- Person
- Kenneth Arrow
- Lived
- 1921–2017
- Field
- Economics
- From
- American
The story
For more than 50 years the drug chloroquine, at about 10 cents a course, had saved millions of lives from malaria and reached even people with little access to formal health care. By the early 2000s it was failing. Resistant parasites had arisen in Asia and South America and reached east Africa by the 1980s, and other cheap drugs were losing ground too. Malaria deaths in sub-Saharan Africa, already more than a million a year, were rising. Effective new combination treatments based on artemisinin existed, but at about 2 dollars a course they were roughly twenty times the price of chloroquine and out of reach for most patients.
Kenneth Arrow, then in his eighties and long retired from teaching at Stanford, chaired the Institute of Medicine's Committee on the Economics of Antimalarial Drugs and co-edited its 2004 report, Saving Lives, Buying Time. In his preface he wrote that while biology and pharmacology were vital, malaria policy also needed the best economic understanding available. The committee estimated that treating the world's falciparum malaria with the new drugs would cost about 500 million dollars a year, a small sum for rich countries but unmanageable for countries with incomes of 2,000 dollars a person or less.
Arrow's committee argued that combination treatment was also a global public good, because it slows the emergence of drug resistance and so protects future generations. Rather than vouchers or new bureaucracies, it urged that subsidies enter at a high international level, with a central buyer purchasing drugs from manufacturers and reselling them cheaply, so that the existing public and private distribution systems could deliver them. It recommended new funds of 300 to 500 million dollars a year to bring prices down to about the cost of chloroquine.
The report warned that without funding for effective treatment, malaria deaths could double over the following 10 to 20 years. Arrow also noted that drug treatment worked best alongside insecticide-treated bed nets and other control measures.
Arrow stressed that the committee's scientists, physicians and economists were unanimous about their recommendations, even though basic data such as the number of malaria deaths were uncertain, and that the world could not wait for better information to meet the crisis.
Why it matters
The report applied economic reasoning to a life-or-death problem and set out a practical plan to put effective malaria treatment within reach of millions.
About Kenneth Arrow
Economist whose impossibility theorem, general-equilibrium proofs and work on risk, information and health care reshaped economics; still the youngest winner of the Nobel economics prize.
More about Kenneth Arrow
- Kenneth Arrow and Gérard Debreu proved markets can balanceIn 1954 Kenneth Arrow and Gérard Debreu published the first rigorous proof that a competitive economy can have a set of prices at which every market clears.
- Kenneth Arrow's 1963 paper launched health economicsKenneth Arrow's 1963 paper on uncertainty and medical care explained why health care markets behave differently, laying a foundation for health economics.
- Kenneth Arrow proved no voting system is perfectKenneth Arrow's 1951 book Social Choice and Individual Values introduced his impossibility theorem and founded modern social choice theory.
- Kenneth Arrow showed how learning by doing drives growthKenneth Arrow's 1962 papers on learning by doing and on markets for invention helped economists explain where innovation and growth come from.
- Kenneth Arrow helped create Stanford's operations researchKenneth Arrow co-wrote a 1951 classic on optimal inventory policy and helped establish Stanford's operations research department in the early 1960s.
- Kenneth Arrow used the winds to save wartime fuelAs a US Army Air Forces weather officer in the Second World War, Kenneth Arrow worked out flight paths that used prevailing winds to cut fuel use.
Sources
- Saving Lives, Buying Time: Economics of Malaria Drugs in an Age of Resistance The National Academies Press
- Kenneth J. Arrow: Biographical NobelPrize.org
- Saving Lives, Buying Time (book description) National Academies Press
Another act of tikkun olam. This is part of tikkun olam, the Jewish idea of repairing the world, and every one of us can add to it.