Markets vs. Humanitarianism: COVID-19 Drugs to Highest Bidder or to Those in Need?

Jul 12, 2020 | Bill Gates, Blog, COVID-19, Health Equity, News

Markets vs. Humanitarianism COVID-19 Drugs to Highest Bidder or to Those in Need

Bill Gates, who knows something about markets, monopolies, and power, recently shared at a virtual COVID-19 conference organized by the International AIDS Society. He shared heightened concerned that a purely market-driven allocation of COVID-19 drugs and vaccines could lead to an even more deadly pandemic. Why? Aren’t market forces the most rational, efficient and effective means of allocating important products and services? Isn’t that a superior way to reward units of capital and talent that compete to out-innovate and perform each other? Afterall, the only reason Mr. Gates can give out so much money to so many different charities and nonprofits is because he accumulated vast amounts of capital, operating in ruthless fashion in cut-throat software markets. Such presuppositions perhaps are relevant in some constructs and contexts, but in others involving health care generally, and pandemic conditions specifically, perhaps a different ideological underpinning necessitates a different set of practices.

Market Forces 

An unfolding dynamic now drives those counties that seek first access to a drug or vaccine to “put skin in the game” via down payments to help share the burden of “at risk.” After all, a drug or vaccine maker must invest heavily in a development-stage candidate faces a high probability that their product will not meet health regulatory expectations, and hence not be approved.  That equals failure. Then, that particular company involved could easily go bankrupt if it doesn’t possess enormous amounts of capital. That, we see a winner-take-all market forming for drugs. This is especially true for vaccines in the COVID-19 epidemic, and it ensures that the highest bidder secures access to that product, should it ultimately be effective and hence cleared for use. One could make the case that if Bill Gates’ own logic was applied to his building of Microsoft, then there wouldn’t be the same Microsoft and he wouldn’t be worth billions.

The Innovator’s Dilemma

These are difficult challenges and decisions. This is especially true in the case of innovative, smaller biotech’s that do not have the capital required to identify a vaccine candidate, undertake the research and development, fund clinical trials and find a way to commercialize and distribute the product. This overall effort is out of reach to all but the largest pharma companies as it is. Without government intervention and payments, most of the small innovative players won’t make it.  That’s how some of the players in the current COVID-19 vaccine race have remained in the pursuit. But the reality is that a tremendous amount of taxpayer money now is awarded and allocated to biotech firms. And the politicians that work to secure and allocate that taxpayer money must promise to those taxpayers that they will benefit. But the problem is that most people feel more empathy for others when they themselves are safe, secure and comfortable. But when they are also driven by fear all bets are off for a “culture of sharing.” Hence the taxpayers in one particular nation want the benefit of that allocation of public capital to secure upfront, at risk vaccine access.

Is Healthcare Truly a Market, or is it a Social Good

What are the implications of this more market driven model? Are there flaws in the paradigm? Is health care a fundamentally different good than, let’s say, computer software? Are healthcare goods purely market goods or do they also have attributes of a shared social good? Much like a utility operations, they are often regulated monopolistic entities. Does this model of drug and vaccine allocation open up fundamental contradictions that hurt society–even those pharma and biotech companies in the long run?

Bill Gates POV

Mr. Gates believes that a pure market model should not be employed or embraced with COVID-19 drugs and vaccine initiatives. He argues that society has crossed into a precarious place as pure market forces take hold. By relying on an economic model of market fundamentalism, Gates suggest the outcome would include a prolonging of the deadly epidemic, especially in poorer countries. And, of course, in a globalized world the virus will never be stationary. Like a boomerang, the SARS-CoV-2 pathogen will make its way back north, or east, or whatever direction.

Gates is not alone. Many in government, academia and even business circles, not to mention non-government groups such as the World Health Organization, warn that “unhealthy competition” among desperate, fear-driven nations that prize exclusive access to COVID-19 medicine and vaccine product would lead to horrific outcomes, that ultimately will again, boomerang back on the richer countries in all sorts of unexpected but not pleasant forms.

Global Distribution System

Gates points to a number of important global collaborations that have had positive impact over the decades. He emphasized a 2002-created “Global Fund to Fight AIDS, Tuberculosis and Malaria,” in addition to the “U.S.-based President’s Emergency Plan for AIDS Relief,” as powerful tools to rapidly distribute effective drugs to where they were most needed. Gates emphasized, “One of the best lessons in the fight against HIV/AIDS is the importance of building this large, fair global distribution system to get the drugs out to everyone.”

It’s all in the Point of View

There has clearly been a trend toward more nationalistic tendencies over the past several years. From Brexit to growing nation-first leading politicians over globalized paradigms is probably the more disturbing underlying force at work here. Citizens in many nations becoming increasingly suspect and leery of post-World War 2 international agendas. However, since the advent of the industrial revolution, and even before during times of mercantilism, economies (and hence people and ultimately, markets) have grown more intertwined, and hence interdependent. That was the great post World War 2 order, for example. The United Nations being a prime example, these global groups became specialized such as groups dedicated to delivering drugs to the most improvised of countries.

Hard Decisions

From Mr. Gates’ point of view, the definition of real leadership means those committed to a higher humanistic ideal, that on the one hand factors in the pragmatic realities of the business of science while on the other possesses the wisdom to understand the importance of equity in the context of health care generally, and deadly pandemics more specifically. So, equity and a uniform global stance to fighting this disease are higher-order principles that Gates’ now fundamentally believe in, declaring: “We need leaders to make these hard decisions about distributing based on equity, not just on market-driven factors.”

1 Comment

  1. Carl Nes

    A nation taking care of its own first engenders the desire to help others. The opposite leads to suspicion, contrariness and skepticism and the erosion of the public trust. Not good things.

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