For Developing Countries, Health Is Wealth

Lord Chesterfield observed that good health is the first and greatest of all blessings and the first of all liberties. Millions of people in developing countries around the globe lack this blessing and basic freedom. What's more, their poor health both reflects their poverty and contributes to it. Economists have found a strong correlation between better health and faster economic growth--a correlation that holds up even after accounting for other factors that explain national differences in economic progress. Providing adequate health services to the world's poorest citizens could save millions of lives each year, reduce poverty, and promote development. Laudable as this goal is, can it be achieved? A carefully researched report from a World Health Organization commission chaired by Jeffrey Sachs of Harvard University--on which I served--concludes that the answer is yes.

A relatively small number of identifiable conditions--such as malaria, tuberculosis, childhood infectious diseases, maternal and perinatal nutritional deficiencies, and HIV/AIDS--are the main causes of illness and high mortality rates in developing countries. For each of these conditions, interventions that can dramatically improve health outcomes already exist. Most such interventions are not technically exacting and can be delivered by local health centers, working with state and private health-care providers and nongovernmental organizations.

Spending on health in the developing countries must increase significantly over the next decade, however. The WHO commission--known formally as the Commission on Macroeconomics & Health--estimates that the minimum cost of essential treatments, including those necessary to fight the AIDS pandemic, is between $30 and $40 per person per year in those countries.

This sounds like a trivial amount compared with average per-capita annual health spending of $2,000 in high-income countries. But it is considerably more than the average per-capita health spending of $13 per year in the poorest countries. Even if developing countries significantly increase the resources they devote to health and use such resources more efficiently, the WHO commission concludes that developed countries must contribute an additional $27 billion per year by 2007. This increase is large compared with their current contribution of about $6 billion per year, but it would amount to only about 0.1% of the gross domestic product of the developed countries, leaving ample resources for other developmental goals.

At the same time, the WHO commission acknowledges that efficient delivery of development assistance for health will require new organizations such as the Global Fund to Fight AIDS, Tuberculosis, & Malaria. Commission members applaud the establishment of this fund and endorse the U.N. recommendation that its resources be scaled up to $8 billion a year by 2007. The commission also urges each developing country to establish a temporary commission to formulate a strategy for increasing domestic spending on health and for extending essential health services to all citizens. The WHO has pledged to work with these national organizations to establish operational targets and a framework for the effective use of donor aid.

Drug companies, too, have a crucial role to play in the fight to improve the health of the poor. The WHO commission recommends that the global pharmaceutical industry formulate voluntary guidelines to ensure that essential medicines be made available to developing countries at the lowest viable commercial prices. Such guidelines should recognize the principle of differential pricing--meaning lower prices in low-income countries as the norm--and should provide for licensing of patented drugs to generic producers in developing countries. In addition, donor countries should negotiate with drug companies for the lowest prices on behalf of countries too small and poor to negotiate on their own. At the same time, developing and donor countries must work together to ensure that lower prices and generic licensing in poorer countries do not undermine market pricing and patent protection in high-income markets.

A sustained, cooperative effort to improve health in developing countries would yield benefits that far exceed its costs. The Commission on Macroeconomics & Health predicts that enactment of its recommendations could save about 8 million lives per year by 2010. The 8 million deaths prevented would translate into about 330 million disability-adjusted life years, a measure of more years of life and fewer years of disabilities.

Conservatively, each disability-adjusted life year saved would yield the economic benefit of one year's per-capita income in a developing country. The direct economic benefits of saving 330 million disability-adjusted life years would be around $186 billion each year. Because reduced disability translates into higher productivity, the total benefits would be larger. On economic and humanitarian grounds, the case is compelling for the world community to invest in the health of its poorest citizens.

By Laura D'Andrea Tyson

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