Richard Chin Headshot

Definition of Affordable

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The mission of iOWH is to develop affordable drugs. What does affordable mean? Let's say we receive a $50M grant and spend the grant to develop a drug. Because we don't have to pay back the grant we can sell the drug for the cost of manufacturing - let's say 50 cents for a course of treatment. And let's say we treat a million patients. Is that an affordable drug?

Some would say yes, 50 cents is affordable.

We would say it's not, because we have to take into account the $50M. That's $50M that could have been spent on sanitation, vaccines, etc. The actual cost of each treatment is 50 cents plus $50 (plus cost of capital of course). For many of our patients, who earn 50 cents per day, $50 is not affordable. Not even close.

Now, some of my friends tell me, Richard, but that $50M would not have been spent on sanitation or vaccines. It would have gone to fighter jets or bonus for Wall St. investment bankers. I don't have a good answer to that.

But if we assume that the fund are fungible across global health, then we can't have affordable drugs without affordable drug development. If we ignore the cost of development, all we're doing is subsidizing the drug. That's not bad in and of itself - subsidies and donations go a long way, but that's not what we're here to do.

Fortunately, we believe that we can develop drugs much less expensively than big pharma. We don't have some of the constraints they do, and at iOWH, and we have had a lot of success in driving costs down.