Pharma in Africa
We Need Fundamental Reform to Help Save the World
Africa desperately needs drugs to combat AIDS, pneumonia, influenza, meningitis, and other infectious diseases. Not only do they need drugs, they need cheap drugs.
This presents a problem. How do we send cheap drugs abroad — using American money — without weakening the incentives for pharmaceutical companies (and subsequently, the entire American biotechnology sector) to innovate?
I propose a solution: we must find a way to make these life-saving drugs cheaper without decreasing pharmaceutical revenues. If many of the major life-saving drugs, such as those that combat AIDS, Alzheimer’s, and high blood pressure, were cheaper, America as a whole would benefit. Health care costs would drop, and fewer people would venture into Canada to pick up cheap versions of the same drug.
But most drugs produced by pharmaceuticals can be called ‘life-saving drugs’, so how do we differentiate between drugs to decrease the price of, and which not to? First, by increasing the price of contraceptives and male “performance” enhancers, we can already make up much of the revenue difference. Think of this as a luxury tax.
Very few people absolutely need contraceptives to live, and perhaps those who do can negotiate help from charitable organizations. Young people are much better at fending for ourselves than the elderly and infirm are, and we have the strength to work to make up the cost difference.
Even if increasing the price of these and similar drugs does not make up for the difference in pharmaceuticals’ revenue, think of the markets that would open up once the prices of life-saving drugs were drastically decreased. If a company makes 10 percent profit on every life-saving drug that they sell, and now they make 5 percent and they sell three times the amount that they previously did … well, you do the math.
Not to mention that pharmaceuticals will find themselves with new markets abroad for other drugs, such as Viagra. So if the price of Viagra increases, and the market for Viagra doubles … well, let’s just say I don’t think the drug companies would mind this much at all. Actually, I’m surprised they haven’t thought of this themselves.
However, perhaps cutting the drugs from a 10 percent profit to a 5 percent profit won’t help Africa or Asia at all. This is where NGOs such as the Red Cross come in. If the above drug price cuts were already negotiated, and then mandated by the federal government during the drug approval process, the Red Cross would be free to subsidize the already lower-priced drugs, and ship them to where they are needed.
Unfortunately, the Red Cross probably has nowhere near enough money to absorb the costs of drugs by themselves.
If the Red Cross were to combine with major NGOs across the nation, which are all focused on different aspects of the same goal — help poor and unhealthy people — however, that powerhouse of an organization would most certainly be better equipped to handle the problem. Not to mention that various churches, such as the Catholics and the Mormons, which have plenty of money, would likely be eager to join the campaign.
I believe the nation as a whole would benefit from the reorganization of NGOs. Imagine if you no longer had to compare those silly pie graphs to decide which organization to donate to. Imagine if one large organization was efficiently divided into multiple sectors, and each specialized in a different area. Experts would long to work for the NGO that seems to do the impossible — effectively address the economic, health, and political problems of the developing world.
Also, separate NGOs would no longer have to compete for the same funding with heavy advertising — which, by the way, eats up quite a chunk of their revenue. No longer would NGOs overlap and attempt to address the same problem with the same nation with twice the funding. Talk about an efficiency boost.
Reorganization is in order if we are actually going to accomplish this lofty goal of saving millions of Africans from what are frequently very painful deaths. We should not be afraid of teamwork, or of giving one organization quite a bit of power.
Large organizations such as Walmart have already demonstrated that the efficiency increases that I described are real. An NGO powerhouse isn’t something to fear — it’s something to be grateful for.
Without overhauling our current system, we cannot effectively help Africa. It takes a whole continent to save another. One NGO, one church, one branch of the government simply can’t do it alone.
Jennifer Nelson ’09 is a student in the Department of Biology.