Philanthrocapitalism_ How Giving Can Save the World - Matthew Bishop [79]
As I write this, almost 750,000 people are receiving treatment with drugs purchased under our contract terms, about a third of all those receiving treatment in the developing world today. The lower price our partners set and the big sales increases they sparked had a ripple effect on the market, accelerating considerable price decreases for other purchasers of AIDS generics. Now the average price listed by suppliers for the most common medicine is within our ceiling, so that even nations not part of our buying group can treat many more people within their budgets.
With the average price of the most common combination of adult drugs now down to about $120 a year and the price of children’s medication down to $60, there are sufficient funds available for the drugs to treat most people in poor countries. We haven’t yet negotiated enough price reductions for the second-line drugs, which cost on average more than ten times as much as the first-line medicines. By 2010, 10 percent of those on ARVs will be on second-line drugs. Beyond that, the main constraint on providing treatment is the limited ability of developing nations’ health systems to identify and care for HIV-positive people. That’s why we need more volunteers and donations.
Bolstered by our experience with AIDS drugs, our foundation and partners have used the strategy of organizing and expanding markets to advance other good causes. That’s what we did for Rwandan farmers in the Clinton-Hunter Development Initiative in cutting the cost of fertilizer supplied by a Norwegian manufacturer 30 percent, reducing microcredit loan interest rates 30 to 50 percent, bringing greater efficiencies to the supply chain, and lowering transportation costs. As a result, Rwandan farmers had access to three and a half times more fertilizer than ever before at dramatically lower prices, despite the general trend of rising prices for both energy and fertilizer.
The public goods market was reorganized in a different way when the major soft drink and snack companies agreed with our foundation’s Alliance for a Healthier Generation voluntarily to limit the caloric and sugar content of the products they sell in schools by reducing the size and improving the content of their products. Because major food producers including Campbell Soup, Dannon, Kraft Foods, Mars, and PepsiCo agreed to follow the same nutrition guidelines, and the American Beverage Association, PepsiCo, Coca-Cola, and Cadbury Schweppes all committed to follow the healthier school beverage guidelines, they will be able to help turn the tide of childhood obesity without being at a competitive disadvantage.
In 2006, Ken Livingstone, the mayor of London, asked our foundation to become involved with an effort he was organizing to get the world’s largest cities to work together to combat climate change by becoming more energy-efficient and using more clean energy. To date, forty cities across the world are participating, along with more than a dozen smaller associate cities. In May 2007, we announced an effort to dramatically accelerate the greening of existing buildings. Beginning in sixteen of the forty cities, with five banks committing $1 billion each to finance the operations, the effort will more than double the current rate of building retrofitting. We also hope to help cities purchase LED traffic lights or high-pressure sodium