New Business Rules Expanding Access to Healthcare to the World’s Poorest Countries
As the volume of political debate over foreign aid increases, a new approach to investment in the developing world by the pharmaceutical industry could offer part of the solution. It is an approach born not out of corporate philanthropy, but from an understanding of the shared value to be gained through aligning the health needs of people in developing countries with the commercial success that will ensure sustained investment and growth.
Every year millions of the world’s poorest people die from curable or preventable infectious diseases. This problem is particularly acute for the 800 million of the world’s poorest people living in least developed countries (LDCs), half of whom live on less than a dollar a day. They suffer unnecessary ill health because they do not have access to essential medicines or basic healthcare services. The shortage of trained frontline health workers in these countries means that people may be hours or even days away from treatment. The WHO estimates that Africa alone needs an extra 100 million healthcare workers.
As a pharmaceutical company, our objective is to supply more medicines to the patients that need them. But the traditional industry business model has focused on those parts of the global population who can afford patented medicines. This is a model that is not relevant for the vast majority of people who live in LDCs. We see the opportunity to go beyond that model in order to support greater access to our medicines for the world’s poorest people and to use it as a catalyst for thinking differently about how GSK runs its business, working in partnership with others and aligning the healthcare needs of people in developing countries with the commercial success that will ensure sustained investment.
This is why GSK has created a dedicated Developing Countries and Market Access unit to focus solely on the needs of those countries. The new operating unit has different rules from the rest of the business. Instead of incentivising our managers in these countries on revenue, we reward them on the volume of medicines they supply. We have a longer-term investment horizon, to encourage longer term business planning. We also have a different pricing policy and cap the prices of our patented medicines and vaccines at no more than 25% of the developed world prices.
Perhaps most radically, we have committed to reinvesting 20% of profits we make in LDCs back into projects that that strengthen healthcare infrastructure in these countries.
This week’s announcement of a new partnership between GSK and three leading NGOs – AMREF in East and Southern Africa, CARE International in Asia Pacific and Save the Children in West Africa – will help to channel this re-investment to where it is most needed – supporting front-line health workers on the ground.
Trained community health workers can provide essential basic healthcare and education services to the communities in which they live. For example, one trained community health worker can provide basic treatment for common childhood illnesses such as diarrhoea, malaria, acute malnutrition and pneumonia to around 10,000 children in a year.
Some projects are already underway and include expanding a group of nurse-run clinics to improve access to quality basic healthcare and essential medicines in Rwanda and a community health infrastructure project in Cambodia which is supporting the renovation of a clinical training centre for midwives to help reduce the number of women and infants who die during childbirth. As a result of the new partnership, we’re planning new projects in Ethiopia, Democratic Republic of Congo, Yemen, Niger, Sierra Leone, Angola, Zambia, Bangladesh and Nepal. The aim is that by 2012, a project will be underway in every LDC where GSK makes a profit.
Some might argue that the amount we have committed to reinvest – £3.5 million this year – is a relatively small sum for an organisation like GSK. We are the first to recognise this is not going to solve the world’s problems. But it is also important to remember that in these countries, a small amount of money can go a long way and can make a real difference on the ground. It is also a sustainable investment which will gives the reassurance of guaranteed investment year in year out. And it is important to recognise is that not all least developed countries will be poor forever. As our business grows so will the amount we have available to reinvest.
The answer to access to healthcare in LDCs is not simple, and is certainly not something we can fix on our own – but GSK is fully committed to being part of the solution.