The Clinton Foundation has focused its global health energies on reordering the marketplace for generic antiretroviral drugs (ARVs) for treating HIV in developing countries. The basic problem, according to its analysis, is a market failure. Pharmaceutical companies had adopted a "jewelry-store model" -- one based on high margins and low volume, pricing drugs high because they assumed there would be few buyers. This may make sense from a business perspective, but it makes no sense when trying to provide a social good. High prices for ARVs mean that developing-country governments and citizens cannot afford these drugs.

The Clinton Foundation's approach has been to reorient the market toward a "grocery-store model" -- low margins, high volume and certain payment. The foundation would negotiate lower prices for a consortium of states, which would then place orders with the manufacturers. The foundation does not buy drugs itself, but rather facilitates the opportunity for states to acquire these drugs at prices lower than those on the open market. In the process, the foundation creates a larger drug market, allowing pharmaceutical companies to profit from higher sales volumes, even if the margin on any individual order is lower.

This market-based approach has shown success. Since 2003, it has achieved price reductions for more than 40 different ARV formulations from eight different suppliers. The cost decreases have allowed more than 2 million people in developing countries to receive treatment. An independent evaluation published in 2009 in the Bulletin of the World Health Organization found that the Clinton Foundation's approach led to statistically significant price reductions for 9 of 13 antiretroviral drugs, reducing prices between 6 percent to 36 percent and increasing access better than other programs. With its efforts on ARVs, the Clinton Foundation's efforts have changed the supply side of the equation, altering the market incentives to encourage companies to provide goods in areas that they would otherwise consider unprofitable.