I had become more and more interested in that as president and in a totally different context. We began to spend a lot of time working with developing countries, helping them develop systems, legal systems, investment systems. Because I became convinced that development was impeded more by incapacity than corruption. So I was interested in this whole idea, and with what Prime Minister Douglas said, that we had both a money problem and an organizational problem.
I called Ira because we had been friends since the late 60s—he was a year behind me at Oxford—and because he had worked with us on health care and on e-commerce. And so we talked about it. In the beginning, we thought the main thing here is going to be getting the money up, because the Global Fund hadn’t been funded, the Bush money hadn’t passed, we didn’t know what strictures would be on the Bush money. We were just trying to help these people that asked us to help.
* * *
We were first invited to go to work in the Bahamas, which is the wealthiest country in the Caribbean but had the third highest AIDS infection rate after Haiti and the Dominican Republic. So the first week we started this project in the Caribbean we found out the Bahamas were treating as I recall somewhere between five and 700 people, and they were paying $3500 a person for their AIDS medicine. Now: that’s about what the Europeans and the Canadians were paying for the anti-retrovirals made in America.” We pay $10,000 here, and they pay about $3500 for the same. You know how the systems works.
So I figured out they weren’t buying that medicine. They were buying generics, which had a list price of $500. So I called Ira. We talked again. I said, “Look, this doesn’t make any sense. How could these people be paying $3500 for $500 drugs? If we just cut this to $500 they’ll be able to treat not 7 times as many people, because there are some administrative costs involved, but at least six times as many people for the same amount of money. This is immoral.”
So, I said, “Find out what’s going on.” It turned out they were buying through two agents, each of whom was taking a huge markup. So the first week our AIDS project was in place, we got them $500 drugs. That was our first great victory. And it got me to thinking about how once more we had a public goods market that was not only underfinanced, it was disorganized.
And the rest, as you know, is history. Ira went to work on that and we negotiated lower prices and we basically got the whole AIDS medicine market—what we tried to do was to get them to go from what I call a jewelry store model to a grocery store model, from a high-profit, low-volume, uncertain payment business to a low-margin, high-volume, certain payment business.
* * *
I got interested in doing something about climate change. I decided that I at least ought to replace every bulb in my home with a compact fluorescent bulb. So I went down to my local hardware store—Chappaqua, NY, I went to my hardware store. They got a great little hardware store there. And I bought every different kind of shape compact fluorescent bulb I could, different wattages. And I went home. And I have a hundred-and something-year-old farmhouse. It’s like 110 years old. And I found that I couldn’t buy bulbs in my hardware store that would fit half the outlets in my home. So I literally picked up the phone and called Jeff Immelt and I said, “I’m trying to be a good customer. I’m trying to buy American, support GE, I like your eco initiatives. But I can’t fill half these sockets, what am I going to do?” And he said, “Well, make me a bigger market and I’ll make whatever bulbs you want.”