Bill Clinton talks to pharmacist in Tanzania before an event announcing plan for subsidies on malaria medicines.
Bill Clinton talks to pharmacist in Tanzania before an event announcing plan for subsidies on malaria medicines. - 
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Kai Ryssdal: There's a new force to be reckoned with in the world of pharmaceuticals, and it's name is the William J. Clinton Foundation. The former president announced a deal this morning that could stabilize prices for drugs to treat the 500 million people a year who get malaria. Janet Babin reports from the Marketplace Innovations Desk at North Carolina Public Radio.

Janet Babin: One of the best defenses we have against malaria these days comes from a fern-like weed called Sweet Annie or wormwood. Fluctuating supply and demand have pushed the plant compound's price from $155 dollars per kilo one year, to over $1,000 the next. The Clinton Foundation deal sets price ceilings for the compound with six world suppliers. Steve Meshnick at the University of North Carolina says that'll make the drugs cheaper.

Steve Meshnick: The less expensive the drugs are, the more people can be treated, and even now the drugs are still too expensive.

The price probably wouldn't go down anytime soon without the Foundation's help. Right now, Novartis is the largest producer of anti-malarials. CEO Daniel Vasella says the company sold 66 million treatments last year, but lost millions on the sales.

Daniel Vasella: We decided it is part of our purpose in society to also deliver medications where we may not make a profit.

But other companies may not go out on a limb for drugs that don't hold a potential payoff. Les Funtleyder's an analyst at Miller Tabak.

Les Funtleyder: Some of the pharmaceutical companies do feel a social responsibility to do that. But in general, you don't want to make too many decisions that are economically negative.

Suppliers that are part of the Clinton Foundation effort, will also receive other incentives, like marketing help.

In Durham, North Carolina, I'm Janet Babin for Marketplace.