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Bill Gates speaks during All In WA: A Concert for COVID-19 Relief on June 24 in Washington. Getty Images for All In WA
Fast-Track Vaccines

Bill Gates: “Our values do change what gets funded in this economy”

Molly Wood and Stephanie Hughes Sep 15, 2020
Heard on:
Bill Gates speaks during All In WA: A Concert for COVID-19 Relief on June 24 in Washington. Getty Images for All In WA

Ever since the United Nations set out a list of goals for sustainable development in 2015, the world has made progress each year on objectives that could move us closer to ending poverty and stopping climate change.  

This year, it did not.

According to the 2020 Goalkeepers Report out Monday from the Bill & Melinda Gates Foundation, the world fell behind on many of the indicators used by the UN to keep track of progress toward the goals. That includes reduction in new cases of malaria, and universal health care and vaccinations. Bill Gates has made vaccine development and distribution a priority for over a decade. He has put more than $1 billion into malaria vaccine research, and now he is working with pharmaceutical companies to fund the development of a COVID-19 vaccine. He’s also helping to match vaccine developers with manufacturers that will be able to help distribute a vaccine to the developing world.

Bill Gates is the co-founder of Microsoft, and now the co-chair of the Bill & Melinda Gates Foundation. He spoke with “Marketplace Tech” host Molly Wood about his work on vaccine development. You can listen to part one of their conversation here, part two of their conversation here and part three of their conversation here.

The following is an edited transcript of their conversation.

Bill Gates: We need to get most of the world vaccinated to bring the pandemic to an end. And so the question is, how do we avoid just having the rich countries make sure there’s manufacturing capacity and procurement dollars for them, leaving out the developing countries where the suffering is even greater and where the disease will keep coming back into the developed countries if we don’t end it in the entire world.

Molly Wood: One of the things you note in the report, though, is that there isn’t yet a sense of how to get a lot of countries on board with an effort like this. How big a challenge is that?

Gates: Well, the European countries have stepped up here. We don’t have enough yet to buy for the entire world. The U.S. is kind of unusual. It’s funded a lot of R&D that is helping move candidates forward. But it’s only funded manufacturing procurement for itself. And so as the Congress looks at a new supplemental bill, the historical leadership of the U.S. in global health — whether it’s smallpox eradication, HIV, polio — I think the Congress will step up. But as yet, it’s been a no-show on this.

Wood: How frustrating is that, I wonder? I mean, you’re personally funding factories that are all working on a vaccine. You’re sort of trying to organize this extra-governmental effort.

Gates: Well, I’m certainly talking to the Congress about their great history that they’re rightly proud of, on a bipartisan basis of how the U.S. has showed up. And here the benefits are stronger than ever, because even from a selfish point of view, it’s stopping the epidemic returning. But strategically and from a humanitarian point of view, we should do what we’ve always done and help save these lives and help try to get things back on track. The report shows that not just the deaths from COVID, but also the disruption to the economy, the schools, the health system, it’s causing gigantic setbacks, even far more deaths than the disease itself is causing.

Wood: In the U.S. or globally?

Gates: Mostly globally. You know, [non-U.S.] health systems are far more fragile, their ability to come up and borrow a lot more money at the government level isn’t the same as what the U.S. can do. So they’re suffering far more.

“Cooperation is fundamental”

Wood: It’s interesting because there are so many ways in which the Gates Foundation does some of the work of government. And yet, this is a case where we have a pandemic, meaning it’s global in nature, and we’re at a time of a lot of nationalism. And I wonder if you find yourself in a position where you think you can straddle a lot of different countries’ responses?

Gates: Well, there’s no doubt that only cooperation will get us out of this thing. The science of the vaccine will be done in many countries, the regulatory review, the manufacturing, the trials — this is global. And so that kind of cooperation is fundamental. Hopefully, people look at that and they say OK for other things like climate change or stopping future pandemics, that we need to put an even stronger framework of cooperation in place.

Wood: One thing that is a priority of the foundation is equity overall, and in this case, equitable distribution of this successful vaccine. Tell me about the role of manufacturing and the technology and shortages around manufacturing that could make that a big challenge.

Gates: Well, a number of the [vaccine maker] candidates, including AstraZeneca, Novavax, Johnson & Johnson and Sanofi, can be made at very low cost and very high volume. And so we’ve set up arrangements where not just the company that invents the vaccine and supervises the trials, but also other companies who have high-volume manufacturing capacity can take exactly that same vaccine and produce billions of doses.

And so that’s why the highest-volume vaccine manufacturer in the world, Serum, we worked so that they’re working with AstraZeneca and Novavax. We’re working with other Indian manufacturers, including BioE, with some of the other constructs so that you get many factories getting up to speed. We need many billions of doses before the pandemic is over, and the quicker we get it, the sooner we can bring it to an end. Ideally, we’re getting over a billion doses out in 2021 and enough to end the epidemic in 2022.

Wood: And you have been quoted as saying you think that we’ll end the pandemic sooner in richer countries, right? That 2022 date is the global date?

Gates: Exactly. If the vaccines work as well as we expect, there’s approval of a number of them by early next year, and there’s no glitches in the manufacturing and these partnerships, [in] rich countries the numbers will really start to drop in 2021 and largely not be a problem. To get the rest of the world, which is where most people live and most of the suffering is, it’s very unlikely we could get that done before the end of 2022.

Wood: Vaccines are the big gun, if you will. But the tech industry, I think, had this kind of start-stop approach to the pandemic. Like, “This is a problem we should jump in with contact-tracing apps or various other types of initiatives.” But what do you think lies between here and a vaccine?

Gates: The phase three trials are underway or will start for these most promising constructs within the next few months. And so you have to get lots of people to sign up for those trials. Ironically, they have to be in locations where there’s lots of cases because that’s what shows the difference between the placebo recipients and the vaccine recipients — that there were lots of cases in the placebo arm and not in the vaccine arm of the trial. And these are the world’s best vaccine companies working together to make this happen. That’s the private sector. You know, no politician is pulling out test tubes and doing anything. Our foundation has a lot of those private sector people because we’ve worked in the high-volume, low-price vaccine area to save tens of millions of lives, because that’s where there’s a market failure. Buying vaccines for poor countries, there’s no market signal that would make that happen without philanthropy.

Matchmaking companies

Wood: So it sounded like you’re saying, in some ways, you’re matchmaking some of these companies, right? Or forging these partnerships, because you have these existing relationships?

Gates: That’s right. We work a lot with these high-volume manufacturers. And we work a lot with the Western manufacturers that do most of the innovation. And so I have regular calls with groups of pharma CEOs, with individuals, CEOs, seeing, OK, how quickly can we get the transfer done? And how does the regulator look at that? And it’s not only making the bulk, we also have to do the fill finish. And then we have to prepare the delivery systems in the countries themselves. So it’s quite complex, and yet the cost to do this, which will be billions, is what will stop the loss of literally trillions that are taking place all over the world right now.

Wood: Right. And so when you say, “without philanthropy,” you mean without the money of philanthropy to make sure that vaccines are manufactured and distributed in poor countries where people can afford to buy it?

Gates: Yeah. And the expertise about the low-cost thing, you know, kind of that private sector mentality, but taking on a non-market-driven goal, which is to stop the pandemic. Sadly, we didn’t want to be ready for this, but we bring the right type of understanding to drive those partnerships.

Wood: Back to what lies between here and a vaccine. More specifically, I meant, are you investing in or interested in therapeutics?

Gates: The only therapeutic that’s been shown to have significant effect is dexamethasone, which was a U.K. therapeutic trial that we were one of the funders of. The next set of therapeutics are likely to be the monoclonal antibodies, where we’ve reserved, again here, a lot of factory capacity. So in case they work well, we can get it out to the developing countries. And I’m pretty hopeful about that. There are a few antiviral drugs, which is a different class, that are still being worked on. But so far, the therapeutic space hasn’t generated as many leads as we’d hoped. There have been dead ends, like hydroxychloroquine. And you know, of course, plasma is a very confused picture. But there’s no chance it will be nearly as good as the monoclonal antibodies.

Wood: So ultimately, we’re still hoping for a vaccine.

“The vaccine is magic”

Gates: Yeah, the vaccine is magic because it stops infection. And so instead of going to the hospital to get treatment, you simply don’t get infected. That’s what’s going to allow us to take off all these special measures. That’s where you’ll be able to go back to public gatherings and not worry about the person sitting next to you.

Wood: I want to pivot to climate change, because you mentioned that if we can figure out a truly global response to the pandemic, it could provide a model for something like climate change. Right now, do you feel hopeful about that?

Gates: Well, climate change is a daunting challenge. There’s no doubt that the suffering from the temperature increase will get greater and greater as time goes on. And it’ll be worse in the equatorial regions, where you have subsistence farmers. So we do need a lot of innovation, we do need every country to participate, because you’ve got to get to zero [carbon dioxide] emissions to stop the temperature constantly increasing. I’m hopeful because [in] my career, there’s been lots of innovations that have been amazing. And here if we can draw in the smartest thinkers, draw in risk capital, create markets even for these products when they still have a premium price and get them down the learning curve, I think we can get to zero. But it’s definitely daunting. And the U.S. has kind of not played its role here as well. And just like the vaccine funding, we hope that that changes.

Wood: How much damage could be done broadly if the U.S. essentially drops out of these conversations? Or worse, engages in public policies that are counterproductive?

U.S. innovation power

Gates: The U.S. is critical because so much of the innovation power in the globe is in the United States: the universities, the national labs, the risk capital formation. So, to invent new ways of making steel and cement, or clean hydrogen aviation fuels with no emissions, without the U.S. scientific capability engaged and seeing that as a future market and good for the planet, we won’t hit the 2050 deadline for this. So the U.S. not only has to reduce its own emissions, which are about 15%, it also needs to contribute to making it economic for countries like India, which will build a lot of buildings with steel and cement just to house their people, and increase electricity just to have basic consumption levels at a fifth of the U.S. levels, we need to make it cheap for them. And that’s where our innovation power is needed for the entire globe.

Wood: We have done some reporting asking various people in the tech industry, to your point about the smartest people. Silicon Valley has been, it seems like, slow to engage on a commercial level. There’s philanthropic efforts, but there isn’t a lot of innovation around climate. What do you think it’s going to take to really engage this industry and all of the innovation that they could potentially bring to the table?

Gates: Well, the typical venture model doesn’t fit perfectly. The risk level, the amount of capital spending to change steel and cement and all the key areas of emission are very, very high. You know, Tesla has made a contribution for passenger cars. They’ve driven progress. And that’s probably an area that does have solutions with only incremental innovation. There are many others [where] we need breakthrough innovation. And there’s a few venture firms, certainly Khosla and a few others, who still invest in these areas. But you need a lot of patience, you need, in some cases, scaling capital that has to come from another source, you need policies that give a price signal. People are willing to pay a premium to buy these clean products. So the overall system isn’t just going to happen naturally. It requires both the government and specially designed vehicles, one of which is [Gates’ own] Breakthrough Energy [Ventures], which got huge backing from all the people I called to create that as kind of a modified venture effort aimed solely at climate change.

Wood: I know that one of the modifications is that the capital’s more patient— companies don’t need to provide a return for at least 20 years. Are there others?

Gates: Yeah. So, the way we partner with industrial companies from the very beginning, which might mean that we don’t make as much in the long run because we’re so impact-driven. That’s a pretty big deal, because if you can sell at a high price to a small part of the market, that’s great financially, but it’s not ever going to meet the goal. Every one of these companies has to have a chance of reducing climate change [by] over 500 million ton of emissions. And so we have a very narrow criteria for who we think is eligible. One of the great things is that as we built our scientific team and done due diligence, other financers who might not have been willing to participate in climate-driven things, have come in. So the co-financing actually has been quite strong on the deals that Breakthrough Energy has done.

Wood: I’ve also heard Breakthrough Energy described as catalytic capital. And so I wonder how much money this problem is going to take?

Gates: Well, overall, to replace the industrial infrastructure and electricity infrastructure and transportation infrastructure of the whole world is literally trillions of dollars. But the innovation piece, the upfront piece, is in the billions. You know, BEV’s first fund is a billion dollar fund. The second fund will be somewhat larger than that. But the overall money that needs to be orchestrated in is in the hundreds of billions. And now, you know, who knows how much the U.S. government will step up. At least the Biden campaign is talking about getting up to that hundreds of billions of government money. So that would make a phenomenal difference. We’d have to make sure it’s spent well, and it can’t just solve the U.S. emissions, it has to help solve all the world’s emissions. But that would be a huge milestone if they’re elected and they put that program into place.

Wood: And then let’s talk about adaptation and resilience. You were pretty early to this conversation. You helped lead the UN’s Global Commission on Adaptation. Is that a part of the Breakthrough Energy portfolio or do you consider that a separate investment opportunity?

Gates: No, Breakthrough Energy’s purely mitigation, so funding to reduce emissions. Over inside the Gates Foundation, the issue’s on, “OK, how do you deal with farmers when it’s too hot for their crops to grow? How do you deal with farmers when it’s either flooding or you have drought?” And so there’s some really exciting work on that adaptation front having to do with improved seeds, sort of a green revolution for climate change. I’m worried that adaptation gets even less attention than mitigation, because it’s mostly countries that are fairly poor. And the outdoor activity that’s at most risk is farming.

Wood: It feels like adaptation gets less attention overall, and yet is becoming more acute by the minute for the the entire world. I mean, I’m in California, we’re basically on fire, just as one pretty privileged example. How much more attention do you think that part of the conversation should receive? I know it’s been controversial in the past because people don’t want to take resources and attention away from mitigation. But in some ways, we’re also talking about climate already changed.

Gates: I’d say we’re pretty early on really having strong thinking on both mitigation and adaptation. You know, there’s people who’ve acted like mitigation is easy. Sadly, you know, that is wrong. I wish that was the case. Adaptation, we need scientific tools, you know, for example, to make breakthrough seeds, you often use GMO-type techniques. And so to avoid starvation in these developing countries, they need permission with their sovereign safety reviews to go and use those tools, even if some other countries don’t mind not having access to those. And so there are some real issues of social justice in enabling the innovation pathways, not blocking these countries from saving their agricultural sector, which is all about enough nutrition. And if you have malnutrition, then you can’t get educated, you get into this negative cycle that is a complete poverty trap.

Wood: From your blog, you wrote that “COVID-19 is awful. Climate change could be worse.” Do you worry at all about distraction from funding or fighting climate change as we deal with the pandemic?

Commitment to climate change

Gates: Yeah, I think the pandemic is using up so much bandwidth and so much of the resources, that people will think after the pandemic their favorite cause will somehow be more popular than it was before the pandemic. At least some of those people will be wrong. I know I think in climate, “Oh, this is about governments thinking ahead. This is about investing in innovation to deal with very bad consequences.” So I feel like, “Wow, you know, this is going to be so logical, the climate commitment will get even stronger.” And it starts off at a fairly strong level. If you poll people in the U.S., the interest in climate is stronger today than it’s ever been, even during this pandemic.

Now, when it comes to allocating the resources, that puts people really to the test, but at least the platform of one of the candidates, Biden, is very generous in this cause. And I hope that whatever the next electoral cycles bring us, that that commitment to climate change is there because that’ll draw other countries in as well. Without U.S. leadership, what we’ve seen with the pandemic, with the U.S. messing up its own situation pretty badly and not working on the global procurement, the rest of the world has a hard time solving problems. We are the necessary leader. And in these two areas, not showing up, at the very minimum, slows things down a lot.

Wood: I think it feels fair to say that a through line of a lot of your work with the foundation is what happens when logic collides with human behavior. That there are potentially a lot of logical solutions or technology solutions that could be applied to big problems that then collide with irrational behavior. How much of your job is overcoming that?

Gates: The teams we build need to understand the cultural factors, the difficulty of delivery. For example, vaccines, there’s always rumors that vaccines are to sterilize people or they cause side effects. And in each country you have to find who people trust, make sure they’re vaccinating their children and that they’re spreading the word that there’s these incredible benefits that come. That’s how we got smallpox eradication. We faced the anti-vaccine rhetoric in the polio eradication campaign. But I’m still hopeful, even though the pandemic’s been a setback there, I’m hopeful that it’ll get done in the next two or three years. So we always have to find a way to communicate, and drawing in people with expertise very different than mine is critical to that.

Wood: You’re describing government-level problems, and you’re describing some level of sort of cultural diplomacy. Why is that your job, the job of the Gates Foundation?

Gates: Well, when we started out, we mostly thought that we would just increase the R&D. Because for malaria, the people who die, which at that time was over a million children a year, they don’t have enough money to have a voice in the marketplace. So there was no science or willingness to fund on their behalf in a capitalistic system. And there was a little bit of foreign aid, but not much. So we came in as the biggest player in malaria funding. At first I thought our role would just be to create the drugs and the nets and that we wouldn’t need to fund the actual delivery side, because once we had the tools, the uptake would be there. In fact, it turned out that it was much harder to have things delivered than we expected. So we were a co-founder of the Global Fund that goes after three diseases: HIV, tuberculosis and malaria. And we were a founder of this GAVI organization that buys vaccines for poor countries at the very lowest prices.

And so those two institutions, which we did in our first two years of existence, to learn about delivery, so far, actually, they’ve probably been the most impactful thing we’ve done. The R&D promises to give us some amazing things, including the tools that will help us end malaria and make incredible progress on HIV. But the delivery side, I underestimated how hard it was and how we would have to partner up to figure out what kind of vaccine would be acceptable, what kind of medical intervention, even how do you tell people that they really need to sleep under that bed net? And that feeds back to the design of the product, because you’re a partner in the delivery and you see what’s not working. And we thought we could get women to take a daily pill for HIV prevention. And the uptake on that was very, very low. And so now we’re working on something that you’d only have to take either a shot or a pill every 90 days, because it looks like that would get uptake. You’re driven by the limitations of uptake. And so that’s why we’ve got to be deeply involved, not just in R&D, but also the delivery side.

Wood: But to put a finer point on it before we have to go, at what point do your priorities, the priorities of the foundation, end up becoming the priorities for the world? And you’ve described a series of unintended consequences that pull you in deeper and deeper to, ultimately, the work of governments. Where does that end?

What gets funded

Gates: Well, in no case should countries depend on our philanthropy or any other philanthropy to solve a basic need. We can accelerate the R&D, and we can accelerate the understanding. And so, yes, by spending money on malaria, as opposed to some fancy vacation or something, yes, the world’s resources are going more into malaria now than they did before, and those million deaths are now down at 400,000. And it’s my lifetime goal to get that to zero. So rather than some luxury goods markets being expanded by spending, you have here the brilliant malaria scientist market expanding. And so yes, our values do change what gets funded in this economy, and malaria just was, in my view, grossly underfunded. And I’m surprised that that was the case, but it created an opportunity to have really dramatic effect for money that although at an individual level, it’s a lot, relative to the global economy, to government-type budgets, it’s actually quite small.

Wood: You said it was either malaria or a luxury good. But there’s a lot in between there. And do you ever think, maybe I should turn my lens on disinformation or wealth inequality or racism in the United States?

Gates: We have two big things we do. One is inequity in the U.S., which a lot of that is education. And then there’s global health. I do believe you really have to focus and become expert. We’re basically saving a life for less than $1,000 per life saved. So these are miraculous interventions. If in other fields, people have miraculous interventions, through The Giving Pledge, we’ll make sure lots of philanthropists see these high-impact things. Some problems, governments spending way more than philanthropists can, haven’t been able to solve, and so mostly philanthropy comes up with pilots. Pilots of a mentoring program, pilots of how schools could organize a bit differently. So we do a lot of that. But once we’ve committed to malaria eradication, we’re not going to abandon that. Sadly, there’s very few fields where you can save millions of lives for small sums of money.

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