Concept Foundation is an organization with a long history of activities in reproductive health and private sector collaboration. Concept Foundation is the organization with the largest number of licensees in developing countries to manufacture contraceptives at preferred prices for the use in the public sector of the developing world. Based on the broad spectrum of experiences and large pool of specific know-how in public-private collaboration and partnerships, the business model of Concept Foundation has proved to be very successful in supplying top-quality, low-cost contraceptives.

Low-cost does not necessarily exclude top-quality, and vice versa. However, the quality-cost balance is subject to a couple of factors that are typically found with small- to medium-sized pharmaceutical manufacturers. Margin pressure from market segments with low earnings potential lead many manufacturers to cost reduction measures in production that may negatively influence the quality of their products. The working model of Concept Foundation with pharmaceutical manufacturers addresses all these factors and more from the beginning of the business relationship. The training and technology transfer provided from Concept Foundation to the manufacturers as its licensees concentrates from the outset on achieving top-quality in production. Common shortcuts as frequently used by small-and medium-sized businesses are eliminated in favor of sustainable production processes aimed at top product quality. During the lifetime of its license products Concept Foundation provides technical assistance and supervision to its licensees to make sure that top-quality is produced at low cost for the benefit of public sector health-care services.

Concept Foundation's working principle for helping manufacturers in the developing world is based on

• Supplying all the intellectual property necessary for registration and manufacturing
• Covering the cost for training and education of qualified personnel
• Covering the cost of technology transfer to a manufacturer.

These contributions by Concept Foundation increase the speed to market for the manufacturers and eliminate a large portion of the initial costs for clinical trials and the preparation of the dossier for the drug regulatory registration process. As a result of providing this license package, Concept Foundation enables the companies to offer preferred public sector pricing for their products. The license grants from Concept Foundation to its licensees mandate that the first priority for marketing and sales of the products is the supply into the public sector of developing countries. To realize an unwavering public sector orientation the license agreements contain detailed provisions that describe the milestones and timelines to be realized by the licensees for rolling-out the product as well as for the pricing and cost calculations to be applied when it comes to public sector pricing. The territory of the license grant is specific for each licensee, adapted to the marketing muscle of the different companies. The licenses include sales rights into the private sector market for added profitability. In contrary to common belief that only profitable sales first into private markets enable low-cost sales into the public sector (later), it is important to understand that public-sector sales itself can be made profitable at low-cost if the business model is carefully planned. All relevant conditions will be elaborated.