A collaboration of governments, industry, foundations, and individuals for health
Global health is traditionally linked with the concept of philanthropy, not investment. From the generous gifts of individuals, foundations, and corporations (primarily in the pharmaceutical industry) to government donor grants, philanthropy has changed the health prospects of billions of people. For example, basic vaccination is now the norm in all countries, while millions are being treated with HIV, tuberculosis, and malaria drugs.
But philanthropy alone cannot meet the challenges of the next 15 years. We have successfully reduced the number of child deaths by nearly half since 1990. But sustaining the pace of progress going forward will be harder yet. The goal to bring all countries to the same low levels of child mortality as those in Europe and the United States by 2030 represents one of the most audacious challenges ever attempted.
At its core, this is about efficiency. Achieving the health targets outlined in the Sustainable Development Goals will ensure better health for millions of vulnerable women and children. Our challenge is to ensure these health gains can be sustained financially. This requires a cauldron of innovation to literally boil over, spilling new solutions to the corners of our world.
But what is the fire that can provide the energy to achieve this goal? Fortunately, a new sector is emerging: impact capital.
Two years ago, a new investment fund was launched. The Global Health Investment Fund (GHIF) sought to provide a new type of capital for global health, with a focus on late-stage development of new technologies, drugs, and vaccines and the explicit target of shrinking the burden of infectious disease and improving maternal health in the poorest countries of the world.
The project’s first investors were true pioneers. They were offered a safety cushion from the Bill & Melinda Gates Foundation and the Government of Sweden in the form of a partial capital guarantee. This structure attracted a group of both new and long-time investors who had never previously come together.
Governments (Grand Challenges Canada, the International Finance Corporation, and KfW Development Bank), foundations (Children’s Investment Fund Foundation), and corporations (AXA, GlaxoSmithKline, JP Morgan, Merck, Pfizer, and Storebrand) joined together with a number of individuals seeking to invest with purpose. The objective was not only to make an investment return but also to have a significant global health impact.
The GHIF has built a pipeline of opportunities and is now in the process of completing its investment program. Transactions to date include:
- A new tuberculosis diagnostic test that can operate outside a laboratory.
- A cholera vaccine that is lower cost and has the potential to be heat-stable to protect adults and children alike from this Victorian-era disease.
- The registration of a drug for the treatment of onchocerciasis (river blindness), a disease spread by flies, particularly in West Africa.
The GHIF’s pipeline includes additional new vaccines, improved diagnostics, and tools to improve the cold chain. Taken together, we believe this will be the start of a significant pool of investment into this historically overlooked sector.
Photo: PATH/Gabe Bienczycki.