Author Archives: Hojoon Kim

(Revised #5) Why poor countries remain poor

Thesis: It is important to understand why poor countries remain poor in order for them to escape from poverty.

Almost three billion people in the world live on less than $2.50 a day, suggesting there are still many people suffering from hunger. Nevertheless, we tend to neglect the fact that about 21,000 people die every day of hunger in many developing countries according to the United Nations. Some people claim that global malnutrition could fall 84 percent as agricultural productivity increases. Thus, some economists expect that poor countries will soon escape from what we call “poverty traps”, which is a spiraling mechanism that forces people to remain poor(Wiki) . This, however, is not necessarily true. In fact, I agree with the idea that higher agricultural productivity would alleviate global poverty. However, it is important us to examine what are the fundamental causes of poverty to help poor people to escape from poverty trap.

The causes of poverty are various but one certain cause is corruption of government. When governments only exist to benefit themselves without properly functioning for their people, development or economic growth are nearly impossible. There are many international organizations or Non-governmental Organizations that aid poor countries but their aids are sometimes meaningless due to corrupted government officials. For instance, BBC news once pointed out that a large sum of money, approximately 32 billion dollar of aid, was ineffective to poverty reduction in a sense that it did not help solving poverty problems in Afghanistan. If the money was used properly to alleviate poverty, it could instead be used to build schools or improve health care systems and the infrastructures. The chart below shows corruption perceptions index of 2013, which measures perceived levels of corruption that are determined by expert assessments and opinion surveys. The chart suggests that countries such as Syria, Republic of the Congo, Afghanistan, North Korea and others that are considered as developing countries have also high level of corruption. However, developed countries such as Denmark, Switzerland, Singapore, Germany, United States and others have relatively low level of corruption, implying there is a positive correlation between the level of corruption and poverty.

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Another cause of poverty is a heavy reliance on natural resources. There are many countries such as Russia and China that have successfully amassed a great amount of wealth by exporting their natural resources like oil. Similarly, Sudan, Angola, Republic of Congo and other developing countries in Africa have earned a significant amount of money. However, these countries all failed to distribute wealth to their people, which shows an example of natural resource curse. Natural resource curse indicates that countries with an abundance of natural resources tend to have less economic growth than countries with fewer natural resources. (http://www.imf.org/external/pubs/ft/fandd/2013/09/warner.htm). This is mainly because revenues from natural resources go directly to government officials and foreigners’ pockets, which enlarge the income inequality even more. In addition, corrupted governments do not spend their money on developing technologies that can extract natural resources without depending on technologies of foreign companies. Thus, abundance of natural resources weakened economies of developing countries by making them solely relying on their limited amount of natural resources that will run out someday.

Lastly, it is crucial for poor developing countries to improve their poor education systems. There are numerous ways or policies that we can employ for better economies but education is one of the most fundamental factors for the growth of economy. Unfortunately, more than 72 million children of primary education age never went to schools and 759 million adults are illiterate. No country can accomplish persistent economic development without investing a substantial amount of money and efforts in human capital. The main reason why we should focus on education for better economies is simple. The worker’s productivity is highly correlated with worker’s skills. When the workers are equipped with high skills, it means his or her productivity is also high, which contributes to a higher level of gross domestic product.

 

Copyright in the U.S. Fashion Industry

Fashion industry is a $1.2 trillion global industry and more than $250 billion spent annually on fashion industry in the United States. There are 1.9 million people currently working in the fashion industry within the United States, which explicitly shows that fashion plays a crucial role in the U.S. economy. With these statistics above, some people claim that United States provides a good environment for designers to work. This, however, is not necessarily true. Most fashion designers have a tendency to avoid working in the U.S. since there is no law that protects their designs’ copyrights or intellectual properties in America. Thus, many designers are leaving to France or Italy where their creative works are protected by the governments, implying that the U.S. government should come up with a law that protects their intellectual properties for the economy.

The biggest fashion events in the U.S. hold in New York City every twice a year, which is called, “New York Fashion Week” that take place in early Feburary and September of each year. New York fashion week is one of the 4 major fashion weeks in the world, and other 3 fashion weeks hold in Paris, London and Milan. During these fashion weeks, fashion designers and companies showcase their latest collections and display their new products to the buyers, press and general public eyes worldwide. New York Fashion Week is an exciting moment for designers but at the same time, it is also a one of the most stressful times for designers as well. This is because some of high-end American fashion designers like Marc Jacobs, Anna Sui and Diane Von Furstenberg suffer from “fast fashion” retailers such as H&M, Zara and Forever21 that copy their new creative ideas right off the runway. Evelyn Cobos, Miami style examiner, said “Fast fashion retailers like Forever 21 copies their designs and puts them out for sale even before the designer’s new collection is off the runway and in stores, cheating designers of their rightful profits for original designs.”

People might wonder why high-end American designers won’t sue these fast fashion retailers. The answer is that there is no proper law protect fashion design’s copyrights in current law of the United States. Forever 21 has been sued more than 50 times for stealing other high-end fashion designer’s work. However due to the lack of copyrights in fashion design, Forever 21 was able to get away from any charges. According to the New York Times, “In the United States, intellectual property laws generally do not protect utilitarian items like clothing, although some original prints, patterns, colors and unique combinations can be protected by copyright.”

Unlike this lack of fashion copyrights in the United States, European countries provide much more broad protection for apparel designs. For example, France has a better system for protecting fashion designs and their copyright system doesn’t just protect fashion designs itself but it also covers any work of the mind. According to Katrina M. Klatka, any forms of art including any literary, artistic, or scientific writings, conferences, speeches, pleadings, dramatic works and musical comedies, choreographic works, fashion shows, musical compositions with or without words, movies, motion pictures, audiovisual works, designs, paintings, sculpture, engravings, lithographs, and photographic works are protected under the copyright laws in France.

Many people argue that setting copyrights on fashion is very vague since it is hard to determine whether law should protect it or not. I personally think that it is not fair for those fashion designers who spend lots of time to come up with new designs and ideas every season. It is unfortunate to see their hard work being copied off by fast fashion retailers just in seconds. I feel that any creative form of work whether its fine arts or fashion design should be protected. Not having a proper law against fashion copyrights will just discourage designers to produce better products within the United States.

Raising Tax on the Rich Cannot Save People from Recession.

In the United States, 68 percent of Americans think the wealthy should pay more federal taxes, and that 60 percent believe the middle class pays too much taxes according to a new associated Press-GfK poll. In fact, the idea of raising tax rates on rich sounds appealing for majority who are mostly the middle class. However, raising tax rates on the rich is a proven failed policy that is exemplified by the French government back in 2012.

During Francois Hollande presidential campaign in 2012, one of the centerpieces that he proposed to the citizens of France was raising tax rate on richest French residents up to 75%.On May 15, 2012 Hollande was elected as the next president and his controversial 75 Super Tax was approved after the French government made a few revisions. The original proposal was to aim 75% tax at individuals who earned more than one million euros annually but the Council rejected this proposal. Instead, the Council decided to levy 75% tax on companies that pay salaries in excess of €1 million for two years. Although this new policy was designed to force the rich people to help France shrink its budget deficit to promote economy, it is considered as one of the unsuccessful policies in history of France that negatively impacted the economies of France.

Without a doubt, the policy caused France’s business leaders, high earners and celebrities to leave France to avoid paying high taxes. A lot of French companies sent away their high paid executives out of France so that they do not pay extra money for taxes. In addition, numbers of wealthy people changed their residences in lower-tax countries such as Belgium, Switzerland, Russia and Luxembourg. One of the most famous French actors, Gerard Depardieu gave up his French citizenship and fled to Russia in response to the controversial tax. Moreover, the richest man in France, Bernard Arnault (LVMH president) attempted to attain a citizenship in Belgium in order to avoid the new tax policy. As an outcome, France government raised very little revenue with the new 75 Super Tax policy for the past 2 years. The tax raised only €420 million ($505.8 million) in 2013 and 2014 combined, less than 0.5% of France’s budget deficit. Jorg Stegemann, the head of Kennedy Executive said, “The tax reform clearly damaged France’s reputation and competitiveness,” which caused government tax revenues to reduce through hindered economic growth and capital fight. Due to these reasons, the government decided to drop the Super Tax policy starting in 2015.

Andrew Lundeen argues that when determines how much tax revenue a tax change will gain or lose, Congress has a tendency to employ revenue estimates that ignore the way people will respond to taxes. He states that, “The French government didn’t fully consider that if a tax change raises tax rates on labor, the government is likely to see less tax revenue than projected as people work less or move.” Therefore it is not wise to raise tax rates on the rich. Instead, history shows that cutting tax rates is more efficient mean to get money out of the rich. In 1980, the richest 1 percent paid approximately 19 percent of the total income tax in the U.S. when the highest income tax was 70 percent. On the other hand, when the top tax rate was 35 percent, the richest 1 percent paid more than twice that amount, suggesting that imposing a heavy tax on the rich is not a good idea.

The United States and France are totally different countries. However, the failure of France’s 75% Super Tax is a good case study for the U.S. that shows what would happen when the government raises taxes too high for the rich.

 

 

Adding more police Officers in New York City

Thesis: Increasing the number of police officers is not a good idea to lower crime rate in New York City.

New York Police Department consists of over 51,000 employees, which is the biggest police force in United States. The estimated budget of NYPD was $4.6 billion in 2013, which accounted for 15 percent of the entire city’s budget (Wiki). Although 15 percent is a huge number, New York City Council Speaker Melissa Mark-Viverito plans to hire 1,000 new police officers, which will further increase the budget that will be spent on NYPD. Some people argue that increasing the number of police officer would end crimes in New York City. However, many experts claim that hiring the additional police officers in New York City is not an efficient mean to reduce crime rate.

New York City has the biggest police force in the U.S. but their crime rate is not relatively low compared to that of other states in the United Stares. In order to lower the crime rate in NYC, Ms. Mark-Viverito emphasized that more police officers are needed to keep the city safe. She said, “The council’s plan to increase headcount while also including cost-control measures is fiscally responsible and will go a long way towards ensuring public safety and better community relations”, which will cost the city an estimated $68.7 million for the additional officers. Of course, there is no doubt that large numbers of police officers in New York City will deter crime. However, adding more police officers does not always result in the reduction in crime rate. Alexander Weiss, an Illinois-based law enforcement consultant also contradicts the idea that more police officers always drop crime rate. He said, “If you look around the county, you’ll see a huge variation in the number of officers per population, for example,” said Alexander Weiss, an Illinois-based law enforcement consultant. “And huge variations in the crime rates. Some places with very low officers per population have very low crime rates”, suggesting that there isn’t always a correlation between the number of police officers and crime rate.

Most cities in the world have been spending considerable amount of money and efforts to eradicate crimes. Unfortunately, New York City is not an exception. Although NYC has successfully lowered crime rate since late 1990s, its crime rate is still higher than other cities around the world. Some people advocate the idea of adding more police officers in NYC but it is important for them to acknowledge that there are already over 51,000 police officers in New York City. Every time I went to New York City, I thought many police officers were just standing and chatting each other on the streets. I do not mean that they were not doing their job. However, New York City should focus more on finding efficient patrol allocation and strategies to fight criminals rather than simply hiring additional police officers.

 

Google, the Best Search Engine

Thesis: Google is the best web search engine in terms of speed, simplicity ,search algorithm and accuracy of information.

Google is considered as one of the best American multinational corporations that provide internet-related services such as search, cloud computing and online advertisement technologies. I first used Google.com when I was middle school student in Korea and to be honest, the first impression of Google was not so great. It was just too simple and there was nothing special about Google compared to Yahoo or other main Korean web search engines at that time. However, I came to the realization in college that Google is the best web search engine in terms of its unmatchable speed, simplicity, search algorithm and accuracy of information.

There are thousands of alternate search engines to Google. Although Google is not the very first search engine in a complete history of the search engines, it is still world’s most popular search engine. According to the recent study, Google occupied 68.75 percent of the global search engine pie in 2014. Despite its relative short history compared to its competitors, why do majority of people regard Google as the best search engine.

Speed is one of the most important components that makes so-called the best search engine. When people type something on Google, the results are shown very quickly. Some people argue that speed does not play a crucial role as long as they find the right information that they are looking for. This, however, is not necessarily true. According to survey done by Akamai and Gomez.com, 40 % of people abandon a website that takes more than 3 seconds to load. Moreover, the survey also shows that a 1 second delay in page response could lead to a $2.5 million loss in sales every year, which explicitly demonstrates that speed is a important factor for web search engine. This is why Google is considered as one of the best search engines because of its response speed that is faster than most other competitors such as Yahoo and Bing.

Google is also very simple and easy so that anyone can use it. In the late 1990s, most websites had many features on their main pages but people could not figure out how to use them because Google.com was so simple. In a study by Google in 2012, researched found that visually complex websites were consistently rated as less beautiful than their simple websites, which tells us the reason why Google purses “simplicity”. In fact, many experts claim that Bing purposefully has almost similar structures to Google in terms of its design so that they can attract more users who are used to search engine like Google.

Google also has the best search algorithm that shows relevant results than other search engines. This is because Google has spent a tremendous amount of money and time for researching how to make computers to interpret human language so that computer can understand what we want even if we do not put a complete sentences. Google General Counsel Ken Walker said, “We regularly change our search algorithms and make over 500 changes a year to help our users get the information they want,” Mr. Walker added. “We created search for users, not websites—and that focus has driven our improvements over the last decade”, explaining why its search algorithm helps us to find exact information we want.

Of course, not everyone think Googles is the best search engine. Some people do not like its simple design. In addition, some people also might argue that Google is not the fastest search engine. However, I strongly believe that there is no other search engine that can compete with Google in terms of its search algorithm that has direct relation with accuracy of information, which makes Google the best search engine in the world.

Two different results of I-Paid-A-Bribe in China and India

China and India not only have many commons in a sense that they both have high levels of gross domestic product growth rate but they also have high levels of corruption. In order to eradicate corruptions, people in India first launched a website called I-Paid-A-Bribe (IPAB), which is a crowd-sourcing platform for reporting any incidents of bribery anonymously. Only a few months later, IPAB was introduced to China by a press report. Although China and India both used IPAB to fight against their corrupted governments, only the level of corruption in India has been steadily decreased. In fact, India now ranked less corrupt than China for the first time in 18 years. Some people argue that IPAB was not successful in China due to government repression. However, I believe that China’s anti-bribery websites, IPAB, failed because the goals of websites were so different from India’s IPAB.

I-Paid-A-Bribe was founded in India, in 2008, by a non-profit organization (NPO), the Janaagraha center for Citizenship and Democracy. Its goal was to “tackle corruption by harnessing the collective energy of citizens.” The site not only asked citizens to anonymously report incidents of bribery but it also allowed people to report cases when they successfully resisted paying bribes. As of January 2013, over 1.6 million people have visited the website and reports over 17,000 bribe cases by May 2012. This statistics clearly showed that IPAB have made a contribution to lower the levels of corruption in India.

Even though many countries have been praising India’s IPAB since it was first launched in 2008, China encountered with a failure to eradicate corruption using IPAB simply because the goals of the website in China were different from the original website in India..

The two main goals of IPAB in India are public education and procedural reforms. The website focuses on educating about how to avoid and resist paying bribes and it also recommends changes in the process of service delivery in order to reduce opportunities for petty bribery.Professor Dan Hough of the University of Sussex’s Centre for the Study of Corruption said, “IPAB in India’s intent is to change the system that breeds corruption, rather than indict the individuals within the system. Besides, you change the individuals, the threat of corruption remains. But change the system and you root out corruption permanently”, implying that India concentrates more on changing the system rather than exposing corrupted individuals. On the other hand, IPAB in China guided people to have narrow view of anti-corruption as the websites concentrated on exposing bad government officials rather than transforming procedures and focusing on educating people. A few months after IPAB was first introduced in 2011, Chinese government eventually shut down the server because the websites did not even contain the legitimate information. Thus, IPAB is no longer exist in China.  

 

Future of Amazon’s Drones in the U.S

Drone is one of the most advanced technologies in the filed of robotics, electronics and aeronautics. It is unmanned aerial vehicle (UAV) that people can control by remote or control systems from the ground, which was first invented by the U.S. military but many people now use it for either personal or commercial use.

On December 1, 2013, Amazon.com CEO Jeff Bezos informed people that Amazon has been developing a drone-based delivery system that will deliver packages to customers within 30 minutes of ordering. A lot of people including my friends and I looked forward to experiencing 30 minutes delivery but Amazon encountered with an unexpected obstacle. The Federal Aviation Administration banned the commercial use of UAV technology in the United States, which not only affected Amazon but also some of the world’s biggest companies such as Wal-Mart Stores Inc, BMW and Nike. Although Amazon’s drone delivery plans appear to come to nothing in the United States for now, I believe that it is just a matter of time for Amazon to get an approval to use drones in the United States.

DRONEThe Federal Aviation Administration claimed that drones not only infringe on people’s privacy but it also causes aviation accident. FFA administrator Michael Huerta said, “We want to maintain today’s outstanding level of aviation safety without placing an undue regulatory burden on an emerging industry”, which eventually led FFA to fine firms that recently used drones. However, despite the fact that FFA fine companies that used drones for commercial use, many firms are still using drones since the benefits from using drones exceed the cost of fine for using drones without the approval of the FFA, suggesting that big companies are so eager to use drones. Therefore, many experts expect that firms will soon obtain an approval to use drones through lobbying the FFA. In fact, the FFA recently proposed a new policy that looses their policy regarding using drones as long as firms keep up with safety requirements. Safety requirements are as following :

  1. Limit commercial drone flight to below 500 feet
  2. Can use it only during daytime hours and within sight of the operator
  3. Ban flying commercial drones near airports or over people not involved in the drone’s flight

Although the FFA has loosed their policy, it is still obvious that Amazon cannot fully utilize their drones with these restrictions, which led Amazon to shame U.S. regulators into action by publicizing what the Guardian calls “Amazon’s Canadian airstrip-in-exile.” Jeff Bezos, CEO of Amazon, said during a business conference that, ““Technology is not going to be the long pole. The long pole is going to be regulatory. I think it is sad but possible that the U.S. could be late to the benefits of drones, which are allowed to fly more freely in Britain, Australia, Germany and Israel as well as Canada”, suggesting that Bezos is trying to embarrass the FAA by pointing out that other countries are flying ahead of the U.S. and get more benefits from new technology. In fact, outside the U.S., governments have already approved thousands of commercial drone operators in Germany, South Korea, China and Canada. 

It is hard to deny that drones have both positive and negative sides. Therefore, U.S. government would come up with more efficient policy regarding the use of drones so people can get benefits without invasion of privacy. This is why I believe that it is just a matter of time for big firms to legally use drones for commercial use

 

 

Revised Post #4: Do pharmaceutical companies only make drugs for rich countries?

Thesis: Most pharmaceutical companies have a tendency to make drugs for diseases that affect wealthier people who can actually afford to pay for the drugs due to expensive cost to develop a new drug.

With the advancement of technologies, the number of people who are starving has significantly decreased in recent decades. Although the number of people suffering from hunger has steadily decreased in most developing countries, 35 million people in poor countries are still living with HIV/AIDS and 6.9 million children died from preventable diseases such as Ebola, malaria, diarrhea and pneumonia. This statistics clearly show that more people in developing countries are suffering from curable diseases compared to that of people in developed countries.

Some people think that pharmaceutical companies only exist for people in the world who are suffering from illness. This, however, is not necessarily true. It is hard to deny that pharmaceutical companies invented a lot of modern medicines that have done much to eradicate and cure diseases. Nevertheless, the statistics above explicitly support the idea that most pharmaceutical companies have a tendency to make drugs for diseases that affect wealthier people  who can actually afford to pay for the drugs due to expensive cost to develop a new drug.

pharmaceutical-industryMost people think that Ebola is a new kind of disease but it was actually first discovered in 1976. Nevertheless, most pharmaceutical companies did not spend their budgets on finding drugs for Ebola. This is simply because pharmaceutical companies knew that majority of people who were affected by Ebola did not have enough money to buy the cure since Ebola mainly occurred in West African countries. Then why are pharmaceutical companies so sensitive about the money? Most pharmaceutical companies claim that it costs a lot to develop and manufacture a new drug in terms of money and time. The most recent report by the Tufts Center for the Study of Drug Development estimated that the total cost for developing a new drug is  $2.6 billion, which includes the cost to develop a new drug and win FDA marketing approval. In fact, many critics not only emphasize that the estimate is significantly higher than other published estimate in recent years but they also accentuate that the huge portion of the Tufts Center’s funding is provided by the pharmaceutical industry, which naturally led Tufts Center to exaggerate the true costs of making a new drug so pharmaceutical companies can sell their drugs at expensive prices.

Nevertheless, it is true that it requires a tremendous amount of money and time to develop a new medicine, which explains why pharmaceutical companies make a decision where to direct their research and development (R. &D.) based on the assessment of the potential market for a drug they are trying to develop. In other words, they are more likely to spend their R&D for wealthier people who can pay them a lot of money for drugs. Thus, diseases such as Ebola or others that mostly affect poor people in developing countries are pushed back on the priority list. Bayer CEO Marjin Dekers also admitted that his company does not exist for poor people when he said, “Is this going to have a big effect on our business model? No, because we did not develop this product for the Indian market, let’s be honest. We developed this product for Western patients who can afford this product, quite honestly. It is an expensive product, being an oncology product.”, suggesting that his company will never make drugs for poor countries.

It is important to know that pharmaceutical companies are different from other companies in a sense that they can actually invent medicines that can save numerous number of peoples’ lives. Therefore, it is a crucial job for our  generation to figure out the solution regarding this problem so people do not suffer from diseases that can be easily cured.  In order to  solve this problem, I strongly believe that giving incentives to pharmaceutical companies such as rewarding prizes for making new drug should be implemented.

The Truth behind the estimated cost of developing new drugs

Thesis: The Tufts Center for the Study of Drug Development’s estimated cost of developing a new drug is overstated and not reliable since they get 40% of funding that comes from the pharmaceutical industry but they also does not give any access to the public regarding their analysis and the full text of their estimates, which lowers credibility of their studies.

Modern medicine has done much to eradicate and cure diseases. However, there is an ongoing debate regarding the true costs of developing an innovative drug. Most pharmaceutical companies claim that it costs a lot to develop and manufacture a new drug in terms of money and time. The most recent report by the Tufts Center for the Study of Drug Development estimated that the total cost for developing a new drug is  $2.6 billion. This number, however, is not necessarily true. It is hard to deny that the cost of developing a new drug is expensive. Nevertheless, the Tufts estimate is not reliable since their funding comes from the pharmaceutical industry but they also do not give any access to the public regarding their analysis and the full text of their research, which lowers credibility of their estimates.

Joseph DiMasi, of the Tufts Center for the Study of Drug Development in Boston, Massachusetts, USA estimated the total costs of drug development based on data provided by 10 drug companies, which is the most recent estimation of developing a new drug. The Tufts Center found that it nearly costs $2.6 billion for a single pharmaceutical company to develop a new drug. The math is really simple. Nearly $1.4 billion is the amount of money that was actually spent on developing a new medicine and the rest, $1.2 billion was the time cost or opportunity cost, which represents the return that could be gained if the money were invested in others.

In fact, it is true that pharmaceutical companies need to spend a tremendous amount of money to make a new medicine. However, there are many experts who disagree with the Tufts Center’s estimated cost of $2.6 billion. Critics not only emphasize that the estimate is significantly higher than other published estimate in recent years but they also accentuate that the huge portion of the Tufts Center’s funding is provided by the pharmaceutical industry, which naturally led Tufts Center to exaggerate the true costs of making a new drug so pharmaceutical companies can sell their drugs at expensive prices.

In addition, critics also mentions that the Tufts Center’s estimated cost has an transparency issue since the public will not have any access to the full text and explanation of the analysis of the estimated cost. .Bernard Munos, a former Eli Lilly &Co. corporate strategy advisor said, “Nobody really knows the accuracy of the numbers”, meaning that the numbers on their report are not reliable. Doctors Without Borders also gave a very cynical response to the Tufts Center’s estimate that if one believes the Tufts estimate, “you probably also believe the earth is flat”. He also said that the Tufts estimate cannot be correct since non-profit drug developers develop a new drug with just a portion of the Tufts Center’s estimate.

Pharmaceutical companies should never exist for their own profit. Their job is not to force universities or research centers to overstate the true cost of drug development so they can sell at expensive prices to people who are suffering from diseases.

Why pharmaceutical companies only make drugs for rich countries?

Thesis: People in poor countries are still suffering from diseases compared to that of people in developed countries since pharmaceutical companies have a tendency to make drugs for diseases that affect wealthier people, who can actually afford to pay for the drugs due to expensive cost to develop a new drug.

With the advancement of technologies, the number of people who are starving has decreased in recent decades. Moreover, inventions of drugs for malaria, diarrhea and other diseases have saved many people’s lives. Although the number of people suffering from hunger has steadily decreased in most developing countries, 35 million people in poor countries are still living with HIV/AIDS and 6.9 million children died from preventable diseases such as Ebola, malaria, diarrhea and pneumonia. This statistics explicitly show that people in poor countries are still suffering from diseases compared to that of people in developed countries since pharmaceutical companies have a tendency to make drugs for diseases that affect wealthier people, who can actually afford to pay for the drugs due to expensive cost to develop a new drug.

Most people think that Ebola is a new kind of disease but it was actually first discovered in 1976. Nevertheless, most pharmaceutical companies did not spend their budgets on finding drugs for Ebola. Most pharmaceutical companies claim that they need more support in terms of money and human resources to find a cure for diseases in poor countries. The Tufts Center for the Study of Drug Development showed in the recent study that the cost to develop a new drug and win FDA marketing approval is approximately $2.6 billion. However, there are also many people who think that pharmaceutical companies’ estimated expenditures tend to be highly inflated. Rohit Malpani, director of policy and analysis of Doctors Without Borders said, “If you believe that the cost is $2.6 billion, you probably also believe the earth is flat”. However, it is undeniable fact that it still costs a huge amount of money for making a new drug or cure, which explains why pharmaceutical companies make a decision where to direct their research and development (R. &D.) based on the assessment of the potential market for a drug they are trying to develop.

In other words, they are more likely to spend their R&D for wealthier people who can pay them a lot of money for drugs. Thus, diseases such as Ebola or others that mostly affect poor people in developing countries are pushed back on the priority list. Even though pharmaceutical companies acknowledge the situation that people are dying from Ebola, malaria or other diseases in developing countries, they do not make drugs for them since poor people cannot afford drugs.  Bayer CEO Marjin Dekers also admitted that his company does not exist for poor people when he said, “Is this going to have a big effect on our business model? No, because we did not develop this product for the Indian market, let’s be honest. We developed this product for Western patients who can afford this product, quite honestly. It is an expensive product, being an oncology product.”, suggesting that his company do not make drugs for poor countries.

It is important for our generation to fix this problem so people do not suffer from diseases that can be easily cured. In order to  solve this problem, I strongly believe that giving incentives to pharmaceutical companies such as rewarding prizes for making new drug should be implemented.