It’s not going to be easy, but it can be done. A new generation of pharmaceutical executives is rising in the industry, although it will be the next CEO cycle before we see significant change. I predicted that the pharmaceutical price-to-earnings ratio would change from about the mid-20s to the low teens, and [now] I think it’s going to go to the single digits. When it does, people are going to reevaluate how they do research. There will be tremendous opportunities to do things differently and better.
Benefits for the World’s Poorest
S+B: You mentioned the breakthrough in creating an antimalarial drug that will be affordable to populations who need it most. Can we expect the next wave of medical and green genomics to reach more of the two-thirds of the world’s people who live at the “bottom of the pyramid,” in lower-income countries?
HASELTINE: When the Soviet Union fell and the Cold War ended, the Russians, the Chinese, and the Indians all joined the global economy. C.K. Prahalad’s The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits [Wharton School Publishing, 2004] was one of the first books to recognize this. It is a profound work that is now changing the thinking of a new generation of leaders. What is about to happen, and is already happening in India, is a reorientation of business toward the 2 billion people worldwide who are emerging from poverty. This is a fundamental transformation.
S+B: And it’s not just about selling consumer goods to them.
HASELTINE: Absolutely not. The rest of the world is going to want energy, more food and better food, and good medicine. The structures that we currently have in place cannot deliver all of those things to so many people without destroying our world.
That’s why we have to get away from petroleum-based energy. Agriculture needs to be much more efficient. We need to feed more people and to feed them well. Many solutions lie in biotechnology. It takes twice as much water, and I think about five times as much energy, to feed a meat eater as it does to feed a vegetarian. There is a tremendous savings to be had in promoting a vegetarian diet, and I think the world will move in that direction.
I am working in India now through a foundation I’ve created to deliver high-quality, cost-efficient health care. I believe it’s possible to get equal quality at a cost between 10 and 20 percent below current costs. (See “The Innovation Sandbox,” by C.K. Prahalad, s+b, Autumn 2006.) There are a number of experimental enterprises using technology to create high-quality, affordable, low-cost health care for the Indian middle and lower-middle classes. These are self-sustaining, profitable organizations. There is a tremendous amount of experimentation. The common theme is, How do you solve the problems of getting high-quality health care at very low cost to very large numbers of people?
That is not just a problem for health; it’s a problem for the whole economy. How do you provide efficient energy, health care, food, and services to very large numbers of people? India is a great laboratory, because of its demographics and mix of high-tech wealth and poverty. And hopefully those solutions then get translated to another 2 billion people globally.
S+B: Are you saying that the innovations spawned by biotechnologies can help eliminate the “have” and “have-not” economic extremes?
HASELTINE: You’ll never see an end to economic disparity, but you will see unprecedented upward mobility in the developing world. We are already seeing something like 35 million to 40 million people a year moving into India’s and China’s middle classes. Think of it as a quarter of the United States’ total population joining the middle class each year. Remember, it was middle- to lower-middle-income Americans, not the upper class, that drove the world economy until very recently.