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Remarks by the 2005 International Development Conference Panel on Funding Innovations
February 26, 2005
Moderator Donovan Cook Western Region Director of Development, Save the Children, Palo Alto, Calif. Panelists Timothy Goodman Srividya Prakash David Green |
Donovan Cook: On behalf of the panel, I would certainly join them and others in leadership roles today, in welcoming all of you students and others gathered here today. I'm aware that this is Parents' Weekend, and I congratulate the committee also for bringing this kind of conference together in coordination with the presence of parents on campus. I think this could continue to be a fruitful and innovative way to address the issues that the committee is concerned about on an annual basis. You can find out more about each of us, but I'm very pleased that David, Srividya, and Tim can join me on this panel today. I'd like for each of the distinguished panel members to say something very briefly about who they are, in terms of why are they doing what they're doing. Because one of the things that I think is so powerful for young people in the university community who are already setting their sights on career development and making decisions, it's nice to put a face [on that] experience with somebody else's career. So I asked Tim, Srividya, and David to just say a word or two about why they do what they do; and then I would like to come back to them to share some of the successes, some of the opportunities, in terms of innovations and funding, that they are personally experiencing, and highlight what they think is the reason for these successes.
I think Dr. Zewdie did an incredible job of spelling out for us what the current reality is, in terms of addressing HIV/AIDS issues internationally. But it does have the tendency to become immobilizing, when we look at that kind of problem. So I think one of the reasons that this particular panel has been assembled is saying: "OK, if that is the global perspective, where are the signs of hope?" We hope that at the close of this conversation where panel members share some of their own experiences of success and where the hope is, we would like those of you in the audience to also share some of your own affirming experiences in terms of opportunities for hope around the issue of innovation in funding these kind of crises and needs around the world. So let me just go down the line beginning with David, then Srividya, and then Tim. Share something about who you are in terms of what you're doing and why.
David Green: I do two things. I help create healthcare programs—historically, mainly in eye care—that are self-sustaining from user fees but still oriented toward the poor, with the feature of multi-tier pricing, where free is the lowest price. I've done that with many programs in many countries—in India, Nepal, Egypt, Malawi, Tanzania, Guatemala, Kenya. The second thing I do is technology transfer to create manufacturing for medical products to bring down their price. I've done this with interocular lenses, sutures, and hearing aids. That's all been part of the establishment of Aurolab, a nonprofit manufacturing trust that I help set up in South India, which produces all these items along with pharmaceuticals and eyeglasses. I do two things: number one, lower the price of key medical technology to make it affordable, and, number two, combine that with a market-driving service delivery model that converts need into demand for essential things in life, such as hearing and seeing.
Now, as to the why of my work, I really don't know. I often ask myself, Why am I doing this? I think that superficially it's partly competitive, just to prove that you can lower the cost of a key medical product and create a service delivery model that will deliver it to the poor. There's a competitive sense there: OK, let's show the world that we can do this. But I think also underlying is probably a sense of our own mortality, the fact that we're not here forever. This is a very ephemeral existence that we all find ourselves in, so the question is, not knowing what comes before or after this life: What can we do to make this world a better place during our time here? The underlying spiritual basis is what forms the motivation for a lot of really great people doing great development work. That's a theme that you don't usually hear about, but I think a lot of people who are doing great work have that in them. Thank you.
Srividya Prakash: Good morning. I'm a practice expert with a global public health group in McKinsey. McKinsey is a global management consulting firm, and the global public health group is one of our three sub-sectors in our nonprofit practice. What I do on a daily basis, in English, is consult with a range of institutions—multilateral institutions like the U.N. bodies, private foundations, nonprofit organizations, ministries of health in developing countries, public/private partnerships—on several issues ranging from developing business plans for new programs, alliance formation, alliance governance, performance evaluation, supply-chain management.
So we pretty much work at the intersection of management business issues in the global health space. On a personal note, the why I do what I do, in 30 seconds, that's difficult. I grew up in India, and that explains part of the passion for the job, because you pretty much see many of the challenges we're trying to address on a day-to-day basis. I joined McKinsey in 1996 in India and was a traditional consultant for almost seven years, but there's only that much soap you can sell. There's only that much sales force effectiveness, what you can do. And somewhere along the way, it just became more interesting and more personally fulfilling to change tracks and look at issues in this space. There is also a strong personal belief that being a part of the business world, you can bring in management practices, private-sector practices that can benefit the technical excellence that you see in the health space, and that kind of management can actually yield very positive results. That's kind of the hope I live on.
Tim Goodman: I'm Tim Goodman; I'm in the global policy unit at Pfizer, which is a global research-based pharmaceutical company. We discover and develop and bring to market medicines to treat illnesses in a range of therapeutic areas. We also provide medicines for health needs in developing countries. In the global policy area, we have a range of responsibilities; we staff our chairman and other senior executives in their involvement with international business groups and multilateral organizations. We conduct and commission policy research on a range of global policy issues that are relevant to the drug industry, including intellectual property protection, health system reform, access—pricing reimbursement of medicines, and access to essential medicines in developing countries.
I'm fairly new to the health field myself; I joined Pfizer in 1999 as a speechwriter for the former chairman and CEO Bill Steere. Before that, my background really is in foreign policy, policy research. I'm a political scientist by training. Before coming to Pfizer I worked for several research institutes, think tanks, and grant-making agencies in Washington, D.C., working on various foreign policy issues.
I was brought to Pfizer by a friend of mine who had been a teacher of mine in college. I was a history major at the University of Notre Dame. I took some electives, particularly in English literature, and became friends with one of my professors who taught English literature. She ended up eventually leaving teaching, went to work in the first Bush administration, and then came to Pfizer in the early 1990s. I stayed in touch with her over time, and she recruited me at the end of the 1990s to come and help her give communication support to our chairman. And I've been there ever since, and have moved over time into the policy areas as well as communications. So I guess the lesson from this is: Make friends with your teachers and stay in touch with them, because some good opportunities might come.
I'm thrilled working at Pfizer. As I say, the health field is a relatively new thing for me, but I love going to work every day. I really believe in what we're doing, and I think all of my colleagues at Pfizer share this. We have tremendous pride in what the company is doing, and in the small contributions that we all make to it as individuals, in improving healthcare for people throughout the world. So I'm glad to be here and thanks for the invitation.
Donovan Cook: Let me ask David to share now in a truncated way what they are doing that is really innovative and hopeful. I'd like for each of them to comment just briefly upon what they've heard from each other, and let that be an entrée to the conversation that we have with the audience. So, David, thank you again for being here, and share with us at this time.
David Green: My main point is, How do you use top-down largess to create bottom-up market-driving healthcare service delivery systems? The systems must convert need into demand and be affordable to those populations where people who are afflicted—whether they're blind or have trouble hearing or are HIV-positive—can put their hand into their own pocket and pull out money that's going to afford them treatment. This way that treatment becomes the consumer's choice rather than being dependent on whether a government or multilateral, bilateral organization can supply that treatment.
Now I'll tell a little story about why I arrived at that major point. I started out developing eye care programs in India and Nepal, and I had the good fortune to end up working with Aravind Eye Hospital beginning in 1983 through my work with Seva Foundation, a nonprofit based in Berkley, to develop their programs. When I started working with them, they were doing about 3,000 surgeries a year. Last year they did 220,000, 80 percent of which are cataract surgeries. They're the largest eye care provider in the world. I helped them develop a self-sustaining model of eye care service delivery, which I've helped to transfer to other locations such as Nepal, Egypt, Malawi, and other countries. Just to give you a sense of Aravind, 47 percent of the patients pay nothing for surgery, 18 percent pay two-thirds cost, and 35 percent pay well above cost.
With that model, they're able to be self-sustaining and profitable. For every dollar they spend, they make about $1.60. So they're able to generate their own money to further their whole operation. We've been able to do that in many countries. Aravind on its own has helped develop probably over 160 eye care programs, where they've helped those programs through a consultative process, not dissimilar from what McKinsey does, but focused on eye care. They've helped these programs make the transition from dependency on charity to being self-sustaining, doing a much higher volume of surgery and having a much higher volume of free services. I want to mention that in Egypt I helped develop a big eye care program with Pfizer as one of our major partners. Working with the Al-Noor Foundation, we developed a major trachoma initiative.
That's sort of on the cost-recovery side, and I think that the key element to keep in mind there is that we study what the paying capacity of the population is. We basically look at how many people are rich, middle, poor, and very poor, and what their average monthly income is, and then that becomes our pricing system. What we've learned pretty much in hindsight is that people are willing to pay their average family monthly income to get their sight back. So we have a multi-tier pricing system.
On the production side, we try to improve management, surgical productivity, and quality; introduce paramedicals if they don't exist; and develop community outreach, where the community is really handling a lot of the cost of the social marketing. And through all those inputs, we try to bring down the per-unit cost of cataract surgery, which is 80 percent of what blindness or visual disability is. We try and reduce that per-unit cost to what the average monthly income is of the bottom 60 percent of the population. That's the equation that we work with to make eye care services affordable and available where many receive it for free.
Now I'll talk a little bit about the technology side. A lot of the work that I do has to do with looking at something like, for instance, interocular lenses. Cataract is a major cause of blindness in the world. Back in the late '70s there was a big transition in the West going from cataract surgery giving the patient thick cataract glasses to surgery with an implantable lens, an interocular lens, and so the U.S. surgical volume went from something like 330,000 in the mid-'70s to 1.4 million by the early '80s, because it was being driven by a better quality visual result made possible with an interocular lens. We started getting lenses donated for our programs in Nepal and India, and we started to see this phenomenon that people were coming earlier for surgery before they were economically blind, where they would still be willing to pay for surgery because of the better visual result. So we got lots of lenses donated and lots of volunteers to train in the microsurgical technique to implant the lenses. Then, due to a variety of factors in the late '80s, the donations started drying up. That's when we looked to make interocular lenses.
We set up Aurolab, which became operational in 1992, and basically my process was to demystify the cost of making interocular lenses and figure out how to make them. My starting assumption was that things don't really cost that much to make. I found that to be true for everything I've done, whether it's interocular lenses or sutures or hearing aids or pharmaceuticals. Today Aurolab is, I think, the second or third largest interocular lens company in the world, selling about 700,000 units a year. We sell for about $4 versus anywhere from $50 to $150 in most other markets. We also fulfill the same regulatory approvals in terms of having [CE Mark] certification for Europe, etc.
So then we did it for sutures, where we set up suture manufacturing and went out and found the former head of R&D for U.S. Surgical, asked him to work with us, and we set up a suture factory where we brought down the price of one suture from $200 a box to about $30. Then we did the same with hearing aids. We've been in production now since 2003 making a digital hearing aid for about $50, and this product is sold, for instance, here in the U.S. for about $2,000. The basic point is that we find people who are really good at what they're doing, probably managing big [R&D] departments, we convince them to work with us, and then, thanks to their big R&D budgets, we have some acknowledgement of the industry's role in creating the people who work with us. By the time we get them, they know what they're doing, and we're able to have a very affordable R&D process to develop these products into production.
So how do you bring down the price of goods? You'll notice I don't say cost, because it costs us about the same to make these products, I believe, as it costs Western-based industry. How do we gain control of production to be in control of pricing to ensure affordability to our intended beneficiaries, mainly poor people? And how do we combine that with a market-driving service delivery model where it's up to the patient to determine whether he or she can afford this service or not, and where free is the lowest price? The main point here is, How do you apply that to other arenas?
We just heard a really superb talk on AIDS, and what strikes me is that so much of what's happening is all based on a top-down approach, where there's top-down largess that's just not penetrating to the bottom. So the question is, How can we take lessons we've learned in technology development and service delivery model development for eye care, and now hearing care, and apply it to really big problems like AIDS? Incidentally, in AIDS treatment I feel that it shouldn't cost more than $40 per year, per patient, to make antiretrovirals available and affordable. So how do you do that? And how do you combine that with a market-driving service delivery model where a person in Nigeria who has AIDS is not dependent upon whether their government decides to offer free treatment through some clinic? There's a different type of service delivery model that has paramedicals. If you look at the healthcare system in most of the developing world, it's really broken, and what we've done in eye care—including even government eye care programs, for instance, in Malawi—is we've created a vertical system that takes eye care out of the primary healthcare system and makes it sustainable on its own.
I think that is probably what needs to happen with treatment of HIV. How do you bring down the price of the key technology, the antiretrovirals, and how do you combine that with a multi-tiered pricing model that makes it affordable to the majority of patients? So how do you have multi-tier pricing on a local level, and then also how do you have it on a global level?
Donovan Cook: Find people who are really bright, who are really good at what they're doing, and persuade them to work with us. In the preliminary conversations with Vidya, she said, "You know, I enjoy these kinds of opportunities, particularly in a university setting with students, because I'm not always politically correct." And I said, "You're the right person to have on this panel." Vidya, thank you for being with us, and please share.
Srividya Prakash: I'll focus my comments in two areas. Part of it will overlap with the kinds of things that Dr. Zewdie was sharing with us in the morning. The first of my comments stems from my work with public/private partnerships, governments, and multilateral institutions. And I will dwell upon some of the dimensions along which we would like to see innovation in development aid. There are a couple of stray examples out here of people who are trying to do it, but not too many, so that's the first part of my comments. The second part is a deep dive into one or two organizations that we've seen at close quarters that are doing very interesting things by linking funding with program delivery to get results, and that will be a more in-depth perspective.
On the first, the last five to 10 years have just seen unprecedented levels of development aid enter the health space. We're talking about multiple billions of dollars. At one level this is heartening; on the other hand, there is an increasing sense that we might just be setting ourselves up for a massive disappointment because all this money needs an outlet in countries, needs an outlet in programs. On the ground in many developing countries there are still massive issues about good governance, about absorption capacity of health systems, and it is unclear at this point whether we are seeing results of money that's in the system or that has been committed to the system over the past five to 10 years. Just a small case in point: The Global Fund against HIV, TB, and malaria has now completed close to four rounds of funding, but I believe their disbursement levels are kind of in the high teens or low twenties. That's not because they don't have money in the bank, but the kinds of conditions the countries need to meet to be able to absorb that money and apply it correctly have just not been met. There is a growing sense that yes, there is more money now—it may not be enough, but there's a lot of money—but are the conditions on the ground ripe enough to use that money effectively?
That's kind of the starting point. A lot of people are asking, now that we have these billions of dollars floating around in health, what can we do to channel this money more effectively, because the past five decades of development aid have not really given us a lot of results to talk about. And I'll just touch upon a couple of dimensions along which we would like to see innovation. The first, something Dr. Zewdie talked about at length, was donor coordination, and I strongly echo her every sentiment, be it donor coordination within a disease area, within a certain country, or across different functions. What we see out there are a plethora of vertical initiatives. She talked about hundreds of missions with HIV/AIDS. Let's complicate that a little bit more and add on about 10 to 20 with TB, another 10 to 20 for malaria, a couple thrown in for immunization vaccination, then a couple for measles, tetanus, and very soon you're talking about what one person in Kenya told me was "mission fatigue." All they do on a daily basis is get stuff ready for donors. Now, we've seen experiments by the Global Fund, which is trying to channel money for HIV/AIDS, TB, and malaria; very soon that gets undone to some extent because you then have the President's fund, which puts in money for HIV/AIDS, which is a back channel of funding. It's not clear at this point whether donor coordination is even doable or just a myth.
That is a starting point. The World Bank and others have tried to do things with swaps that provide approaches. Again, I believe that the number of countries that a swap is working in can be counted on the fingers of one hand. That's not very heartening. So there's a lot of lip service given to donor coordination. But I don't believe there are many results to show for that. That's one dimension of innovation. The second dimension is, How do you increase absorption capacity of this aid? One thing that I mentioned in my introduction is my area of focus and specialization is not in disease. I'm just more interested in the health system aspects—how do I communicate that?
When you look at the West, one reason we're able to deal with HIV/AIDS or SARS or the new epidemic that's around the corner is not because we have the latest and the best drugs for everything, but because we have a functioning health system. We have enough doctors and nurses, we have health information, we have a surveillance system that can detect something new around the corner, and we have drug delivery systems. We just have a system that's functioning. That same system is broken in virtually every developing country. So the question you ask yourself is, What will it take to get a drug from the port of country X to the hinterland? What will it take to have new, innovative models of health workers, so you don't always need a doctor or qualified nurse for every kind of intervention? And we just need to get more creative about what can be done to increase absorption capacity on the ground, and that's very much a health systems issue.
The third area of innovation that one would love to see is something about engaging the private sector, and what is probably known as civil society. Much of today's aid is from the World Bank or from a U.N. agency to the government of a developing country, or it is bilaterally negotiated with another country's government. There is, however, a growing concern that that money is not really trickling down, and there is a movement toward getting civil society, nonprofits, and private sectors involved. No doubt there are challenges in doing that effectively, but being able to figure how you can get the private sector as a viable partner really makes sense, and, frankly, it's in their interest as well.
When we talk about Botswana losing 30 percent of its workforce, you're not really going to get qualified, trained people to run those mines and plantations and banks and what have you, to run schools, the private sector. So it's very much in the private sector's interest to be a willing partner, to see through some of these interventions. In other words, how do you really get good governance in a developing country context, such that money that's coming into that country is really utilized well?
A lot of us have been reading about Kenya in the press over the past couple of months, about how billions of dollars of World Bank and donor money is effectively lying in various Swiss bank accounts. That is not great news for a lot of people who are in keen on seeing results. There are studies that show good governance is pretty closely correlated with good health systems, good education, and overall public services. But how do donors put in conditions with governments that they're giving this aid to without those conditions being restrictive or unrealistic? Because I agree, you can't be sitting in Washington or New York or Geneva imposing conditions on developing countries' governments. That equation just does not work. At the same time, how do you develop a carrot and stick approach that good governance is a part of the package?
Lastly, something I think, David, you touched upon, how do we get more action moving at the micro-level, bottom-up, versus top-down? And there has been increasing talk about involving the end-consumer, ensuring they have a voice. For instance, having a village-level group of people who elect their own spokespeople to have a voice in what kind of service they're getting and can effectively rate the quality of the services. Co-pays, for example—we often believe that the poor effectively want stuff free. That's not true; they can pay for what they need if you can give them a voice in the quality of services that they're getting, and give them the ability to demand the best. So it's just those kinds of dimensions along which if we can innovate that I'm sure we'll probably see many more results.
I'll change tracks a little bit now and talk about two organizations that we've either worked with or seen at close quarters that have done interesting stuff by tying funding to other aspects of a program. The first example is the global TB drug facility, which is a part of the Stop Tuberculosis Partnership. This facility is about three or four years old now. They basically exist to ensure access to quality, low-cost drugs for curing TB in developing countries. But instead of just giving grants of money to developing countries, they give grants of drugs, and they follow up those grants with technical assistance and performance monitoring. Now this seems like a pretty straightforward concept, but the reason why grants in kind work better than just grants of money is very straightforward; the minute you actually have a drug that people can see and feel, it's very easy to mobilize technical assistance and other support to structure a program around it, because the drug is real. Money might be sitting in an account with a bank or with the donor somewhere else, and it takes years for the money to actually flow into the country. But if I can ensure the drugs reach the port within the country, it's easy to mobilize technical assistance for in-country drug-supply-chain management, or advise on how to structure a TB program, consumer awareness, patient education, and stuff like that.
So they effectively tie funding with procurement practices and technical assistance to significantly reduce the price of the drugs, so TB drug prices have already come down from $50, $60 for an entire regimen to something like $10, which is very affordable for a 6-month period for a disease which, frankly, could kill otherwise. And they have been able to mobilize a lot of technical assistance around that for advice on just how do you set up a procurement practice, how do you set up supply-chain practices, how do you set up a program, how do you do performance monitoring—stuff like that. And they have been able to tie that, of course, with the classic carrot-and-stick approach, because, although a grant is given for three years, it needs to be renewed every year, and that's backed up by a mission. And what the Stop TB Partnership tries to do is rather than have 10 TB missions in a country, they try to collapse those into one that the global drug facility then tries to coordinate. It's been working very well in a couple of countries; of course, there are issues now of scaling up. The kinds of issues you see is how do you then partner not just with a government but NGOs on the ground? How do you partner with drug companies so you can get access to drugs? So on and so forth.
The other example I would urge people to really look at is GAVI, the Global Alliance for Vaccine Immunization, which again is trying to do very similar stuff with a $750 million grant from the Gates Foundation. It's now negotiating with suppliers to significantly bring down the cost of vaccines. It has got data quality audits running with countries so that countries can actually audit what their needs are. Now, all of this sounds great on paper. Dilute it a couple of steps when you actually see execution on the ground, but that's another interesting example of funding tied with actual availability of products, tied to performance monitoring, on a sustained basis.
Tim Goodman: Well, in the handful of minutes I have I would like to supplement what we've heard about already and talk briefly about what private industry is doing to fund greater access to healthcare in developing countries, especially related to the infectious diseases we're talking about: HIV/AIDS, TB, malaria, and others. I also talked about what my own company, Pfizer, is doing to improve the quality of healthcare in developing countries through direct financial support, donated medicines, and strengthening of healthcare infrastructure, both physical infrastructure and human capacity as well. There's no question that health-financing needs in developing countries are overwhelming. I agree completely with Dr. Zewdie and others who have pointed out that these needs demand coordinated, concerted actions on the part of all the donors. I'd like to cite a few statistics just to give you a sense of the dramatic gap that we face between health needs that confront developing countries and the resources that have either been committed or pledged to date. I agree completely that there's a problem with absorptive capacity. The resources exist but countries have very limited ability at this point to absorb and use them effectively. That said, it's clear that given the scale of the challenge we face, there's a need for a dramatic increase in the supply of resources to deal with it. According to a recent estimate of financing needs for HIV/AIDS in low- and middle-income countries this year, that need is estimated to be approximately $12 billion, and it's expected to rise to $20 billion by 2007, then higher than that beyond.
It's impossible, needless to say, to overstate the importance of mobilizing adequate resources to meet this need. Three years ago [Delancey] published a study that showed that new HIV infections could be reduced to just a million and a half per year if a new comprehensive program of prevention were put in place. Conversely, for each $1 billion that goes unspent, we can expect an extra 1 million new infections ever year, and for each $1 billion that isn't provided for treatment, we can expect over half a million preventable, unnecessary deaths as a result of HIV/AIDS. This year alone the gap between needed spending and actual spending on HIV/AIDS is likely to be close to $6 billion, as Dr. Zewdie mentioned earlier. In other words, donors are likely to provide only half of the total $12 billion that we need to treat current HIV/AIDS infected patients adequately and to prevent new infections.
If that funding gap isn't closed, the consequences for developing countries are likely to be severe. In 2001, the WHO Commission on Macroeconomics and Health published a report that predicted that without a significant increase of spending on HIV/AIDS, economic activity in the developing world could decline by as much as $500 billion by 2015, and this would translate into an aggregate loss in tax and other revenues for developing country governments of between $70 billion and $100 billion. A lot of money, isn't it? And that's money that could otherwise go to provide health system reform, increased healthcare services, strengthened education systems, and better sanitation and public health facilities. Now, providing these resources is obviously a shared responsibility. It falls to governments, to NGOs, to private foundations, and to the private sector.
In the time I have left I would like to say a few words about what my industry in particular is doing to address these health needs. According to an estimate by the Hudson Institute, the 10 largest global pharmaceutical firms have contributed more than $4 billion for healthcare in developing countries since 1999. That's equivalent to about 25 percent more than what the Global Fund has already disbursed. In 2003 alone, the last year for which we have firm figures, the pharmaceutical industry donated more than $2 billion in cash, products, and services to fight HIV/AIDS, TB, malaria, and other infectious diseases. To give you a sense of that, it's equivalent to more than a half of the U.S. government's total annual spending for global health, and about $.5 billion less than total disbursements made by national governments and multilateral donor agencies in 2003 for international HIV/AIDS relief. By the way, sometimes we get complaints from our shareholders about this work; they point out that we have a fiduciary obligation to boost shareholder value, but we really believe that this work is not only good in itself, but good for business. It's consistent with our mission of providing healthcare around the world, and it's ultimately good for our shareholders and good for all the stakeholders that we respond to.
The drug industry provides a wide range of health assistance to developing countries, much of which is hard to quantify. In fact, we're working with a range of other partners right now with the Center for Global Development in Washington, D.C., on a project to try to quantify the financial flows from various donors into HIV/AIDS work, to try to give a more concrete sense of what the dollar figures are and where they're coming from. The drug industry's contributions to this effort include donated money, drugs, equipment, human resources, and concessionary pricing, as well as volunteering licensing of patented medicines. In the interest of time, I'll just mention a handful of the public/private partnerships that Pfizer has either established or is participating in to expand access to medicine in developing countries. We recognize at Pfizer that most people in developing countries can't afford innovative medicines at any price, and we've responded to that where we have the ability by developing donation programs that are intended to take price out of the equation. For instance, in our Diflucan partnership program, we donate our powerful anti-fungal medicine Diflucan to HIV/AIDS patients through government health clinics in developing countries. Diflucan isn't an ARV, it's not a cure or treatment for AIDS specifically, but it is effective in treating two opportunistic infections that are common among HIV/AIDS patients: cryptococcal meningitis, which is an inflammation of the brain lining that creates excruciating headaches for people in middle and late stages of AIDS, and esophageal candidiasis, which is a fungal infection of the throat, which makes it extremely painful for people to swallow—very debilitating illnesses for people with AIDS, and Diflucan is effective in palliating and making it easier for people to live with these illnesses. This program operates today in 23 countries, and we've treated more than 87,000 patients so far with Diflucan. To try and ensure that this program is sustainable, Pfizer has committed to the governments we work with to provide Diflucan free of charge to as many patients who need it for as long as they need it.
Another major health threat that David mentioned earlier is trachoma. This is the world's leading cause of preventable blindness. Today, 6 million people worldwide are blind because of trachoma, and another 150 million people are infected. In fact, overall some 10 percent of the world's population is at risk of losing their eyesight because of trachoma. To fight this disease and hopefully eventually eradicate it, six years ago Pfizer established with the Edna McConnell Clark Foundation and other partners the International Trachoma Initiative, which today operates in 11 countries fighting trachoma. And besides providing financial support to the initiative, our contribution includes Zithromax, which David mentioned earlier. It's an antibiotic that is effective and very easily dosed for treating trachoma. Prior to this the standard treatment for trachoma was to apply an ointment directly to the eyeball, twice a day for six weeks, which is difficult to do in any case, but particularly hard in resource-poor settings. Zithromax is an oral, single-dose preparation, which people take once a week over a period of time, and it's very effective in treating and eliminating this illness. The initiative has been under way for six years now and has currently been extended to 11 countries. Our biggest success is in Morocco, where trachoma has been reduced by 90 percent in children, and we're on track, actually, to eliminate trachoma entirely in Morocco by the end of this year. And the incidence has been reduced by 75 percent in Tanzania.
Finally, Pfizer has established the Global Health Fellows program to further address the human capacity needs of Africa and other developing countries. This is a program where Pfizer colleagues can be detailed to work with NGOs on the ground for up to six months in developing countries, working with them to fight HIV/AIDS and other infectious diseases. It's a really innovative program and one that has been very popular with our colleagues; in fact, it's been oversubscribed. So these are just a couple of examples of what Pfizer is doing to address health needs in developing countries. Other drug companies are doing very similar things. I look forward to talking about them further.
Donovan Cook: You can see as your own careers evolve, when you're invited to participate in a panel, you want always to make sure you're the moderator. One of the things that's so valuable about these kinds of gatherings is it becomes really an opportunity for the cultivation of imagination. And I would encourage you now, on behalf of the committee that has provided this opportunity for this conversation, to begin to think about questions for the panelists. But I would like to suggest that your questions be framed out of your own experiences. As David Abernethy knows, about four years ago, I had the privilege of sitting in a class that David taught for undergraduates that focused on the history and evolution of NGOs—nongovernmental organizations. Being a part of the class was significant in and of itself, but on Fridays, David would buy the pizza and everybody would show up, and the purpose of those gatherings was for the individual students to talk about what they had been doing, and I was blown away. I was totally inspired by what I heard. What I'd like to suggest is that I know in this room are an amazing collection of successes in terms of the achievements of some of you working as volunteers and interns, both in the undergraduate period here at Stanford and before, so as you frame a question, think about framing that in terms of something you have done, or something one of your colleagues or peers or friends has done that's been inspiring for you. I think it's really valuable when you have the privilege of having this kind of expertise and leadership in a panel for them to hear from you, and hopefully move from this conversation into an ongoing relationship with Tim, Vidya, and David, because that's really the purpose here. How do we keep this energy and this inspiration moving? So, as we prepare for your questions—and you can raise your hand and get situated by a microphone—let me just ask David, Vidya, and Tim again really briefly: What have you just heard as you listen to each other that's a common theme or something that you gravitate to as an innovative and hopeful element in this conversation today? Let me begin with you, David.
David Green: I don't know what to say. I think that one of the themes is top-down largess versus creating competitive force, like how much of these problems can really be handled by donations versus how do you create the competitive force at the bottom to bring about that change. I always like to think about the new physics that says the whole is contained in the part, quantum physics—whatever that means. For me, the whole and the part in development means how do you take the essence of what needs to happen and package it so that it can be socially franchised at a very, very, very local level, where it can happen and it can be sustainable locally. How do you create both the global force and the local force to make that kind of development happen?
Srividya Prakash: One thing that I would like to kind of reinforce is if you really think about it like a three-legged stool: You have the public sector, you have the private sector, and you have the nonprofit sector. Each of these has a role to play. I would combine that with David's comment of the individual consumer who is very often willing and able to create a sustainable market for these kinds of products. How do you bring these four parties together to create sustainable interventions that can continue to show results without depending on donations, bureaucracy, so on and so forth? I think getting that kind of partnership going is probably the most important thing.
Tim Goodman: I agree totally. Public/private partnerships have been identified by Pfizer and other drug companies as really the optimal vehicles for delivering healthcare in developing countries. It's a shared responsibility. The need is such that no single actor operating alone, whether it's governments or NGOs or academic medical/professional groups or the private sector, can do it by themselves. Another important theme that Vidya alluded to is the importance of good governance. One dramatic example of this in the context of the drug industry is the barriers the governments raise to donated medicines in the form of taxes, customs, duties, and other kinds of fees. I just read an article in the paper the other day about how apparently a large shipment of insulin medicine is sitting on the docks in one nation because the government won't release it. These are donated medicines. But the government is requiring really extortionate customs duties. In fact, there's a very interesting report the International Policy Network has issued recently called "Debt and Taxes," which documents the tax-related obstacles that governments in developing countries impose on donated medicines. The global average is 18 percent, which is added to the price of donated medicines by these governments. I think the address is policynetwork.net or .org, but if you Google International Policy Network, you'll get right to their homepage, and their report is right there. It's interesting to read.
Q: I've spent two years working in north Tanzania on HIV education and testing, and the question is about funding for antiretroviral therapy. He mentioned the model where it might be possible to get the price down to a point where people might be able to pay for it. In Tanzania in the past, that's sort of been an option for a few people. The price has been in the range where rich people can afford medications. But what I've seen is that if the price is right in that borderline range, people will get medications for the months that they're really sick, get to feeling a little better, and then stop taking them, which is a kind of a recipe for resistance. How would you respond to that?
David Green: What I've been doing in an informal way, but which I want to do in a formal way once I get my hearing aid project squared away, is to do a feasibility study to look at the question: Is it possible to make antiretrovirals for $40 per year, per patient? A lot of the technology development work I do starts out with what I call forensic cost accounting, which is to gather as much information from as many sources and as many observations as possible to really ascertain how much it really costs to make an interocular lens, a suture, a hearing aid—in this case, antiretrovirals. So, what is the cost to buy the active pharmaceutical ingredient? How do you source that? What is the cost to set up tablet making?
If you're doing pediatric antiretrovirals, which I think is going to be my main focus, initially, how do you make liquids in an affordable way? One of the key features of the technology transfer that I've done is to have the majority of the start-up costs donated; so, for instance, to set up the suture factory costs $700,000—60 percent of that was donated. How do you start out with donated largess—how do you use donated largess to start something that can be self-sustaining, where the cost price can start out not having the cost of the capital, but at least where you put in the amortization of the equipments? These are some of the strategies that I've employed for reducing cost. I think also that if you gaze about in the realm of HIV, one of the big issues is detection and the over-medicalization of detection, and the fact that people don't want to go and have HIV detected because of the stigma or because they know that treatment is out of their reach. I would say that you have to combine affordable treatment with private detection, and right now, again, I haven't done my study, but I think that there are products on the market—the saliva testing—where if you make HIV testing with the saliva strip that takes a minute ubiquitous in the marketplace, where people can buy it and do it in the privacy of their own home, and know that treatment is available, I think that would be transformative also.
And then there's the whole question of how do you lower the cost of monitoring CD4 count and viral load testing. I know for a fact there have been some really good technologies developed for CD4 counting, where instead of a $30,000 machine, you can put it into a $600 PDA-type device to do that, but from what I know, that device has been given to another company to develop. They already figured out that it's going to be a $3,000 machine. So the question is, How do you create the right types of entities and organization structures that can embody this concept of what I call compassionate capitalism or social enterprise, where you can be profitable and sustainable? Just like Aurolab is—Aurolab has a 52 percent profit margin, but that doesn't mean that they can't continue to provide their goods and services for really affordable prices. A lot of this boils down to organization structure, bureaucratic imperative, and the type of people that you have involved, and how entrepreneurial they are.
Donovan Cook: Let me just intervene here to say that if we're looking at this issue of capacity building, let me ask both Vidya and Tim to respond to the thrust of the question. Vidya, why don't you provide any thoughts you have?
Srividya Prakash: Just two quick thoughts, both on the means testing question and how do you do these kinds of programs sustainably over a long period of time. There is no easy answer as far as means testing goes, because obviously whenever you have price discrimination, you will have some loopholes. One thing that we've seen in some settings that has worked is when you start involving the community around the patient groups, there is automatically some kind of pressure that the community exerts on people who are coming to that clinic to make sure that the free facilities or the subsidized facilities are not being misused. This goes by the previous point I was trying to make, which is that you want to involve a bunch of people in this program and not just one or two. When you have the entire family or a set of families involved, or an entire community involved, they automatically exert pressure to make sure that the free facilities are going to people who need it. I'm not saying these are foolproof, and it's a great question, it's just that these are some of the things that have been tried.
On the sustainability of some of these programs, I can talk with experience of TB, which although not like HIV/AIDS in requiring lifelong treatment, still is a six-month course. You feel dramatically better within six weeks, and you find a lot of people dropping off, which contributes to multi-drug resistance. So there is probably a thing or two from TB as far as how to keep people on treatment.
One very interesting example we saw in a couple of African countries is that the patient who was being treated would be housed with a relative that had some kind of social standing in the community, and there was almost a bond, not a financial bond, but a bond that was signed by that relative saying that this person will complete the treatment and I am personally responsible. Basically, you're building on strong social networks that exist in many of these communities, and that relative would then assure that this person stayed there for six months and completed the treatment. In Burma, for example, we are told that there's an entire volunteer army of over 100,000 women who effectively go every morning, starting at 5 o'clock, from house to house making sure that they have the pills in hand and people are taking them. They actually observe that those pills are taken over a six-month period. Again, I'm not saying these are scalable or sustainable, but involving the community when you have chronic care situations is probably a starting point.
Tim Goodman: The only thing I would add is that, with regard to expanding access to ARVs in Africa and other developing countries, there's of course a thriving generic industry. The innovative medicines for the most part are not patented in most countries of Sub-Saharan Africa, which means that generic manufacturers in India and other countries are able to market their products at cost or at a much lower rate than is charged by innovative companies in the developed world in these less-developed countries. Under international trade rules, governments also have what are called flexibilities to basically compulsorily license the patents of drugs that are deemed essential in certain crisis conditions and for certain disease areas, and manufacture them locally at a much lower cost for distribution within their countries. Then there's also the accelerating access initiative, which is participated in by several companies that develop innovative medicines, intended to make these medicines at cost to developing countries.
Donovan Cook: We were given, as a panel, a dispensation of maybe five minutes but no more, so we've about given our allotment of time. Let me conclude with a personal note of tremendous appreciation to the SAID group and the GSB International Development Club for your leadership on campus, and with an observation. Some of us were involved in a gathering yesterday on campus at which there was an examination of this extraordinary moment globally where there's this international response to the circumstances created by the tsunami on December 26, and the acknowledgement that this particular campus, Stanford University, as a student body, has become engaged in awareness and fundraising to direct this issue. David, I'm sure, would support this—we were at this gathering yesterday. It's an extraordinary moment for this community, the university—faculty, administration, students, and friends—to really keep this moment alive, and the significance of this compassionate concern on the part of the community here to address that issue, and to really look deeply at what is happening there, and what does your own engagement and involvement mean, in terms of monitoring and evaluating your own engagement and your investment in supporting others. So I trust that this will continue to be through the balance of the year really a vital opportunity for the community here at Stanford to continue this type of engagement. The second thought is just thanks to the committee here at Stanford for this fourth annual event. It's an extraordinary opportunity to come together and address critical issues of concern to all of us, particularly the global community. So I congratulate you and thank you for this privilege of being a part of the panel this afternoon.
Related Links
2005 International Development Conference
Remarks by the Conference Panel on Medical Innovations