Weekly Roundup: Dubious Controversy, Outrageous Pricing and Angels in South Africa
The latest campaign controversy: Yunus and Grameen?
It was a rough week for Grameen Foundation and Muhammad Yunus, as they became exhibit A in a problematically explosive AP article detailing the “extraordinary” access that Clinton Foundation donors received to Hillary Clinton when she was secretary of state. In highlighting the “possible ethics challenges” this access implied, the article described how Yunus “pleaded for” (and received) help from Clinton during the period when Bangladeshi government authorities were investigating his oversight of Grameen Bank, ultimately pressuring him to resign from its board. It also mentioned that Grameen Foundation (a NextBillion content partner) received millions of dollars in USAID loans and grants shortly after Yunus met with Clinton in April 2009, and that Grameen America, which Yunus chairs, has given $100,000-$250,000 to the Clinton Foundation. The report seemed to imply an unseemly connection between these events.
Yet in separate (and rather pointed) responses to the AP, Grameen Foundation’s president and CEO Steve Hollingworth and Grameen America emphasized the following:
- Yunus does not actually run Grameen Foundation.
- The foundation received those USAID-funded grants after participating in its “rigorous and strictly regulated competitive bid process.”
- Yunus himself didn’t donate any funds to the Clinton Foundation.
- And all Grameen America’s payments to the foundation have been for “standard conference fees” to attend the Clinton Global Initiative Annual Meetings.
Further, as some critics have pointed out, Clinton had known Yunus for decades prior to their interactions during her tenure as secretary of state. And her efforts to support him during his imbroglio with the Bangladeshi government (which was widely interpreted as retaliation for Yunus’ criticisms of government corruption and tentative plans to seek public office himself) reflected common thinking among Democratic foreign policy hands at that time. Many politicians faced with controversy have said it over the years, but it’s hard to avoid the conclusion that when it comes to a would-be scandal involving Yunus and Clinton, “there’s no there there.”
– James Militzer
Even ‘the face of greed’ winced
When Martin Shkreli, who became “the face of greed” while CEO of Turing Pharmaceuticals, calls your pharmaceutical company a bunch of “vultures,” you might want to recalibrate your firm’s moral compass.
Shkreli’s opinion of Mylan Pharmaceuticals and its controversial CEO Heather Bresch was shared by many this week, as some of the company’s key financial figures started showing up in headlines: When Mylan bought EpiPens (an injector that reverses allergic reactions) in 2007, the list price was about $100, and it’s now $600; and Bresch’s salary has increased over that same time from $2.4 million to about $19 million. Those are especially big numbers when considering that a plastic EpiPen delivers about $1 worth of epinephrine.
Under the avalanche of criticism, Bresch is already backpedaling, cutting out-of-pocket costs for some customers. But it’s clear why Shkreli and Bresch – and many others who haven’t made the headlines yet – jack up drug prices: They can.
U.S. drug laws, including exclusivity regulations, have resulted in per-capita prescription drug spending in the U.S. being the highest in the world, according to an article published this week in the Journal of the American Medical Association. (For comparison’s sake, two EpiPens cost about $85 in France.)
One can argue convincingly that price discrimination is good for global health; that it’s sometimes necessary to charge more for drugs in developed countries so those same drugs can be made available in poorer countries. Those forward-thinking market dynamics tweaks are made more difficult to organize and harder to explain, however, when others manipulate prices out of pure greed.
– Kyle Poplin
Angels in South Africa
This week saw the launch of the South African Business Angel Network (SABAN). As reported by Sarah Rice in VentureBurn, angel investors typically fill that missing middle between “friends, fools and family” money and structured equity investments by venture capital.
SABAN has linked with African Business Angel Network (ABAN), which is trying to create a network of investors and mentors across the continent. Other organizations making up ABAN include the Lagos Angels Network, Cameroon Angel Network, Ghana Angel Network, Venture Capital for Africa (VC4Africa), Silicon Cape, with support from by the European Business Angel Network, the LIONS Africa Partnership and DEMO Africa.
Many angel investors serve as important consultants to startups, usually for a year or two and often at the $25,000 to $250,000 level, according to experts at a recent African business financing forum.
“It’s not just about the money. It’s about what the money brings with it – experience, networks and often a healthy dose of realism. And it’s this combination that makes angels so important in South Africa … We need to take the first steps ourselves. If we want our ecosystem to access international capital and support, we need to back our own entrepreneurs, so that we have scalable high-growth businesses, which offer attractive returns,” Alex Fraser, Silicon Cape Initiative and ABAN executive committee member told VentureBurn.
– Scott Anderson
Educate Girls’ Early Success
Last month Instiglio issued a press release announcing its India-based Educate Girls development impact bond was succeeding in its mission of getting more girls into primary school, while improving literacy for both genders across 166 government schools in Rajasthan.
This week, Avnish Gungadurdoss, managing partner and co-founder of Instiglio, provided a more detailed review of the results (as measured by a third party) in The Stanford Social Innovation Review. Instiglio says Educate Girls, which targets 15,000 children, is the world’s first DIB. As such, many pay-for-success advocates are – and should be – watching closely.
– Scott Anderson
BlackRock launches ESG fund – Bloomberg kills the buzz
In a welcome return to more positive headlines, this week BlackRock launched the BlackRock Impact Bond Fund. The new ESG mutual fund follows the 2015 formation of BlackRock Impact, the company’s $200 billion sustainable investing platform company, and it will invest in a portfolio of companies “with positive aggregate societal impact outcomes such as corporate citizenship, high impact disease research, greenhouse gas emissions, ethics controversies, and litigation.”
Any new move in ESG investing by the world’s largest investment manager is significant, but a Bloomberg article published this week tempers the excitement somewhat. Here’s the opener: “Thinking of putting your money into a fund that describes itself as ethical? You’d better read the fine print if backing Exxon Mobil Corp. and British American Tobacco Plc isn’t your idea of doing good.” It goes on to detail some very un-ESG companies hiding in the portfolios of some of the 30 biggest funds that follow environmental or social governance guidelines. The article names names – and to be clear (see how it’s done, AP?), BlackRock isn’t among them. But it does highlight a problem that holds true across the sector: “There’s no agreed definition on what an ethical fund should be.”
– James Militzer
No Zika cases linked to the Olympics
News about Zika this week was mixed. A study in Brazil showed that the virus can affect different parts of babies’ brains beyond microcephaly, the most obvious sign of the disease. But, on a more positive front, no Zika cases have yet been linked to the Olympics, which concluded last week in Rio.
The worst-case scenario was that the Games would help speed the spread of the Zika, via participants and attendees, to all corners of the globe. While new cases could still come to light, global health authorities can exchange a high five, Olympic-athlete style, and celebrate that the Games vs. Zika scoreboard currently shows nothing but zeroes.
– Kyle Poplin
Quotable: Data That Actually Does Something for Inclusion
Instead of merely targeting and profiling customers, Niraj Dawar, a professor of marketing at the Ivey Business School in Canada, recently argued that big data could have a more customer-centric purpose. That higher calling, so to speak, involves harnessing oceans of data to serve customer needs (how novel!). That can be true even if those customers are not part of the formal economy, Dawar writes on The Harvard Business Review blog.
“What type of information is currently widely dispersed, but would yield new insight if aggregated? Is there any incidentally produced data (such as keystrokes, or location data) that could be valuable when assembled? InVenture, a fascinating new startup operating in Africa, is turning incidental data on smartphones into credit ratings that allow base-of-the-pyramid customers access to loans and other financial products. In an environment where most of the population has no credit history, and therefore no credit rating, even rudimentary phone usage data serves as a handy proxy (people who organize their contacts with both first and last names are more likely to repay loans).”
– Scott Anderson
In Case You Missed It … This Week On NextBillion
NexThought Monday: Beyond ‘Africa Rising’ – The Emergence of the Not-Quite-Middle Class
Marshaling Digital Cash for Humanitarian Challenges: Uniting Private, Public and Nonprofit
Curing Silicon Valley’s Myopia: Ross Baird, on How to Change the Narrative Around Investment and Innovation
Creating ‘Solavores’ By Thinking Inside the Box
Photo credit: Johan Lange, via Flickr and University of Salford Press Office via Flickr.
- Education, Health Care, Investing, NextBillion Originals