Bulls n Bears Entrepreneurship Zone :: From warehouse to patient: mPharma’s approach to increasing the accessibility of medicines in Africa

Thu Jul 5 07:17:21 CAT 2018

 <http://www.oldmutual.co.zw/> 

Since 2013, the startup mPharma has been trying to build an infrastructure
and a drug-monitoring system to connect patients, hospitals and pharmacies.
The objective is to enable doctors to know the exact location and
availability of medicines in real time, and patients to have better access
to medicines.

One of the greatest modern day success stories in global health has been
the reduction in the yearly price of branded HIV/AIDS drug prices from a
high of US$10,439 in 2000 to $347 by 2011. During the same period, the
introduction of generic drug treatments dropped a year’s worth of treatment
to about $61. With financial support from organisations like the Global
Fund, PEPFAR and the Clinton Foundation, more than five million patients in
sub-Saharan were on treatment by 2011.

While a lot more work needs to be done to ensure that 100% of HIV/AIDS
patients in Africa get on treatment, the achievement thus far has been
nothing short of spectacular and highly commendable. At mPharma, we are
inspired by this story everyday. It shows that when different stakeholders
in the healthcare ecosystem come together with a singular vision, miracles
can be created. We are using the lessons learned from this achievement to
re-imagine how pharmaceuticals are procured, prescribed and dispensed in
Africa.

What is mPharma?

mPharma is a prescription drug manager for providers and payers in Africa.
We manage the drug inventory for providers and design drug benefits plan for
payers. mPharma currently operates in three African countries (Nigeria,
Ghana and Zambia), serving close to 20,000 patients each month across a
network of over 70 hospitals and clinics in Lagos, Warri, Port Harcourt,
Benin, Aba, Accra, Kumasi, Cape Coast, Lusaka and Ndola. mPharma aims to
build the data intelligence and retail layer to support the future of
African healthcare.

If CVS Health, QuintilesIMS and McKesson had a baby, it would be called
mPharma. mPharma is building a more scalable version of CVS Health in Africa
using the  <https://www.howwemadeitinafrica.com/tag/airbnb/> Airbnb model.
This model enables mPharma to create a tightly coupled pharmacy monolith (on
a continent that has a highly fragmented pharmacy retail market) with
leverage over pricing, distribution and reimbursements.

mPharma has developed supply-chain software that enables us to implement
vendor managed inventory for independent healthcare providers in Africa.
mPharma takes over inventory procurement of retail and hospital pharmacies
while remotely running pharmacy operations using proprietary technology
infrastructure. This entails using data we generate through our software to
forecast demand, and commanding lower pricing from suppliers (distributors
and manufacturers) due to aggregated and predicted volumes across hospitals
and retail pharmacies in our network.

mPharma supplies drugs to all pharmacies on consignment. Thus, revenues are
based on actual drug sales to patients, and not what we supply to hospitals
on a timed basis. This creates a disruptive business model for hospitals and
pharmacies because it is different from the traditional “pay-for-supplies”
model that distributors offer. This model improves working capital and cash
flow for hospitals and pharmacies.

A better supply-chain model for improving availability and accessibility

The drug supply chain in Africa is built on a “push” data model. This
means, distributors have to wait to receive a purchase order from providers
before supplying drugs to them. The push model is built on siloed data
systems between distributors and providers. As a result, both parties are
unable to forecast demand which leads to frequent stockouts.

A “pull” model is based on an integrated data system that gives
distributors real time access to anonymised patient-level dispensation data
from providers. Instead of waiting for a provider to send a purchase order
before supplying drugs, a distributor can use the dispensation data they
receive to set appropriate re-order levels. A new purchase order is
automatically triggered when the stock reaches the reorder level and prompts
the distributor to supply drugs without needing the input of the provider.
The financial interests of the provider are aligned with that of the
distributor if the stock is provided on a consignment basis. This enables
the distributor and provider to create a tightly coupled monolith that can
aggressively negotiate prices with pharmaceutical manufacturers.

Better payment models for improved patient access

According to the WHO, for every $100 spent on healthcare in Nigeria, $23 is
financed by the government, $2 through private payers and an overwhelming
$75 through out of pocket expenditure. Approximately 90% of the African
patient population is paying out-of-pocket for services. The affordability
of medications for out-of-pocket patients has been linked to behaviours that
have further exacerbated chronic conditions. Research shows that adherence
to treatment can be influenced by inability to finance the treatment
specifically targeting drugs for non-communicable and chronic diseases (e.g.
oncology, cardiovascular treatments). mPharma aims to create a programme
that bridges the gap between financial constraints and non-adherence,
ultimately increasing both patient adherence and patient wellbeing. By
spreading the cost of a drug over a long period of time for patients that
are creditworthy, mPharma aims to minimise the influence of cost on medicine
use.

We need to rethink how patients pay for healthcare whether through
government-backed insurance programmes or innovative payment models for
out-of-pocket expenditures. We cannot improve and guarantee access to
innovative treatments if we don’t fix the cost structure for delivering
healthcare. According to the Aon 2018 Global Medical Trend Rates Report, the
Middle East and Africa saw the second-highest net growth rate in medical
costs at 7.6% compared to the global average of 5.4%. This growth is due to
a rise in the incidence rates for non-communicable diseases. This trend will
only get worse if we don’t take a more proactive approach to reducing the
cost of drug treatments. At mPharma, we plan to play a small role in
ensuring each patient gets the drug they need irrespective of their
socio-economic status. Especially with Mutti, offering available
high-quality medications (e.g. oncology, cardiovascular treatments – usually
high-cost drugs) at affordable prices to the patients.—Howwemadeitinafrica 

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