While chopping firewood yesterday I was bitten by a mosquito on what may be described euphemistically as the very ‘bottom’ of my spine. This has led to a rather unpleasant swelling and itching. I will spare you the gruesome details; as my children say – ‘just too much information, Dad’. However, it made me reflect on how fortunate I am to live in a country where being bitten by a mosquito does not (as yet) carry with it the risk of malaria or dengue fever.
A new report published in the British medical journal The Lancet (October 21st) claims that the World Health Organisation’s official estimate of approximately 15,000 people dying of malaria each year in India is ‘misleadingly low’ and that the numbers could be as much as 13 times higher at over 200, 000. The study points out that the UN agency takes into account only those deaths confirmed and recorded by hospitals and other healthcare facilities, and does not include deaths at home. You can hear a BBC report of the findings here.
Malaria not only has appalling consequences for the individuals who are infected and for their families; it has significant economic and commercial consequences. Research by the World Economic Forum estimates that malaria costs sub-Saharan Africa as much as 0.6% of its Gross Domestic Product, with one malaria episode resulting in up to 10 working days of lost labour. Gallup and Sachs (2001) in a cross-country study of the effects of malaria on national income concluded that: “countries with substantial level of malaria grew 1.3 percent less per person per year for the period 1965 – 1990”.
More than 80% of the malaria incidences take place in sub-Saharan Africa. The World Economic Forum study reported that over 70% of African business is adversely impacted by malaria, with nearly 40% reporting serious consequences. Certain industries appear worse affected, particularly the oil industry, agriculture, mining and tourism. Sufferers who choose to remain at work may be less productive as a result of their symptoms. Workers may take days off for their own illness, but absenteeism may also be the result of caring for family members with the disease. Malaria causes nearly 1 million deaths per year, and 85 % of these are children under 5 years of age with current estimates suggest an African baby is dying of malaria every 30 seconds.
Ghana is an example of a country where malaria prevention and treatment is stretching resources to the limit. The disease imposes heavy costs on health institutions in terms of spending on health staff, medical supplies, administration, accommodation and general services such as sanitation. Ironically, the drive to grow Ghana’s tourist industry to improve foreign earnings is also increasing the risks of malaria and the associated costs. Hotel construction sites are likely to contain pools of standing water; a perfect breeding ground for mosquito larvae.
In 2008, the Ghanaian Ministry of Health reported that the annual economic cost of reported malaria cases was US$772.4 million.
“Considering the budget for Ministry of Health stands at about GH¢20,000,000 a year, it means that the total economic cost of malaria, embracing the cost of treatment and the productive time lost under the spell of the disease is several times greater than the ministry’s annual budget.”
However, in all aspects of the human condition, businesses can thrive. The very human misery and disease that threatens individuals, families and nations provides commercial opportunities for others. Those who provide services directly related to deaths, such as undertakers and private medical facilities may benefit. Of course, the potential pot of gold is for pharmaceutical companies which discover effective malaria treatments… and imagine what rewards wait for the company that finds a cure.
Charities, foundations and governments are expending huge resources and finance in search of new treatments in their efforts to eradicate the curse of this terrible disease. The Gates Foundation, for example, has prioritised the fight against malaria. Nick Clegg, the deputy prime minister of the UK recently announced an increase in UK funds for malaria from £150m a year to £500m by 2014 in his closing speech to world leaders discussing progress towards the millennium development goals.
Even multinational pharmaceutical firms are coming under pressure to share their findings with the world community in the search for a cure. GlaxoSmithKline (GSK) recently announced it would reveal previously confidential data on thousands of potential anti-malaria compounds and pump millions into an ‘Open Lab’ for independent research teams. Many private companies appreciate that acting in a socially responsible manner and providing ‘free’ resources and information is likely to improve their corporate image in the long run.
Some commentators believe that the fight against diseases such as malaria and HIV should be conducted by public-private partnerships. The profit motive can drive pharmaceutical companies to research and develop drugs that can ameliorate the condition and Government can provide the necessary controls on clinical trials and also prevent profiteering.
It seems that every week there are claims in the media of potential cures, but even if treatments are found to be effective they are unlikely to be available for years, as all new drugs need to be put through rigorous clinical trials before they can be released to the general public.
IB style questions:
1. Define the following terms:
- productivity
- GDP.
2. Explain how the process of new product development in the pharmaceutical industry may differ from that in other industries.
3. Analyse the costs and benefits of cooperation between the public and private sector in the fight against malaria.
4. Evaluate the opportunities and threats for businesses in a country with high levels of malaria.
Image: http://www.flickr.com/photos/28481088@N00/1503042055/
A new report published in the British medical journal The Lancet (October 21st) claims that the World Health Organisation’s official estimate of approximately 15,000 people dying of malaria each year in India is ‘misleadingly low’ and that the numbers could be as much as 13 times higher at over 200, 000. The study points out that the UN agency takes into account only those deaths confirmed and recorded by hospitals and other healthcare facilities, and does not include deaths at home. You can hear a BBC report of the findings here.
Malaria not only has appalling consequences for the individuals who are infected and for their families; it has significant economic and commercial consequences. Research by the World Economic Forum estimates that malaria costs sub-Saharan Africa as much as 0.6% of its Gross Domestic Product (the total value of the goods and services produced by a nation), with one malaria episode resulting in up to 10 working days of lost labour. Gallup and Sachs (2001) in a cross-country study of the effects of malaria on national income concluded that: “countries with substantial level of malaria grew 1.3 percent less per person per year for the period 1965 – 1990”.
More than 80% of the malaria incidences take place in sub-Saharan Africa. The World Economic Forum study reported that over 70% of African business is adversely impacted by malaria, with nearly 40% reporting serious consequences. Certain industries appear worse affected, particularly the oil industry, agriculture, mining and tourism. Sufferers who choose to remain at work may be less productive as a result of their symptoms. Workers may take days off for their own illness, but absenteeism may also be the result of caring for family members with the disease. Malaria causes nearly 1 million deaths per year, and 85 % of these are children under 5 years of age with current estimates suggest an African baby is dying of malaria every 30 seconds.
Ghana is an example of a country where malaria prevention and treatment is stretching resources to the limit. The disease imposes heavy costs on health institutions in terms of spending on health staff, medical supplies, administration, accommodation and general services such as sanitation. In 2008, the Ghanaian Ministry of Health reported that the annual economic cost of reported malaria cases was US$772.4 million.
“Considering the budget for Ministry of Health which stands at about GH¢20,000,000 a year, it means that the total economic cost of malaria, embracing the cost of treatment and the productive time lost under the spell of the disease is several times greater than the ministry’s annual budget.”
However, the very human misery and disease that threatens individuals, families and nations provides commercial opportunities for others. In all aspects of the human condition, businesses can thrive. Those who provide services directly related to deaths, such as undertakers and private medical facilities may benefit. Of course, the potential pot of gold is for pharmaceutical companies which discover effective malaria treatments and imagine what rewards wait for the company that finds a cure.
Charities and foundations are expending huge resources and finance in search of new treatments and in an effort to eradicate the curse of this terrible disease. The Gates Foundation, for example, has prioritised the fight against malaria.
Private pharmaceutical firms are coming under pressure to share their findings with the world community to seek a cure. GlaxoSmithKline (GSK) recently announced it would reveal previously confidential data on thousands of potential anti-malaria compounds and pump millions into an ‘Open Lab’ for independent research teams.
Some commentators believe that the fight against diseases such as malaria and HIV should be conducted by public-private parnerships. The profit motive can drive pharmaceutical companies to research and develop drugs that can ameliorate the condition and Government can provide the necessary controls on clinical trials and prevent profiteering.
It seems that every week there are claims in the media of potential cures, but even if treatments are found to be effective they are unlikely to be available for years, as all new drugs need to be put through rigourous clinical trials before they can be released to the general public.
Tags: Economic Growth, external environment, GDP, health care, innovation, public-private partnerships, SWOT
[...] reading Paul Clark’s post on the malaria business, I was inspired to complement this with an anthropological view of the international inequalities [...]