Companies must take unilateral action now to address the challenges of global health and development, says Raymond Gilmartin. –
Twelve months ago, I had the privilege of serving as a co-chairman of the World Economic Forum Annual Meeting in New York City. The meeting took place against the extraordinary backdrop of the tragic events and inspiring heroism of September 11. But it also reminded us that – for much of the world – poverty, war, environmental degradation and disease are threats as immediate as terrorism.
Although globalization and free markets have lifted hundreds of millions of people out of grinding poverty, prosperity still eludes too many. These are also the issues that will help define the political, business and economic environment in which companies such as ours will operate.
Corporations must view these issues from the perspective of a long-term investor. The ability to maintain and extend markets from the developed world to emerging markets and on to all the nations of the world will be impossible unless we create the foundation of political and economic stability that can only come by addressing the economic and social needs of the world’s poorest nations.
Addressing the issuesCompanies have traditionally taken a conservative view of engaging in these issues with governments, international organizations, community groups and nongovernmental organizations. But in our 21st-century world this limited view is no longer tenable. Corporations need to engage with a broader group in the public sector and civil society on the basis of their particular expertise, areas of business and resources.
As a global healthcare company, Merck’s engagement logically has health at its core.
The improvement of global health is an area that our people know intimately. It is a field to which we contribute directly with our research and medicines and indirectly with our experience and expertise.
It also makes sense to frame our role in addressing global poverty around health because the link between global health and economic development is increasingly well understood. Disease is not just a consequence of poverty, it is also a cause of poverty. Conversely, improved health is a driver of economic growth and a way out of poverty.
Corporations seeking to engage in actions to meet the critical needs of developing nations need to approach the task from two perspectives. First, they need to seek ways in which they can supply their goods and services to improve health and build economic prosperity. Second, they need to initiate and enter into partnerships with governments, multilateral organizations, other corporations and NGOs to address specific development challenges.
Corporations cannot choose to write off the developing world as beyond their business interests. Although philanthropy remains an important role for corporate America, the development of workable, long-term business models is the only real way to ensure that the products and services we generate are truly available to fight global poverty and meet health challenges such as AIDS, malaria and TB.
For pharmaceutical companies, that challenge has centred on how people in developing nations can gain access to our medicines and vaccines. In May 2000, Merck and four other companies entered into the Accelerating Access Initiative to provide medicines at reduced cost in the developing world.
We followed that agreement with our announcement in March 2001 that we would sell our two current HIV/AIDS medicines, Crixivan and Stocrin, at a no-profit price in more than 60 of the least developed countries and those hardest hit by the HIV/AIDS epidemic, and at reduced prices in more than 50 other countries. This strategy is right for the people who need our medicines, right for the countries and donors paying for the medicines, and, equally important, right in a business sense.
By pricing our medicines differently from country to country, on the basis of the unique aspects and wealth of the market, we can expand access while gaining the increased revenues that are possible because – as with many high-technology products – sunk research costs are very high and marginal production costs relatively low.
Our actions have succeeded in increasing access to medicines. By July 2002, more than 36,000 people in African countries were on antiretroviral therapy. For Crixivan and Stocrin this represents an elevenfold increase in sub-Saharan Africa in less than two years. But although these numbers are encouraging and important to the individuals involved, they represent only a fraction of those in need.
That is because the price of medicines is just one aspect of the access picture. It is simply not enough for corporations seeking to make a difference in global health to put out a price list and then wash their hands of the problem. We also have to help build the capacity to get those medicines to the people who need them.
That is where public/private partnerships come into play. At their core, public/private partnerships are cooperative ventures between the public and private sectors, built on the expertise of each partner and designed to meet a clearly defined public health need.
UN secretary general Kofi Annan observed at the World Summit on Sustainable Development in Johannesburg last September: “Today, there is growing recognition that lasting and effective answers can only be found if business joins in partnership and works together with other actors.”
Making a difference
For the past 15 years our company has been involved in a partnership of governments, multilateral organizations and nongovernmental organizations in which we donate Mectizan, a once-a-year treatment that prevents river blindness, to more than 30 million people each year in 33 nations.
River blindness is endemic throughout sub-Saharan Africa, Latin America and the Arabian Peninsula. It is a disease which destroys vision and, with it, the ability to support a family. The fear of infection drives entire villages away from their homes and the fertile farmland near rivers that they must farm to escape hunger and poverty.
Our partners include the World Health Organization, the World Bank and UNICEF, as well as more than 30 NGOs, including Helen Keller Worldwide, Sight Savers International and the Carter Center. We also have strong government and community-level sector partners in the affected nations.
Not only are an estimated 50,000 people spared blindness each year, in addition millions of acres of prime farmland are now available for settlement and cultivation again. And what we learnt with Mectizan distribution has informed new health partnerships, including successful efforts by others to fight leprosy, sleeping sickness, lymphatic filariasis and trachoma.
We apply the lessons now to HIV/AIDS through the partnership we formed with the government of Botswana and the Bill & Melinda Gates Foundation to support the development and implementation of Botswana’s national HIV/AIDS strategy.
The financial support for this major initiative – $50 million each from Merck and the Gates Foundation – is significant. But perhaps equally remarkable is the concept of a formal agreement between a foundation, a company and a government to meet a pressing health need.
As we undertake this partnership, we find ourselves heavily involved in helping to build the critical human resource capacity – through training and skills development in leadership, project management, monitoring and evaluation. We did not expect this, but it is what we must help to do. Such partnerships – along with modifying business models – make up elements of a corporate strategy for addressing the pressing issues of global health and development.
The World Economic Forum continues to play an important role in bringing stakeholders together and catalyzing new ideas. The Forum’s Global Health Initiative, which Merck has joined along with other leading companies, is an example of stakeholders pulling together to achieve more equal opportunities for better health. The Forum’s leadership in the establishment of the Global Fund to fight AIDS, Tuberculosis and Malaria is another area in which it is making a solid contribution.
US secretary of state Colin Powell said at the Johannesburg summit in September: “Plans are good. But actions can put clean water in the mouths of thirsty girls and boys, prevent the transmission of a deadly virus from mother to child and preserve the biodiversity of a fragile African ecosystem.”
It is indeed time to act. As a company, we are committed to moving beyond advocacy, beyond argument and beyond planning to take actions on global health that can make a difference now.
Raymond Gilmartin is chairman, president and chief executive officer of Merck & Co.