Bringing sustainable healthcare to the bottom of the pyramid; Big Pharma, small innovators, can either win the race alone?

In 2009, McKinsey’s Clay Chandler interviewed Sameer Sawarkar, founder and CEO of Neurosynpatic Communications, through what read like an enjoyable interview, Sawarkar spoke quite eloquently about ReMeDi—his low-cost telemedicine solution that aims to connect rural patients to urban doctors via the Internet. In essence the diagnostics tool, run by a local kiosk operator, sends key information to doctors often densely located in urban areas, who make a preliminary diagnosis for the patient. In many cases not only will this device connect patients to the doctors, but it will save cash poor and even time poorer rural dwellers both time and money and possibly even their lives.

Based in India, Sawarkar was driven by the desire to pragmatically tackle one the biggest problems in global health care delivery – delivering healthcare to the poor and rural dwellers in emerging markets. He cites ‘poor infrastructure, insufficient supply of skilled doctors, and dispersed poor populations’, chief amongst the barriers to delivering ‘sustainable healthcare’. Change the name to any other from any other emerging market and he could have been talking about at least 50 other countries in the world.

Fast forward to 2011, five hopeful big Pharma employees are standing before senior management presenting ‘healthconnector’ one of five innovation solutions that they hope will be given the go ahead for implementation. The team’s presenter a young MBA who had worked on a pilot project in one African country, skillfully went through the narrative of the presentation. He cited the number of healthcare professionals missing across Africa, gave comparative statistics showing access to doctors across the globe, demonstrated the time burden imposed on people in rural areas who sometimes had to travel for days before they could see a doctor, reminding the audience that some never made it, before moving on to the next slide. Then he unleashed ‘health connector’ on the unsuspecting members of the jury, ‘This is how we can start to make an impact on the healthcare needs of rural Africans, we bring the doctors to them’. Then he went quickly through the business model, financials and ended with presentation with a ticking clock and text emerging out of the slide PowerPoint animation fade style. ‘XXX numbers of children have died while I've given this presentation, the time to act is now’. Tugging on those heartstrings - It was his final call to action; the team probably thought that would drive the urgency and importance of the solution home. 30 minutes of Q&A after the 15 minute presentation, ‘healthconnector’ had had its moment of glory; it was time to wait for the verdict.

After a couple of hours of buzzing around the teams gathered to hear the verdict of the jury, it was good news for some but not for ‘healthconnector’. The biggest objection was ‘how are the already overburdened doctors going to cope with all the new patients?’ and a valid objection it was, but not one that should have stopped the proposed project in its tracks, particularly as the charitable arm of the big Pharma company quite ironically has a focus on building the capacity of healthcare workers and infrastructure in Sub-Saharan Africa. Given a little more thought and with some well thought through partnerships, it would not have been impossible to train other healthcare professionals to deal with what would have been basic triage, freeing up the time of the doctors to deal with more critical issues.

Now while it is impossible to tell how this faithful group of five would have fared in front of execs from some of the other big Pharmas, it does get one thinking about where the big innovations of the future in healthcare solutions are going to come from. Historically, big Pharma has focused on ‘products’, healthy product pipelines were, and to a large extent are all that matter. While it is slowly starting to use language like ‘affecting health outcomes’, many pharma execs still lose sleep over the state of their pipelines.

Younger, smaller, nimbler companies like Neurosynpatic Communications, which are even pharmaceutical companies, however don’t have the legacy or burden of this history. Their corporate cultures and structures haven’t evolved to focus purely on product; this probably gives them a higher chance of bringing game changing breakthroughs to the table. Breakthroughs which may not see much of the light of day if they aren’t backed by the big players, since businesses of healthcare business isn’t cheap and needs to be scalable.

The many ways of putting a price on life

 ‘Immunisation against pneumococcal disease, a leading killer of children in Africa, begins on Monday as a vaccine made by British company GSK is rolled out across Kenya. Thousands of lives will be saved. Sarah Boseley, in her article ‘Life-saving vaccine rolled out in Kenya’, ends the opening paragraph by asking ‘but could it have been done more cheaply?’ The vaccines, the article says are likely to save thousands of lives in Kenya, and beyond as Pneumonia is the cause of 18 percent of child deaths in developing countries.

The cost of paying for this vaccine apparently was US$2.8bn with the governments of Italy, the United Kingdom, Canada, Russia, and Norway and the Bill & Melinda Gates Foundation committed $1.5 billion and the Gavi Alliance promised to allocate $1.3 billion up to 2015. In order to provide other basic vaccines such as DTP, pneumococcal and rotavirus, the Gavi alliance will have to find an additional US$3.7 billion.

While reading Boseley’s article, I found myself continuously returning to her opening question ‘but could it have been done more cheaply?’ I think it resonated so strongly because recently I’d similar questions of another project which was concerned with reducing child mortality caused by diarrhea in sub-Saharan Africa. The project in question proposes a public-private partnership that will utilize existing private sector supply chains to get lifesaving products to the last mile. The pilot for the proposed project will cost US$1 million, which of course is no US$3.7 billion; it will impact between 2,000 to 10,000 mothers and will push US$33,000 worth of products through the supply chain. That’s right; a pilot that is all about supply chain effectiveness is going to cost US$1 million to push US$33,000 through an existing, well functioning supply chain.

One has to wonder how many more US$1 million dollar projects and pilots are out there that if approached differently, more frugally and effectively would result in greater impacts for less, and let’s not forget it’s not just healthcare economists that put a price on life. Every time an inefficient health care solution is rolled out anywhere, but particularly in a developing country, a price is put on life. Very simply, the less money there is to go round, the less healthcare solutions there are to go round, the more people pay with their lives. And that is a very high price for healthcare delivery inefficiencies. Surely, for those who claim to be at the forefront of providing healthcare for the poor, this is an unacceptable outcome and good reason to revolutionise or at the very least apply some of the principles of say frugal engineering to healthcare provision.  

Pharma 3:0: Ensuring healthy outcomes for Africa's underserved.

On the 27th December 2010 the BBC News Africa told a heart rendering story about 41-year-old Amos Phillips, and the 43-year-old widow with three children, Karen MacPherson. Both South African, both afflicted by kidney failure, both in need of daily dialysis and as the tragedy of their stories unfolded, both embodying the challenges and opportunities at the center of healthcare provision not only in South Africa, but more broadly across the continent.

 

According to the report, the combination of the increasing demand and limited resources means that healthcare professionals have to make life and death decisions about who gets help and who doesn’t. In this case, the life decision favoured Amos. Ms MacPherson died before her 44th birthday, only two weeks after a committee had denied her dialysis treatment.

 

With a population of I billion people, projected to reach 2 billion by 2040, Ms MacPherson’s story is not, and variations of it will not be isolated cases, unless urgent action is taken now.

 

 

PHARMA 3:0

 Mid way through 2010, Ernest & Young (E&Y) published ‘The global Pharmaceutical report 2010. Progressions: Pharma 3:0’. If it hasn’t already this report will and probably should find its way onto the desk of almost every C-level executive’s desk in the Pharmaceutical sector, just about the same time it did or should land on the desk of every healthcare minister or senior execution with healthcare provision responsibilities across Africa.

While not unique in its outlook, the report in question uses compelling and equally popular words and phrases like ‘seismic changes, healthcare ecosystem, delivering healthy outcomes, business model innovation’. It prophetically warns that ‘To remain relevant in the new ecosystem, traditional pharma companies will need to move quickly to:

• Redesign their business models and develop innovative medicines
• Understand how they fit into others’ business models
• Partner in creative new ways

Additionally, they will need to build models around a combination of three value propositions in order to deliver health status improvements:

• Manage patient outcomes (e.g., boosting patient compliance, targeted health care delivery)
• Expand access to health care (e.g., underserved/emerging markets, uninsured patients in industrialized nations)
• Satisfy unmet medical needs (e.g., complex indications and underserved therapeutic areas)

Meeting unmet healthcare needs across Africa will be a mammoth but not an insurmountable challenge, as the report advises, it will require game changing innovations, rethinking the idea of partnerships, developing, marketing and delivering new drugs for otherwise overlooked therapeutic areas, and making sure they are both accessible and very importantly affordable. The provision of healthcare will not play itself out in isolation, moving towards healthy outcomes will require being intricately linked to, and pushing the boundaries of pieces of the puzzle that affect the overall health of the eco-system.

 

For those that step to the plate, and get it right the rewards are likely to be exponential. As we step into the brave new world of Pharma 3:0, is it about time that we witness pharmaceutical companies take firmer steps towards collaboratively building portfolios for Africa? A shared fund perhaps that looks at market access from R&D through to the marketing and distribution of products? In 2011 and beyond isn’t also time that pharmaceutical companies with the aid of other partners jointly started developing the capacity and availability of health care professionals? It also seems like an opportune time to think about integrating cost effective and high impact corporate social responsibility strategies into core business strategies, and in fact using them to access and develop the markets of the future.

 

On the flip side, 2011 should usher in an era where we see the Governments of African countries, starting to, or continuing to create the most enabling environment for these companies, be they multinational and or local.

 

 

COLLABORATION: THE KEY TO ENSURING HEALTHY OUTCOMES

 

Expanding access to healthcare and ensuring healthy outcomes particularly in sub-Saharan Africa, presents some unique and some not so unique challenges, and there is of course a difference between the delivery of products and services to the expanding middle class in Nigeria, Ghana, Guinea or any of the other 52 African countries, and the Bottom of the pyramid demographics in those markets. A important question at this juncture is also what is meant by, and how far companies are willing to go in ensuring health outcomes. Is it simply about affordable medication for Malaria, Tuberculosis, HIV/AIDs, the more prominent of the diseases affecting inhabitants of the continent, alongside sleeping sickness, elephantiasis, leprosy, helminthiasis, trachoma, leishmaniasis, Buruli ulcers, schistomiaisis and yaws and other less publicised neglected tropical diseases? Or is it about looking at the holistic well being of a patient or individual? The Human Poverty Index (HPI) is a good place to start in thinking about answering this question, an introduction to the HPI states the following: ‘If human development is about enlarging choices, poverty means that opportunities and choices most basic to human development are denied. Thus a person is not free to lead a long, healthy, and creative life and is denied access to a decent standard of living, freedom, dignity, self-respect and the respect of others.’

 

The HPI uses ‘indicators of the most basic dimensions of poverty’, the first relates to survival, the second relates to knowledge and the third relates to a decent standard of living. Together these indices are supposed to show how ‘free – people are - to lead a long, healthy, and creative life’. This sounds a bit like a ‘healthy outcome’ to me.

 

So why revolutionise collaborative approaches? Well simply put no pharmaceutical company, Government or individual player can do it alone.Ensuring healthy outcomes will depend on innovative and bold partnerships with a wide range of traditional and none traditional players, who are have the core competencies to deliver healthcare and healthy outcomes through innovative business models.

 

 

SUB-SAHARAN AFRICA: THE OPPORTUNITIES AND CHALLENGES OF PARTNERING

 

 

The healthy outcomes ecosystem according to E&Y begins to chart some of these relationships. We see the progression of key relationships from Pharmaceutical company to Patient in Pharma 1:0 to Academia, CROs, Biotech companies and a couple of other key stakeholders in Pharma 2:0. In Pharma 3:0 the relationships quadruple, key stakeholders now include Governments, Health record firms, retailers, physicians, the telecoms industry, providers and a host of others. On the surface this seems quite straightforward, but in fact for right hand to speak to left, within the context of legacy systems and business models of pharma companies this requires mammoth reorganisations and potentially the insourcing and alignment or reorientation of new and skills, ability, departments, approaches, strategies and reward systems. For organisations the size the most large pharmaceutical companies, this will be no walk in the park.

 

A further layer of complexity is added when we talk about emerging markets. Focussing on Sub-Saharan Africa and taking only four or five of the important stakeholders identified in Pharma 3:0– Health record firms, Telecomms industry, physicians, retailers and Government, for any pharmaceutical company wishing to navigate this terrain. It isn’t just as simple as finding and building the right partnerships to deliver healthy outcomes, because in many cases, the ‘underserved’ in this vast market, simply don’t have their needs addressed by these stakeholders. This brings the extra challenge and opportunity of seeking out diverse and non traditional partners who can create or nuance the particular value add that these stakeholders bring.

 

Now, it is worth noting that private investment in healthcare solutions for the growing middle- class in sub- Saharan Africa is booming, according to an article in African Business ‘Private healthcare – Africa’s latest boom’, 60 per cent of US$16.7bn expenditure on healthcare came from private investors. The article goes on to reference a McKinsey report which detailed how millions of Africans still suffer from diseases that are relatively simple to prevent or treat. That of course probably isn’t new news to anyone, the same story is told by a plethora of NGOs operating across the continent with high visibility in the ‘west’, constantly reminding us of just how Africans are ravaged by diseases. What might be new news however, and is very relevant to the considerations of Pharma companies, wishing to nuance the pharma 3:0 model to sub-Saharan Africa, is that African Government spending on healthcare, as percentage of national expense rose by less than 1% from 2001 to 2007. In fact to be exact, it was 0.3%, now Pharma companies are used to dealing with cash strapped Governments. Recently, the Greek Government imposed price cuts of 25% on drugs, the Spanish Government announced price cuts for patent-protected and generic drugs by 7.5% and 25% respectively. Germany apparently is also threatening to go down a similar route and with Europe’s drug bill increasing by 50 percent in just one decade, it’s likely that others will follow suit.

 

In the same period, donor funding rose from 15.3% to 20.1%. This sounds impressive, right? But it is? Pharma 3:0 in sub-Saharan Africa requires partners that can deliver both thought leadership and execution excellence. It requires partners who are agile and can make a sizeable IMPACT. What exactly has been the impact of the near 5% increase in donor aid on healthcare outcomes and provision in Sub Saharan Africa? The question is not rhetorical.

 

On the issue of paying for healthcare provision, let’s delve a little deeper, according to a review of 52 African countries’ health spending by The Global Fund to Fight AIDs, Tuberculosis and Malaria (the more popular of the diseases affecting inhabitants of sub-Saharan Africa), In 2007 half of African countries set aside at least 5 percent of their national income for health care. In the same year four met the Abuja Declaration goal of spending 15 percent of annual budgets on health: Burkina Faso (14.8 percent), Botswana (17.3 percent), Djibouti (15.1 percent) and Rwanda (18.8 percent). Liberia and Malawi had exceeded the target in 2006 at 16.4 and 18 percent, respectively, but then dropped to 6.4 and 12.1 percent in 2007.

 

Although not reflective of the entire GNPs across the continent, It is worth noting that in 2006, Liberia’s Gross National Product (GNP) was US$868m, 16.4 percent of that is US$142.32m. In 2008, GNP stood at US$ 1.17bn, 6.4 per cent of that being US$ 74.8m, now I quote these figures not to chastise the Liberian Government, far from it, I actually think President Ellen Sirleaf-Johnson should be one the most celebrated leaders across the globe, from inception she has been extremely focussed on guiding the Liberian economy as it grapples with rebuilding itself after a civil war, and at the same time trying to make itself relevant in a new and ever changing global economy with a limited budget. The point however, is to showcase that Pharma 3:0 is going to equally have to grapple with this reality when dealing with this particular stakeholder in sub-Saharan Africa. The value- add that these companies can bring in addition to for instance the efficacy of a drug becomes vitally important.

 

Botswana and Rwanda also reported major jumps in health care spending as a percentage of overall expenses from 1999 to 2007 – 8.9 and 9.7 percent, respectively. While Ghana and Benin had the largest dropped – 6.1 and 3.6, and Nigeria spent 3.5 percent of its 2007 budget on health care, a nearly 2-percent drop since 1999. With all these changes, increases and decreases alike, in Africa’s lowest income countries patients paid out of pocket for more than half their health care, with governments pitching in 46 percent. The burden is clearly still on the patient, this also nuances the expectations that Pharma companies will need to grapple with when thinking about ‘delivering healthy outcomes’.

 

So where exactly, am I going with this? Patience is a virtue...

 

Let’s look at some of the other necessary partners that E&Y points out in its healthy outcomes ecosystem - Health record firms, Telecomms industry, physicians, and retailers. Starting with the latter, we know that sub-Saharan Africa has great informal retail distribution networks, which provides a livelihood for a significant proportion of its population, but what it doesn’t do is provide ‘retailers’ in the traditional sense to partner with. This presents a very unique and particular challenge to the pharmaceutical sector. How do you create a retail distribution network in rural and urban Africa? And how can you influence the informal network? Likewise, the brain drain has left potholes large enough to drive hommers through, in the availability of trained professionals and physicians to treat and administer care to patients. Career development, better economic and social conditions are often cited as reasons for migration. And for those that remain they typically tend to be concentrated around urban centers, a point worth noting, since Africa’s population is still predominantly rural despite it having one of the highest urbanisation rates in the world.

 

A paper entitled ‘Estimates Of Health Care Professional Shortages In Sub-Saharan Africa By 2015’, projected that there will be a shortage of 800,000 health professionals by 2015. Figures, from a 2004 paper entitled ‘The migration of physicians from sub-Saharan Africa to the United States of America: measures of the African brain drain’ put the ratio of doctors to patients in Sub-Saharan Africa to fewer than 13 physicians per 100 000 population, or a total of 82,949 doctors. While ratios in the United Kingdom (UK) stood at 164 physicians per 100,000 and the USA at that point had over 279 physicians per 100,000 (or almost 800,000 doctors for a population of 284 million). We know that both countries have sill struggled with the provision of health care to all, and that’s despite the proliferation of qualified healthcare professionals – the absence of these professionals in sub-Saharan Africa therefore adds additional complexities, but not insurmountable challenges. ICT can play a major role in career development and continuous learning, while other partnerships and collaborative approaches with innovative players can impact the economic and social conditions that contribute to the brain drain.

 

Similarly, healthcare insurers and record firms are scant, the telecoms industry however is booming, according to the Africa mobile fact book 2008, Africa has become the fastest growing mobile market in the world with penetration ranging from 30 to 100 per cent in markets across the continent. The availability of cheap handsets, pre -paid billing, community phones and the liberalisation of telecom policies in a number of African countries have helped to encourage the spread of mobile technology.

 

In this space, Pharma 3:0 players, might find willing partners, chief amongst them the key pan-African players, namely MTN, Vodacom, Zain, France Telecom, Orascom and Millicom, who can help to make products and perhaps more importantly services from Pharma companies available to the masses, and help to connect them to other important stakeholders. Perhaps the right partnerships in this space can help key players overcome some of the issues presented by the lack of key healthcare infrastructure.

 

 

ARE THESE LOFTY VISIONS REALISTIC?

 

Now all of this might seem like mammoth hurdles to overcome, and you can understand why some c-level executives just get a headache when the combination of Africa, formerly drugs, and now healthy outcomes is mentioned. These headaches may be somewhat premature and are nothing that a good dose of aspirin, actually I mean systems thinking can’t solve. It’s time to revisit E&Y’s report again, because herein lies the answer, remember the talk of, business model innovation’ and Partner(ing) in new creative ways? So what does and innovative business model, underpinned by new creative partnerships look?

 

We now know a few things; Currently, Governments across Sub-Saharan Africa generally are unable to afford provision of healthcare services on their own. Donor agencies have tried to come to the rescue, but it is still unclear what impact this is having, and the focus tends to be on a limited number of therapeutic areas. The private sector is also coming to rescue, but mostly to the rescue of the middle classes by building, operating and transferring hospitals in urban centers. In the lowest-income countries across Africa patients are paying for more than half of their healthcare needs out of their own pockets. Those who could get healthcare were fortunate because there is a severe shortage of healthcare professionals. They are also fortunate to have been able to afford it; we all know the popular figures of those living below the poverty line in sub-Saharan Africa, and while data is emerging that may question these statistics, it is clear that affordability is still a key issue.

 

Formal networks or platforms to deliver healthcare into local communities are also largely missing, and the private sector is notoriously bad at engaging the informal sector and its intricate networks. To top it all, most pharmaceutical companies, haven’t even developed a portfolio of drugs that are price competitive and relevant for both the Governments and the underserved within these markets. All of this plays itself out within the wider context of ‘development’ and all the components that impact it.

 

Developing the right portfolio of drugs will have very little impact if ‘opportunities and choices most basic to human development are denied.’Pharma 3:0 in Africa isn’t just about new stakeholders and linear lines linking them to the patient; it is about the interconnectedness of the stakeholders and the ability to collaborate revolutionarily, while jointly addressing ALL the issues impacting healthy outcomes for the patient or individual. It is also about going beyond the usual suspects, the NGOs, the donors, and others who have been in this field for decades and are still unable to make a dent in the healthcare woes of sub-Saharan Africa.

 

And where partnerships are to be formed the usual suspects need to be held to a higher level of accountability. IMPACT is the name of the new game. Quite importantly, for Pharma 3:0 to play itself out in sub-Saharan Africa, Pharma companies need to make effective collaboration, which responds to the specific and nuanced needs of the ‘eco-system’ a core competence. They must find partners that can act as network integrators, integrators that provide physical and theoretical platforms, which allow a series of players to deliver joined up solutions into the underserved demographics. These solutions must impact all dimensions affecting healthy incomes, and may require completely rethinking traditional and even emergent ideas about health care outcomes.

 

I leave you with this:

‘Innovation is no longer just about the product — it now encompasses how you do business, whom you do business with and how you mobilize your resources to contribute to healthy outcomes for patients.’

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