Thirteen.

That’s the number of types of toilet paper that are available in super markets.

Toilet paper - thirteen different kinds.

How did we get to a point where there are starving children, no access to essential medicines, unclean drinking water… and thirteen choices of which to do your daily business?

Last night, after realizing that virtually every subway to Queens was under construction and not going to be arriving any time soon, I reluctantly decided that my only option was a cab. While chatting to Luis, the taxi driver, as we sped down the LIE to Queens Boulevard, we discussed his home of Colombia. He raised his son here in New York, with frequent visits back to Colombia to visit the family.  (His son after being accepted to numerous medical schools is now in dental school in Texas.)

We spoke about healthcare in developing countries, Hugo Chavez and the bubble to which most Americans live their lives, day in and day out.

“Can you imagine someone living in a slum for two days” he chuckled.  “Sometimes I think it would help if for a few days, if people had to live as most of the world does. Only then will things start to change”.  

His son does not want to open a practice here in New York and settle into a routine, but wants to visit developing countries to provide medical care and teachings to medical students.  “Seeing all that poverty over the years in trips to Colombia” he continued, “it makes you appreciate what you have and want to give what you can back”.

While we all can’t give back in quite the same way, taking time to appreciate the little things can bring about some perspective.

So, the next time there is a visit to the grocery store, while strolling among the never-ending aisle of cereal choices and the checkout line is looking long, realize you are lucky enough to have a choice of toilet paper.

Thirteen choices in fact.   

Evaluating BoP initiatives is never an easy task – and, of course, there is always a risk that a project will succeed or fail based on uncontrollable factors.  A few years ago as I read C.K Prahalad’s now famous book “The Fortune at the Bottom of the Pyramid” (BoP) the concept of a BoP strategy were pretty obvious although fairly new to many seasoned executives. However, after many projects and countless frequent flier miles later the drivers of successful BoP initiatives described have helped me evaluate many types of BoP models and concepts.  Attached to this post is an excel document with BoP initiatives explained by the drivers of BoP strategy listed below. The excel sheet at the bottom of this post was completed in 2008.

There are four main elements of a BoP strategy, which can be broken down into concepts that drive each strategic focus:

1. Price Innovation 

-          Affordable price

-          Packaging strategy (cost/environmental waste reduction)

-          New approach (group-based, pooling etc.)

-          Creative financing (micro-lending, installment etc.)

2. Product Innovation

-          Functionality

-          Design (specific to hostile infrastructures)

-          Scale of Operations (Scalability)

-          New Products / Service

-          Modification or Adaptation

3. Localize Value Creation

-          Process innovation

-          Distribution channels

-          Strengthen/ develop local systems

-          Dis-aggregate Access & Ownership (ex. Pay-per-use)

4. Sustainable Development

-          Defined job descriptions and trainings *

-          Education

-          Easy-to-use interface

-          Partnering

-          Advancement opportunity / Incentives  *

* Based on my work in developing countries, I have added drivers of a successful BoP strategy

Molding the concepts of Social Business (read: Muhammad Yunus’ book “Building Social Business” with concepts that work at the BoP is something that intrigues me. Creating a type of evaluation framework for investing Social Business aimed at the BoP that goes beyond financial dollars or typical Social Return on Investment approaches.

What if one measured the success of not only Social Business but For-profit business by using the principles of success at the BoP?  Would businesses become more efficient? Reduce waste? Create sustainable local value over the long-term?  

Click here to download:

A_Grant_BOP_Strategy_Summary.xls (116 KB)

(download)

Click here to download:

A_Grant_BOP_Strategy_Summary.xls (116 KB)

By: Alexandra Grant, AccesstoMedicines.com

Summary

4,000 patients lack access to one life-saving drug in Florida. They were put on a waiting list and told to hope for the best. Aside from the obvious quality of patient life, if the U.S issued a compulsory license (which legally it can, and voluntarily do not according to the World Trade Organization) and import a quality assured generic version of the drug, the state would save an estimated $494 million over seven years. The cost of NOT issuing the compulsory license is far greater than even the savings: $672 million would be spent in providing additional medical care over the next seven years if the drug is not provided. Alternatively, if the U.S provided the drug at the current cost of $20,000 per patient per year the savings would still outweigh the future amount spent on additional medical care due to the 4,000 people wasting away due to lack of access to this drug. 

Background

Recently, I read an article in the NYT that discussed the recent addition to the patent pool for HIV medicines. One section which surprised many readers (including myself) was the state of Access to Medicines in the United States. As reported by the NYT, in Florida there are 4,000 people with AIDS are on a waiting list to get antiretroviral (ARV) drugs. The state has also proposed cutting funding for 1,600 people who already rely on the drugs.

Perhaps what Florida misunderstands is the amazing progress patients can make if the drugs are readily available. Relatively normal, long lives can be expected with the consistent taking of ARVs. I have personally seen people “come back from the dead”, once reduced to mere skeletons arise to become healthy and productive members of society.  Not only that, but untreated HIV+ patients can become a public health issue: infection can spread more rapidly – not to mention the increased costs to the medical system for hospital stays to treat varying opportunistic infections and illnesses. (Don’t forget the additional costs of associated medicines for those infections!)

In the United States, the cost of the most popular ARV is a combination drug called Atripla (TDF/FTC/EFV) produced by Gilead and Bristol Myers Squibb. The cost of this medicine for someone living in a developed country such as the U.S is roughly US$20,000 per year (depending on the state and insurance negotiated prices if applicable). The cost for someone living in a developing country, receiving generic, quality assured copies of the pill are about $2,628. That is more than 700% more for the same drug – one coming from a patented innovator and one from a generic manufacturer.  Identical treatments, unbelievable price difference.

The reason for the price difference is due to patent enforcement and Access policies that vary from country to country. Countries included in the Access policy for Atripla are able to import the generic versions while the manufacturer pays a small licensing fee (5%) to the innovator pharmaceutical company. Only countries included in the pharmaceutical companies Access policy have the ability to “bypass” the patent restrictions. The World Trade Organization (WTO) has written extensively on the use of patents for public health and was reconfirmed at the Doha Declaration. TRIPs (which is signed by all WTO member countries and acts as a treaty to respect Trade Related Intellectual Property) enables countries to issue a compulsory license if there is a public health emergency. 

Compulsory licensing

According to the WTO website, compulsory licensing is “when a government allows someone else to produce the patented product or process without the consent of the patent owner.”

Although explicitly stipulated in the TRIPs agreement, countries that have gone down the route of compulsory licensing usually face a form of retaliation from the pharmaceutical company that owning the patent for the drug. Perhaps the most widely publicized case was that of Thailand issuing a compulsory license in 2006/07 for Abbott’s HIV “wonder drug” Kaletra (LPV/RTV) in order to afford the drug for HIV positive patients. Thailand did not qualify for the reduced Access pricing, and could not afford the innovative version directly from Abbott. Cipla and Matrix both generic manufacturers based in India produce quality versions of this drug. Abbott then retaliated by stating that due to the compulsory license the company would no longer register products in Thailand – drastically limited future Access to new products.

Compulsory licensing and the United States

At the Doha declaration which clarified some of the language and evolved into a separate declaration of TRIPS and Public Health constituents agreed that the TRIPS agreement “does not and should not prevent members from taking measures to protect public health” (WTO). If the country is unable to manufacture drugs then importation is allowed under the condition that the drugs be used within the country borders and not sold in other markets (parallel trading). All WTO member countries are eligible to import under this decision but the U.S and many other developed nations announced voluntarily that they will not use this system.

The U.S is facing a critical shortage of funding for HIV drugs. Usually I agree that developed nations should pay more for access to medicines – and developing and middle-income countries should pay less…but with certain therapeutic areas such as HIV – where not having the life saving drug means a short unhealthy life of suffering horrific side effects (not to mention higher transition rates if not on ARVs) this is truly a public health concern. Issuing a compulsory license for a limited number of HIV drugs and importing directly from India would benefit the U.S in this case, both from a public health perspective and a financial one.

Accesstomedicines.com is a resource for developing Access to Medicines strategies. Comments are welcome – please contact me here.

Four years ago I remember reading the WHO Medicines Strategy (2004-2007) while at a client site. We embarked on a new project creating an "Access to Medicines Business Unit" for an innovative pharma company. Our task was to show how this could be a sustainable business, subsidized at first by an internal budget but then create innovative ways to offer commercial solutions by partnerships or creating interesting pilots.

Of course this project took many twists and turns with MANY differing viewpoints along the way. However, every person was passionate. This topic seems to elicit a very strong reaction either way - whether you believe in "Access for All" or that Pharma has no business in Access. 

Personally, I believe that Access to Medicines is a right for all, not only a privileged few.It's not something you should be "lucky enough" to have just because of the country or socioeconomic status. If a medicine exists to cure HIV then access to this medicine should be ensured through social business models or micro health insurance. Access to Essential Medicines should be seen as a right, not purely a business opportunity. (Although the size of the health care market is estimated in the TRILLIONS for developing countries...but...that is another post coming in the future). 

There are always arguments that it is not the job of innovative pharma to "care" about developing countries and those that can not afford to pay. At the end of the day, the pharma companies are a business, and not a charitable organization. And, I understand and even (surprise) agree with this. Pharma companies need incentives (financial incentives to be clear) in order to continue and innovate for new diseases. This makes sense...it costs money to make money. 

On a macroeconomic level, increasing access to medicines not only improves quality of life but creates economic value. Imagine all those parents not passing away - able raise their children and maintain businesses, encourage education and continue on their paths. What if the life expectancy in Swaziland was not in the 40's (thanks to AIDS) but pushed to the 70's? Would businesses thrive? More families stay in rural homelands instead of moving to overly crowded cities? A halt in the spread of HIV because not as many young girls would have to resort to prostitution? 

On this blog and website www.accesstomedicines.com, I hope to create awareness of the challenges to Access to Medicines, while also sharing knowledge to raise awareness of potential solutions and examples of initiatives that work. Pharma companies, governments and various industries such as gas & oil companies must have vested interests in improving Access to Medicines issues around the world. 

I hope this website educates, inspires and fosters Access to Medicines in the world.

Future posts to include: Patent Pool, UNITAID, Product Development Partnerships (PDPs), Forecasting in Developing Countries, Clinton Foundation basics, Barriers to Access, Access from a Pharmacist perspective, Innovative pharma value chain, Generics value chain, Innovation vs. Generics, Case studies, innovative business model profiles, Special Guest posts and more!

If you have an idea for a post and would like to submit it for posting please contact me at: AGrant@AccesstoMedicines.com. 

Let's take the Gilead example a few summers ago that caused less than 1,000 HIV+ patients in Ecuador major grief (once again, to the people who argue that middle income countries should still pay inflated prices to subsidize the lower income countries - 1,000 patients hardly constitutes a "commercial market"). 

Here is the story in brief: Gilead has a licensing agreement with Matrix (a Generic manufacturer in India) to product TDF/FTC (Truvada - one of the best HIV ARVs out there). In return, Gilead receives 5% in licensing fees from this arrangement. Gilead now registers the Truvada product in Ecuador and suddenly the country can no longer import the quality approved, affordable generic version since it is not a country included in the Gilead Access policy and it now violates patent trade agreements (TRIPS). We are talking about 1000 patients. That's it. No more affordable meds. 

Not only are the trade agreements hindering access, but in many middle income countries local distributors act as middle-men and inflate the costs (as much as 3000% in some middle-income countries). Even drugs purchased through foundations are subject to this local distributor cost inflation. Local pharmaceutical sales reps are rewarded based on incentives to sell drugs at higher prices - even selling the marked-up goods to government sponsored programs. 

It is true that certain therapeutic areas (restless leg syndrome anyone?) should be more expensive to "subsidize" other diseases that are more frequent in developing countries. HIV/AIDS is a therapeutic area where patients no matter where they live, deserve regular access to the treatments. 

http://opinionator.blogs.nytimes.com/2011/07/26/a-trade-barrier-to-defeating-aids/?scp=1&sq=aids&st=Search