Sunday, November 21, 2010

The Gates Foundation and World Health: Closing in on Polio

The Gates Foundation (actually named the Bill and Melinda Gates Foundation) has such a large endowment that it can, by its own actions and funding decisions, affect world health. This places a burden on the organization to use their funds wisely, and occasionally makes them a target for criticism.

As of the end of 2009, the Foundation had assets of $33.5B. To maintain its status as a charitable organization it must disperse 5% of its funds annually, about $1.5B. This is a rate that a conservatively invested endowment might be expected to earn. In 2006, Warren Buffett agreed to contribute shares in Berkshire Hathaway worth approximately $30B at the time. These shares would be distributed over time, and were provided with the intention of having them distributed rather than being added to the endowment. The net effect of the Buffett contribution was to double the amount of funds available for charitable causes from the Foundation. Funding at this level allows the Gates Foundation to participate on the international stage at the same level as nations and international organizations such as the United Nations.

More about the history and activities of the Foundation can be found here. The Foundation’s web site is also a good source of information. Perhaps of most value to those interested in the foundation’s goals, motives and approaches, is a message composed annually by Bill Gates, a form of annual report directed at the world. Not surprisingly Gates has an approach that one might expect from a technology-oriented businessman.
“Although innovation is unpredictable, there is a lot that governments, private companies, and foundations can do to accelerate it. Rich governments need to spend more on research and development, for instance, and we need better measurement systems in health and education to determine what works.”

“Melinda and I see our foundation’s key role as investing in innovations that would not otherwise be funded. This draws not only on our backgrounds in technology but also on the foundation’s size and ability to take a long-term view and take large risks on new approaches. Warren Buffett put it well in 2006 when he told us, “Don’t just go for safe projects. You can bat a thousand in this game if you want to by doing nothing important. Or you’ll bat something less than that if you take on the really tough problems.” We are backing innovations in education, food, and health as well as some related areas like savings for the poor.”

“We have a framework for deciding which innovations we get behind. A key criterion for us is that once the innovation is proven, the cost of maintaining it needs to be much lower than the benefit, so that individuals or governments will want to keep it going when we are no longer involved. Many things we could fund don’t meet this requirement, so we stay away from them. Another consideration for us is the ability to find partners with excellent teams of people who will benefit from significant resources over a period of 5 to 15 years.”
Gates collects the major initiatives under three headings: Global Health Program, Global Development Program, and the United States Program. The latter is focused on education with components addressing teacher effectiveness, on-line and interactive training, and computer and internet availability. The teacher effectiveness thrust has aroused the ire of many education stakeholders. That was previously discussed here and here. The global development activities are focused on agricultural productivity, improving financial tools and availability, and sanitation.

Gates’ review lists under global health activities: pneumonia and rotavirus vaccine delivery, development of a malaria vaccine, and developing the means for reducing the risk of contracting HIV. These are all worthwhile activities, yet the Foundation’s work still comes under criticism occasionally. Much of the complaining seems to come from journalists looking for a good story, or someone whose idea did not get funded. Most of the same criticisms could be directed at the United Nations, for example. However, there are some valid reasons for concern related to placing a narrow focus on a few large-scale projects. Laurie Garrett, in an article in Foreign Affairs (January/February, 2007), The Challenge of Global Health, argues that such narrow focus can detract from the development of general health infrastructure in poor countries and ultimately lead to poorer health delivery.
“Less than a decade ago, the biggest problem in global health seemed to be the lack of resources available to combat the multiple scourges ravaging the world's poor and sick. Today, thanks to a recent extraordinary and unprecedented rise in public and private giving, more money is being directed toward pressing heath challenges than ever before. But because the efforts this money is paying for are largely uncoordinated and directed mostly at specific high-profile diseases -- rather than at public health in general -- there is a grave danger that the current age of generosity could not only fall short of expectations but actually make things worse on the ground.”

“But much more than money is required. It takes states, health-care systems, and at least passable local infrastructure to improve public health in the developing world. And because decades of neglect there have rendered local hospitals, clinics, laboratories, medical schools, and health talent dangerously deficient, much of the cash now flooding the field is leaking away without result.”

“The fact that the world is now short well over four million health-care workers, moreover, is all too often ignored. As the populations of the developed countries are aging and coming to require ever more medical attention, they are sucking away local health talent from developing countries. Already, one out of five practicing physicians in the United States is foreign-trained....”

“The years ahead could witness spectacular improvements in the health of billions of people, driven by a grand public and private effort comparable to the Marshall Plan -- or they could see poor societies pushed into even deeper trouble, in yet another tale of well-intended foreign meddling gone awry. Which outcome will emerge depends on whether it is possible to expand the developing world's local talent pool of health workers, restore and improve crumbling national and global health infrastructures, and devise effective local and international systems for disease prevention and treatment.”
But we came here to praise Bill Gates, not to criticize him. The suggestion for this post came from an article in Businessweek magazine highlighting Gates’ contribution to the effort to eliminate polio throughout the world via an aggressive vaccination program.
“Bill Gates’ eureka moment came in June 2009 in an underground conference room at the World Health Organization's headquarters in Geneva. After a decade of giving away millions to eradicate polio, the billionaire philanthropist was being briefed on hours-old data showing how two doses of a new polio vaccine protected 37 percent more children than conventional ones.”

“The immunization, which protects against multiple strains, promised to speed the effort to wipe out the crippling killer that remains a scourge in developing nations. Several months later, Gates pledged an additional $285 million toward eradication of the malady.”

“Fast forward to early November, when Gates again stepped into the fight against polio. This time his charitable foundation helped broker a deal that will allow the UN to buy those new vaccines more cheaply. The Microsoft co-founder met with GlaxoSmithKline Chief Executive Officer Andrew Witty in New York this month as part of talks that resulted in five international suppliers—GlaxoSmithKline, Indonesia's Bio Farma, Sanofi-Aventis, Novartis, and New Delhi-based Panacea Biotec—agreeing to steep cuts in polio vaccine prices.”

“The $60 million saved by the price-cuts will allow Unicef to buy up to an additional 400 million doses, says Bruce Aylward, head of WHO's polio program. ‘We have a real opportunity to give it our best shot to finish this with the new vaccines,’ he says. ‘The manufacturers are playing ball’.”

“Polio, an acute viral disease, paralyzed millions of people worldwide in the 20th century. At the height of the most extensive polio outbreak ever in 1952, almost 60,000 cases with over 3,000 deaths reported in the U.S. alone. Polio was eliminated from the Western hemisphere after vaccines became widely available in the mid-1950s. Yet before the Global Polio Eradication Initiative began in 1988, the disease still paralyzed at least 350,000 children in more than 125 countries annually. Although outbreaks have been dropping fast in recent years, the malady still struck in 23 countries last year. India had the most cases.”

“The Seattle-based Bill & Melinda Gates Foundation has provided more than $1 billion for polio programs during the past decade, making it the biggest donor to a global three-year, $2.6 billion plan to root out the last vestiges of the disease by 2013. It would be the first viral illness in humans to be declared eradicated since smallpox in 1980. “
Sometimes, when money talks good things happen. Thank you Bill (and Melinda).

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