The bill gates problem, p.4
The Bill Gates Problem, page 4
None of this is to say the Gates Foundation isn’t helping save lives. It is. It’s helping get vaccines into arms, for example, and vaccines save lives. But so do other interventions, like training doctors and nurses, building and staffing clinics, and investing in transportation infrastructure to help patients reach those clinics. Where and how we spend our limited resources on public health, at a point, is a political question. And this is why the Gates Foundation generates criticism as an undemocratic force. It uses its wealth and bully pulpit to make sure its priorities are our priorities. It partners with wealthy nations, pushing them to direct foreign aid spending on the foundation’s charitable projects, which diverts taxpayer dollars away from other interventions that might save even more lives or deliver other, more important benefits.
Upon close examination, many of Gates’s claimed successes fall apart. A good case study is the foundation’s work on rotavirus, which causes diarrhea and severe dehydration. In 2022, Bill Gates boasted, “We supported the creation of a new vaccine for rotavirus that has reduced the number of children who die of this disease every year by 75 percent, from 528,000 annually in 2000 to 128,500 in 2016.”
Many, if not most, of these avoided deaths, however, have nothing to do with the foundation’s work with vaccines. It is true that deaths from rotavirus are in decline, but that trend began years before the foundation started working on the disease, or before a vaccine was widely recommended for use in poor nations (in 2009). Improved sanitation and hand washing, clean drinking water, and the wider availability of oral rehydration therapy (and, more generally, the availability of health care) have all contributed to the mortality reductions. Also notable: a cruel irony of rotavirus vaccines is that they are not as effective in the poor nations where they are needed most as they are in wealthy nations. That doesn’t mean they aren’t an important tool. They just aren’t the only tool—or the silver bullet solution the Gates Foundation wants them to be. Really improving public health requires us to address more fundamental issues related to poverty, like making sure people have access to a healthy diet, clean water, health care, income, and housing.
“Yes—biomedical technology (especially vaccines and antibiotics) has given us the ability to keep more and more people alive,” David McCoy, a researcher at United Nations University, told me, “but this reliance on technology is fragile and [ignores the fact that] most premature mortality across the world is largely driven by poverty. Arguably, the heavy emphasis placed by the Gates Foundation on technology, and Gates’s active neglect of the social determinants of health, mean the Gates Foundation is causing more harm than good.”
McCoy authored one of the only independent analyses ever published into the proliferation of lives-saved claims, a 2013 academic study examining one of the Gates Foundation’s biggest lifesaving partners, the Global Fund to Fight AIDS, Tuberculosis and Malaria. “The model to produce these [lives-saved] figures is highly suspect and incredibly biased as well,” McCoy told me. “It involves all kinds of methodological imputations that are not really justified.”
Even within Gates’s narrow, pharma-focused approach to public health, we find major limitations. For example, nearly half of all children across the globe today are not vaccinated against rotavirus. Given that multiple rotavirus vaccines are available, and given that Bill Gates seems to have planted his flag and claimed ownership over the disease, doesn’t he have to take some responsibility for these failures? If he’s willing to take credit for the progress we’ve made, torturing or misrepresenting the data to inflate his foundation’s accomplishments, does he not also have to own the shortcomings of his philanthropic work?
The really gaping bias in Gates’s lives-saved narrative is that it fails to reckon with how many lives are being lost. Every year, around sixty million people die. It’s a grim statistic underlined by a troubling reality: many of these people die from preventable or treatable diseases. This speaks to the paradox in modern medicine in which large numbers of people die because the cures are too expensive or because local health systems are not equipped to manage sickness. Again, it’s a problem of poverty and of inequality. At times, it’s also a problem of monopoly markets—of the way we’ve organized the political economy surrounding drugs, vaccines, and diagnostics.
In Bill Gates’s view, patents and intellectual property protections reward companies for the enormous research and development costs they undertake to bring a new medicine to the marketplace. These companies took a risk and invested significant sums of money. So, as a reward, we give them legalized monopoly power in the form of patents as a way to recoup their costs. Monopoly patents lead to high prices, but if we changed our patent system, Gates argues, companies would have no incentive to develop new drugs, and lives would be lost.
Gates did not arrive at this position through independent research or dispassionate inquiry, however. His stance is informed by his career at Microsoft, whose revenues turn on the same patent (and copyright) considerations that drive the pharmaceutical industry. Without strong intellectual property rights, Microsoft could not have been successful, and Bill Gates would not be one of the richest men in the world. He also wouldn’t be a philanthropist. Just as Gates believes that Microsoft’s innovative technology ushered in the computer revolution, he sees pharmaceutical companies, and their patent-forward business model, as saving lives.
“The foundation at this point, we’ve saved about 10 million lives that otherwise wouldn’t have been saved, and our goal for the next decade is 50 million. But we never would have been able to do that except for our partnership with the pharmaceutical companies,” he noted in a 2013 presentation. “Thank god for patent laws that allow them to invent drugs that they get to sell, that then they get to hire researchers [to develop more patented drugs]. They are phenomenal at understanding the drug libraries, the assays, the things like that. And, in fact, none of their patents exist in any of these developing countries. We never run into IP [intellectual property] problems. Not a single time on a single thing. Because in the poor countries we work in, the poorest 90 countries … nobody files patents, nobody enforces patents. It’s essentially a transfer of people buying drugs in [the] rich world who are now enabling these things to be done at marginal cost. All the vaccines we do, we understand the marginal cost—we make sure that’s exactly what the pricing is for the [world’s poorest people].”
In reality, millions of people have died and continue to die because of IP problems. Even if patents don’t exist in poor nations, as Gates argues, that doesn’t mean Pfizer’s or Merck’s monopoly patents don’t shape prices—and access. Multinational pharmaceutical companies can’t make money treating the poorest people on earth, so they often don’t sell their drugs in those countries (at least not at a price people can afford). And as we saw with the Covid-19 pandemic, pharmaceutical companies also refuse to share their blueprints and recipes with generic manufacturers that could make drugs and vaccines cheaply for poor nations.
Many public health experts see Big Pharma and its monopoly patents as an obstacle to progress, not an engine of innovation. In her book The Truth About the Drug Companies: How They Deceive Us and What to Do About It, Marcia Angell, the former editor of the New England Journal of Medicine, skewers the idea that patents allow industry to recoup the costs of innovation. Industry’s largest expense, by a wide margin, is on marketing, not research, as companies try to squeeze as much profit as possible from their monopoly patents. “The prices drug companies charge have little relationship to the costs of making drugs and could be cut dramatically without coming anywhere close to threatening R&D,” Angell notes. “Now primarily a marketing machine to sell drugs of dubious benefit, this industry uses its wealth and power to co-opt every institution that might stand in its way, including the U.S. Congress, the Food and Drug Administration, academic medical centers, and the medical profession itself.… Only a handful of truly important drugs have been brought to market in recent years, and they were mostly based on taxpayer-funded research at academic institutions, small biotechnology companies, or the National Institutes of Health.”
Whereas many medical experts and public health professionals see a need to reform the pharmaceutical industry and change (or challenge) our patent system, Bill Gates sees—and wants us to see—Big Pharma as a humanitarian partner, one that just needs the right incentives. His solution is to provide inducements to industry “to make markets work for the poor”—or to make monopoly medicine work for the poor. The most potent example of the foundation’s “market-shaping” activities is its work with vaccines, which bring together Bill Gates’s twin passions, commerce and innovation. “In the same way that during my Microsoft career I talked about the magic of software, I now spend my time talking about the magic of vaccines,” Gates explained in 2011. “They are the most effective and cost-effective health tool ever invented. I like to say vaccines are a miracle. Just a few doses of vaccine can protect a child from debilitating and deadly diseases for a lifetime.”
Gates’s signature project with vaccines is an organization named Gavi (previously, the Global Alliance for Vaccines and Immunization), which the Gates Foundation founded with $750 million in seed money in 1999. The foundation would eventually plow more than $6 billion into the Geneva-based organization, making Gavi the single largest recipient of foundation funding by a significant margin. It is also a key source of Gates’s lives-saved public relations.
The project boasts of having vaccinated nearly a billion children through routine immunizations, the net effect of which, it claims, has been the saving of 15 million lives. Bill Gates regularly cites Gavi as one of the projects he’s most proud of in his philanthropic work. Melinda French Gates also trumpets Gavi, which, she says, “has spurred a 40 percent decrease in the number of children in low- and middle-income nations who die before their fifth birthday.” (These claims appear either uncited or cited to research funded by the foundation.)
Gavi, itself, doesn’t develop new vaccines. Nor does it work with Big Pharma to transfer its vaccine technology to manufacturers in poor nations. Rather, Gavi pools large sums of money from donors—mostly from taxpayers—to purchase vaccines from the pharmaceutical industry. If Big Pharma didn’t previously have an incentive to supply vaccines to poor nations, they do with Gavi, which puts up billions of dollars to move markets.
Gavi’s single largest vaccine purchase over the years—of at least $4 billion—has been for pneumococcal vaccines, which protect against a common cause of pneumonia. At certain points, around half of Gavi’s vaccine budget has gone toward pneumonia immunizations. This focus reflects the fact that pneumonia is the world’s leading cause of vaccine-preventable deaths in children. Around four hundred thousand children die each year from infections that could be prevented if we had universal access to the pneumonia vaccine.
Gavi’s approach to vaccine distribution, however, doesn’t appear aimed at universal access. It works only in the poorest nations and, with pneumonia vaccines, covers only around half the children living there. And once nations become slightly less poor—at a point where people earn an average of five dollars a day—they “graduate” out of Gavi’s program. One industry source cynically likened this to a drug dealer who hooks new customers with freebies—“the first high is on me”—and then expects them to start paying higher market prices going forward.
The marketplace for pneumonia vaccines over most of the last two decades has been governed by monopoly, or duopoly, power, controlled by Pfizer and GSK. The extreme market power of these two companies allows them to charge high prices—and they do. Hundreds of millions of people around the world go unvaccinated because they cannot afford immunizations and because Gates and Gavi don’t reach them. Again, despite what Bill Gates asserts, patent monopolies have major impacts on the global poor.
“There are approximately 430 million children under the age of 15 living in countries with zero coverage of the PCV [pneumococcal conjugate vaccine],” according to Every Breath Counts, a coalition that notably includes the Gates Foundation. “The cost of this exposure is ultimately measured in children’s lives lost due to pneumonia.” The Gates Foundation’s own funded research reports that the GSK-Pfizer “duopoly has limited supply and stifled competitive market forces that drive prices down,” also noting that “price and supply barriers” leave millions of children without access to vaccines.
Even rich nations have struggled to negotiate access to pneumococcal vaccines. A 2014 New York Times investigation profiled how Pfizer’s market power translated into difficulties for American pediatricians and families to get vaccines. In the United States, the price of Pfizer’s pneumonia vaccine was, inscrutably, rising over time—not falling as one would expect because scaling up production should deliver efficiencies. The investigation also reported that after the government of Singapore, another wealthy nation, started mandating pneumonia vaccinations for all children, prices there inexplicably jumped 50 percent. The suggestion was that once Big Pharma had locked in a captive market, it could bilk consumers.
As Bill Gates describes it, monopoly medicine, left to its own devices, is governed by the law of trickle-down economics: “When you get this problem of these diseases—this sounds like an awful thing to say—but when diseases affect both rich and poor countries, trickle-down will eventually work for the poorest, because the high cost of development is recovered in the rich world and then, as they go off patent, they’re sold for marginal cost to the poor, and everybody benefits.”
Gates’s utopian thinking hit some hard realities with pneumonia. Up until Pfizer’s lucrative Covid-19 vaccine, pneumonia vaccines were the company’s leading source of revenue, with annual sales at around six billion dollars. Pfizer has very likely recovered the money it put into developing its pneumonia vaccine many times over, but the golden moment Bill Gates describes—when the vaccine is suddenly “sold for marginal cost to the poor and everybody benefits”—never materialized.
Twenty years after the world’s first pneumonia vaccine for children reached the market, it remains inaccessible to a huge swath of the globe. Millions of children have died, and continue to die, from a disease for which we have multiple highly effective vaccines. Cynically, we could say that Pfizer and GSK have made a killing off pneumonia. And one could argue that Bill Gates sat on his hands and watched it happen—or even encouraged it.
Instead of challenging the fundamental problem, the monopoly power of Pfizer and GSK, the Gates Foundation has nibbled around the edges, trying to create subsidies and incentives to coax monopolies to be more charitable—or, really, marginally less greedy. In one high-profile effort, Gates, Gavi, and other donors developed what was called an “advanced market commitment,” putting up $1.5 billion to send a signal to the pharmaceutical industry that there was money on the table. The plan was aimed at “reducing the risk for vaccine manufacturers and incentivizing the creation of new, less expensive PCVs [pneumoccocal conjugate vaccines].”
While the fund promised to bring “new” competitor vaccines to the market, Gavi ended up handing out $1.5 billion pool of funds as bonus payments to GSK and Pfizer, essentially rewarding, if not entrenching, their monopoly power. Gavi always negotiates with pharmaceutical companies to secure lower prices than wealthy nations pay, but with the new bonus payments, Pfizer and GSK were receiving as much as $7 per dose. This is far less than rich nations pay but, nevertheless, several times higher than the cost of production, according to multiple estimates. “Certainly the whole notion was to create a sustainable model,” Pfizer said in 2010, describing its work with Gavi. “It wasn’t to make it into a money-losing proposition.”
In reports to its investors, Pfizer trumpets the benefits of working with Gavi as both boosting corporate revenues and “earning greater respect from society.” Bill Gates believes the global poor also benefit from this model of “creative capitalism.” “So, for our foundation, where we’re trying to help the poorest, our relationship with the pharmaceutical companies has been fantastic,” he noted in 2014. “And it’s great—every time they’re successful, they come up with a new drug, they manage to keep profitable because of that. That’s great for us because it means they’re going to have a little bit more understanding to help us with our issues and a little bit more in the way of resources, all totally voluntary on their part to pitch in.” At the time Gates made these remarks, his signature project in global health, Gavi, was paying more than half a billion dollars a year for pneumonia vaccines.
Gavi’s monopoly-subsidy model found a high-profile critic in Doctors Without Borders, also called Médecins Sans Frontières (MSF), the Nobel Prize–winning humanitarian group that spends a billion dollars a year delivering medical help to poor nations. What makes MSF uniquely positioned to publicly criticize Gates and Gavi is that it is one of the only large international health organizations that has refused to take Gates funding, a principled step it took to maintain independence from the foundation.
MSF and other critics accuse Gavi of paying inflated prices for pneumonia vaccines, arguing that its negotiations have lacked transparency and accountability. Indeed, how does Gavi decide what is a fair price? If Pfizer and GSK can generate profits selling vaccines to Gavi, is this really charity? (Another point on transparency: Gavi refused multiple requests for an interview and did not provide responses to most questions sent by email.)
More important, the vast majority of Gavi’s budget actually comes from taxpayers in Europe and the United States, which have pledged tens of billions of dollars to the project. Do we simply trust that the deals Gavi negotiates with Big Pharma are a good, just, and efficient use of taxpayer dollars?
One early adviser to the Gates Foundation, Donald Light, alleges that when he and other experts questioned Gavi’s pricing, their names were removed from a report Gavi presented to rich donor nations, making it seem as though its pricing structure had been “unanimously endorsed, because no negative votes or minority opinions were allowed.” Light cites industry sources to estimate that two thirds of the dollars Gavi planned to pay out for pneumonia vaccines would go as profits to Pfizer and GSK. (Pfizer did not respond to an interview request or questions I sent by email about its pneumonia vaccines. GSK also did not respond to specific questions sent by email, including if it generates a profit from its work with Gavi, but did offer a general response: “We reserve our lowest vaccine prices for Gavi.”)
