I recently read a report on how private sector companies and grant-supported organizations have addressed and can address the need for medicines in bottom and middle-of-the-pyramid (BoP/MoP) markets. While aimed at the major international pharma companies, I thought it also had useful guidance and resources for bioentrepreneurs. The report, “Bringing Medicines to Low Income Markets,” was sponsored by the German Federal Ministry of Economic Cooperation and Development (BMZ) and Sanofi, and written by Endeva, a consulting firm offering “enterprise solutions for development.” The report starts with a helpful and succinct description of the BoP/MoP healthcare market’s opportunities and challenges. Here’s my summary of the salient points made:
- the demand (need) is large with 1.7 billion people lacking access to the basic, essential medicines and another 2.3 billion with limited access;
- while the annual household income of these 4 billion is under $3,000, they spend about $160 billion on healthcare, about one-third of which is on pharmaceuticals;
- drugs are 2-6 times more expensive in the under-served markets than in developed markets due to taxes/tariffs, middleman mark ups, and supply (inventory) problems;
- in lower-income countries communicable (infectious) and non-communicable diseases (NCDs, such as diabetes, heart disease, cancer) contribute equally to a country’s mortality rate, while in middle-income countries the NCDs contribute more than twice as much as the communicable diseases; and
- companies seeking to enter the low-income markets are challenged by missing “enablers” such as the lack of doctors and other trained health practitioners, regulations (in many countries 20-30% of the drugs sold are counterfeit), infrastructure for delivery and stocking of products, financing for businesses providing health care, and insurance plans (70% of low-income patient drug purchasing is out-of-pocket).
The next section of the report provides a “tool,” though it’s actually a framework description for what everyone in business should know: to sell a product the customer has to recognize its value, it needs to be in a form she/he can use, and be affordable and available. Also described are the key actors: governments, international organizations (like WHO), bilateral agencies (like the BMZ and USAID), foundations, microfinancing organizations and insurers, NGOs, and the private sector. The rest of the report is heavily weighted in its examples and recommendations toward the existing dominant actors of the bilateral organizations, NGOs, foundations, and the major pharma companies. Therefore it is not specifically helpful to the bioentrepreneur. That being said, some of the report’s examples (case studies) are relevant to entrepreneurs developing health care-enabling technologies or technologies that may help the major pharma companies build markets in low income countries. These studies are:
- DataDyne is selling its mobile phone-based data collection system for health care surveillance and delivery;
- Sproxil has started market testing of an anti-drug-counterfeiting system;
- Square Pharmaceuticals of Bangladesh has created a vertical drug distribution system to decrease costs and increase quality; and
- Novartis is working with mobile service companies and the Tanzanian government to use a mobile phone platforms to track drug supplies in public health facilities.
In my own experience, I have advised a handful of ventures that are developing products or services in the developing world markets that are not related to pharmaceuticals. These include:
- eHealth Systems is deploying health informatics platforms in pubic sector hospitals and clinics in Chile;
- Logistimo has phone-based tools for supply chain management for the rapidly industrializing areas of Asia and Africa;
- Sana Mobile is field testing simple and low-cost products for phone-based diagnostics for cancer, heart disease, blindness, and other conditions; and
- Wi Care is an early-stage venture developing a system to accelerate wound healing.
Given the magnitude of the need in global health, the number of potential partners, and availability of grants for start-up funding, the field is ready for the innovations of bioentrepreneurs.