PATH, Fueled by Bill Gates’ Fortune, Builds Global Health Hothouse in Seattle

2/4/09Follow @xconomy

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of such daunting problems, I wanted to know, what is PATH’s secret? What is the insight that has turned this place into one of the hottest nodes in the world of social entrepreneurship, in a vast sleepy sea of traditional nonprofits?

The answer, as near as I could tell, was in PATH’s people and how they are organized. PATH is organized project by project, with small semi-autonomous teams of a dozen or so people who always have three kinds of skills, Elias says. There’s always a technologist, who understands the technical aspects of, say, malaria vaccines. Then there’s a program staffer, who might be a nurse who has lived and worked in the country that needs the product, like Kenya. Then there’s a business development person, usually with an MBA, or at least five years’ experience working in a biotech or medical device company, who understands how to put together a deal that will cajole a for-profit partner to get on board. If engineers were together in a room by themselves, they’d come up with “cool” stuff that might not be workable, Elias says. Getting all those diverse skills together in a room is what can work, and what’s unusual, he says.

Plenty of for-profit companies have multi-disciplinary teams set up to solve problems, and there’s nothing written in the law that stops them from forming partnerships with the WHO, for example. Then again, there are huge cultural barriers between innovative entrepreneurial life sciences companies and huge government bureaucracies, Elias says. PATH aims to play a role as broker between these two worlds. About one-third of the people PATH hired in the last year came from jobs in for-profit industry. That background makes them more likely to be able to put together a deal between a government agency and business that makes sense for both parties, he says.

PATH can attribute its effectiveness to three main things, says Steve Davis, the former CEO of Seattle digital image company Corbis and a board member of PATH, in an e-mail. He credits the leadership of Elias, the organization’s omnivorous interests in a wide range of global health projects, and a willingness to do deals with partners of all kinds who have skills needed to do the job.

“Chris’ vision, strategic sensibility, humble confidence, professionalism and ability to engage with, and relate to, all sorts of folks around the globe and the organization, is a major reason for our success,” Davis says. “PATH is also unique as a private non-governmental organization in its enormous breadth of focus – from vaccination discovery work to low-tech water solutions, to behavior change models, to gender equity work, and a lot in between.”

“I sit on (too) many corporate and non-profit boards, and none of them are as sophisticated in their thinking about finances, management, culture or business models as PATH,” Davis says.

Of course, nothing is perfect. Elias has been worrying lately about the same things that worry business leaders-many of them associated with the global economic crisis. He’s particularly concerned that the U.S. government will cut its foreign assistance budget, causing his organization and others to lose momentum, just as progress is being made. He cited sub-Saharan Africa, where about five percent of AIDS patients were getting anti-retroviral medicines to manage the disease five years ago: while that number has soared to more than 30 percent, largely because of support from Uncle Sam, he doesn’t want to see those numbers go backwards.

“Given that there is no natural constituency for foreign assistance in the U.S. voting public, you worry,” Elias says. “It’s vulnerable, and it’s coming to a critical moment in the scale-up of success. We’ve built a virtuous cycle of implementation leading to results, leading to reduced mortality, leading to better commitment of political will and resources to help. One of the things that worries me is that the momentum will stall or go backwards, and the resuscitation will take much longer.”

A related, equally big worry is from what he calls the “innovation pile-up.” The fear is that so many new vaccines, drugs, and diagnostics have entered the R&D pipeline that if many of these things pan out, they could overwhelm the meager public health delivery systems in the developing world. If, say, a great new malaria vaccine gets developed and sits on the shelf, it would spell big trouble. “We wouldn’t have any credibility … Next Page »

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