|.17|.2S|3.40|
|Ecuador|.82|33.00|2.90|164.00|9 6<sup>3</sup><br>0 0 <sup>b</sup>|37|37|7.40|
|tl Salvador|3.00|25.00-|-|200.00|100.00|.30|.30|6.00|
|Guatemala|3.00|22.00|4.00|150.00|12S.00|.2S|.25|-|
|Haiti|2.50|40.00|7.00|300.00|0.00|.25|.25|2.00|
|Londuras|2.50|30.00|5.00|175.00|100.00|.40|3 <sup>.</sup>0 0 <sup>d</sup>|5.00|
|Jamaica|2.00|25.00|4.7S|_56eaO_|56.00|.10|.2S|5.00|
|Panama|1.50|6S.00|4.7S|400.00|200.00|35|.40|10.00|
|Paraguay|1.30|33.00|2.25|150.00|100.00|.33|.33|6 <sup>.</sup>70<sup>e</sup>|
|Peru|.76|10.80|3.00|162.00|b|c|c|4.70|

Siurce: Soque at *I. I1966I

- a. Avorago amount paid by a porson in the poorer s*gmont of society.

- b. Procedure currently not available in country.

- c. Data not available. but in past sot at .25.

- d. Per tube

- *. $10 with pap test.

## I - Data not availablo

M*.fp:Table 11.A-1
# Average Pi-ice of Contraceptives from Private Sector Sources in Selected Developing Countries

|Country|Female<br>Sterilization|Vasectomy|<br>IUD b/|Oral<br>contra-<br>ceptives<br> <br>(per cycle)|Condom|Injectable<br>per month's<br> <br>supply c/|<br>Diaphragm d/|
|---|---|---|---|---|---|---|---|
|Bangladesh<br>|<br>||46.15<br>|1.28<br>||||
|Brazil<br>|1,061.25<br>|481.25<br>|327.5<br>|.63<br>|.24<br>|1.72<br>|69.90|
|Colombia<br>|169.75|123.731|41.63|.80|.23|.72|.|
|Dominican||||||||
|Republic|200.00<br>|250.00<br>|65.25<br>|2.55<br>|.29<br>|2.29|27.50|
|Rgypt<br>|145.50<br><br>|181.50<br>|50.39<br>|.46<br>|.19|.<br>|..<br>|
|ElSalvador|<br>232.00<br>|140.00<br>|46.50<br>|3.60<br>||5..20<br>|22.00|
|Guatemala|175.00|100.00|42.00|2.25|.33|2.83|.|
|Indonesia|120.00|24.30|30.70|1.38|.12|1.17||
|Jamaica|188.50|174.00|33.15|1.74|..|4.00|13.40|
|Jordan|404.20|301.00|113.26|1.23|.35|2.86|24.00|
|Kenya|..|..|48.91|3.54|.36|3.79|33.96|
|South Korea|70.88|70.88|26.62|1.02|.11||.|
|Iorocco|..|..|25.04|2.50|.17|||
|Nigerla<br>|..|..|65.04|6.98|.81|12.61|29.10|
|**Panama**|300.00|175.00|35.00|1.98|.25<br>|6.00|..|
|Philippines|<br>..|..|13.60|1.21|.19|1.56||
|Thailand|155.00|90.00|25.00|1.25||||
|Zaire|88.75|..|60.41|3.55|.27|2.96||
|Madagascar|..|..|..|2.03<br>|.48<br>|2.82||
|Mexico|..|..|..|.41|.16|||
|Nepal|..|..|..|.85||||

- **a.** Average **is** estbmted **as** *Adpoint of reported range.

- b. Includes Insertion and fol lw-up visit.

- c. One moanth'a supply is calcuTIated on the basis of three month's effective action. d. Includes Initial fitting and follow-up visit, but not spermicide supply.

Source: Schearer, 1983.
78

# **IV.** PROKOTING **TUB** PRIVATE SECTOR: ALTERNATUVE APPROACHES

Promcting private sector activity in family planning has not been a central component of public or donor programs until recently. Indeed, historically donor emphasis has been on public programs, and technical assistance and funding were geared a4most exclusively to public entities. International Planned Parenthood Federation (IPPF) has made support and assistance to indigenous NGOs (family planning associations) its major mission; however, for-profit activities have been ignored for the most part.

Working vith the private for-profit sector can mean many things, including encouraging private companies to provide family planning coverage to their employees, or demonstrating the benefits of extending family planning information and services to employees. Family planning employee benefits help to foster demand for family planning, and typically include the financing and delivery of services. Where such programs serve those previously dependent on governments, they relieve government coffers. Broadening insurance coverage to include contraceptive services but relying on other suppliers to deliver care can also foster demand because a third party pays the bill. Prepaid and cooperative arrangements (such as health maintenance organizations) have an incentive to promote family planning because they avoid the cost of delivery, and vhere applicable, the cost of an additional dependent's health care. Prepaid groups can either provide services directly or act as a third party payer and refer patients to outside sources of contraceptive services. Promoting private investment in family planning involves a somewhat different set of activities: improving the efficiency and effectiveness of private and nonprofit provider services to assist them in becoming more

**.fp:fasily Pleiming Paper (whole)**
79 responsive to family planning markets; supporting feasibility studies for possible private investments; supporting demonstration projects vith strong evaluation components; providing incentives to producers and distributors that increase family planning availability through private channels; making investment capital available through loans (preferably) or grants; and, eliminating the regulatory and legal impediments to family planning investments.

This seciion discusses the major initiatives undertaken in delivering family planning through the private sector. Although a complete inventory vas intended, limited and inaccessible information have reduced the sample to major activities for vhich there is at least minimal documentation. Good, empirical information is generally lacking for most ongoing projects in this area. The projects referenced in publications but without detailed description are mentioned in the text.

Table IV.1 provides a summary of each project, indicates the components of the effort, and summarizes selected characteristics. The projects are listed in chronological order under three headings: (1) employee benefits/industry-based services; (2) social marketing;13 and, (3) promoting private investment in family planning. The existence of an evaluation is included as one of the characteristic **s** ince virtually all of these projects are (or vere) experimental, and evaluation is key to understanding how vell a program worked, what worked, and vhat elements failed. Host projects only count users, fev undertake a true evaluation of what vorked, vhat did not and vhy; nor do many measure or assess impact, effectiveness or costs. A description of most of the plans in Table IV.1 is provided in Appendix IV.1.

13. Only four of the social marketing projects are included here. These recent additions provide a flavor for the social marketing approach and represent never programs. Footnote 2 in Section I provides a list of a number of contraceptive social marketing revievs.

l.fpWVsily **PIeiag Paper ItAwl** *
# Table IV-1

Sumry of Experiments in Private Sector Delivery of Fainly Planning

|Country,<br>Title of Project|Funder, Status<br>of Activtty|Project Sumary|Use Private<br>Dtstribution<br>System|Cmpany<br>Benefit<br>for Employee|Characteristics<br> <br>Contract<br>wlth Private<br>Providers|of Project<br>Training|Evaluation<br>C-Onent|
|---|---|---|---|---|---|---|---|
|_DnumuiNWn1Jm5-u_|_mi_<br>_Inwi_|||||||
|India:<br>Family Planing<br>Programe at<br>TVS-Lucas|TVS-Lucas Group of<br>Cmpanes,<br>1938|Famly planning lnformton<br>and<br>services<br>were provided for 16,000<br>employees. Paid leave and cash<br>Incentives<br>of Pa. 260-270 were<br>given to employees/spouses<br>who<br>undeaent<br>sterilization.<br>Dise-<br>inetives<br>were Saposed, such**as**<br>employment restrictions,<br>and<br>elttimtion<br>of mternity,<br>medical<br>and educationl<br>benefits<br>after<br>the third child.|No|Yes|No|No|no|
|Tata Cha;ncals<br>Nithapur|Tato Chemicals,<br>1950|In 1950, the company introduced<br>fdmily planning iafqimaton<br>wth<br>lectures**and**group meeting, and<br>contreptive.<br>A Rs. 25 Incen-<br>tive for sterilization<br>was intro-<br>duced<br>nd raised to Rs. 200 In<br>1965 along with 6 days leave.<br>UDJ<br>acceptors<br>received Rs. 25 In 1967.<br>Free orals were offered<br>in 1969.|Yea, (FPA)|Yes|Yes|No|No<br>Co<br>0|
|Tate Industries<br>Ltd. Fdmily<br>PlaMing Program<br>Jmsphedpur|Tata Industries<br>1950a|The company design and funded a<br>comprehensive<br>amily planning<br>project<br>beginning in the 1950,.<br>Counseling and services were<br>provided with Incentives<br>offered<br>for clinical<br>measures. Currently<br>all Tat& plants have such<br>srvices.|No|Yes|No|No|Only follow users|
|Codrej & Boyce<br>Manufacturing<br>Co. Ltd.,<br>Bombay|Godrej & Boyce<br>Manufacturing<br>Co. Ltd.,<br>Bombay|Information,<br>motivation and<br>services<br>were provided to<br>employees and tubectonies<br>were<br>reimbursed at local hospitals.<br>Incentives<br>of Rs. 20/sterilized<br>case was provided along with two<br>days paid leave.<br>Disincentives<br>Included no maternity<br>benefits<br>after 3 chLidren, no housing<br>for those with 3 or more children<br>unless the worker was sterilized,<br>and the fourth child would not be<br>ad.<br>I to the ,<br>I<br>i|Only for<br>tubectomices|Yea|No|Yes, for 150<br>otlvators|No, but track<br>number of<br>acceptors|
Tal KY61 (me'd)

||||use mrvate||auracteristics<br>o<br>Contract|f Frlect||
|---|---|---|---|---|---|---|---|
|Cttry,<br>Title ofPrject|Vbmdr, Statue<br>of Activity|Fijent<br>_Sumary_|<br>Distributien<br>Syste|*1loyee<br>SmefItt|witb<br>riwate<br>Providers|TSnin|valettc<br>ea Omet|
|India:<br>raily<br>Planing<br>In Tm PlFta<br>tion|lidia<br>Tm<br>Zatate",<br>WA of<br>India, lon<br>lnstitute,<br>If5|Medical offcer<br>wem trald<br>tn<br>_ftily_<br>_pIS1_<br>id met estate<br>bopital<br>had csgrceptlva.<br>ad<br>full-tim<br>soi<br>Var<br>t<br>fr r<br>ftily<br>plauAVg for etivattos.<br>Froield<br>orals,<br>c om,<br>hiD sd<br>steriliation<br>a<br>of lff8.<br>Inrs-<br>tivas for steuiliastios<br>Included<br>*e_5D_-<br>Se_130_tocamb_<br>7-14<br>days of pa<br>ame.|lbaM|YM|TM|To, for mdical<br>oftiers<br>to<br>mivotlos<br>d<br>fly<br>ltfr|No|
|lindutan<br>SpimUng Id<br>Weaving kils|Uidurte<br>SpUmg<br>ard<br>Waving Kills,<br>1962|law c_<br>bired pera-profeseanal<br>staff<br>to cm the<br>ealtb/tmlly<br>plumin<br>cinaic end 9specaltite.<br>Condome, oral,<br>UhV a<br>sterili-<br>ttaion an provided.<br>vostare<br>receve<br>as. 50 * -<br>Incentive for<br>aterilimtios<br>_d 2 days leave<br>witb pay for vactomies.||T|lb|lb|lbt|
|HSS Spinmlg A<br>Weving Campy<br>Nospital Famly<br>planing<br>Pesrch<br>Cotre<br>|No Inforntion<br>1962|Two f_ily<br>_plaming_clinics-in<br>the_Cmpay_Wpital<br>ad worker's<br>village-wer<br>set up.<br>ployee<br>were hired as aotivators<br>_ad_<br>eaflets,<br>lecturee,<br>confereae,<br>aNd plays auarae<br>ftmily<br>plaming.<br>Cocomo, pills.<br>s<br>and steriliastto<br>were offered.|no|Too|_V_|YTo|lb. bat tn 1976<br>38.17 of fertile<br>w<br>used<br>contraceptives|
|India:||||||||
|Delhi Cloth<br>General kills<br>Co. Ltd, 194|Delhi Cloth 4<br>Ceeral<br>Hills<br>Co. Ltd, 1964|Enloee<br>trained (with cetift-<br>cates) to act *c<br>otivatora<br>wo<br>distriuted<br>cotraceptives<br>atthe<br>work site,<br>uis etook**a**muse-to-<br>house vsectey<br>c_<br>ipsd<br>compassed honholds.<br>Also_used_<br>pcters,<br>stortes,<br>slogas,<br>md<br>_ftim._<br>Volusteer<br>tivators wt<br>r<br>paid as. 30 pe<br>meuth. Vasec-<br>_tosy_<br>iffcetives<br>of PA. 70 were<br>provided b<br>_gemnt.<br>1kw Delhi<br>WA -<br>ploya<br>Iere<br>_<br>Cowporatis,<br>atd Runs<br>gaW 3<br>days of paid lea.<br>**(Iote:**otbhr<br>**c**<br>**_**E plats<br>had**sitghtly**pr'-<br>_vide_<br>pills,<br>ce_dom, n.<br>_Ios_<br>steritisttit.|We|Tee, foer<br>trenepots-<br>tios and<br>refre<br>t|NW|'a<br>of<br>sutivatora|NW|
# Table IV- (cont'd)

||||Urs Privete||dhracteristics<br> <br>Contract|of Projt||
|---|---|---|---|---|---|---|---|
|Country,<br>Titlo of Projet|rwder,<br>Status<br>of Activity|Project Summry|Distributio<br>Syste|employ<br>Benfit|witb Private<br>roidsrs|Training|Evaluation|
|mAim<br>_WIT/imNi_|_n!-Win_<br>inviin|(cot'd)||||||
|Indiss<br>Qajeret<br>efifery<br>(miuim Oil<br>Corporation.<br>Deroda)|India<br>Oil<br>Corporation,<br>laroda,<br>1A|Distrktitam<br>of tfaUy pluming<br>literture,<br>letue<br>by experts<br>ad aIdbitions<br>and film.<br>Con-<br>treceptive<br>erstre.<br>In**1965,**<br>striliwztions<br>_d<br>mUI wr<br>offered aid_add_<br>to pills,<br>coedom, jelly ad foam table.<br>Vaact<br>Incentive of as. 200<br>(raised<br>to am.**500 In**1975).|,l|**Tom**<br>b|lb||lb|
|Aleebic Croup<br>of Industris,<br>30y|Al'mbc**_Ccoup_**of<br>Industrila,<br>1966|Famly plumin<br>informetion,<br>servic<br>d ectivatwe<br>were<br>provded fer the 4.500 wokers.<br>A copamy<br>**_1ec_**wwrk<br>_tracked_<br>tboe<br>'in sed'<br>of famly<br>pluming.<br>Sterilisatiop<br>acceptors<br>mr<br>traind<br>**as**mti-<br>vators ad sotivator<br>rcewivd<br>icentlve<br>peyments. Hastin<br>were held with nonecceptore<br>regularly.<br>Steriliastion<br>acceptors<br>rweivd<br>tln<br>off<br>end_PA._15-45 d<br>10ag on<br>circumstauces.|lb|Too|lb|Tea, for<br>motivators|lb bit trcke<br>users<br>en<br>ritratlom<br>ad eurvsp|
|-Philspi:<br>Family Lte &<br>Frmily Plaming<br>In Hlalian-<br>fhilippine<br>Co.|Hr_lan-<br>Philippine Co.,<br>1970|A copny<br>prgram fudd<br>pertly<br>by the governant<br>offere<br>info:-<br>**stion,**<br>eduation,<br>Ed_motiva-_<br>ticn witb hoe (follow-up)<br>visits.<br>Paid leave to attend<br>family plumtin<br>lectures,<br>paid<br>sick**leve**<br>**after a vasectomy,**<br>ai<br>echolarhipe<br>for the<br>chtldr<br>of fally<br>plaming<br>ecceptore.<br>Pills., condin,<br>nm,<br>**uteriligation,**<br>**Ed**other wthoda<br>were Offred.|lb|_Te,_<br>for<br>tramport_-<br>tionEd<br>refreshments|lb|Yes, for<br>eotivatorr|Yes, costs of<br>progrm aid<br>net savlis|
# Table IV-1 (zont'd)

|Country.<br>Title of Project|Funder, Status<br>of Activity|Project Smmary|Use Private<br>Distribution<br>System|Employee<br>eefit|Curacteristics<br> <br>Contrat<br>with Privat*<br>providera|of Projct<br>Training|Evaluation<br>CoM|
|---|---|---|---|---|---|---|---|
|0'wm<br>**WIT/Dln**|irSm-<br>**smvis**|(cnt'd)||||||
|Kore:<br>Kaus HoTire<br>Industrial<br>Compny|Kau Ho Tire<br>Industrial<br>Cony.<br>1972|Co pny Mngemmnt ad the union<br>aopted<br>nd pro oted f_ily<br>plAnnn<br>_and_mle It part of the<br>persomAl magemennt policy.<br>Compay oriented new employees<br>d educated existing employees<br>in the benefits<br>mid specifics<br>of<br>fmily pluming.<br>Incentivesare<br>inthe fom of priorities<br>for<br>house sdloas,<br>pd<br>holiday<br>after**a**vasctomy.<br>DLtacentives<br>include covered obstetric<br>care<br>through the third child. proso-<br>tioa restriction<br>for employee<br>with large famlies<br>and those<br>with sor tha 4 children sat<br>leave the firm.<br>Condoems pills.<br>nd sterllsation<br>offered.|No|**yes**|No|ND|lb|
|Sri Lanka:<br>Industrial<br>Sector Programs|Family Plannin<br>Asswlatloo<br>of<br>Sri Loam, 1972|UfO semasra witb FPASL urging<br>convinced labor unlons**Lo**press<br>for family plaraing**as a**bone<br>fit.<br>Thirty popalation educators<br>**va**<br>trained with paying salaries<br>for the 30 days. Eacb motivator<br>was given 4 days/mth<br>to educate<br>thelr fellO<br>employee.<br>Instituk<br>tional qestlomalrea<br>and follor-<br>up<br>otivtlon,al<br>activities<br>for<br>employees are provided.<br>Sterili-<br>at'lon_was_offered with Rs. 50<br>3 (vas-.:toay) or 10 (tubectomy)<br>days paid leave as an incentive<br>whether the employee or spouse<br>werE, scerilIJ.?-.|No|**YI"**|**Yes.**gover-<br>ment_fnAWd_<br>FFASL<br>provided<br>**ervlces**|**Ye,**for<br>motivators|No|
Table IV-1 (coat'd)

|Country,<br>Title of Project|runier,Statue<br>of Activity|Projet<br>Sumary|Use Prlvate<br>Distributioan<br>System|ER )y-<br>Om it|Characteriatics<br>Contract<br>with Private<br>Providera|of Project<br>Trainin|Evaluation<br>Cqtonn|
|---|---|---|---|---|---|---|---|
|rUMB<br>_mLT_<br>nU|<br>Ii-Ui<br>SnWIMS|(cot'd)||||||
|Indonesia:<br>Fadily Planing<br>at P.T. Inritea|P.T. lebritam<br>and 31U,<br>1974|Faily<br>plamng<br>is Integrated<br>with the campuy baltb<br>facili-<br>_tsl_<br>at tbie cany<br>of 1.S73<br>worer.<br>_h<br>itei<br>b,<br>py t-<br>_cLa_m<br>tstiff iudeeatke<br>mativailm<br>octivities<br>tbroug<br>film,<br>Ieter,<br>_<br>brochs.<br>ImIp, PAUs, e_s<br>am steril-<br>isatL<br>anprov-<br>d<br>Tde e<br>_m<br>-<br>reqairse<br>regiaratiam<br>With tdo<br>fiwy<br>plinie<br>clinc<br>a<br>_<br>ad_nftU<br>uLWcom<br>Itf<br>they fail to nugister.<br>F_lly<br>slhines<br>an oly_provided_to<br>thl<br>chiMes..|_No_|Ya|Yea, 3tfalm<br>for fre<br>con-<br>traceptiem|No|s|
|kf<br>_r_iae_<br>ag<br>Servi<br>f<br>Industrial<br>1okr|Pth_flader 5_<br>1,77-INS|Fmily pimir.<br>clini<br>s<br>eateblAd<br>at tuD pleuat.<br>Eight<br>fild<br>waars<br>at e_c be<br>eapected tagts<br>am receved<br>referral<br>ft<br>for Me A sign-<br>latim.<br>Clinics provide<br>cornelie<br>ad<br>sece.|ND|e||No<br>U<br>|11|
|Impact of<br>Trained_rmla_<br>Labor Unlon Shop<br>Stewardese"<br>on<br>nOtivators<br>**in**<br>Family Planing<br>Services|UC,19Sl|Tmeffectivmesof<br>)mltb<br>edueator,<br>_tradm_<br>(volunter)<br>'ahop stowardeae<br>already<br>employed by the_fig,_<br>end a<br>**control**<br>group**war**compred<br>as<br>td tbhlr<br>impat<br>on contraceptive<br>useacros<br>educstlon<br>program;<br>no aigificant<br>differences<br>were<br>noted across<br>typs of or lack of<br>a ottvator.|lb|yes|No|Yo, of<br>otivatorc|Yes, of cd_<br>i contracep-<br>tives|
|Tenta Induatricl<br>Famly<br>Planning<br>Project|PathfLnder<br>Fugd<br>1983|Family planing<br>lnformaton.<br>educatien.<br>**counellng**<br>**and**<br>wthods<br>(bhrtier<br>methods,<br>pills<br>**lUlh)**prowided<br>to**4,0CC**<br>factory<br>workers<br>at a clinic<br>on-site<br>during<br>working hours.<br>Health**_and_**sterlzeation<br>**needa**<br>will<br>be referred.<br>KAP & CPS<br>be<br>the|Yes, for<br>sterilisation|Yes|No|Yea of<br>edLcal<br>andadministra-<br>tion staff|IA? & CPS at<br>project<br>end|
||||Use Private||Characteristics<br>o<br>Coatract|f Project||
|---|---|---|---|---|---|---|---|
|Country,<br>Title of Project|Wusder, Status<br>of Activity|Project Summary|Distribution<br>System|Pply<br>Rfelit|witb Private<br>Providera|Tanit.|Evaluation<br>m|
|m<br>M<br>UU/S|MY-SMD<br>S<br>iin<br>(|cmnt'4,||||||
|St.<br>_LiaW1:_<br>Contraceptive<br>DistributionIn<br>Factories<br>In<br>St. rucia|WAID Population<br>Council Opera-<br>tional Reseac<br>Project,<br>1986|lthi ms a dec_med<br>eqeriat<br>comparing factory<br>otivation ad<br>sale of oetaceplve<br>(orals,<br>condams d ftC)<br>by factory<br>workers witb a *m<br>**as**back-p.<br>vran<br>vi1idtiwn m<br>provider.<br>Employe<br>did sinficantly<br>better.|Yes, to obtain<br>contraceptives<br>for "It l<br>t<br>factories|Po|No|Yes. for<br>.otivator/<br>**sles**staff|YTe|
|Medco:<br>F_tly<br>Pl1i:g<br>Delivery Strat_-<br>cle<br>in an<br>ldustrial<br>Setting<br>(Cuidad Juarez)|OSAID Popalation<br>Cucil<br>Opera.<br>tional<br>eserch<br>Project.<br>1987|Althougb a local grup prowie<br>servies<br>already to plans<br>In<br>C.J.,<br>th<br>facilities<br>that<br>ser<br>10,00<br>_ployees are to<br>Include a**promoterprogram**<br>udure<br>employee are selected,<br>traind,<br>_mupervised, ad_mplied<br>by the<br>locl<br>group, NWAC.|Tea|lb|no|Ye, for<br>sotvatore|N<br>aslac|
|Philigpplws<br>r<br>Industry-besad<br>Pa 'ly Plamain<br>Project|Poputloai<br>Canter<br>Founmmation,<br>1965-1987|Ia-plant volunteer<br>(Ilv)**we"**<br>trained to prmote famil_y plannig<br>use.<br>**UIs**referr-d<br>fellow<br>mployees to cmpay<br>**1seiars,**<br>company rars, ad outside clinics<br>**as appropriate.**<br>The total<br>-mber<br>ofacceptorsroe<br>In 90 of the<br>firm.|Yea|Tea|**Yes**|**Yes**of ItV G<br>project ain-<br>otrattonstaff|Oaly tracked<br>mw acptore|
|Peru:<br>Electro Ums<br>**and**HILO<br>Family PluMing|WSAD TIPnS<br>Project,<br>Qngoig|After quick overview of d nad,<br>undlettook a cost/benefit<br>of add-<br>Ing family_p?lis_<br>to caleu<br>health benfit<br>**packges**(15,000<br>employees ad dependents**at**the<br>two firms).<br>Arranged for<br>contract**with loal**<br>PVO to buy<br>family pluaing<br>ervices.|N/A|Yer|tPrepid con-<br>tract vith<br>local FPA|_No_|No|
|Turkey<br>Proviston of<br>Famly Planntng<br>Inforstion<br>A<br>ServIck9 In 15<br>Workplaces|Pathfinder Fund,<br>1986|Services will be provided to<br>20,000 workers to 15 factories.<br>Grantee will psy to equip<br>existing<br>health cinice<br>and<br>personnel, train**a**full-time<br>nursemdwife<br>per site sad MD<br>oversite*<br>ad provide educatton<br>and<br>otivation<br>for employees and<br>their spouses.|No|Yea, but**door**<br>paying for It|No|Yes, for**nurse**<br>and midwives|_NO_|
# Table IV-1 (cont'd)

|Country.<br>Title of Project|Funder, Statucs<br>of Activity|Proect<br>SiM qry|Use Private<br>mltribution<br>System|Employe<br>leefit|OCaracteristics<br>o<br>Ctract<br>with Private<br>Protiders|fProject<br>Trainwin|Evaltion<br>Cpnt|
|---|---|---|---|---|---|---|---|
|D<br>81iNNW_ITD_|_11USIT-USCD_<br>SO<br>(|cont'd)||||||
|Bolivia||||||||
|Fmily Planning<br>_and_Health<br>Services for<br>Organized<br>Workers|Pathfinder Fwid,<br>Popalation CQM-<br>cil and USID<br>Operatlonal<br>Aeserch Project|Famly pluin<br>lnforuation<br>sevicee<br>will be provided to<br>20,000 minig famUil<br>In thre<br>towns. Service. lclude<br>piU,<br>IUD, fam<br>and condoms. Training<br>for mdlcal**staff**_md_promoters<br>In inlouded.<br>Ka_physicins_<br>_Will_<br>received<br>nan-mnetary<br>incetves<br>_foT f-aIY_<br>plaming eevicee-|_NO_|No||TeYe of Mu am<br>F;ly<br>Pl<br>clinic physicians,<br>auxilary<br>urve,<br>field eductorrs,<br>6<br>volunteer promoter|lb<br><br>s|
|Fmily Plar ing<br>Program through<br>Employers|USUD_EAterpriss_<br>Centro de lnveetl-<br>gaiones<br>Social.<br>(IS) Prom<br>Proposal|Integrated progras of reserchb<br>_education,_counseling ed direct<br>family_plaming_**_aerviceg_a*d**<br>**at**workin I<br>. ..:<br>eswith 150-<br>170 mloym<br>to be approached.|I/A|TYe|No|lb|ria<br>to**seem**<br>_<br>fit.<br>m<br>eving of<br>famly plumin<br>to<br>mloyers<br>surveys|
|Indonesia:<br>P.?. Cremsy<br>_Ojaja Family_<br>Planying Progrm|USAID Enterpris<br>Progrm Proposal|P..<br>COmy Dajej is a fitr with<br>1.30 employes0. The firm wl lk<br>renovate & Enterprise will cover<br>all expene. for a deily famly<br>plannin<br>clinic for 2 year.|No|Yee|No|**TM**|lb|
|Mexico<br>Fmily Plamig<br>Services at<br>Induatrial<br>Unides<br>S.A.S.E.P.<br>Quintero<br>Industril<br>Camplex|USAID Enterprlse<br>Progrm Propov l|uSA propo<br>to provide fadly<br>plannin<br>srvice<br>to Its 9,000<br>employes In_cany_<br>ElUlrce.<br>FEIDU (PV_supplies_contracep-<br>tives under a subcontract).<br>Objectlve li to reduc birth<br>rate amd teranty leave.<br>tAP<br>pro and post progra<br>planned.|No|Yes|Tee. for con-<br>traceptive|Tee forMm<br>end mdlcal<br>peremel.<br>Also trainn/<br>orientation<br> <br>for _layeWe<br>12 times a year|**Te,**through DI<br>monitorin<br>eva lntian<br>of<br>progrm by 2AfI<br>_<br>tasssemm<br>of net benfits<br>at proect<br>clne|
|Nigeria<br>LEN Employee<br>Clinic Family<br>Plannang Child<br>Spacing Program|USAID Enterprise<br>Program Proposal|Lover Drothers Nigerli Ltd. wnt<br>to eat up a fadly<br>planning pro-<br>gramnaexlsting covny<br>cilnics<br>servino white-collar<br>employees.<br>All methods will be provided and<br>referrals<br>mad for sterilization,<br>Will determ<br>desand through<br>focus Sroups, tAP surveys and<br>TIPPS project analyses.|No|Yes|Unclear. but<br>love plan<br>to<br>obtain con-<br>trsceptlve.<br>w sle<br>presumbly<br>after the<br>project end.<br>Sterilization<br>referrals|Te,<br>of<br>_dIcal<br>suff,<br>personnel and<br>voluntetr<br>tivatora|_NO_|
**Table** IV-l ,

||||UsePrivete<br>||Characteriltics<br>of<br>Contract<br>ith Pit|Project|Evaluation|
|---|---|---|---|---|---|---|---|
|Country.<br>Title<br>of Project|Funder,<br>Status<br>of Activity|Project<br>Summary|Distribution<br>S7te.|Employe<br>Benefit|w rvae<br>Providers|Training|Coqamnt|
|FlOIUinWwrjDzU|Sm!SAr<br>VIES(<br>|cont'd)<br> <br> d<sup>i</sup>|Ys|Yes|No. PVO|Yes, of|Assessat|
|Thailanid<br>Factory-Based<br>Family Plaing<br>Services<br>iimuri<br>mv*uno|USAID Enterprise<br>Progra<br>Propoal<br>t=in<br>MFMini<br>RA|Projet<br>WIU extenda<sup>mprove</sup><br>Necha's<br>existing<br>factory-based<br>family planning<br>servicce.<br>KIS<br>for operation<br>and evaluation<br>to<br>cut costs.<br>IUP survey to deter-<br>m<br>d_mnd.<br>Foods will also<br>reorientation<br>nMd Ltrelamling<br>of existin<br>pror<br>**d expur-**<br>dion to maw sites.<br>Mn|||<br>Implementing<br>projet|<br>volunteer<br>motivatora|of progre|
|Indonaesi|||||N/A|N/A|Project Is|
|feasibility<br>of<br>Commercial<br>Clinics Providing<br>Steriliztation<br>in<br>Jakarta|USAID Enterprise<br>Progra mPrposal|Moe project will<sup>**assess**attitudes</sup><br>of likely candidate<sup>couples and</sup><br>tbeir wi1ligmes<br>to pay; the<br>lIiklhood<br>of MS_raeferal; and_<br>the coat of outfitting<br>and<br>|N/A|MIA|<br>|<br>|<br>am aseesaomet<br>of udat might<br>be possible<br>|
|The WK<br>Entrepreneurial<br>Dmvlojast|USAID Entrprise<br>Progra Proposal|MWO<br>clinics<br>(of 11)~i,ich<br>are<br>underperforming. Enterprise<sup>wll</sup><br>wourk witb TIM to improve<sup>their</sup><br>pricing and msanement<sup>and</sup><br>raise overall utilization.|Tes|_NO_|_NO_|No|N|
|_Thailand:_<br>Family Planning<br>Nawkat Survy<br>and<br>arketatio<br>Capability<br>Evaluation|USAID Enterprise<br>Program Proposal|PopAultion & commity<br>Devlopmt<br>Association, (PDA) wll<br>support a<br>PDA--Coopers and<sup>Lybrand study of</sup><br>the c'uudoe market<sup>in Thailand and</sup><br>the developmmut of a<sup>basinea</sup><br>plan<br>for IDA. The latter<br>will Include<br>pricing poliles,.<br>distribution<br>strategies.<br>promotional efforts.<br>and gmneial strategise<br>a finan-<br>cia<br>eassesments.|N/i|*/A|N/A|N/A|Kmuasman and<br>buoineaa planning|
|Brazil:<br>Aaaeasing Coats<br>VAd Benefits of<br>incorporating<br>Family Planning<br>Into H16)|USAID Population<br>Council Opera-<br>tional Resarch<br>Project|Cost-burnlt itanlysis<br>of adding<br>family planning to NM<sup>benefits.</sup><br>Analysis estimated that<sup>beneitse</sup><br>would he esaer and<sup>mmoreffective</sup><br>contraceptive<br>_me.,_fewer births,<br>(by 63), 57.52<sup>reduction in abor-</sup><br>tion complications.<br>Costs would<br>he increased In<sup>DID and inpatient</sup><br>services for family<sup>plaming.</sup>|yes|**yes**|N/A|N/A|yes|
# Table IV-1 (cont'd)

||||Use Private<br>||CharacutListics<br>o<br>Contract<br>|f Project||
|---|---|---|---|---|---|---|---|
|Country,<br>Title of Project|Funder, Status<br>of Activity|Project Su_ary|Dlstribution<br>System|Employee<br>Benefit|with Private<br>Providers|Training|Evalust!on<br>Component|
|0DPIO IVFA3U<br>DN|<br>V<br>.IrW Di FAMILr PL|NIM<br>(cont'd)||||||
|Mexico:<br>MedicalService<br>Micro-enterprlses<br>inMetropolitan<br>Areas|USAID Enterprise<br>Program Proposa|Projectwill buildonanIPPF<br>actfvity,<br>ndcat<br>up 20sall<br>heltb<br>service**centere**WiLh<br>special inphaison family<br>plmnnag.<br>Physician.<br>nd<br>prioters<br>wiUbetrained,<br>the<br>letter<br>willalsoreetive flmt-<br>clalIncentivesto lncreas<br>the<br>rmber ofusers.Wewillbe<br>guarantedthevalueofa minl-<br>_.amber of F_mly Planing<br>vielteatthe onset which**are**<br>**phased**out over two years.|Yes|N/A||yes<br>-|Onfifatcial<br>vability<br>of<br>the enterprise|
|Self-Financting<br>Family Planning<br>Plaing|UStID Enterprins<br>ProgramProposial|Provide Social Security&pri-<br>vat*M)D withlUb ad training.<br>Set up now PVO tobackstop.|Private 1M<br>Offices|For Social<br>Security<br>participants|No|lOe in IUD<br>insertions|Measucoats|
|**Peru:**<br>Micro-business<br>IJkn|USAID (ADIN)<br>Operational<br>Resarch:<br>Micro-<br>business WIen|ADIM us<br>clnic<br>**as**referral<br>and suppliescooditles<br>to<br>street sellers.|Yes|**Yes,as**part<br>of ADIN|No|**Yes**|**yes**|
|8OCIL<br>WIw||||||||
|**Nigeria**<br>Sterling Products<br>Private Sector<br>Family Planning<br>Project|FPLAOngoig<br>3 Year Project|(I) Sterling<br>Productswillue<br>Its drug distribution<br>network<br>to diatribute<br>pille,<br>foaming<br>tablesand condom to 3,500<br>outlets.<br>(2) Add family planning to<br>health aervices of companies.|Yes|Yea|Yes|Yes,<br>I.and<br>nursesatcan-<br>psny health<br>services In<br>famllyplanning|No|
|Ghans:<br>SocialMarketing|USAID SOMAtRC<br>Project, Ongoing<br>asof 1984|An established<br>phrmceutical<br>distributor<br>(DANAFa)) is die-<br>tributing<br>contraceptives<br>to 800<br>pharmaciesand3,500 chatical<br>sellers.<br>Trainingandcertifi-<br>cationofcomercialsellers<br>Included.|**Yes**|Yes|No|Of pharnaiste<br>nd chmical<br>sellersin<br>contraceptive<br>methods**sd**<br>screenin,.|No|
# Table IV-I (cnt'd)

||<br>||UsePrivate<br>Diibi|El|OCracteristics<br>of<br>Contract<br>with Private|Project|Evaluation|
|---|---|---|---|---|---|---|---|
|Country.<br>Title of Project|Fuder,<br>Statu<br>of Activity|Projet<br>S9mry|struton<br>Systeo|poyee<br>Imtfit|<br>Providers|Training|Cmpomant|
|IL1<br>(con|t'd)|||||||
|Nligriat<br>IlbAenNhrat<br>Project|US&ID Operationl<br>Researchb Colmuia<br>UnivrsityAftivmr-<br>sty<br>of Ibadm<br>owl"|Projtct<br>Is expudn<br>retailin<br>of Costracertf!1*<br>(orls,<br>cn-<br>das,<br>_d fotamng tablets)<br>from<br>only chmiate<br>sbops to murt<br>trad_.<br>Approch bd<br>on an<br>sY<br>of_taes_<br>_SW_foca<br>poq<br>of ptmtlia<br>c<br>.|Yes, (for a3T,<br>malaria trat-<br>_mt<br>d<br>first<br>aid too)|U/A|N/A|Tee Witb<br>certificate<br>i eompetion|Of ealem. prces,<br>_am costs_|
|lomialas<br>_laic<br>Coatrecative<br>Social<br>NeetiWm|LIM NUw<br>Project|Project Vil<br>a<br>b_ad-mm m<br>1<br>advwen<br>ad<br>lea<br>pried<br>ora<br>otratePtiVO<br>(Scherim<br>prect)<br>ts smaxht ad wala.<br>mren<br>a£ceptablety<br>at<br>_m-<br>irasaptives. A eaomd Phase may<br>Istrui<br>-ce_Adh_<br>pAU<br>_<br>f_1.|<br>"|No|am Ushrin<br>Corporation|lb|TM. M1**amps**<br>ioact<br>aai|
|_Q1il_<br>Cho. of<br>iser,<br>Ltd.<br>U|1<br>TI<br> <br>r*jct<br>iS|Afte_Ak<br>efmui<br>d<br>ofp<br>tl<br>ao<br>fo asavem,<br>amidsritab**a**<br>_oebaf<br>it<br>ma"<br>of<br>family<br>p-asir<br>io mpeps<br>bin-<br>fits.<br>ihe anmplopme ,<br>y<br>mi1**a memt**fima_i<br>bmflts<br>**fre**<br>aing<br>faiRy_plamAg_ to_<br>am-site halth<br>aeic.|lb||U||lb|
||<br>|<br> <br>|<br>"|**l**|bl|lb|lb|
|c<br>rial<br>Industrial<br>_Vadlcl_<br>_Aid_<br>Society|WA<br>UD<br>Tins<br>Ongoi|Projecttoestimtiu<br>th<br>cost<br>and bmnefita of addig<br>fmily<br>pleaing<br>to helth<br>imuamce<br>_conpmi"'_<br>rerlaborud bafsiits.|Tes<br>me<br>Implmentid|_lb._**aas**<br>heilth<br>is<br>aon<br>by<br>CDWS**ma**<br>eloWYs. hame-<br>fit progrm|Fosay|||

a. btcludes compy distribution mtwrwb. b. Contract arragmat with outside ntity, for er_pU, a famly plumig aseeiation, private compay, to prvide services for cohon being<sup>***erved**by the projet.</sup> c. Excludes process evaluatiam.
90

# Pa ily Planning as **E** n mployee Benefit

Company Programs. Large companies have led the effort toward making family planning services and contraceptives available to workers and their families. The rationale for the involvement is that large families have added to employee stress and demands on their time, vhicb affects productivity and therefore raises company costs (Tata, 1979; Hurthy, 1983). Maternity leave, child care needs, and childhood illness are added costs vith a large number of female employees because vomen are more likely to miss vork. to care for children and, unlike men, require both some maternity leave and medical costs for delivery. Some companies provide benefits to the dependents of employees and vhere this is the case, medical care costs to employees is directly related to family size. Large families are also more time consuming and distracting for employees than are small families, and the quality of life is substandard for households vith large families, and likely to remain so (Tata, 1979; Murthy, 1983). In addition to potential savings from smaller employee families, some firms set up family programs from a sense of social-responsibility. These reasons are not mutually exclusive, so many of these can play a role in a firm's decisions to offer or promote family planning.

The first employee family planning programs vere initiated by private Indian companies as far back as the 1930s. Most of the industrial workers in these nev industries were hired from rural areas where large families and child labor were the norm. Company provision of family planning was partly an effort to socialize these new urbanites and to assist them in adjusting to a nev environment (Tata, 1979).

In 1938 TYS-Lucas began a family planning program; followed by Tata Iron and Steel Company in 1950; Alembic Chemicals in 1956; and, Hindustan Spinning and Veaving Mills, Gujarat Refinery, and Godrej & Boyce, and the Tea Plantations

**al.tp:Fwaly** Plarning **Pvapr (whole)**
91 in the early-1960s. In the Philippines, the Havaiian-Phillppine Company began a family planning effort in 1970. These firms sensitized their work force about family planning; set up various motivational activities; usually covered all costs of contraceptives and family planning services; and, elentually set up monetary incentives for acceptance of clinic methods, especially sterili:ation, and developed disincentives for large families.

Incentives in these company programs included payment for undergoing sterilization (all six firms); paid leave for a sterilization acceptor of between 2 and 10 days; life insurance policy for employees whose vife underwent sterilization vith policy values decreasing as the number of living children increased (Tata); and, a one time payment for an IUD insertion (Tata). Alemr'v Chemicals, Godrej & Boyce, Gujarat Refinery, and Tata all provided free mediL re to sterilized men and their families, and Tata gave preference to steril-zed couples in loan allocations (Murthy, 1983).

Disincentives for large families at Indian plants were much more diverse than the incentives. For example, those at TVS-Lucas consisted of elimination of school and medical benefits for the fourth and all subsequent children. At Godrej & Boyce, maternity leave for women employees was only extended up to three children, only three children could be admitted to the catpany school, and company hcusing vas only open to families with two children. TVS-Lucas, with full union concurrence, adopted hiring practices that involved only hiring men with three or more children if they agreed to a sterilization (Murthy, 1983). In Korea, employees with more than four children were fired (Vhang, 1979).

In addition to industrial plant programs, a number of agricultural estates and cooperative organizations have adopted rural programs to encourage family planning use. Three Indian Tea estates that employed large numbers of women and provided living accommodations on the estates began a "no birth bonus scheme,"

**l.friamly Plenin; Paper** (whole)
92 contributing 5 rupees a month into a retirement account each month the voman vas not pregnant (Ridker, 1980). Three major Indian sugar factories, Jamaican sugar and bauxite companies, Colombian coffee grovers, P.T. Imbritex textile factory in East Java, Indonesia, and Pertamina Oil Enterprises all have established some form of motivation or contraceptive service availability at their facilities (Draper Fund, 1986).14 Labor unions have also been involved in promoting family planning as an employee benefit. In India, unions were either in tacit agreement vith management's policies or vere vorking in tandem vith them in the 1950s. In Turkey, family planning has become a top priority for the union organization as the vorking aged population increases and economic opportunities decline (Draper Fund, 1986). In Sri Lanka, unions have become major promoters of family planning benefits for employees.

International Assistance. In addition to industry and labor union initiatives, international organizations, bilateral donors and NGOs have become involved in family planning as an employee benefit. Indeed, many of the union promoted efforts vere stimulated by the International Labor Office (ILO) and in some cases international NGOs. This generally means expanding employee benefit packages to include on-site services (i.e., delivery) or financial coverage for family planning (i.e., financirng), and typically involves training medical and administrative personnel, and training and deploying (volunteer) motivators vho inform fellov employees about the benefits and sources of-family planning. The cost of the programs are almost alvays borne by the company and/or donors, and only infrequently do users pay something for services. In Sri Lanka, the Family 14. Ueerakoon (1986) also cites two USAID operational research projects in Guatemalan coffee and cotton plantations. Both experiments failed miserably with the former gaining no acceptors and the latter only one.

**a1.tpfsatly** Plu=ig **Paper** ldhole)
93 Planning Association (FPASL) spearheaded an industry-based program where costs were shared by the FPA, government, and industry--both management and unions. The International Labor Office, a U.N. organization, has a long standing program to address access to private sources of family planning. Their efforts have focused on lobbying for expanded employee benefit packages to include family planning, and has included country studies, conferences and seminars, and documentation1of successful experiences (ILO, 1979, 1985; ILO Regional Office for Asia and the Pacific, 1974; Murthy, 1983). Much of ILO's work has been undertaken in collaboration with or with funding from the U.N. Fund for Population Activities (UNFPA). Among nongovernmental organizations (NGOs), Pathfinder Fund, International Planned Parenthood Federation (IPPF), Family Planning International Assistance (FPIA) and the Population Council have initiated employee-based schemes in a fey countries. Virtually all projects subsidize contraceptives and most have covered the costs of establishing and training personnel.

Although not a major player in this area historically, USAID has recently launched two large family planning projects vhose mandates are to promote the private sector in family planning. The subprojects of USAID's Technical Information on Population for the Private Sector (TIPPS) begun in 1984 and the Enterprise Program begun in 1985 are a mixture of innovative and new approaches, as well as expansion of existing employee benefit models. Both of these programs will be described in more detail and some specific examples will be given to innovative projects that have been undertaken. Another USAID'project, OPTIONS, is attempting to address the legal and other policy-related impediments to greater private sector activity in family planning. Tovether, these programs constitute the most significant concerted efforts in the area of private sector and family planning, and have quickly dominated the field.

**al.tp:aully** Plaiuing **Paper** (Whole
94

# Social Karketing of Contraceptives

Social marketing applies a model of using private distributors to market subsidized, nonclinical contraceptives (pills, condoms, injectables or vaginal methods), thus using market inceat es to distribute and retali the contraceptives at belov market prices. Subsidized products are proviaed a nev brand name, slogan end packaging and are sold alongside traditional private sector products. Typically the nev contraceptive brand is developed and marketed intensively through an aggressive and broad advertising campaign. Market research accompanies the product choice, packaging and the advertising campaign so as to ensure community acceptance. It is assumed that the product vill be of greater interest to lover income couples than the commercially priced commodities that are beyond their means. USAID's long standing Social Marketing of Contraceptives (SOMARC) project has pioneered this effort to use the incentives and methods of private marketing to encourage pr4vate vholesaling and retailing of family planning, thereby greatly expanding access points (Sherris et al., 1985).15 SOMARC is adjusting its traditional approaches to take greater advantage of its relationship with the private sector. In Ghana, SOMARC is training traditional chemists and pharmacists to assist potential users in selecting an appropriate contraceptive product and identifying complications. The premise is that an informed seller can and will promote a product vith a sufficient profit margin. Since there are more chemist shops than pharmacies, the approach vould reach a broader audience than relying on trained pharmacists alone. A similar 15. Social marketing campaigns often promote different facets of private sector involvement. Local market research, survey and advertising firms are used for product development and product launch as vell as for monitoring program progress, local packaging operations are often used to do the overpacking of the socially marketed products.

**a.fp:Fauily** PlarmAng **_Paper_ (whole)**
95 USAID supported pro!ect In Nigeria is attempting to market a number of products through existing retail outlets and is also providing family planning sexvice provision training to traditional and modern providers. In the Dominican Republic, a brand-specific effort by SOMARC is piggybacking on the distribution network of the selected brand's manufacturer. Brand-specific advertising is planned during the second phase of the project, which is likely to give the manufacturer, Schering Ag, a major boost in terms of market share.16 Traditionally, SOKARC developed a new social marketing product with its own brand and slogans. The Dominican Republic is the first effort to introduce a subsidized, known brand (and price) through an established manufacturer and distributor.

# Promoting Private Sector Activity in Family Planning

While companies have established family planning programs and NGOs and donors have assisted companies and distributors to design, finance and deliver services, it is only recently that incentives for greater private sector investments in family planning have been tried. Virtually all of these efforts are products of two of the nev USAID projects mentioned above, the TIPPS Project and Enterprise Program.

These two nev projects are currently in the proposal or initial stage and take fresh approaches to promoting the private sector. USAID's TIPPS project is undertaking a "business analysis" (cost benefit analysis)-to demonstrate the savings that firms could realize from introducing family planning to their employees. TIPPS disseminates the findings widely to e o rage other firms to consider offering family planning, and currently has p" to work in Brazil, Nigeria, Zaire, Zimbabve, India, and Indonesia.

16. This issue vwas discussed at length in Section II above. al-twasly Pla1i Papet (whte
96 Another innovative approach is being tested under USAID's TIPPS project in Zimbabve. A business analysis is being undertaken vith. CIMAS, the country's largest health Insurance company vith 135,000 clients and 2,100 member companies. The company anticipates that it vill be able to reimburse for family planning with little or no increase in premiums based on a preliminary assessment.

Tvo different projects in Nexico involve innovative approaches to increase the number and types of outlets that offer family planning products. The Enterprise Program's Micro-enterprises Project. is assisting private physicians to set up family planning clinics, and Enterprise is absorbing all of the investment risk in the first fev monthr by guaranteeing the physicians' salary; however, the project's risk is systematically reduced over 12 months after vhich donor support is totally withdrawn and the clinics must operate on their own without a subsidy. This type of project should be carefully assessed and vill be discussed further in Section V.

Enterprise's Self-Financing Project in Mexico is training private and social security physicians in IUD insertion and selling contraceptives to them at cost to ensure that the lov income populations they serve can afford and will pay for the contraceptive. No other subsidy is contemplated. Uhile the latter raises the issue of vhen or if the contraceptive subsidy can be vithdravn, the incentive structure of the project is to encourage the private sector to operate in response to market forces.

Tvo Enterprise projects, one in Thailand (Family Planning Products Market Survey and Marketing Capability Evaluation), the other in Indonesia (the YKB Entr2preneurial Development Project) propose to assist local NGOs in improving their management, financial viability, and effectiveness in distributing family planning. Both efforts are aimed at making these enterprises more competitive

**al.wp:Vaily rlzmning Pp e lwhole)**
97 and attractive to users. Since public sector ability to corntinue to provide free contraceptives Is questionable over the longer term, these NGOs may vell be the major alternative source for current users who cannot offer unsubsidized commercial prices and who must rely on public or quasi-public service programs. Thus, reducing overall costs of family planning provision even for NGOs is In the long term interests of family planning availability.

Enterprile Program's Feasibility Study of Commercial Clinics Providing Sterilization in Jakarta is also an interesting method of encouraging priv.-. sector act'uity in an area that has an uncertain demand, and therefore ma. constitute i risky investment. Gathering and analyzing information on the nature and extent of the family planning market is an appropriate nd useful use of public funds, especially vhere the social benefits are high and individual risks are high.

These experiments are altering the definition of private sector activities. They are not only persuading firms to shoulder the cost of family planning provision, but they do not alvays provide financing for services. These nev initiatives offer services that can help initiate or enhance a family planning service delivery operation, provide seed money for family planning investments and feasibility studies, or demonstrate the financial benefits of such investments. It is a different and much more market oriented approach than those applied in the past and it bodes vell for sustained service availability vithout long-term donor involvement.

**al.tp:Pa1ly** Planning **faper** g(wiol
98 Privatization and Government Inc.;atives to the Private Sector Although not vell documented, there are developing country examples of the privatizing of family planning delivery. Public family planning programs in Korea and Taiwan have contracted with private physicians to perform sterilizations and, in Taiwan, IUD insertions as well. The government reimburses private providers for the services provided to eligible low-income couples. Seventyfive percent of IUD insertions and 80 percent of all sterilizations financed by the Taivan government are performed on a reimbursement basis. Nearly all sterilizations in Korea are obtained from private providers both on a fee for service basis or reimbursement basis, depending on the income group of the recipient (Draper Fund, 1986). In Nigeria, a private pharmaceutical firm handles the distribution of contraceptives to government health centers. Government incentives to encourage private provision of family planning is not an area with much information. Korea, however, allovs companies a tax exemption if they have over 500 employees and provide subsidized contraceptives for employees (Whang, 1979). In 1976, Malaysia legislated that women with 3 or more surviving children need not be allocated the legally mandated maternity benefits (Perumal, 1979).

Information on tax incentives (or elimination of disincentives) in developing countries, and incentives to expand insurance coverage and include family planning in that coverage is lacking.17 The TIPPS effort in Zimbabwe is attempting to encourage a private insurance company to add family planning, but this is a donor rather than a government generated effort. Nonetheless, this kind of program represents an important means for achieving increased demand for private family planning services.

17. USAID's OPTIONS project is initiating an activity with the government of Morocco to assess the consequences of altering the tax structure on local (Footnote 17 Continued on Next Page **&l.fp:Padly Plumlag aper (wkoWe**
99 S'lient Characteristics of Private Sector Proje:ts A number of the never projects are taking into account consumer demand--an element frequtently overlooked in previous efforts in both the public and private sectors. In order to ensure that provision and subsidization of family planning vill have any ef'ect on use and is a sound investment, some idea of the extent of demand for,services is essentiai. Otherwise services may go unused, and investments are wasted.

Cost-benefit studies in family planning often assume that all births are unvanted. Analyses such as that of Nortman et al. (1986), which assume that family planning interventions vill result in averting all births, are unrealistic and only are useful as theoretical exercises. In practical terms, investments in services should be based on a perception of the value of the service to the employer and the potential demand among employees. For example, Mexico's Industrias Unidas project, Egypt's Tanta project, the Dominican Republic's social marketing project, Zimbabwe's business analysis, and Bolivia's Family Planning Program determined demand through surveys and focus groups. However crude, at least these programs are making an attempt to assess potential use.

A number of projects are tracking utilization, often by method, as was done in UHO's Turkey project; however, most fail to account for substitutions from other sources which inflates the impact and value of the program. Less common are financial assessments or measurement of net project benefits. Table IV.2 summarizes the financial characteristics of each of the projects in Table IV.1. The included factors indicate whether contraceptives have been donated and by (Footnote 17 Continued from Previous Page) production of contraceptives. The results might indicate how minor tax changes could alter private invbztment behavior.

**l.tp:Wamily** Pluamng Paper 1wholel
# Table IV.2

## Finncial Characteristice of Private Family Planntig Delivery Experiteate

||||S|ubsidization||
|---|---|---|---|---|---|
|Title<br>of Project,<br>Country|COntraceptive<br>Donated|Company Subsidy|Donor Subsidy<br>for Services|Client<br>PaysFree|Policy and astimates<br>of<br>Costl/Rvenaues<br>or Budget|
|India:<br>Fam ly Planin<br>Programm,<br>TVS<br>LUC"|Uso|Tes|no|me|No Informtto,|
|Tata Cbemlcals,<br>mithpur|No|Tr|so|so|nomfor_ti"o|
|Tata Idumtries<br>Ltd. family<br>Plasning<br>ProSrm|we|Yee|no|**TS**(Cr4iiamally<br>highe<br>I<br>employs"<br>paid<br>fee)|is lmfeatiom|
|Oodrej & Boye.<br> <br>Hanufacturieg<br>Co. Ltd.,<br>Sobay|*.|**Ys**|MD|No|Ubs itfo.tia|
|F*mily Planning<br>Is Te Rotates|s".by "A of<br>Iadia|**Tes**|Us|Us|soinformatio|
|misiuca<br>Spinning<br>**and**<br>Weaving Hills|Uo<br>s|es, full<br>subsidy<br>for all<br>but oral<br>contraceptlive|No|as. I.SO/cycle<br>orals|Rs. 2,375 per motb<br>for physlcian<br>fees|
|NISR Spinning<br>*<br>Weaving Company<br>Hospital Family<br>Planning Research<br>Centre|No Information|Yea|No information|No Information|soitformation|
|India:<br>Delhi Cloth I<br>General Mills<br>Co., Ltd.|Yes, by FPA|Yes|No|No|No Informatlon|
|Gajarat Refinery<br>(Indian<br>Oil Corp..<br>Baroda|No|Yes|No|No|No lnformation|
|Title<br>of Project,<br>Country|Contraceptives<br>Donated|Company Subaidy|Donor Subsidy<br>for Services|Client Pays Fees|Policy andCetimates of<br>Costs/Revenuem or**Oudget**|
|---|---|---|---|---|---|
|OWLOMiNVITA/DUST|RJ -ASED<br>-<br>SmV<br>(co|mttd)||||
|India:<br>Alebic<br>Group<br>of Industries,<br>Sombay|No|Yes|No|No|Companyspent an average<br>ofaboutRa. 15.000 per<br>year on literature,<br>Incentives**and**other<br>lncdentals.<br>Personnel<br>**and***oe operating<br>costs<br>were not Included.|
|Philippines<br>Family<br>Plenalng<br>InHavailmn-<br>Philippinv<br>_CO._|Yes, by governmet|Yes.for<br>personnel_and_<br>medical expenses|No|No|Totalprogram cost to the<br>cmpany - 117,820(com-<br>traceptives<br>educational<br>aterial,<br>and training<br>provided free by the<br>government).<br>Staff<br>**costs**- 35000Iyear<br>(U Sl '<br>***pesos)**|
|torea:<br>KausRoTire<br>Industrial<br>Co.|No|Teo|No|Ho|1972 - mid-1978costs<br>57,330,000 won almost<br>702 of ItforIncentives|
|SriLanka,<br>Industrial<br>Sector<br>Program|Yee, byFPASL|Yes,for incentive<br>payments<br>and moti-<br>lvator<br>activities|No|No|Noinformation|
|Indonesia:<br>P.T. Imbritex|Te,byB10uH|<br><br>Teo|No|No|No Information|
|Bangladesh<br>Family<br>Planning<br>Services<br>for<br>Industrial<br>Workers|Yee, byMinistry<br>of Healthand<br>Population Control|No Inforomtion|Yes|No information|Projectcosts:<br>1972-78-<br>$30,426<br>1983-84 -<br>23,437<br>1987-88-<br>26,696|
|Turkey<br>Impact<br>of Trained<br>Female<br>Labor Union<br>Shop Stewardesses<br>on Moctivators<br>In<br>Family Planning<br>Services|No Information|Yea,forclinic<br>space|No|No Information|Project coet - $28S10|
|Rgypt:<br>TantaIndustrial<br>Family Planning<br>Project|Noinformation|Yee|Yes,for LOP|No Information|Project cost - $19,659<br>from Pathfinder|
Table IV.2 (cont'd)

||||S<br>|ubsidiaat<br>ion|<br> <br>|
|---|---|---|---|---|---|
|Title<br>of Project.<br>Country|Contraceptive<br>Donated|Company Subsidy|Donor Subsidy<br>for Services|Client<br>PaysF*e|Policy<br>andCetimat-e<br>of<br>Coats/ehveaues<br>or Budget|
|YWL!U O<br>TIS<br>SU|i-NAiS<br>SIiin<br>(co.t'|d)||||
|St. Lucia:<br>Contraceptive<br>Distribution<br>In<br>Factories<br>In<br>St.Lucia|so|No|so|Tea, well below<br>market|Project<br>cost<br>-<br>$25,000|
|Brazil$ AssessingCosts<br>andBenefits<br>of<br>Incorporatins<br>Family Planning<br>Into<br>Vi|U/A|U/A|No|Teo,atloet<br>througb<br>prepay-<br>ment|Project<br>cost- $26,000<br>(plus<br>undetermined<br>contribution<br>by ANICO)|
|Mexico:<br>Fad iy Planning<br>Delivery in an<br>Industrial<br>Setting<br>(Ciudad Juarez)||||||
|htilippines:<br>Industry-based<br>Family Planning<br>Project|No, but starter<br>packsfor the<br>first visitwere<br>donated bymenu-<br>facturers. FPOP<br>performed<br>vasectomies|No|No|Yes.at commer-<br>clal<br>outlet;<br>no<br>infornmtion on<br>vasectoeles|0<br>No information|
|Peru<br>Electro LimeA<br>HILPO Family<br>Planning (Li"-)|No|Yes|_No_|No|Cost for4years $23,000-<br>$50,300 for Electro Lime<br>and$3S.400 for HILPO|
|Provision of<br>Family Planning<br>Informatton and<br>Services In 15<br>Workplaces|Tee.by Patb-<br>finder Fund|No|Yes|No|Costs 10/86,C 9/86-<br>$196,1883|
|Bolivia:<br>Family Planning<br>Health<br>Servtces<br>for Organized<br>Workers|T<br>Tee|No|Yes|Yes. but heavily<br>subsidized|Project<br>costs<br>Pathfinder<br>fund- $105,192<br>coIutm<br>$35.212<br>USAID-<br>$56,792|
||Yes|_NHo_|e.<br>a<br>I<br>on-'|<br>Tee but estimate|Pro lect cost: $105,112|
**LV.4**

||||Sub<br>|sidization||
|---|---|---|---|---|---|
|Title of Project,<br>Country|Contraceptlves<br>Donated|CompanySubsidy|Donor Subsidy<br>for Services|Client PaysFees|Policy and**Etimatese**of<br>Costs/Revenuesor budget|
|XPLomW<br>ITNR/F<br>0DU|STI-3ASEDSEVIcES(co|ntd)||||
|Indonesia:<br>P.T.CGasy Djaja<br>Family Planning<br>Program|Yes, by OKXENin<br>year one**and**by<br>3111**snd**gnter-<br>prie<br>inyear<br>two.|Yes|Yes,for<br>two years|Noinformation|Project cost- $25,180|
|mexico:<br>FamllyPlanning<br>Industries at<br>IUSAZPq Indus-<br>trial<br>Complex|No, obtained<br>through sub-<br>contract vith<br>WO|Yes, for space<br>equipmnt. May<br>also coverlong<br>term operation|Yes,through<br>EXFAM: training<br>materials, dona-<br>ttons<br>sservices|Unclear, but no<br>sention is made<br>ofthis|Project coat- $83,000|
|NiZeria:<br>LBN Emplroyee<br>Clinic<br>Family<br>Planning<br>Child<br>Spacing<br>Program|**Yes,**and company<br>will<br>obtain<br>sme<br>contraceptive.**at**<br>wholesale<br>prices|Yes|Yes|Not yet<br>determtned|Project<br>cost - $114,070,<br>ith<br>435,000<br>from Enter-<br>prite<br>Program.<br>The**costs**<br>of contraceptives<br>arenot<br>included.|
|Thailand:<br>Factory-based<br>Family Planning<br>Services<br>Project|Yes|No|Yes|Yes|Project<br>coat<br>- $260,255<br>0|
|OWTlCNG MIAuT IUMT|U<br>IN FAMILY_FNAIN_|||||
|Niseria:<br>Gulf Oil|No|Yes|No|No|Noinforuatton<br>predomi-<br>nately<br>technical<br>**assistance**|
|Zimbabwe:<br>Comercial .nd<br>Industrial<br>Medical Aid<br>Society|No|Yes|No|Yes|<br>$31,911 for employce survey|
|Indonesia<br>Feasibility of<br>Comercial<br>Clinics<br>Providing<br>Sterili-<br>zation<br>inJakarta|N/A|N/A|N/A|N/A|Project coat- $24,000|
|TheYKBEntrepre-<br>'neurial<br>Develop-<br>mentProject|Yes, byBKKBN|N/A|Yes, from PVO|Yes|Projectcost<br>-<br>$10,552|
Table IV.2 (cont'd)

||||S|ubsadlzation||
|---|---|---|---|---|---|
|Title of Project.<br>Country|Contraceptives<br>Donated|Company Subsidy|Donor Subsidy<br>for Serviceg|Client Pays Fees|Pollcy<br>*nd Estimates<br>of<br>Coats/Revenues<br>or BWget|
|uNOTlrCPfITAhXINY|EXlS<br>IN<br>**_DAN*L?_**PL*L|IN (cont-d)||||
|Thaillnd:<br>Family Planning<br>Narket Survey<br>q<br>Marketing<br>Capa-<br>bility Evaluation|N/A|N/A|N/A|N/A|Project cost- $59.038|
|Ibxicos<br>Nedical Service<br>NicGenterprises<br>In metropolitan<br>Areas|In first year<br>only|N/A|Only for first<br>M.D|Yeo|Project cost- $150,039|
|Self-Financing<br>Family Planning<br>Project|Sold to NDs at<br>cost and donated<br>to Social<br>Security<br>na|Social Security<br>services only|so|**eas**butbelow<br>market price for<br>IUDbecauseof<br>subsidy.<br>Consul-<br>tationfeefor<br>private<br>M6Dm|Over 3130,096/year|
|SOCIALhAWING||||||
|**N15erla:**<br>Sterling Products<br>Private Sector<br>Family Planning<br>Project|Tea to both dis-<br>tributlon projects|**Tea.**for provider<br> <br>time at health<br>clinic|Teo|Clients pay for<br>pharmacy&chemSet<br>shop products for<br>benefits project|Sales from distribution<br> <br>project grossed $700,000<br>In first four months.<br>Total project cost-|
|Chan&<br>**Social**Marketing<br>Program|Tea|_N/A_|N/A|YeT,butbelow<br>maiket price|$1,000,000 over fouryears|
|Nigeria:<br>lbedanMarket<br>Project|Teo|N/A|_NIA_|Tes|Three quarters of revenue<br>goes beck to project,<br>one-<br>fourth to traders|
|DominicanRepublic<br>||||||
|Contraceptive<br>Social Marketing|No|No|No only paying<br>for advertising|Yea,butless than<br>*rket<br>price|Not yet determined|
105 whom, whether the firm, donor, or user pays for the services, and the reported costs (usually anticipated expenditures) of **the** program.

The TIPPS project, **USAID's** operational research project (Columbia University) in Nigeria, Mexico's Industrias Unidas project and Enterprise Program's Medical Service Micro-enterprises in Mexico are attempting to measure net costs both ex-ante (all TIPPS projects) **and** ex-post (both Mexico projects). Even where the cost of the project is recorded, in-kind donations are frequently ignored even where the donation consists of **all** contraceptives, vhich constitute t e bulk of program recurrent costs in developing countries. Only one company hus measured the net financial benefits of a company family planning program, the Havaiian Philippine Company.

The company's annual costs for the family planning program were $ (P$35,000.00), which covered salaries of clinic staff and motivator,a **s** vell as contingencies. The clinics were already furnished, the vasectomy operating room had been donated to the company, **and** contraceptives vere donated by the government. The company's costs vere modest. Their savings came from not having to pay the following maternity and birth costs per voman: pre-natal consultations and medications (U.S. $37.00), the full cost of delivery (U.S. $40.50), maternity leave benefits (U.s. $102.15 for 42 days), and post natal care (U.S. $10.10), vhich amounted to $189.85 in current U.S. dollars (P$1,405) per averted birth.18 In addition, the **company** saved on social services for dependents, particularly savings for health care and education. The company estimates that between 1972 and 1976, they saved a net total of $59,190 (PS 438,007). Thus significant savings can accrue from the establishment of family planning. Hovever, the true cost of the service should take into account the 18. Exchange rate for 1975 vas 1$ * 7.4 ***** U.S. S 1.00.

SlEfP:Fawly Planing **Paper** Ubole)
106 cost of the contraceptives and the depreciation of the family planning's share of the clinic facilities. This vould have reduced the net savings.

The extent of financial and human risources required to operate a project are almost never known, and the "cost/budget" estimates reported in the table virtually alvays exclude technical assistance personnel regardless of the funder. Technical assistance is frequently a costly if valuable project element and therefore all the cost figures are gross underestimates.

Assessing the impact of company or donor investments is infrequent. A number of the early Indian company programs compared employee birth rates and contraceptive use vith national averages. In the Indonesian P.T. Irnbritex company, the company indicated that the employee birth rate vas 8 per thousand as compared to 34-36 per thousand in the "general community" (Suma'mur, 1979). In all cases, however, employees had lower birth rates and higher prevalence rates than the community at large. What to attribute these differentials to is impossible. The employee cohort was better off than the average Indian, there vere convenient, subsidized services, motivational activities and, in some cases, strong disincentives to large families at each of the industrial sites. All of these have the potential for affecting family size decisions, but the relative importance of any one activity has not been assessed.

Thus the evaluation component of these projects is limited, and even those that have attempted to measure some aspects of the projects have fallen short of the ideal.

# Vho pays for Contraceptives?

Charging users for services or commodities is uncommon in both public and private programs. There are exceptions, of course. Where there is an attempt to promote private networks and expand availability of family planning, such as x1.fp:FaMly Plaming Paper (whole)
107 the SOMARC efforts, or where private, for-profit suppliers are the exclusive focus of an intervention, family planning services have fees attached. Some of the nevly designed projects of the Enterprise Program are introducing nominal fees that are well below those markets, and a fev of these (e.g., the SelfFinancing Project in Mexico) are planning to phase-in a self-supporting fee-forservice arrangement. TIPPS, vhile its main objective is demonstrating the financial benefits of family planning provision to employers, has also<sup>begun to</sup> served as a broker to Peruvian firms that vish to introduce family<sup>planning into</sup> employee health services. Donors are not paying for contraceptives or services under TIPPS assistance; either management or, less often, users vill<sup>cover all</sup> opersting and recurrent commodity costs. All of these innovations are nev and none has received any form of evaluation. As a result no firm conclusions can be reached on their effectiveness, but their design are vorth tracking as a source for future guidance.

At the other extreme of subsidies and user payments are<sup>a number of</sup> companies in Asia, notably in India, and Korea, that in the 1960s established incentive payments for employees to select sterilization and, in some cases, the IUD; the companies absorbed the costs not only of services and commodities but of recipient payments as well. These two countries as well as companies in Sri Lanka and Indonesia also set up disincentives to large families and many pregnancies, as already mentioned. All of these programs were managed, designed, and funded with minimal if any outside assistance, suggesting that managers recognize the benefits of smaller employee families.

Where companies and donors bear the entire cost of bringing family planning information and services to workers, programs do not promote private providers or the private sector unless companies contract out for services.<sup>Employee</sup> benefit programs inform individuals about family planning through trusted

**l.tp:Manily Pluwing** Paper **RAol.**
108 sources, make services more convenient and, as mentioned, usually cover the cost of service delivery and commodities. The effects of nev employee benefits for family planning include: shifting the source of service from other public or private sources; shifting users from traditional or less effective methods to more effective contraceptive methods; or, increasing the level of overall acceptance from improved information and access. Which of these is most common is unclear, although some programs have assessed method shifting, increases in knowledge, and nev users at the site (ignoring the possibility of a shift from outside sources).

Vhereas firms that elect to supplement employees salaries through family planning services are providing an additional benefit, donors that are serving the factory population through subsidized services are aiming their subsidies at iqiddle income earners, even if that means lover middle income. It is unclear vhy those services need to be subsidized by donors or hov long the donor vill be able to bear the cost of the program. Thus there is an issue of whether there should even be a commodity subsidy on an ongoing basis, and how long such<sup>an</sup> arrangement should or can go on. Social marketing programs, on the other hand, are aimed at lower middle or upper lover income households under the assumption that the poorest couples will seek free public services. However, there is equal access for all users and since no assessment of social marketing users<sup>has</sup> ever been undertaken, no evidence exists on who uses the products. The SOHARC project in the Dominican Republic, hovever, is planning to undertake such a study.

The other issue, vhich none of the projects consider, is how much of a subsidy is required to reach the target population. Some of these projects have modest budgets, mainly because contraceptives are not purchased for the clinic. What has not been assessed is the relative effectiveness of modest technical

**ml.tp:Fuily Plannng Papper (whol.e**
109 assistance and seed-money programs and those with generous budgets that pay for most program elements Including contraceptive commodities.

The potential drawback of benefit programs vhere donors are involved and have promoted the program to management through offers to cover (some) costs, especially for contraceptive commodities, is vhen the subsidization can be terminated. Where management and employees come to expect the provision of free contraceptives, changing the rules i.s difficult. The constant extension of FPIA's Nigeria project may be due to their inability to withdrav since it is a popular and vorking program, and has received a number of extensions since its inception.

The question is, should donors subsidize private services? Should they finance the recurrent costs of programs of for-profit entities? Providing free contraceptives to employee benefit programs essentially subsidizes recurrent costs of for-profit activities. The TIPPS Project does not subsidize contraceptive commodities (except in Africa where contraceptives can only be obtained through donor programs), although many "private sector projects" do so. Where contraceptives are totally subsidized, employees have no incentive to use the private market and rely instead on the largesse of their companies. When companies extend services, management decides who benefits and what to buy for employees, rather than letting employees make the decision.

# Conclusion

There are a number of established projects in promoting family planning through private means, and a number of nev and innovative projects are in their infancy. The latter are going beyond the traditional, employee benefit programs vith frequent donor subsidies for services and contraceptives, to try nev approaches that both foster demand and encourage private investment in

**L.tp:atly Plann4ng** Paper **(whole**
110 family planning. Noreover, projects that rely on employers are trying nev approaches. The gap in these experiences are evaluation and issues of long term sustainability.

This rich set of experiences is testing numerous different approaches and assessment of these could be the source of future guidance in designing alternative delivery and financing modes that do not rely on public funds.

**.:tpPanily Plamiug** Pape (whole
111

# **V. BOV TO** PRONOTI **PRIVATE** ACTIVITY

As discussed, promoting family planning use in developing countries has historically implied government and donor collaboration in making contraceptives videly available at concessionary prices. The vast majority of those services vere meant to be delivered through public sector outlets, usually at zero price. The means of designing successful programs, reaching all population groups, and retaining users have been studied, tested, and perfected so that in some countries at least government programs are reaching the bulk of users vith effective means of contraception.

The role of nongovernmental entities has been afforded considerably less attention. Indeed, little is really known about what kinds of NGO family planning programs work best, hov much they cost, or vho they serve. On the forprofit side, little hard analysis exists to guide governments in hov best to promote and regulate commercial endeavors.

The foregoing sections of the paper attempted to set out what is known regarding: (1) private production, distribution, and delivery of contraceptive services; the incentives, disincentives, and impediments faced by private companies and Investors; (2) the distribution nf users across sources, with some attempt to explain the correlates between user characteristics and source; and (3) the private sector delivery initiatives that have already been identified or tested.

This background sets the stage for the topics discussed here, vhich focus on the possible options for public sector (and by extension, donor) intervention to expand the use and improve the operation of the private family planning market, as an alternative to direct public intervention. The folloving provides options and a guide to the most appropriate role for government in nurturing the

**u1.fpata17 PlaiMl Wape I*ol.)**
112 private market. While not all of these options will be appropriate in every setting, they provide a panoply of possible actions for governments and donors to consider.

Role of Government Policy and Action in the Private Health Sector Government policies set the parameters under vhich private entrepreneurs function. Fupdamentally, the governmental role should not be to subsidize either consumers or producers/distributors of contraceptives where otherwise the market would lead to the same outcome. The public sector can set obstacles or enhance the climate for the private sector. For instance, vhen tariffs are set to discourage imr..'-ts due to balance of payments difficulties, they will affect private investors' dttempts to modernize a family planning clinic--if most equipment must be imported--and vill force private providers co raise the price they charge for imported contraceptives. Overregulation can cramp the expansion of private insurance and offer disincentives for innovations such as adding family planning to employee benefit packages; restrictions on new health care delivery mechanisms can limit the development of pre-paid group practices such as health maintenance organizations (HMOs), a particularly valuable outlet for family planning vith HMO emphasis on preventive care; licensing, price controls, and taxation can make family planning investments urprofitable and unattractive; and restrictive earnings repatriation policies can discourage new entrants and competition, thus leading to higher prices. These kinds of restrictions, while perhaps legitimate to achieve other policy objectives, can create disincentives for entrepreneurial activities in health and family planning.

Government can promote greater private sector activity through modifications in policy; introducing legislation, or establishing new or revised laws that encourage and facilitate private investment; and through direct technical

**Il.tp:Faily** Planning Paper (wholo)
113 and financial assistance. This can mean either assisting the private sector expand the supply of family planning service delivery through assistance and removal of impediments, or through efforts to raise the demand for private care. The former implies access to technical assistance and capital for family planning-related investments. The latter suggests encouraging alternative financers of health care, that is, promoting insurance coverage, the development of HMOs, and other third-party payers through tax incentives or other regulatory means.

Private Sector Options and Their Applicability Across Countries A number of different kinds of interventions can be undertaken to -romote private sector activity. Table V.1 summarize these options, explaining the possible initiatives that can affect the demand for private sources or the supply of private contraceptive services, and the necessary steps for initiating each.

Because of the complexity of the effects of the multiple objectives to be achieved by specific interventions, the folloving discussion is organized around major options.<sup>1 9</sup> The major kinds of interventions that government can make to foster greater private sector activity cover a broad range. Not all of these are applicable in all cases, and in some countries all of these can be difficult to implement. The degree to vhich public and private entities coexist, the 19. For example, establishing a reimbursement system to replace or complement direct public provision of family planning relies on private providers to deliver care vhile the public sector pays for it. This kind of system obviously expands the demand for private family planning services, stimulates private investment in family planning, and reduces the role of public entity; hovever, it can be a complex and involved proposition vhen it is part of an overall shift in government's financing of health and family planning.

**mlItp:?auily Planning Paper** (Wole.
114

## Table V.1

Summary of Options for Promoting Increased Demand for and Supply of Private Family Planning Services Means to Foster Private Family Planning Services Steps Needed to Accomplish Effort Foster Demand for Private Sector Partially subsidize private sector serv'ces o Social marketing initiatives Social marketing (type) programs; reestablish eligibility for subsidies, vhich forces those able to pay to seek private sources of contraception

- Means testing for public services

Promote private insurance coverage, HMO and other third-party payers, including family planning vith existing nev Insurance and employee benefit packages Legislation, tax breaks and other legal and financial incentives requiring broad public sector endorsement Adjust public payment reimbursement, voucher or capitation system for patients treated by private providers instead of direct provision Legislative and bureaucratic changes

# Promote Private Supoly of Family Planning

## Technical Assistance

- assistance to improve the management and efficiency of private operationsa

- supporting experts to assist private organizations and firms

- upgrading and assistance to management

- new or modified programs

- information on private sector status and impediments to its expansion

- information gathering and studies

- research and evaluation to assess cost effectiveness of alternative arrangements

- nev programs/evaluation of existing programs

l.ftTable, V.1 **Sm opts**
115 Table V.1 (cont'd) Page 2 Means to Foster Private Family Planning Services Steps Needed to Accomplish Effort

# Financing

Provide access to loan capital (vith donors/governmen **t** aking foreign exchange risks) Establish laan fund and effective method of operation. Absorbing risk may involve higher level concurrence o loans to encourage private investment o tax relief to providers o reduction in impediments, (see belov) Incentives to private providers, Can involve simple nonenforcement; based on an understanding of private adjustments to existing regulation, or sector impediments and vhat legislative changes, depending on constitutes attractive returns. For constraint and necessary action example, reducing tariffs on contraceptives, or easing price controls

# Privatization of Public Delivery

Contracting out to make greater use of the private sector in the delivery of services Entails adding a provider under government contract.

Reimbursement, voucher or capitation system for family planning to rely on private rather than public providers Shift existing programs and resources to private providers/managers to provide or operate facilities. For example, paying NGOs to deliver services Involves legislative and bureaucratic changes, but can help to narrov eligibility and lover costs Difficulties vith shifting resources/firin **g** overnment employees may require high level approval Social marketing-type collaboration Develop joint activities with the between public and private entities private sector vith incentives to to address equity concerns as vell as attract private entities operational efficiency a. Such assistance, hovever, is inappropriate for profitable multinationals or parastatals vhere the companies have access to and can afford appropriate expertise.

ml.tp:Table V.1 Sw_ Opts
116 existing level of private activity, and consumer perceptions of the accessibility, quality and reliability of private suppliers will all play a role in determining what course is most appropriate.

Inforuatiotr/Technical Assistance. Promotion of private activity involves understanding the legal, financial, and economic climate in which (potential) family planning investors operate. First, it is important to identify the incentives and disincentives investors face in establishing or expanding health care programs.

Secondly, the constraints that impede investments, need to be understood and addressed. Government and donor actions can serve to identify and redress the disincentives and constraints, bolster existing incentives, and design initiatives that complement existing incentives and promote new activities. For example, if a fledgling insurance industry is concentrating on life insurance, encouraging companies through tax breaks to provide health and family planning coverage to their employees can spur the demand for private family planning commodities and services. In turn, the rise in demand offers an incentive to companies to add family planning to existing policies or develop health insurance programs that include contraceptive services.

Every country can benefit from a better understanding of the role and importance of the private sector, gaining a more informed basis upon which to proceed. In many instances, the private sector is dismissed by government as ineffective and too small to be considered before any kina of assessment has been attempted. Promoting for-profit or even NGO activities depends on knoving the impediments these investors face, and such a study can be undertaken anywhere. Similarly, almost any country can develop a social marketing program that piggybacks on existing distribution networks. These activities are virtually universally applicable and potentially useful to governments El.fp:Fauily Plauning Popov **(whole)**
117 interested in harnessing the private sector in meeting fertility reduction goals.

Access to capital is a very real constraint in many countries due<sup>to</sup> underdeveloped capital markets and the modest profits of small scale health investments. Providing access to loans, including foreign exchange,<sup>can</sup> critically affect vhether indigenous companies can invest in family planning. Giving potential investors access to capital may be a key element in promoting greater private sector activity. For instance, if establishment of a private family planning clinic is constrained by insufficient capital and a shortage of foreign exchange to import medical equipment, then loans in both local<sup>currency</sup> and foreign exchange are a means of promoting the finalization of the investment. Moreover, this tends to be a problem in the<sup>International</sup> Development Association (IDA) countries as well as the nevly industrialized countries.(NICs), and it is an adaptable activity across the spectrum<sup>of</sup> recipient countries.

Financing Assistance. Donor assistance in private activity<sup>can be critical</sup> in making consultants available to the government, in developing and financing the process of establishing and carrying out these initiatives, and, most importantly, in evaluating their contribution to reducing facilities' costs and/or raising quality vhile ensuring continued access to family<sup>planning of the</sup> indigent. Foreign e-change loans may only be obtainable<sup>through a donor</sup> financial loan scheme. Moreover, some concessions on repayment arrangements (e.g., repayment in local currency may be necessary since<sup>health and family</sup> planning services do not generate foreign exchange) may be best<sup>handled through</sup> foreign assistance.

Public-Private Collaboration. Expanded public ^ooperation with the commercial sector (i.e., private pharmaceutical companies and distributors) to

*I.fp: **Falty Planning** Paper **twhol.I**
118 accomplish greater user reliance on private providers vith a minimal subsidy from the government is varranted, especially given the successful collaboration that has occurred in social marketing endeavors. Based on observations across countries, it seems that private firms are not induced by current market conditions to dramatically lover the price of orals and achieve a higher volume of sales through pharmacies. This suggests that the profit maximizing position entails high prices and low volume. This does not mean that acceptable profits could not be gained from higher volumes and lover prices. Schering Ag's experience in the Dominican Republic provides some indication that positive profits can be generated from such a strategy, provided there is adequate advertising and promotion for the product. The issues are how do profits differ across the two pricing strategies, and vhat kinds of incentives are needed to encourage the high volume lover price option.

Social marketing-type approaches where public and private groups collabo-. rate at vhat each is best at can be an important avenue to pursue for possible reductions in cost or improvements in delivery efficiency. For example, were the government to subsidize generic advertisement and promotion for orals and emphasize that they are nov more affordable and that pharmacies are a possible, convenient place for purchase, and,-in return, private firms (or a subset) agreed to lower the price on at least one of their marketed orals, prevalence might be raised with minimal government investment and subsidy. Whether privat firms would benefit enough to participate is an empirical-matter. Also, the degree to which this approach gains nev users is also an open question. Nonetheless, enhanced public-private collaboration is warranted in the long run interests of keeping supplies available to potential and current users.

Privatization. Privatization, where the government can hire private specialists or groups to undertake certain tasks for the government, is a key

**a1.fp:Fa"ly Plazinnq** Papr **(whoAel**
119 method to increase the demand for private health care and stimulate potential suppliers. Privatization options, hovever, are more complicated and involve investments of greater political capital than many of the other options discussed here. For example, privatization is only possible vhere there is a political will to change the manner in which services are delivered. This can mean firing government employees if contracted private services are being substituted for public services, vhich requires endorsement and support from the highest levels of government.

Privatization may also help to improve the efficiency of family planning delivery as well as reduce the public sector's subsidy burden. The Jamaican government with USAID assistance has just completed the transfer of laundry and housekeeping services to a private contractor in four major public hospitals. Government employee unions posed an obstacle to the reforms since the contracting implied firing government employees currently carrying out those tasks; hovever, since privatization the cost of these same services has been halved while performance has been enhanced.

Economic Policy Changes. Changing the incentive structure for private entities investing in family planning may vell involve changes blessed at the same high levels as privatization initiatives. Granting tariff adjustments or exceptions, relaxing price controls, or offering tax breaks cannot be accomplished by ministries of health, the government body typically responsible for family planning. These decisions require the concurrence of other ministries, the legislature, where relevant, and perhaps the head of state. Thus a consensus and strong political backing are required to implement some of the key changes in incentives that affect private family planning providers.

Promoting Private Activity. Building on existing strengths and exploiting veaknesses to advantage vithin the market can also bolster efforts in private U1.fp:IPaxly **Planning Papet** (%&ol*)
120 family planning activity. For instance, an over supply of physicians is reducing vages in some countries and leading to unemployment among doctors. Creating incentives to encourage their participation in family planning delivery (as is occurring already in Mexico under the USAID Enterprise Program project) can be a means of obtaining services at a reasonable charge for the government's target population. Greater reliance on the for-profit private sector for the provision of family planning services in the developing vorld is possible vhere the private sector resources already exist, are dormant, or can be mobilized through proper use of incentives. The potential seems greatest in Latin America and the Middle East where physician unemployment is a rising problem. Hany of the NICs in Asia already have large private sectors and these can also be encouraged to expand and modify short term objectives (e.g., profits).

In Africa, where the monetized economy is smaller and public programs tend to be weak, however, contraceptive prevalence is low even among urban couples employed in the monetary economy. Therefore, getting private firms to add family planning benefits to their health benefits may be a very fruitful approach to raising contraceptive prevalence.

The degree of subsidy necessary to attain high cont.raceptive prevalence is going to depend on the ability of people to pay for contraception and on their desire to contracept. The ability and willingness to pay for contraception often move together. In Africa, the commercial prospects for increasing contraception seem poor because the profit-maximizing prices are beyond the reach of most (potential) users. However, the public sector is also underdeveloped and typically lacks the administrative capacity and resources to expand family planning services that the Thailand and Indonesian governments have. Therefore, donor and government resources should be directed at using the

**fl.tp:Fasly** Planninq **Paper Eutho1e)**
121 private sector as much as possible as SOHARC is trying<sup>in Zimbabwe, or as a new</sup> USAID project is attempting to.do in Nigeria.

Alternative Financing Options for Family Planning. Insurance is<sup>probably</sup> the most important means of fostering demand for private sector (especially forprofit) services, although the focus of insurance has historically been on curative care. It is a most relevant approach in the NICs<sup>where an established</sup> insurance industry exists, although this option may<sup>offer the opportunity to</sup> foster a nascent industry. Insurance is a complex service that is often beyond the capacity of countries with minimal managerial<sup>and technical talent, hovever</sup> (Wasow and Hill, 1986), so this option needs to be<sup>pursued with caution.</sup> A federal reimbursement system vhere government reimburses private providers for services to the eligible population is in theory<sup>applicable in</sup> many settings, but it too is complex. In most cases,<sup>adopting a medical</sup> reimbursement system implies a total revamping of the financing and delivery of Wealth care, although it may be an initiative that could be tested<sup>or applied on</sup> a limited basis for some services such as family planning. In tandem<sup>with such</sup> a switch, some assistance must be given to the private sector<sup>both to gain</sup> access to the resources it needs to develop services, and to promote insurance or other coverage (e.g., HMOs) for the population not covered by<sup>the</sup> reimbursement system. Hence, the proposition has a number of different facets that need to be considered as a package if the political,<sup>medical and economic</sup> issues are to be addressed.

Portugal has recently established a diagnostic related groups (DRG) system in its hospitals thereby adopting the U.S. model, so nev reimbursement systems can be adopted, but 't is an involved and lengthy<sup>process. A reimbursement</sup> system requires that the government has the ability to oversee<sup>and manage a</sup> great many tasks from defining eligibility, to setting acceptable charges, to

**ml.tp:ranily Pliaminq Papr 'whoel**
122 managing and administering a complex set of billings, payments as vell as service access. It may be overly complicated and involved for some governments. However, reimbursement arrangements have worked vell in Korea and Taivan.

# Government Regulations

The other role for government that has not yet been discussed, but becomes important as privatization occurs and the private sector takes on greater responsibility for delivering care, is that of oversight. Whether the initiative is a contract to a private entity or greater latitude for private actors, the government needs to track progress and performance, and regulate activity for the social good.

In contracting out, for example, it is essential that the terms of agreement are met and that the government has some recourse to remove the contractor. This obviously requires human and financial resources. Contracting out has some hidden costs to the government that are not readily apparent. Additionally, if the government decides to let multiple contracts for a number of small, discrete tasks, the oversight responsibilities become major undertakings. Fever contracts encompassing a number of different tasks may be preferable and less time consuming because there is only one firm with which to negotiate. Regardless of the size of oversight the issue is a very real one for thinly (professionally) staffed ;istries of health.

Regulation of the private sector to prevent abuses, ensure quality, help mitigate waste and control costs are common throughout the developed vorld, including the U.S. For example, the acquisition of costly high technology in the health field in the U.S. is typically regulated to prevent overcapacity, which unregulated would raise the cost of care so that all owners could cover the cost of their underutilized equipment. Reimbursements for family planning

**In.fwp:9adly Pl1min;** Paper **(whole)**
123 and health services to indigents are priced by the government based on a package of minimal services to control costs. Another implicit tool used by governments, especially the U.S., is competition, which helps to control costs. The advent of HMOs in the U.S., for example, has promoted competition and helped to contain costs.

Thus where private providers are active in introducing or expanding existing services to encompass family planning, government can help to improve affordability and mitigate limitations of alternative private financing mechanisms through regulations. Moreover, government's oversight rather than direct delivery may be a more efficient way to provide family planning.

# Conclusion

Thus donors and governments can work jointly to: (1) promote the private health and family planning sector through tax incentives, improved private access to (loan) capital, expanded technical assistance, relax existing legal and political obstacles, and provide better aceess to information; (2) redesigning public financing of health care to reimburse private providers for delivering care rather than relying exclusively on direct provision through government-operated facilities; and, (3) hire private contractors to take on functions for the government such as: management of family planning clinics, leasing out clinic management and service delivery, or outright selling of public health and family planning facilities.

Although there are a number of options, their applicability must be assessed on a country-by-country basis. Each option involves a set of primary actions and may require secondary, supporting actions on the part of the government. Since many of the proposed options involve tradeoffs (economic and political), governments and donors will need better analyses on the costs and

**al.fp:Family** Planning **Papet (whole)**
124 benefits of the options. Evidence on the costs (in terms of lover contraceptive prevalence or depressed sales, for example) associated with particular impediments like price ceilings, taxes, or tariffs would provide governments vith the information needed to gauge whether policies shoulo he changed.

**aL.tp:Vaaly PlaimiagPae (whole)**
125

# VI. CONCLUSIONS AND RECOMMENDATIONS

This paper has revieved existing evidence on the private sector, vhat it is, where and how it operates, the kinds of impediments it faces, and the options for structuring closer public-private collaborative arrangements. This section provides a summary of the key findings vith regard to who the private sector is serving, hov commercial ventures have fared, and the appropriate role for private sector groups, and then outlines outstanding issues and areas deserving further attention.

The private sector is made up of both for-profit entities that operate exclusively on earnings, and nongovernmental organizations that function under subsidies from government, charity, and sometimes earnings from users, but are privately run.

The commercial sector serves a wide range of contraceptive users in developing countries. It is the major source of nonclinical methods in almost every country, and in some countries the key source of clinical services. For example, in Thailand the commercial sector provides the bulk of female (but not male) sterilizations. Younger women tend to rely on commercial sources for contraception as do urban relative to rural vomen. And as expected, more education and higher incomes are associated with a greater likelihood that commercial sources rather than subsidized services will be used.

Despite these patterns, there are dramatic differentials in reliance on commercial sources across countries of relatively similar socioeconomic status. In Thailand, only 33 percent of married women with more than a secondary education use commercial sources, whereas 66 percent of Egyptian women with no education rely on commercial sources. Contraceptive prevalence, hovever, is twice as high in Thailand (65X) as it is in Egypt (30X). Thus the expected

**_il.fp:Paaily_ Planning Papc (w'hol***
126 relationships within each society are borne out in most cases, but the differentials across countries are far more significant and call for a reexamination of the determinants of use of commercial sources of contraception. Private producers and distributors of contraceptive services have continued to invest in countries where the climate is poor (i.e., low returns), in the hopes of gaining a foothold for future profits. Impediments such as price controls, tariffs, restrictions on repatriation of earnings, and general bureaucratic difficulties have raised the price of commercial products and reduced profits in many countries. Most importantly, government programs have cut into commercial companies' market shares and profits. Indeed competition from government programs has forced private-public collaboration to allow private companies to survive locally. In effect, strong public programs have crowded out private activity, especially that of the for-profits.

Private providers offer an alternative to government programs, are typically more convenient and reportedly offer higher quality products and services. Commercial providers, however, can only serve those who can pay, and the pattern of operation in developing countries suggests that high volume and modest prices are 'Less profitable than high prices and low volume; although no firm evidence exists on the existence of such a str.tegy. The current pattern, however, effectively closes out commercial sources to some segment(s) of the population. Lowering prices to capture a larger market share does not appear to be common, although there are a few nev efforts such as the SOHARC-Schering Ag collaboration in the Dominican Republic to deliver a mid-priced product commercially. But a firm may be reluctant to lower its price without having the ability to attract nev users to the product--they are prevented from advertising their product in most countries.

**ul.tp:fauily Plarning Poper (whol1J**
127 NGOs appear to flourish vhere the government has had difficulty building strong health or family planning infrastructures, as in Africa, but their role is mixed in other regions. NGOs can also play key roles where governments cannot--by taking the lead and supporting contraceptive services--like sterilization that are perceived as too controversial to be a part of the official government program. How much NGOs compete with for-profits is not known. The for-profits are more efficient than government while NGOs are in some undefined place in between. Lack of information prevents any generalizations about NGO performance and efficienLy.

Although options for promoting private activity have been discussed (see Table V.1 for a summary of the suggested options), none has been tried and documented, so these have emerged from theory, discussions with the affected parties, and a reviev of the literature on somewhat similar actions. The planned and ongoing efforts in this area deserve greater attention and evaluation and the next subsection addresses these gaps.

# Unansvered Questions and Areas for Future Activity

Despite the volume of activity in the area, the many surveys that have addressed some aspects of the private sector, and the modest attempts to understand the mechanism, efficiency and effectiveness of family pianning programs in the private sector, a great deal of pertinent data and analysis are lacking. Indeed, fev firm conclusions can be made regarding the experience with private sector approaches, partly because so many are in the formative stages, but also because the level of evalua on has been so poor. Similarly, conclusions regarding potential users of commercial products are inadequate both in terms of appropriate data and analysis. Data on costs and efficiency are exceedingly poor. Cost data, where they exist, are incomplete, and comparative

**ml.tptVally tPln"n n pea imhol.I**
128 costs across programs are hampered by incomparability of the services and service components costed out. No definitive conclusions can be made on costs of programs or delivery modes.

This subsection points out the weaknesses of the existing literature and highlights areas for further work. It is divided into three separate sections: evaluation, determinants of private sector use, and costs and cost effectiveness.

Evaluation. Despite the progress in evaluation, most of the private sector projects summarized in Section IV do or are planning an inadequate assessment of the costs and benefits of the investment. The evaluation criterion most often used is the increase in the number of contraceptive users occurring after the introduction of the project. Rarely is cost per user calculated. Counting new users by method is quite useful, but it is equally important to measure the costs and benefits of the program to decide if there are better and cheaper means of financing and delivering family planning services.

In particular, evaluations need to focus on the family planning behavior of the target group to gain a better understanding of the following: importance of motivators versus printed matter in advertising the availability of services; the importance of on-site services as opposed to vouchers or reimbursement arrangements through commercial outlets; the shifts in sources that take place with the introduction of benefits, that is, the permanence of the increase, the number of acceptors, the effectiveness of the methods, and the profile of the (potential) user who benefits most from on-site services; vhat is the most appropriate and effective roles for donors; and, whether donating contraceptives enhance or inhibit the establishment of a self-sustaining family planning program?

**in.fp:taaily Plamin Pr hauc**
129 The impact of alternative means of promoting private delivery of family planning should be assessed in both absolute and relative terms. These evaluations generally are not anticipated for the ongoing projects described earlier. For example, does it pay to provide grants or loans to physicians to set up clinics? Do firms improve their operation and efficiency through a management reviev? Does including family planning in an insurance or HMO benefit plan raise the demand for family planning? This is particularly relevant vhere vage earners make up the middle class, many of vhom may already practice contraception. What are the tradeoffs betveen convenience of on-site contraceptive services and reimbursing referrals in terms of costs and continuing users? Despite the ex ante cost benefit analysis, do firms actually save money over time either on a gross or net basis by introducing family planning to their employees? What kinds of firms are more likely to experience net savings? For vhat kinds of target groups (i.e., different prevalence, income or fertility levels) will the impact and cost savings be greatest? These kinds of questions address the gaps that currently make project design difficult. Guidance on what elements to stress and how to structure private sector programs in the future can only be obtained through careful evaluation of planned or ongoing projects.

Capital markets in most develop.ng countries are not well developed. Small operators and businessmen often cannot raise the necessary investment capital to set up a family planning (or health and family planning)-facility even if profitability vere assured. Thus, consideration of loan funds to make capital available, including foreign exchange, couid contribute to ameliorating the critical deficiency in investor incentives in developing countries. Indeed, experimenting with different loan arrangements would be ideal to reach different investors and maximize investment.

**1.fP:raally Plazin** Paper **'i,wl-e**
130 The question of how to price contraceptives is an important issue too, if the premise is that the private sector vill eventually take over and continue programs. Vhere management has decided to provide family planning as an employee benefit free of charge, the issue is decided, but where free-standing projects are planned or NGOs are assessing how to become more efficient and solvent, how to price services to both earn revenues and yet retain users are important questions. There is some evidence that the price elasticity of demand varies across contraceptives and therefore cross subsidization may be possible. Host of the projects reviewed in section IV assume an inability to pay or an ability and willingness to pay only nominal amounts. Some experimentation and documentation is varranted in measuring the elasticity of demand for contraceptives with respect to price, and to establish how much of a trade off there is between convenience and price. Although this is really an adjunct issue, it is nonetheless key to the continuation of private sector projects and will be important in future endeavors. The sustainability of many of these projects over the long term depends on recovering some share of costs.

Determinants of Private Sector Use. The available data on source of contraceptives was reviewed in Section III. The analysis provided an overview of the topic and indicated regionai patterns and disparities. Hovever, the CPS and DOS data are somevhat limiting in not being complete enough to *apture some of the issues of interest, such as the difference in reliance on NGO, social marketing and commercial sources of contraception. Horeover, better information on supply would help interpretation of the source information, and vould allow demand analyses to control for supply characteristics.

Host important, however, is the need to analyze these data in greater depth, controlling for the many factors that affect consumers' decisions. Comparative multivariate analysis is key to a better understanding of the ad.wraa1ly **Planninq** Paper lwhole)
131 Information presented here. The CPS and DHS data are available, accessible and of reasonably high quality. They deserve to be further analyzed along the above dimensions.

Thus, both an effort to exploit existing information and to collect broader and more focused information on consumer behavior in family planning decisions are warranted. Moreover, a more rigorous approach is called for given the emphasis to date on anecdotes and the dearth of data. Both data and analysis of existing (and nev) data could contribute importantly to a better understanding of the role and contribution of the private for-profit and NGO sectors.

Costs and Cost Effectiveness. As part of the reviev of what is known concerning the private for-profit sector and how it compares vith other providers, the cost and cost-effectiveness of alternative providers vas explored. Little good evidence exists on the costs of government programs, commercial providers consider costs proprietary information, and social marketing programs have never been costed out. The NGOs have probably the most available cost data, although it is virtually always incomplete and only available for some endeavors. The majority of this evidence is compiled in Levis (1985).

The lack of cost information prevents comparisons of the cost effectiveness of alternative financing and delivery arrangements. No guidance is available on the most efficient means of delivering family planning to different income, location, education, and age groups. Even the industry-based programs have by and large ignored the (full) cost of their programs. For example, there are no plans to compare costs and effectiveness across projects to determine the best approaches to fostering demand for family planning or promoting activities by the private sector. Cross-project evaluations are neither mandated by any project nor anticipated by any entity. Assessing the costs, effectiveness, and

**L.fp:Faaily** Plaming **Paper (whole)**
132 savings (e.g., to firms) across experigents vould assist the next generation of projects avoid pitfalls and focus on the most valuable project designs of the projects revieved in this study. Only the Philippines' Philippine-Hawaiian program measured company costs and savings of the family planning effort, but even there, no contraceptive-costs are included, since commodities were donated Some new projects plan to do impact evaluations, but none has even begun. The lack of analysis will inhibit their ability to measure the savings from family planning service delivery, and prevent comparisons across alternative delivery arrangements.

Thus, collection of cost information and assessments of relative efficiency and effectiveness is key to helping donors and policymakers make sound decision regarding resource allocations and program design. Currently, little information is available to assist that process in family planning.

The private sector is a major actor in family planning--and its actual and potential role should be much better understood. The future agenda should address the gaps in information regarding consumer behavior and consumer demand for private services; introduce greater rigor in analysis of existing data (e.g., CPS and DHS data); collect specific data that can address the topics suc as cost and cost effectiveness of alternative providers; introduce sound evaluations into planned or initiated efforts aimed at promoting the private sector; experiment with and document alternative means for establishing effective incentives to promote private activity; experiment with and assess privatization of public services; and, introduce greater cost recovery in NGO programs.

**l.fp:Wasily** Pluaing Papr **(whole)**