Posts tagged with: Effective Compassion

At least, the title of this post is typical of the mantra against the practices of drug pharmaceutical companies, according to Peter W. Huber’s “Of Pills and Profits: In Defense of Big Pharma,” in Commentary magazine (HT: Arts & Letters Daily).

Huber, a senior fellow of the Manhattan Institute, summarizes in brief the anti-drug company argument, and then goes on to examine what truth there is in such claims. He says of the difference between creating and administering drugs, “Getting drug policy right depends mainly on getting that difference straight—the difference, that is, between ministering to the sick and making medicines—and grasping its implications from the start. Big Pharma’s critics do not even try.”

He goes on:

Pricing is indeed the key. Whether the first pill typically costs $100 million or $1 billion to develop, replicating it costs less—a thousand times less, or perhaps a million times less. This slope—precipice, really—is far steeper than most of the other hills and valleys of economic life. It complicates things immeasurably. It also largely explains the gulf between the industry’s perception of reality and that of the critics.

Huber gives some explanation of the function of the price mechanism in pharmaceutical markets, and says, “Economists have established—as rigorously as things ever get established by the dismal science—that there is no efficient price, no ‘right’ price. Any scheme is, from one perspective or another, inefficient, unreasonable, or worse.” He argues that the high prices for boutique drugs like Viagra in the developed world help fund the provision of desperately needed drugs in the developing world. This is the situation created by so-called “price discrimination”.

The situation he says, is similar to that of airline travel: “Business travelers get soaked, college students fly almost for free, and the jumble of prices in between drives most people nuts. But the planes are packed full, and that drives the average price of a ticket way down. The rich fly, and the much less rich fly, too.” There is, I would think, a similar model at play in the work of plastic surgeons who charge Hollywood millionaires huge sums to do face lifts and tummy tucks, and then use a portion of the money they make doing that to do pro bono work for burn victims and deformed children.

The complexity of the pricing situation is what critiques of drug companies tend to ignore. Concludes Huber, “This kind of behavior is not aberrant or anomalous—it is an inevitable and essential part of groping toward the right price where there is no right at the end of the tunnel. Somehow or other, the average price of the pill has to end up high enough to pay off the up-front cost.”

If Huber’s analysis is correct, it is interesting to see how a nonprofit drug company, like the one profiled in today’s New York Times article, “A Small Charity Takes Lead in Fighting a Disease,” fits into the picture. The NYT article itself exemplifies many of the criticisms against pharmaceuticals that Huber summarizes.

Huber points to the vagaries of government regulation and private insurance, which greatly affect the drug market. One explanation for the situation that a nonprofit drug company like OneWorld Health attempts to address is that “big drug companies shun some drugs and embrace others because, collectively, the FDA, doctors, patients, insurers, and juries push costs higher, and prices lower, on some categories of drugs and not on others, to the point where some make economic sense and some do not.”

Indeed, OneWorld Health is working with a drug for black fever that, according to the NYT, administered “a series of cheap injections was identified decades ago but then died in the research pipeline because there was no profit in it.” There is, effectively, a partnership at play between for profit and nonprofit drug companies. OneWorld Health didn’t develop the drug in the first place, but on that point is dependent on the work of for profits.

Huber says:

Universities and small biotechs license their innovations to Big Pharma because they lack the capital, scale, and expertise required for mass manufacturing, because they wouldn’t know how to sell the same drug five times in succession (to the FDA, doctors, patients, insurers, and juries), and because a vast and swampy system separates pharmaceutical innovation from the treatment of real patients at prices that will cover cost and earn a profit. The little guys just don’t have what it takes to finish the job.

But OneWorld Health, in the case of the drug mentioned above (paromomycin), “has conducted the medical trials needed to prove that the drug is safe and effective. Now it is on the verge of getting final approval from the Indian government. A course of treatment with the drug is expected to cost just $10, and experts say it could virtually eliminate the disease. If approval is granted as expected this fall, it will be the first time a charity has succeeded in ushering a drug to market.”

Huber concludes that in the future “we will fare better, much better, if we streamline regulation, curb litigation, and unleash prices to make vaccines as alluring to Big Pharma as Viagra and Vaniqa.” But in the meantime, it may be that efforts like OneWorld Health can help at least some of those who fall through the cracks. Says Dr. Ahvie Herskowitz, one of the backers of OneWorld Health, “We fill a gap pharma companies cannot because they have to make a profit.”

And on the biggest obstacle to getting vaccines and drugs like paromomycin to those who need it, for profit and nonprofit drug companies seem to agree: “The government will be the biggest challenge,” says Dr. C. P. Thakur, a former Indian health minister who oversaw a OneWorld Health trial of paromomycin.

The Super MoneyMaker Pressure Pump

No, we’re not talking about Elmore James’ Blues hit covered by the likes of George Thorogood, Fleetwood Mac and The Black Crowes nor its racy subject matter.

Rather, it’s how members of the other oldest profession in Kenya and Tanzania power the irrigation pumps that extend both their growing season and range of crops. This foot-powered move beyond subsistence farming to much more profitable harvests, such as vegetables, is facilitated by the aptly named MoneyMaker series of pumps. 

KickStart (previously Approtec) 10 years ago produced the Original MoneyMaker Pump; the over 4,000 in operation still generating $3.9 million in profits annually. Since then the Super MoneyMaker Pressure Pump, resembling and operated much like a Stairmaster, can push water uphill 7 M (23 ft.) to irrigate 2 acres. The newest – and most affordable – version, The MoneyMaker Plus Pump relies on swinging one’s hips side to side on a skateboard-like platform, a motion that, unlike arm-powered pumps in particular, can be performed all day. Costing $34, KickStart officals claim it generates $1000 in profits the first year.

Though even this amount can be out of the reach of the world’s poorest, KickStart co-founder Martin Fisher, insists on a business model. Along with enriching “farmerpreneurs”, Kickstar has created a private supply chain though hundred of farming supply shops that sell the pumps and spare parts. Undercutting these local merchants and removing their incentive to stock parts would be one of the serious disadvantages of giving away the pumps.

Beyond the pragmatic concerns, their ultimate goal is to “create dignity,” Fisher said on NPR’s Weekend Edition. He concluded, “When you give things away, you are really just creating dependency and people hanging out waiting for more handouts.”

Acton Impact ad raising awareness of the malaria epidemic.

An article in today’s New York Times, “Push for New Tactics as War on Malaria Falters,” coincides nicely with Acton’s newest ad campaign (see the back cover of the July 1 issue of World). The article attacks government mismanagement of allocated funds in the global fight against malaria. Celia Dugger, the author, writes:

Only 1 percent of the [United States Agency for International Development's] 2004 malaria budget went for medicines, 1 percent for insecticides and 6 percent for mosquito nets. The rest was spent on research, education, evaluation, administration and other costs.

The game is now changing, however. The White House has initaited new campaigns, boosting allocation for medicines, insecticides, and mosquito nets to over 40% of the agency’s total malaria budget. The new government push is also raising awareness among private donors, including the Bill and Melinda Gates Foundation.

Acton has begun a media campaign to raise awareness of available and economically sound solutions to the malaria epidemic. Among possible solutions is the indoor residual spraying of insecticides, including DDT (proven to be highly effective and safe in South Africa), distribution of treated mosquito nets, distribution of medication, and educational programs that explain where malaria comes from and how to avoid it.

Visit our Impact Malaria page for more reading and for links to get involved in the global fight against malaria.

A recent NYT article outlines some recent research showing that many people who give to charity “often tolerate high administrative costs, fail to monitor charities and do not insist on measurable results — the opposite of how they act when they invest in the stock market.” Tyler Cowen writes in “Investing in Good Deeds Without Checking the Prospectus,” about the research of John A. List, a professor at the University of Chicago, which “implies that most donors do not respond when they have opportunities to be more effective in their giving.”

Cowen, who is a professor of economics at George Mason and blogs here, concludes, “If donors do not abandon failing causes, those efforts will continue. Perhaps the content of donor pride needs to change. Rather than taking pride only in their generosity, donors should also take pride in their willingness to confront unpleasant news.”

The bottom line is that when you give to charity, you have a responsibility to give to charities that are good stewards of the money, thereby rewarding good charities and punishing bad ones. Doing this gives the proper incentives for charities to work well.

Part of the problem is that people may not really know how to measure the effectiveness and stewardship of a given charity. The Acton Institute’s Samaritan Guide is a tool designed to assist donors in meeting this responsibility.

Indeed, Acton’s effective compassion initiatives, based on Marvin Olasky’s seven principles for effective compassion, are largely based on providing the education that donors need to find out the sort of issues and questions that they should be asking.

HT: EconLog

Joe Knippenberg, who blogs at No Left Turns, provides a thoughtful and engaging analysis of the particulars of the recent Iowa court decision finding against InnerChange Freedom Initiative, an outreach of Prison Fellowship Ministries. In “Penitents in the Penitentiary?,” at The American Enterprise Online, Knippenberg writes, “Despite my general support for the faith-based initiative, and for religious efforts to put the penitence back in penitentiaries, I’m inclined for the most part to agree with Judge Pratt. In this particular case, where the state and Prison Fellowship self-consciously tested the outer bounds of current church-state jurisprudence, they went too far.”

Reaction from PFM’s president Mark Earley is available here and at the special IFI verdict page. I have written before in support of work of PFM, and this decision does nothing to change my mind on that score.

It does expose the real complexities involved with taking for Christian ministries, even those that have a strong social service component. As Knippenberg writes, InnerChange staff ran up against the difficulties of abiding by what I consider to be the increasingly rigid and invalid separation of secular and sacred elements: “Where so much of the program is devoted to inculcating a Christian worldview, it is difficult, if not impossible, to precisely delineate what portion of a staffer’s time, or what fraction of a piece of equipment’s value is devoted to secular, as opposed to religious, purposes.”

I’ve written more about the entanglements and effects of the faith-based initiative in the case of the Silver Ring Thing, and there’s conversation between myself and Knippenberg on this linked here, here and here.

“Should I not be concerned about that great city?” asks God of the prophet Jonah about Nineveh, which “has more than a hundred and twenty thousand people who cannot tell their right hand from their left, and many cattle as well.”

God is rebuking the recalcitrant prophet, who only carried out his assigned proclamation in Nineveh after a rather harrowing adventure on the high seas. After Jonah delivered his message, “Forty more days and Nineveh will be overturned,” the Bible tells us that “Jonah went out and sat down at a place east of the city. There he made himself a shelter, sat in its shade and waited to see what would happen to the city.”

If Jonah embodies the spirit of withdrawal and the desire for God’s wrathful judgment on sinful human society, think of Tim Keller as the anti-Jonah. As he’s introduced in a piece he wrote for a recent issue of Christianity Today, “For 17 years, he has been preaching at Redeemer Presbyterian Church in Manhattan, distilling biblical teaching into arrestingly simple phrases that convey the radical surprise and gracious truth of Christian faith.”

Photo Credit: US National Oceanic and Atmospheric Administration

Keller’s ministry is vital and engaged: “Keller’s vision of a church keenly committed to the welfare of its city attracts 5,000 worshipers each week to Redeemer’s four rented locations, sends them out into many forms of charitable service through the church’s ministry Hope for New York, and fuels a church-planting effort that embraces Baptists and Pentecostals as well as Presbyterians, immigrant neighborhoods as well as Manhattan.”

Keller writes in the piece, “A New Kind of Urban Christian,” that for the Christian church to properly and effectively engage culture, “We need Christian tradition, Christians in politics, and effective evangelism.” But these alone or combined are not enough. Keller believes that “as the city goes, so goes the culture. Cultural trends tend to be generated in the city and flow outward to the rest of society.” Large cities tend to attract young and vibrant people, who influence the course of the broader culture.

The sad fact is that the Jonah phenomenon has had an impact on evangelical Christianity in America. “Do I mean that all Christians must live in cities? No. We need Christians and churches everywhere there are people! But I have taken up the call of the late James Montgomery Boice, an urban pastor (at Philadelphia’s Tenth Presbyterian Church) who knew that evangelical Christians have been particularly unwilling to live in cities,” he says. (more…)

Blog author: jballor
posted by on Tuesday, May 30, 2006

Entry #2 in Joe Carter’s Know Your Evangelicals Series is Jim Wallis, editor of Sojourners magazine and founder of Call to Renewal.

The one-sentence summary? “While Wallis appears to be a genuine and passionate Christian he would do well to base his political views a bit more on the Bible and a bit less on leftist ideology.”

Acton’s Jay Richards reviewed Wallis’ recent book, God’s Politics: Why the Right Gets It Wrong and the Left Doesn’t Get It, in the October 2005 issue of Touchstone magazine.

Pat Nolan, president of Justice Fellowship, writes about the challenges that non-profits face in seeking funding, in the latest Justice eReport, “Equpping the Armies of Compassion.” Nolan highlights the Acton Institute’s Samaritan Guide and We Care America, which has a grant center that assists charities in getting proposals together.

And on a related note, Joe Knippenberg at No Left Turns critiques an article by Amy Sullivan in The New Republic, “Patron Feint,” which depicts the faith-based initiative as a mere political tool to satisfy the GOP’s evangelical base.

My commentary last week on the situation of the Silver Ring Thing has occasioned some conversation on the LewRockwell.com Blog (here, here, here, and here). The consensus on the faith-based initiative seems to be that, in the words of William L. Anderson, they “were pointing out at the beginning that this was a bad idea, and that taking the state’s money ultimately would mean that the state would be interfering with the larger mission of these religious groups.”

Contrariwise, Joseph Knippenberg, who blogs at No Left Turns and is a professor at Oglethorp University, writes in this week’s The American Enterprise online column that the faith-based initiative is being undermined by partisan Democrats and that it will have to continue under the diligent faithfulness of Republicans.

Citing the differences between the Republican and Democratic approaches, he writes of the former, “because the shekels come without unnecessary shackles, the effect of government funding isn’t necessarily homogenizing or secularizing. In a nutshell, this co-religionist hiring exemption enables government to cooperate with, but not dominate, a vigorous and diverse private philanthropic sector.”

The danger is, in Knippenberg’s view, that the faith-based initiative will become dominated by Democratic partisans, who “would force every government contractor into essentially the same bureaucratic mold. Every recipient of government funding would ultimately be simply an extension of the government, offering more or less the same services in more or less the same setting.”

But even if Knippenberg is right, and there is this vast difference between the approaches of the two parties, it merely serves to underscore my point about the unreliability of government funding. He is responding in part to this Washington Post story which notes the boon that Bush’s faith-based initiative has been to certain conservative-minded charities. (more…)

In this week’s Acton Commentary, “The North American Church and Global Stewardship,” I note that blessed with extraordinary material riches, Christians in North America are increasingly viewing their stewardship responsibilities in a global context. I look at one school in British Columbia and how their local building project also raised funds for a school in Sierra Leone.

Dennis DeGroot, principal of Fraser Valley Christian High School, writes and informs me, “The money keeps coming in for the school project. The students have far exceeded their goal. The total now at $36,000 and money still coming in.” He also says, “My long term vision for this is that all Christian schools would find partnerships like ours in the developing world; true partnerships where we learn from each other where real wealth lies.”

For some background, you can read my brief column in The Banner, “Building on the Tithe.”