Update 19th September 2023 from @johngreen:
HUGE NEWS and what it means: This morning, @USAID, @StopTB, and @GlobalFund jointly announced that Danaher will lower the price of their standard TB test cartridge by 20% to $7.97. This isn’t the 50% reduction we hoped for BUT...
@DanaherCorp is also committing to ZERO profit in their distribution of standard TB tests to impoverished communities. They will sell the cartridges at cost and bring in an “internationally accredited third-party” to assess prices and adjust them accordingly so that Danaher earns no profit from selling these cartridges. That is a huge deal. It means if Danaher’s costs decline with increased volume, the price of the cartridges will further decline. Just for some perspective, if (conservatively) 10 million cartridges are sold annually at the reduced price, this deal would save the poorest communities and those who serve them $200,000,000 over the next decade. This is a massive win for people living with and fighting TB around the world, and it’s a credit to years of activism by @MSF_access, @TAGTeam_Tweets, @PIH, and others. There are many questions still outstanding, of course, and we hope that Danaher will take a similar course with their extensively drug resistant TB test cartridges. But I for one am very grateful to be able to celebrate today, even as the fight for universal access to treatment and diagnostics continues. https://theglobalfund.org/en/news/2023/2023-09-19-global-fund-stop-tb-partnership-and-usaid-announce-new-collaboration-with-danaher-to-reduce-price-and-increase-access-to-cepheids-tb-test/
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Really great piece from Good Good Good on the campaign to pressure Danaher to reduce the price of their TB test. Excited to see the outcome!
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Tuberculosis is the world’s deadliest disease — and it is entirely curable.
The airborne disease has plagued human history, and the World Health Organization estimates that 10 million people across the globe are infected by TB every year. Of those millions, 1.6 million still die each year, despite the existence of life-saving technology and medicine.
These are facts that enrage many — but especially author and philanthropist John Green.
“Why am I passionate about TB? It’s the deadliest disease in human history, but for most of human history we couldn’t do much about it. However, since the mid-1950s, TB has been curable — yet we still allow TB to kill over 1.6 million people per year,” Green told Good Good Good.
“This is horrifying to me. I don’t want to accept a world where we know how to cure Tuberculosis but deny millions of people access to that cure.”
This passion was put on display in July of this year.
Through the social media campaign #PatientsNotPatents, Green and his fanbase — called Nerdfighters, or Nerdfighteria in collective form — followed the lead of TB advocates to call on drug company Johnson & Johnson to allow the sale of generic bedaquiline — a life-saving TB drug that had been inaccessible under the company’s patent for over a decade.
Nerdfighteria — as well as longtime TB organizations such as the Stop TB Partnership and TB-survivors Phumeza Tisile and Nandita Venkatesan — was successful, and Johnson & Johnson ended its reign on bedaquiline (though advocates are still working to ensure that all low- and middle-income countries receive access to the generic drug).
To end the TB epidemic by 2030 — a goal shared by both the WHO and the United Nations — more pharmaceutical companies need to do their part to make healthcare more accessible, especially in countries with a high TB burden.
So, in their effort to end TB, Nerdfighteria has taken on a new company: Danaher.
The Issue
Danaher is a multinational corporation, founded by brothers Steven and Mitchell Rales, that owns a number of other large companies, such as Cepheid, Pantone, and X-Rite. (Steven Rales also founded Indian Paintbrush Films, which has financed many of Wes Anderson’s movies.)
Most relevant to this campaign, however, is that in 2006, Danaher and molecular diagnostics company Cepheid created the most helpful diagnostic resource for TB: The GeneXpert machine.
This rapid molecular testing machine is able to test for a number of infectious diseases, including COVID, HIV, TB, and multidrug-resistant TB. In fact, the WHO recommends Xpert tests as the initial test for all people with signs and symptoms of TB.
The GeneXpert machine itself is cost-effective, but its testing cartridges are more costly. The company charges about $10 per regular TB testing cartridge and about $15 per multidrug-resistant TB testing cartridge (though both tests cost the same to manufacture).
According to a 2019 brief from Doctors Without Borders, Danaher and Cepheid could reduce the cost of these cartridges to just $5 each — or lower — based on continuous increases in volume. The brief said a “20-30% reduction in price may be overdue” thanks to expansion in volume.
“These pricing packages serve to expand Cepheid’s footprint … and do nothing to address the urgent need to scale up affordable testing for COVID-19, TB, and other diseases, or to address the longstanding lack of affordability and unfair pricing of Xpert tests,” David Branigan, of activist organization Treatment Action Group, said in a statement in 2021, when Cepheid last updated the pricing of its testing cartridges.
“This is a clear attempt by Cepheid to increase profits without meeting countries’ immediate needs for affordable test cartridges.”
Green helps contextualize what dropping the cost of the testing cartridges could mean for countries with a high TB burden.
“For countries with high levels of TB, the price of these cartridges is a huge barrier. As one Sierra Leonean lab technician explained to me, ‘These machines are great; if only we could afford the tests,’” Green told Good Good Good.
“Lowering the price of cartridges to $5 would result in millions more people being able to learn they have TB and begin treatment promptly. Hundreds of thousands of lives would be saved over the next decade if Danaher lowered their prices. They know they are overcharging. But it’s essential to put people over profits.”
The Call To Action
Stemming from HIV medication and research efforts since the 1980s and ’90s, organizations such as Treatment Action Group and Doctors Without Borders have been working on a campaign called Time For $5 since 2019, attempting to convince Danaher to reduce the cost of its Xpert cartridges.
To increase pressure, Nerdfighteria — which has shown a long-time commitment to philanthropy and global health — is now in on the campaign, too.
“After seeing what Nerdfighteria helped TB fighters accomplish with Johnson & Johnson, I think we can help [move] the needle with this project,” Nerdfighter community organizer Jessica Dirks told Good Good Good.
“TB fighters and activists have been working tirelessly to end TB for decades. They understand the problem and what’s needed to address it. What they haven’t had is the support they need behind them, and I hope that we can loudly support their efforts enough to help them succeed.”
Their call to action? Tell Danher to put people over profit.
Coinciding with a new video from John Green about the Time For $5 campaign, Nerdfighteria has organized online to get this message to the very top.
Here’s what they’re asking supporters to do:
Watch John’s video and visit the community’s website, tbfighters.org, to learn about the issue and what activists can do to help.
Call +1-202-828-0850 and respectfully demand that Danaher and Cepheid reduce the cost of TB testing cartridges to $5 each.
Respectfully email sustainability@danaher.com with the same request.
Post on social media with the hashtags #PeopleOverProfits and #TimeFor5 to spread awareness. (Organizers also encourage users to tag Danaher and Cepheid in their posts and link to research on the campaign)
For the more offline folks, Nerdfighter organizers have drafted a letter and other scripts that can be sent to the company, as well.
“Danaher’s website says they are a company trying to ‘make the world a healthier, happier place,’” Nerdfighter organizer Nichole Ezell told Good Good Good. “We know they need to make money to stay in business. But we know that they will still make a profit at a $5 price point. We also know people in poverty-stricken countries will die because of this pricing.”
At the end of the day, Ezell said, Nerdfighteria knows that while corporations can make inhumane choices, they are still made of humans — who hopefully want to do right by others.
“We absolutely want Danaher to be successful and turn a profit so they can continue to manufacture these life-saving machines and components for them,” Ezell said. “We just want as many people to have access to them as possible. That makes the world a healthier, happier place.”
The Organizers
Nerdfighteria — and John Green himself — have made it clear that this campaign is the work of Treatment Action Group and Doctors Without Borders, and that the years of advocacy by organizations such as the Global Coalition of TB Activists, the Stop TB Partnership, and Global Drug Facility are at the heart of this newly invigorated movement.
But they also seem to know their own power, which includes bringing more passionate advocates into the fold.
Take Elianne, a 22-year-old Nerdfighter in the Netherlands, who has a degree in medicine and will soon wrap up her master’s degree in global health. A longtime Nerdfighter, she has been heavily involved in the organizing of this campaign.
“I think the power of Nerdfighteria is that all of us — including John and Hank — understand that nothing great like this is ever really a one-person achievement,” Elianne told Good Good Good. “In my experience, being a Nerdfighter has always been about community and using the collective power and talent of that community to make the world a better place.”
Along with Elianne, countless Nerdfighter organizers worked behind the scenes for weeks leading up to Green’s video to launch a coordinated effort to persuade Danaher to end its over-priced practices.
“I have tried to use the little expertise I have in the field of global health and medicine to help out where I can. I think that is also why this campaign has worked so well within the community; there are so many people with such a wide range of interests and expertise that we were able to cover all our bases in an incredibly short amount of time,” Elianne continued.
Leaders in the fanbase have turned from everyday Green devotees to health and business researchers — volunteering hours upon hours to assemble documents, compile research, create visuals, and articulate the perfect wording of their message.
“These are people with real knowledge and experience who are giving it freely and willingly because they want to see this succeed. They want to live in a world without TB,” Dirks said. “If Danaher and Cepheid’s leadership could put the same kind of effort toward making their TB tests affordable to those who need them most, we wouldn’t have to be here right now.”
But Nerdfighteria is here — thousands of motivated online organizers, following in the footsteps of lifelong TB activists. Together, they unite under the mantra: “We lead by following, and we act with compassion.”
“I am immensely proud of Nerdfighteria’s passion and activism. It’s easy to portray Hank and I as leaders of the community, but the truth is, they’ve led us. They’ve encouraged us to think about how we can use our shared enthusiasm and resources to bring about a better world,” Green told Good Good Good.
“Our community recognizes that when we listen carefully and work together, we can change the world.”
It’s that togetherness that fuels their entirely volunteer-led hive.
“Studying global health can sometimes make you feel a little hopeless about the world and powerless to change it. However, this project has been incredibly uplifting: If enough people pay attention and work together, things can change,” Elianne said.
“Progress is not inevitable, but neither is inequity. We will be paying attention and working together until real change is achieved.”
As of the time of publication, Danaher has not responded to Good Good Good’s request for comment.
This seems potentially pretty bad to me for Copenhagen Interpretation of Ethics reasons. Based on your description, it sounds like Danaher made a better product than anyone else and were already doing more (in this specific area) to help the global poor than anyone else. But rather than being praised them for this, they receive harsh criticism. Not only does this seem very unfair, I think it also contributes to the effect where people actively try to avoid dealing with poor people because they know doing so invites opprobrium, treatment they would avoid by making products exclusively for the well off.
We have strong evidence that this has played out in previous decisions to develop lifesaving products (see Advanced market commitments). At the very least there’s a strong burden of proof on this campaign to prove they are not exacerbating this stressor.
Bill Gates has made this exact point on a previous debate with MSF in 2015: This general thing where organisations come out and say, ‘hey, why don’t vaccines cost zero?’ – all that does is that you have some pharma companies that choose never to do medicines for poor countries because they know that this always just becomes a source of criticism. So they don’t do any R&D [research and development] on any product that would help poor countries. Then they’re not criticised at all because they don’t have anything that these people are saying they should price at zero[1]
Edit: Added second paragraph
https://www.theguardian.com/global-development/2015/jan/27/bill-gates-dismisses-criticism-of-high-prices-for-vaccines
Could you say more about the strong evidence beyond the statements by Bill Gates?
See my other comment
Potentially. However, Danaher’s current market share in LMIC can be traced to public funding and buy-down agreement with WHO and Unitaid in 2012 on the basis of projected annual sales of 4.7 million tests (number that was quickly eclipsed). There are potential competitors but they won’t LMIC market before 2024 and gaining market share will take years. Therefore, Cepheid will remain the dominant supplier of critical rapid molecular tests for LMICs for the next few years.
“Time for $5” Campaign: Questions and Answers | Médecins Sans Frontières Access Campaign (msfaccess.org)
The campaign is advocating that they reduce their profit margin which given the potential sales volumes will still likely make this a profitable outcome. I am pretty unconvinced that it would serious decision relevant factor.
If you have evidence or case studies beyond this post that this has seriously influenced a for profits decision to commercialise in LMIC then I’d love to read it.
When deciding whether to invest in something, there is always uncertainty about the outcome. If ex post successes will be met with demands for reduced prices, but ex post failures do not get compensation, the ex ante expected value is reduced and firms are less likely to invest, even if it’s still worthwhile for firms that have already invested to continue operating.
Note that the tax system is better designed than this, because unsuccessful ventures generate tax loses which are (roughly) symmetrical with the taxes paid on successful ventures.
I think it’s pretty clear that prices falling by 50% or 67%, and gross profits falling by 71-87%, is going to be an important decision factor for various things.
I like your reasoning, but in this case I lean towards Gemma’s argument. I’m not sure how many millions of dollars were put in not only by WHO but by Gates foundation and others to ensure LMIC access, which they now have to the exclusion of any other product. The price has remained the same for years, which is unfair given the massive leg up and profits pumped into this company by the philanthopic sector.
This is a complex, not pure free market situation, and I think on balance it is more than fair that the company lowers its profit margins after making bank for years here.
Yeah aligning incentives here seems hard and tbh I don’t think it’s a sustainable option to have advocacy campaigns targeting pharma companies for every global health issue.
It was interesting to read about Advance Market Commitments from this piece (https://worksinprogress.co/issue/why-we-didnt-get-a-malaria-vaccine-sooner/#advance-market-commitments)
Quoting (on mobile so can’t seem to do the formatting):
A standard Advance Market Commitment (AMC) is a promise to subsidize the future purchase of a new vaccine in large quantities – if it’s invented – in return for the firm charging customers close to marginal cost (that is, with only a small mark-up).
Letʼs break it down. The subsidy incentivizes research by compensating innovators for their fixed cost investments in R&D and manufacturing capacity. The commitments to buy a certain quantity at a certain price ensure the vaccine is affordable and widely available. The subsidy is conditional on a co-payment (this is the part that is close to marginal cost) from governments in low and middle income countries – without it, the developer receives nothing. This incentivizes firms to develop vaccines countries will actually use, not just those that meet technical specifications.
So while patents trade-off innovation incentives with affordable access, AMCs help us achieve both. And the price strategy means that AMCs encourage deployment at scale in a way that most prizes do not. AMCs are a kind of inversion to typical ‘push funding’ – they instead ‘pull’ innovation towards a goal by paying for outputs and outcomes. They don’t require funders to choose which research efforts to back in advance – they can just commit to rewarding the innovations that succeed. And they’ve been successful at doing so in the past.
I agree that AMCs seem like a good idea!
I’m pretty hard-nosed on market stuff, but I was at least uncertain. I guess the question is how much of the research was subsidised.
It seemed after a cursory look that they had been given $10 − 500mn. I wonder how much research costs.
Isn’t the question: “How will this campaign effect the likeliness of future innovations”. I don’t see an immediate connection between this question and how much the R&D of the machine was subsidised.
One consideration worth examining is the historically complex dynamic between MSF and organizations such as GAVI. A revealing example was when MSF launched an advocacy campaign that prompted a critical response from Bill Gates, who as a major GAVI funder voiced concerns about MSF’s approach:
For anyone curious about this debate, I’d recommend reading the full article.
Citing from wiki: https://en.wikipedia.org/wiki/GAVI
Which cites from: https://www.theguardian.com/global-development/2015/jan/27/bill-gates-dismisses-criticism-of-high-prices-for-vaccines
I don’t think Bill’s statement there is particularly fair—MSF aren’t pushing for the price to be “zero”, they pushing for reduced profit margins since the tiered pricing doesn’t go far enough.
I’d like to see more evidence of this deterrence effect beyond statements by Bill Gates who has a history of controversy over his business practices.
The Problem isn’t that they make money from their superior product. The problem, as I understand, is that they use an unethical business model to do so, heavily distorting the options available to doctors and locking them into using their product.
At the very least, I think they should openly justify their pricing strategy. The public and Danaher’s customers should know about their profits, per-machine and per-test, so they can negotiate fairer deals.