Businesses that compete by saving lives

How do healthcare companies win in the Sustainable Development Goal era? In the waning years of the Millennium Development Goal era, Michael Porter and Mark Kramer published Creating Shared Value and redefined the purpose of the corporation. Not long after, a group of companies joined forces with consulting company FSG to publish, Competing by Saving Lives. The report, still relevant 12 years later, made a series of startling claims to companies involved in health.

Healthcare companies create shared value, the report stated, when they compete on the basis of improving health outcomes for the underserved; in other words by saving the most lives in low- and middle-income countries. To underscore the point, the report shared a shocking graph on the current misallocation of health spending which showed that less than 5% of global spending on medicines went to South East Asia and Africa despite these regions accounting for 41% of all deaths.

To succeed in creating shared value, the report advised healthcare companies to cultivate five things: (1) a deeply committed CEO, (2) a culture of innovation, (3) performance indicators that include how many lives the company is saving, (4) staff with cross-sector skills, and (5) partners from beyond the business community. With these assets in place, the report concluded that companies can get down to the business of creating shared value by reconceptualizing products and markets, redefining value chains, and developing local clusters that both generate and capture value.

Nine years into the Sustainable Development Goal (SDG) era, these claims are even more salient. Not only are healthcare companies being asked to contribute more to the most ambitious set of health goals we have ever imagined, but they have never been better positioned to deliver.

Why? Because we have entered a period when economic growth is slowing and an inward-looking nationalism is sweeping across Europe and the USA, causing high-income country governments to pull back from active roles in international development. With stronger growth continuing in low- and middle-income countries, most of it driven by the expansion of private sector finance and product markets, companies are better placed than ever to step into the vacuum.

But with just seven years to effectively end deaths in pregnancy, childbirth, and childhood, stop the spread of HIV/AIDS, tuberculosis, and malaria, eliminate child malnutrition, reduce deaths from non-communicable diseases by one third and deaths from road traffic accidents by one half, and meet all unmet need for modern contraception, it is only shared value strategies that have the power to leverage company assets at the scale needed to achieve such ambitious goals. In fact, we will need shared value approaches firing on all cylinders in a majority of healthcare companies by 2025 to have even a chance of achieving the SDGs.

In this environment, the companies that can deliver health benefits to the massive underserved populations on this planet and build stronger businesses as a result, may well turn out to be the biggest contributors in the SDG era. There is no doubt the early adopters of shared value in global health – Nestlé, Novartis, Novo Nordisk, Becton Dickinson, GSK, Danone, Unilever, and the other companies listed on Fortune’s Change the World list – have a head start and many are busy reinventing their businesses. Efforts like Novartis Access, Novo Nordisk’s Changing Diabetes® and Danone Communities are leading examples of companies building markets for their products and improving public health at the same time. But watch out for the global technology powerhouses Apple, Alphabet, Microsoft, Facebook, and Amazon and the new wave of healthcare disruptors. Think what this group of companies could do if they aligned their investments in health with shared value and the SDGs, prioritizing the emerging markets that are both the source of their future growth and the places where public health challenges are most acute.

The winning companies who contribute most to the health SDGs will be those who achieve a competitive advantage in executing shared value initiatives across five areas: 1) data quantity and quality, 2) application of new and emerging technologies (e.g. AI/machine learning, DNA sequencing, CRISPR, nanotechnology, drones, 3D printing), 3) network reach and quality, 4) partner quality (government, NGO, academic, business), and 5) leadership quality. The companies that can activate all of these assets through the kind of collective impact partnerships described by Mark Kramer and Marc Pfitzer in The Ecosystem of Shared Value can potentially contribute more to the achievement of the new health goals than any government or non-profit organization.

But what might the kind of shared value collective impact partnerships look like that can save the most lives? Here’s five examples of areas where the benefits of private sector action could have an outsized impact on health outcomes and the SDGs:

1) Chronic disease control: Medical device, pharmaceutical, and technology companies should join forces to improve the diagnosis and treatment of heart disease, cancer, and diabetes, especially in the Middle East, Oceania, and the Americas. A massive 1.6 billion Disability Adjusted Life Years (DALYs) are lost each year due to non-communicable disease, by far the largest of all diseases and conditions measured by the Global Burden of Disease.

2) Improved diets: Food and beverage companies should join forces with government agriculture, social welfare, and health ministries to build markets for nutritious foods that simultaneously reduce child malnutrition and female anemia without increasing the risk of diet-related diseases like diabetes and heart disease, especially across South Asia and Latin America. Almost 500 million DALYs are lost each year due to poor diets – 200 million from dietary risks like high salt and low whole grain diets and 300 million from malnutrition, mainly among children under five in low- and middle-income countries.

3) Alcohol and tobacco reduction: The makers of tobacco products and alcoholic beverages should proactively engage governments and UN agencies to change their product lines or face rising taxation and other government regulations designed to reduce demand for these harmful products. 230 million DALYs are lost each year due to tobacco and 90 million to alcohol consumption, with the latter also a major risk factor in injuries (transport, violence, and self-harm).

4) Clean air: The companies responsible for most of the emissions causing the shockingly high rates of air pollution that now exist in most countries (e.g., energy, transport, manufacturing, agriculture, and food retail) should invest in the companies developing solutions to air pollution, both outdoor and indoor. 210 million DALYs are lost each year due to outdoor air pollution (120 DALYs) and household air pollution (90 DALYs).

5) Reproductive health: Pharmaceutical, insurance, and advertising companies should join forces to dramatically reduce the risks of pregnancy and childbirth by building markets for modern contraception, healthy pregnancy, and safe childbirth, especially in Sub-Saharan Africa and South Asia. Up to one billion women may have an unmet need for modern contraception in these markets, and all the while they cannot access modern contraception, maternal and newborn mortality will remain high.

A final point. When healthcare and consumer goods companies join forces with data companies to share their consumer data with public health authorities to map health behavior at the lowest geographic level across all of these areas, they create a massive public good. One that can identify pockets of illness and target resources for maximum impact, one that can tell you what public policies and private products work and which do not, and one that can forecast  disease outbreaks before they become epidemics. This is exactly the big shift in health aid to “global public goods” that Larry Summers has called for in “The Future of Aid for Health.”

If Carlota Perez is right and we are smack in the middle of the deployment stage of the fifth technological revolution, we can expect to see companies continue to drive shared value in health by applying information and telecommunications technologies at scale in existing and new markets. But Perez also says we are on the cusp of a sixth technological revolution, when a suite of new health-related technologies (e.g., biotechnology, nanotechnology, and bioelectronics) will transform disease prevention, diagnosis, and treatment by taking account of individual variability in genes, environment, and lifestyle – what is being called “precision medicine.”

Whether the existing and new technologies usher in an era of better health for humanity – longer life spans and better quality of life – or are captured by a select few, high-income countries, will largely depend on how many companies pursue shared value health strategies over the next decade. The stakes are very high. My bet is on the wide-scale adoption of shared value by a majority of healthcare companies as key to the achievement of the SDGs.

Updated January 2024