“Technology is way advanced, and it’s the business models that are lagging way behind, limiting what social entrepreneurs are able to accomplish,” says Victoria Hale, founder of two nonprofit pharmaceutical companies.
The Scientist has an exciting new article on new model for the pharmaceutical industry, blending the social mission of non-profits with the efficient business practices of big corporations. The perennial problem of big pharma and global health is that developing new treatments is expensive, and many of the most horrible disease are suffered by small numbers of people in the third world. Even though these diseases exact a terrible human toll, it isn’t financially viable to search for cures.
Enter non-profit pharmaceutical companies, which target these diseases, like malaria, dysentery, or the deadly visceral leishmaniasis:
Since its inception, [Institute for OneWorld Health] has received more than $200 million from the Bill & Melinda Gates Foundation as well as funds from other philanthropic donors. The socially conscious company has even tugged at the heartstrings of several for-profit pharmaceutical companies, who have agreed to make and distribute drugs developed by iOWH on a no profit, no loss basis. With that backing, the company has already brought to market a drug to treat visceral leishmaniasis—the world’s second-largest parasitic killer after malaria—and developed a pipeline of others designed for scourges of the developing world: malaria, diarrheal diseases, and parasitic worm infections.
iOWH is unusual, but it is not alone. With philanthropists funneling billions of dollars into biomedical research and traditional drug discovery efforts producing fewer and fewer therapies, the line between for-profit and nonprofit life science companies is beginning to blur as both sides of the divide look for new options. More and more for-profit enterprises are experimenting with nonprofit models, while nonprofit organizations look to incorporate for-profit business practices to stay afloat.
“At one time, people in the nonprofit world had a disdain for business, and business people thought nonprofits were without discipline,” says Jack Faris, CEO of the Pacific Northwest Diabetes Research Institute, a nonprofit research center in Seattle, Washington. “People have matured a substantial amount beyond that…There’s much more appreciation of the role that each plays and a readiness to work together.”
The typical pattern is a partnership, where non-profits use advanced scientific knowledge to find cures, and local partners get the drugs into the hands of those who need them:
iOWH, however, did not have funds for manufacturing facilities to make and distribute the product. So to get the drug to those who needed it, iOWH partnered with a for-profit company in India, Gland Pharmaceuticals, which has agreed to take on those roles for no profit, no loss. With Gland’s help, paromomycin is now available in India and costs $10-15 for the whole 21-injection course of therapy. “It’s a family-run company, and they really care a lot about diseases of the poor,” says Chin. “They’ve been fantastic.”
iOWH, however, did not have funds for manufacturing facilities to make and distribute the product. So to get the drug to those who needed it, iOWH partnered with a for-profit company in India, Gland Pharmaceuticals, which has agreed to take on those roles for no profit, no loss. With Gland’s help, paromomycin is now available in India and costs $10-15 for the whole 21-injection course of therapy. “It’s a family-run company, and they really care a lot about diseases of the poor,” says Chin. “They’ve been fantastic.”
These hybrid models might offer one solution to the crisis of global health, distributing socially beneficial knowledge to help everybody, not just those who can afford it.