Good morning, Hank. It’s Tuesday. Three things. One, I have an essay
in the Washington Post about tuberculosis. Two, there's a new Crash Course
lecture about the history of tuberculosis. And three, Danaher.
Two sentence backstory. The company Cepheid, owned by the
larger conglomerate Danaher, makes these amazing GeneXpert tests,
which are the best available tests for tuberculosis. But similar cartridges
can also test for HIV or hepatitis, or extensively drug resistant tuberculosis.
Recently, our community helped pressure Danaher to lower the price
of their standard tuberculosis test cartridge, which resulted in literally
millions more people per year being able to access high quality testing.
But the tests for extensively drug resistant tuberculosis, HIV, hepatitis, etc.
All remain far too expensive. So several organizations have come
together to ask for a drop in test pricing for low and middle income countries,
and you can sign their petition at the link in the doobly doo. Now, I know it
often feels like signing petitions is just a shout into the void, but I would
argue that in this case it isn't. Because, one, Danaher has shown a willingness
to respond to polite but insistent pressure. And two, this kind of thing appears to
be the only way to bring change in the system as currently understood
by Danaher. Because right now, there's exactly one group of people who
benefit from Danaher charging an over 300% markup in the world's
poorest countries for, say, an HIV test. Poor communities certainly don't benefit, right?
Like, as Partners in Health puts it - in every country where they work,
if the cost per cartridge were lowered,
we could expand access significantly. People with HIV don't benefit, as it's
harder than it needs to be to access quality testing. The social order doesn't
benefit, as the human community wants HIV to be diagnosed quickly
and accurately. And I would argue that most Danaher employees don't
benefit either. Like most people who work at Cepheid did not get into their
lab or tech work because they wanted to make piles of money, but instead
because they wanted to make these amazing tests that can absolutely
transform healthcare globally. They want their tech and research to be
creating the maximal possible societal benefit, and there's plenty of money
to be made in rich countries in order to fund that research and their livelihoods.
The only person who benefits from Danaher's price gouging is, for lack
of a better term, me. Because Danaher is a publicly traded company
and I am a shareholder. Now, in the current system, Danaher has a
responsibility to us shareholders. It is legally obligated to do what is in
our best interest because we own the company. And at least as far as I
understand Danaher's position, they don't feel they can make decisions
that would harm the shareholders, even when that would benefit the
entirety of humanity. So I bought a tiny slice of Danaher recently, partly
to say thanks for lowering the price of that standard TB cartridge,
but mostly because it allows me to attend certain meetings and talk with
other shareholders about how they're profiting off of price gouging the
world's poorest people and those who serve them. I just think it's
important for my fellow shareholders to understand this, because they're
literally the only people who benefit from this profiteering. Like each of us
makes about a dollar per share in profit dividends every year, which
amounts to only like $10 for me. But for Danaher’s co-founders,
Steven and Mitchell Rales, they each make over $25 million a year just in
dividends. Now, not all of that comes from overcharging the poor for HIV
and tuberculosis tests. In fact, very little of it does. Danaher makes over
$4 billion a year in profit. Less than 1% of that comes from Cepheid
overcharging for test prices in low and middle income countries.
Which is actually why I think they can be convinced to change.
Because when I hear that a company's primary obligation is not to its employees
or its customers or the social order, but instead to its shareholders,
what I hear is that the only way to get Danaher to do the right thing is to
cost them more in reputational harm than they make from overcharging
the poor. And petitions can help do that, along with other forms of polite but
impassioned pressure. Five or 10,000 people having a negative
opinion of your company and caring enough to sign a petition
makes it harder to recruit and more expensive to market, and so on.
It's a real problem, as is negative publicity. And there's currently quite
a bit of that for Danaher, not only in the Washington Post, but also online,
on Threads and Instagram and Facebook and Twitter, or whatever
Twitter is now called. There's even a “lower your test prices” version of
Flappy Bird, which I, for one, find utterly addictive. Combine that with
the Danaher employees who have been heroically speaking up and
letting their voices be heard, and it starts to get pretty expensive not to
lower your test prices. Expensive enough one would hope that Danaher
will consider lowering test prices, not just for the standard tuberculosis
test, but for all of their tests in low and middle income countries.
And if we haven't made it expensive enough, rest assured that we will
continue until we do so. Please sign the petition linked in the video info
below and continue to ask Danaher to lower their prices. This shareholder,
for one, would appreciate it. Hank, I'll see you on Friday.