Our Motivation

From 1995 to 2004, a total of 1,556 new drugs were approved in the US. Only 1.3% of these new treatments were developed to fight infectious diseases in developing nations.

One in every seven people in the world has been infected with HIV, malaria, tuberculosis, or a NTD. Three in every seven people are at risk of contracting such diseases. Why, then, have so few new drugs been developed to combat these conditions?

To a large extent, the mechanisms of supply and demand as viewed from a corporate business model explain why there are so few medications available for these important diseases.

The diagram on the right illustrates the cycle of supply and demand for a new product, with demand from patients and supply from the product developer. When a certain number of patients suffer from a given ailment, this generates demand for a treatment. Companies view this as a business opportunity that may generate profit, which drives investments in R&D of new medications against the disease. If R&D and commercialization of a given product succeed, the product will reach patients, and treatment can proceed.

The creation and commercialization of new products requires major outlays of time and resources, and the chances of success are extremely low. Companies that undertake R&D thus shoulder heavy amounts of risk. New product development is desirable for both product developers and the patients. But when companies stumble during development they can suffer major financial blows. Therefore, they choose their R&D targets carefully. They are not in a position to innovate without concern for profits, because this is not a sustainable business model. The traditional business model, therefore, fails to address many global health challenges.

Consider the case of infectious diseases in developing nations.

In the developing world, the catalysts for product development are similar: patients contract certain diseases, and the demand for treatments emerges. Yet in contrast to the developed world scenario, in poor countries demand often comes from populations that cannot pay for treatments. In such settings, product developers have no expectation of obtaining earnings commensurate with the risk and outlays required to develop a new product. This complicates incentives and thereby disrupts the supply-demand cycle. The patients in developing nations, who as a whole represent the poorest of the world’s poor, generally subsist on less than 1 dollar a day. Because this translates into severely limited purchasing power, product developers have not viewed these patients as viable consumers.

The lack of expected profits proportional to R&D costs lowers the likelihood that private-sector companies will undertake vigorous product development programs. As a result, patients fail to gain access to the pharmaceuticals needed to treat their conditions. Free market-based business models contain structural limitations with regard to the development of new products targeted for use in developing nations. In this context, patients and their diseases in developing nations have been relegated to so-called “neglected” status.
The ability of patients to obtain and utilize the products they require, when and where they require them and with full confidence, is known as “access to medicine.”

The benchmarks used to determine the quality of such access are generally expressed as the 4As – Availability, Affordability, Adoption and Architecture*.

What is it that impedes access to medicine for the most impoverished classes in the world’s developing nations? High prices and the lack of suitable product development alone do not explain this problem. Many factors interact in a complex way to undermine access to medicine. These factors at the global national and regional level include weak national healthcare systems, underdeveloped insurance systems, physical and geographical obstacles to reaching hospitals and pharmacies, patents, and the circulation of inferior or counterfeit pharmaceuticals. Such issues are extremely challenging for individual nations or companies to resolve on their own. Solutions to these problems require collaboration among stakeholders in developed and developing nations to hammer out effective strategies.

* Frost LJ, Reich MR, Access: How Do Good Health Technologies Get to Poor People in Poor Countries? Cambridge: Harvard Center for Population and Development Studies, distributed by Harvard University Press, 2008.