Global Health Ideas

Finding global health solutions through innovation and technology

Garrett’s speech to the IFC: Time for healthy profits to save lives

Laurie Garrett, author of incisive books on public health and senior fellow on global health at the Council on Foreign Relations, recently spoke at the World Bank on the pressing significance of the profit motive in scaling effective health services. If you have time, I recommend reading the full PDF (hat tip to the Acumen Fund blog). Incentivized healthcare as a donor priority has been on the agenda for at least the past 15 years (see more recent World Bank 2004 World Development Report) and donor-supported health programs incorporating large numbers of private healthcare providers can be found in Taiwan and South Korea as early as the 1960s.  (If you can find a copy of this publication, worth a checking out: Kim, Ross and Worth (1972). The Korean National Family Planning Program: Population Control and Fertility Decline.  The Population Council: New York.  Use WorldCat to search your local libraries.)

Although the ideas are not new, the convergence of some donors’ calls for greater accountability and growth of pragmatic social ventures underscore the role of effective healthcare markets in low-income countries.   As always, Garrett is a compelling writer. The following excerpt sums up her call for productive investment in health:

For decades global health has been treated as a charity. Billions of people the world over have, for decades, been dependent on the kindness of strangers for their health and survival. While other fields of development may have encouraged capitalist solutions, health has been treated as if it were too sacred to be besmirched by profits. In the wealthy world every aspect of health, from record-keeping to pill-making; ambulance driving to hospitalization, is a profit center. We seem to feel that if you are living in France, Denmark, Canada, Japan – in those places it’s ok for hundreds of companies and thousands of individuals to realize profits from the health enterprise. We just don’t think that is ok in poor countries.

I think it’s time to tell truth to power: The charity model of global health is racist. It assumes that the health leaders of the poor nations of the world will endlessly get on bended knee, and with outstretched arms beg for alms. It doesn’t matter to whom the begging is directed – the World Bank, USAID, Bill Gates, Bono – it is still begging. The charity model offers no supply or resources guarantees over time. Yet it expects targeted achievements, realized in very short time windows, allowing the donor to brag about the numbers of lives saved, thanks to his beneficence.

I think it’s time to get out of the charity model, and get serious about investment. My take-home message is this: Invest in small businesses, even micro-finance approaches to health. Do not invest in models that promote health by subsidizing outside corporate interests. Rather, build local economies and businesses, employ the unemployed, and do so aggressively.

The second piece of this is related to supplies: sterile syringes, medicines, latex gloves, autoclaves — build global scale supplies procurement and distribution centers. Give the little guy in Malawi a chance to purchase essential supplies as part of an international pool, arguing down unit prices in favor of volume purchasing. Why should a small pharmacist in Lilongwe pay more for aspirin than Wal-Mart?

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6 Responses

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  1. Never carry your shotgun or your knowledge at half-cock.–Austin O’Malley (1858 – 1932), physician/humorist

    Mefinvette

    July 15, 2008 at 7:47 am

  2. […] Ben at Technology, Health & Development reports on Laurie Garrett’s speech at the International Health Conference. […]

  3. A couple examples come to mind:
    CFW shops in Kenya
    Living Goods
    Freedom from Hunger’s Microbusinesses for Health Initiative

    I’ve highlighted all of them at one point or other on my blog over at microfranchising.blogspot.com

    stokemeister

    May 6, 2007 at 5:32 pm

  4. Good points. Hadn’t heard about the ARV generics costing more than branded versions. Drug supply has definitely vexed the global health community for the past 20+ years. The Bamako Initiative in 1987 declared that the way forward was to funnel drugs to public sector pharmacies with the understanding that cost recovery would replenish stocks. It may have worked in Mali for a time but the Initiative elsewhere had mixed effects dependent on the characteristics of the local leadership and regional pharmaceutical markets. More problematic, it failed to engage the private sector.

    Ben

    May 6, 2007 at 4:00 pm

  5. I should add, though, that CGD’s demand forecasting work (published later this month) does also point to the potential of demand driven supply hubs as a possible solution to the weak global health supply chains, at least for some products like ACTs.

    Jessica Pickett

    May 5, 2007 at 2:18 pm

  6. On the last point about volume purchasing driving down prices: Obviously, that’s a desirable and economically logical assumption. Unfortunately, Brenda Waning at Boston University has just done a study of ARV pricing (based on the WHO Global Price Reporting Mechanism) and found a shockingly low – possibly nonexistent, I’m not sure of the statistical significance – correlation between purchasing quantity and prices paid (at least not for 1st line products in pill forms). Definitely worth learning more…

    On an interesting side note, she also found that counter to common beliefs, generic 2nd line ARVs are on average actually more expensive than their branded counterparts.

    Jessica Pickett

    May 5, 2007 at 2:16 pm


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