Doing Well By Doing Good

Doing Well By Doing Good - International agencies and major suppliers unite to improve world health

By Ian R. Lazarus, FACHE

Over the past year, various industry observers have placed labels on both the last century and the new millennium that began just a few months ago. Like a Chinese calendar, we feel compelled to label these parcels of time so we have an immediate reference point for ourselves and for future generations. "The computer age" was recently replaced by "the digital age," and the implications of this shift are supposed to offer immediate instruction to those of us that can do something about it. Now there are suggestions that the year 2000, and indeed the new millennium, will represent the "age of social responsibility." This should cause anyone to wonder, when was social responsibility not a good idea?

It would appear that the convergence of many world issues to the forefront of media attention has reached that point of critical mass to call for such collective social responsibility. Threats to the environment, continued inequity in social welfare and world health, and the spread of disease across continental borders bring sobering headlines to the American people with increased frequency. The impact of civil wars and cataclysmic events in poor and developing countries heighten our sensitivity to the plight of those less fortunate. Many see personal implications from a continued decline in global prosperity, and recent demonstrations in Seattle clearly demonstrate the resolve of some Americans to assure greater equality among people and nations. And all of this has occurred during a period in which the American economy enjoyed the longest period of sustained prosperity in history.

It is against this background that the Academy for International Health Studies created the International Summit for Managed Care, held for the fourth time last December in Miami. The Academy is a knowledge-sharing organization that develops and coordinates educational programs and international missions for healthcare leaders. At the most recent Summit, leaders from across the globe came together to share challenges and ideas on how to improve world health. Representatives from over 55 countries attended the event, where it became abundantly clear that problems related to access to care, cost of care, and more equitable distribution of resources is as universal an issue to foreign nations as it is within our own borders.

The problem in numbers

It is difficult to fully comprehend the magnitude of problems facing developing countries without a closer examination of their health status. It is even more difficult to imagine how American companies can effectively impact this situation. But specifically because there is so much work to do to improve the situation, there are also many opportunities for American companies to participate.

"Village Earth"

6 billion people now live on Village Earth. Imagine shrinking this village to just 100 people:

  • The village would consist of 58 Asians, 13 Africans, 10 Latin-Americans, 8 Europeans and just 6 North Americans
  • 51 villagers are female; 49 are male
  • Half the village is under 25 years of age
  • The men live on average 61 years; the women live 3 years longer
  • The village is a virtual "Tower of Babel:" 20 villagers speak Chinese, 8 speak English, 7 converse in Hindi, 6 in Spanish, 5 in Russian, 4 in Bengali, another 4 in Arabic, 3 in Portugese, and 2 each communicate in Japanese, French and German
  • 30 villagers are Christian; 70 are not
  • 37 have jobs
  • 18 are illiterate and 1 has a college education
  • 80% of the village lives in substandard housing
  • 50 villagers will never send or receive a telephone call
  • 50 villagers are malnourished and do not have access to a basic sanitary toilet
  • 96 people share 50% of the village's healthcare resources
  • The 20 poorest villagers consume just 1.5% of all goods and services
  • The 20 richest villagers eat 45% of all meat and fish. They use 59% of the energy, 84% of all paper, andown 87% of all vehicles
  • 5 people control 50% of the village's total wealth, and those 5 individuals live in a special neighborhood called, the "United States"

Source: Academy of International Health Studies, 1999

Today, seven hundred million people live in the 42 so called "Highly Indebted Poor Countries" (HIPCs), where malaria and tuberculosis claim the lives of nearly 5 million people each year, and where two thirds of the 33 million people with AIDS can be found. According to UNICEF, 80% of the children who die in Africa each year could be saved with better nutrition and basic immunizations. One would think that with a few ailments having such a catastrophic effect there would be tremendous energies invested in developing and distributing vaccines for these conditions. Unfortunately, this is not the case. A Wellcome Trust study conducted a few years ago revealed that only $80 million was spent on research into malaria, and only a fraction of this devoted to the development of vaccines.

Obviously, the situation in developing countries will not improve without intervention. In fact, it could get considerably worse. A "human tidal wave" is approaching with the current population of 6 billion swelling to nearly 10 billion by the year 2050. In the past 20 years we have documented 50 million cases of AIDS; the spread of this epidemic will cause this figure to double in just the next seven years. And while today one-third of the world's population lives in urban areas, it is expected that two-thirds will live in such conditions in the next 50 years, causing further crowding, congestion, and the threat of infectious disease spreading further and faster.

Still today, the responsibility of Americans to improve world health remains an ambiguous argument. Our traditional lack of attention to the plight of developing countries is a function of macroeconomics: scientific advances follow the demands of the market, where real currency has greater influence than the reality of relative needs. This is particularly true where patents are of limited duration and the ability to recover investment in the development of new medicines is dependent on a sustained competitive advantage over existing alternatives.

Why world health

How can American companies, some with their traditional focus on short-term gain, develop a rational policy in support of world health? The answer becomes a case of either enlightened self-interest, or an obvious moral imperative. It can be argued, for example, that improving world health will indeed benefit the American economy by creating a productive workforce overseas. Healthy people can tap the natural resources of their native land and produce goods for export to the U.S., or they could produce components of American products at low cost. Healthy people ultimately create healthy economies, and these economies could repay huge debts to U.S. and other foreign governments that might otherwise be forgiven through debt relief programs. The view that poverty causes ill health must be balanced by the realization that ill health reinforces poverty, and that such a condition could be reversed to produce advances which ultimately benefit all economies. Finally, healthy communities can quickly stop the spread of infectious disease that might otherwise reach the shores of American communities, keeping such deadly diseases as the West Nile Fever away from American soil.

Ironically, many developing countries enjoyed the support of stronger nations when their historical colonial connections to those nations sustained economic ties and the contribution of needed supplies. But globalization of our economies has created huge conglomerates that are driven now by the need to enhance shareholder value. By 1997, 6,000 multi-national mergers had occurred, over three times the number just 10 years ago. "Many suppliers today focus on the profitable 'lifestyle' drugs such as those related to obesity and impotency, and not drugs to treat the tropical diseases that infect so many people living in developing countries," notes Daniel Berman from the Geneva office of Doctors without Borders. "Others might donate supplies to achieve the benefit of a tax deduction, but many of these supplies are simply not useful within the context of problems we are trying to solve," he adds.

Doctors without Borders (a French organization literally translated from Medecins Sans Frontieres) has campaigned vigorously to eliminate some of the barriers for poor and developing countries to access needed drugs and vaccines. Recognizing the lack of research into tropical disease, the prohibitive cost of existing medications, and the fact that many tropical diseases are now resistant to older medical regimens, DWB has embarked on a project known as the "Access to Essential Medicines Campaign." Working with drug companies and other international agencies, they hope to stimulate new research into tropical disease, and to create more flexibility in allowing multiple sources of production for patented drugs so that patent restrictions do not impede progress in achieving higher levels of global health.

A visible example of how important these goals are became evident when the government of South Africa announced it will consider authorizing local pharmaceutical manufacturers to produce AIDS medicine in spite of patents currently held by American and European companies. The South African government maintains that if these companies will not supply drugs at affordable prices (prices that might include the cost of marginal production and a reasonable profit but without the traditional premium for recovery of R&D costs on drug patents), then they will simply mimic the production process and create their own.

A simple solution

Fortunately, many inspiring cases of cooperation between the private and public sector are demonstrating that American and European companies can be good "corporate citizens" in the challenge to improve world health. It is estimated that private companies invested $252 billion in the developing world during 1997, up from $43.6 billion in 1990. The spread of free market capitalism has made many of these investments possible. Whereas the UN used to be careful in allowing private corporations involvement in international assistance programs, now they seek them out.

Some solutions to improving global health are remarkably simple. Since procurement costs for drugs and vaccines are often outside the reach of developing countries, many manufacturers have developed "tiered pricing" programs to bring the costs to more affordable levels. In 1998, for example, Glaxo Wellcome announced preferential pricing of up to 75% below global prices on a series of antiviral drugs that prevent the transfer of HIV from a mother to her child. This action followed the realization during clinical trials on the effectiveness of Glaxo's Retrovir and Epivir drugs. The program, now known as MTCT ("Mother-To-Child-Transmission") has gained the support of UNICEF and the UN, and is now operating in 11 developing countries. In these programs, Glaxo donates the initial supply of drugs free of charge, before implementing the discounting strategy for future orders. Success from the program has captured the attention of neighboring countries, and Glaxo is in active discussions with the governments of Uganda, Botswana, Burundi and South Africa to extend this program to these regions as well.

Beyond the Call of Duty

Some American suppliers take a more direct approach in providing assistance overseas, particularly when the severity of the situation catches global attention. "We have two principle criteria in determining where to commit resources during relief efforts," notes Robert Marino, Director of Business Development for Pfizer Pharmaceuticals Group. "We are prepared for immediate involvement when a major disaster overwhelms an area's healthcare infrastructure, or when a developing country without sufficient infrastructure experiences an epidemic or similarly severe medical crisis." Marino adds that Pfizer would not perform a return-on-investment analysis from such activities, but it is clear that such activities benefit the organization. "Outreach activities to the community reflect Pfizer's mission to help save lives and enhance the quality of life for people around the world," suggests Marino, "if there are additional benefits such as increased visibility or stature in a region then that is a bonus for undertaking these humanitarian efforts."

Pfizer contributed over $1.3 million in medical supplies and equipment following the earthquake in Turkey last year, and in 1998 announced a $66 million program to help eliminate blindness from trachoma in five developing countries. American Benefactor magazine selected Pfizer as one of America's 25 most generous companies during 1998.

The power of private-public partnership

Like many advances in medicine, several inspiring situations come about by accident. Drugmaker Hoechst Marion Roussel (HMR) abandoned work on an oncology project related to the use of Eflornithine to concentrate instead on the use of this drug to treat African trypanosomiasis, or sleeping sickness. Sleeping sickness claims the lives of up to 150,000 Africans every year, and as many as 55 million people in 36 sub-Saharan African countries are afflicted with the disease.

Recognizing the potential, but not the profit, from continued research into the application of Eflornithine in treating trypanosomiasis, HMR collaborated with the World Health Organization to arrange continued development of the drug and a process for handing it off (including licensing rights) for future production. They undertook the complicated process of filing regulatory submissions with the FDA in 1990, with European authorities in 1991, and in the targeted African countries shortly thereafter. Concurrent with these activities HMR collaborated with WHO and their Tropical Disease Research Division to transfer technical knowledge regarding production and administration of the drug. Finally, as recently as last December, WHO assumed complete proprietary rights to the new drug, and they are free to license production as necessary to any suitable, cost effective manufacturer.

While American companies clearly have the resources, and many have the motivation, to take an active role in improving global health, ongoing challenges will thwart the most well intentioned efforts. Simply put, developing nations do not allocate comparable resources to the maintenance of health, and within socialized systems the Minister of Health does not carry the authority of the Minister of Finance, making it difficult to effect changes in policy during the course of a single term of office. Most of these countries also do not have an effective consumer lobby to demonstrate the fundamental needs of the people. Further, cataclysmic events, corruption, and civil war can erase decades of progress and leave a country bankrupt both financially and emotionally.

To be sure, if this is the era of social responsibility, then there will indeed be barriers and obstacles for those companies that rise to the challenge. But for those that do, the rewards can go beyond short term visibility and long term profits. For these companies will continue to be recognized and respected for their willingness to take a chance, to catalyze change, and to make the world a healthier place in which to live.

Ian R. Lazarus is Managing Partner of Creato Performance Solutions (www.creato.com) and also a member of the Editorial Board of Managed Healthcare.

Author's note: All companies profiled in this article are involved in similar efforts related to tiered pricing, direct donations of supplies and public-private partnerships.

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