Bill Gates Charity Buys Stakes in Drug Makers
May 17, 2002
The Bill and Melinda Gates Foundation has purchased shares in nine big pharmaceutical companies valued at nearly $205 million -- an investment likely to attract attention more for its symbolism than its size. The foundation, the nation's largest with an endowment of $24.2 billion from Microsoft Corp Chair Bill Gates and his wife, already is a major force in international health issues, contributing $555 million in 2000 alone to global health programs. The foundation has often assumed the role of broker between poor countries in need of cheaper drugs and drug companies.
With its investment in Merck & Co., Pfizer Inc., Johnson & Johnson and others, the foundation has a financial interest in common with makers of AIDS drugs, diagnostic tools, vaccines and other drugs. Joe Cerrell, a spokesperson for the Gates Foundation says the investments are independent of the foundation's programs. Indeed, they might just be good investments, as beaten-down drug stocks are generally cheap these days.
The foundation's investments in "Big Pharma" could spur controversy, given Mr. Gates' staunch support of strict intellectual-property protections for drugs in poor countries. "The impression people have, because of the types of projects Gates has funded and because of his Microsoft background, is that he has an ax to grind on the intellectual property front," says James Love, director of the Consumer Project on Technology, who works with African officials to obtain low-cost drugs.
Other people involved with the issue say medical progress in poor countries depends on incentives for drug makers, and the Gates foundation is balancing the tradeoffs responsibly. Richard Feachem, director of the Institute for Global Health at the University of California, San Francisco, and recently appointed to head the Global Fund to Fight AIDS, Tuberculosis and Malaria in Geneva, argues that the Global Fund's buying power could create a strong "pull factor" spurring drug makers to develop inexpensive products. "For the industry, that would lead to the development of a high-volume, low-margin market, which could be a win for them as well," he says.
Wall Street Journal
05.17.02; David Bank; Rebecca Buckman
This article was provided by U.S. Centers for Disease Control and Prevention. It is a part of the publication CDC HIV/Hepatitis/STD/TB Prevention News Update. Visit the CDC's website to find out more about their activities, publications and services.