The Clinton Health Access Initiative (CHAI) deploys a unique mix of business, political and medical capabilities against major health issues around the globe. In June, Ira Magaziner, CEO of CHAI, talked to Perpetual philanthropy clients about lessons learned in the battle against HIV, tuberculosis and malnutrition.
Turns out, if you want to change the world, it helps to know how a pharma plant works.
Ira Magaziner is a former head of policy development in the Clinton administration. He was also a successful businessman and says business thinking has been crucial to the results CHAI has achieved since it was founded in 2002.
“We were trying to bring down the costs of a new drug or vaccine,” says Mr Magaziner. “We know that in a pharmaceutical plant scale is everything. You want to use the biggest vats possible and you don’t want to swap your production line from product to product.
We talked to companies in Africa and India and convinced them we could get them two million orders for AIDS drugs, rather than tens of thousands – with better security of income. That meant they could charge much lower prices, because their costs were cut and their revenues boosted by much bigger orders.”
Works in 38 countries, 1500 staff, growing at 25% per year.
Changing nine million lives
That mix of business nous and the pursuit of “transformational change” typify the CHAI approach.
CHAI’s first big battle was against HIV/AIDS. In 2002, only 200,000 people were on antiretroviral drugs – and the treatment cost over $ 1200 per person per year in developing countries. CHAI helped negotiate much lower prices and worked with governments and NGOs to improve distribution. Today, more than nine million people are receiving treatment – and that treatment costs less than $140 per person per year.
According to Caitriona Fay, National Head of Philanthropy at Perpetual, the work of CHAI and others such as the Bill and Melinda Gates Foundation, represents a philanthropic revolution. “What the best organisations do is build capability,” she says. “Rather than just treating symptoms, they’re changing systems and looking at things like the supply chain and asking: “How do we do this more efficiently and effectively?”
“We focus very strongly on outcomes” says Mr Magaziner. “Measuring outcomes helps rid you of the tendency to micro-manage. You need to say -”We will commit this amount of money to achieve these health goals – and we will measure what we achieved, not every step we took along the way.”
The first 1000 days
By focusing on mother/child nutrition in the first 1000 days – from conception to age two, you can make a massive difference to child health.
CHAI obtained $1.5 million in initial funding and is leveraging it with $150 million in private sector investment to set up three nutritious baby food factories in Africa. CHAI negotiated a five year purchase contract with the World Food Program. With the raw materials and production now based in Africa, the product is cheaper for African consumers than products imported from Europe. And the factories have the time and capital to build a sustainable export-based business model.
Food is the future
CHAI’s 1500 staff work long hours alongside medical professionals, governments, aid agencies and other NGOs. Their nights are spent talking to other CHAI staff, learning lessons from other projects around the world.
Mr Magaziner says their work is driven by the difference they can make. In countries like the Bahamas, Tanzania and South Africa the Aids problems was so big it dwarfed all others.
In other countries it’s food that matters – “How can your economy develop when 40% of your children are malnourished, with the stunting of growth and slowing of brain development that entails?” Mr Magaziner asks. “The health of the people is the foundation of a country’s future.”