Our big idea for the World Health Summit
The World Health Summit starts today at the German Federal Foreign Office in Berlin. mPharma won the inaugural Startup Innovation Challenge last year and we look forward to meeting the winners of this year’s challenge.
Over the next 3 days, we will engage stakeholders on how we can use lessons from the HIV/AIDS epidemic to increase access to drugs for Non-communicable diseases (NCD).
The graph below from Doctors Without Borders shows the drop in prices for HIV/AIDS drugs from a high of $10,439 per year for branded drugs in 2000 to $347 in 2011. During that same period, the introduction of generic copies of these branded drugs led to prices for generic drugs dropping to about $61 for a year’s worth of treatment.
Drug prices didn’t drop because of the altruistic values of pharmaceutical companies. It took the effort of non-profits like Doctors without Borders and the Clinton Health Access Initiative (CHAI) working with generic drug companies to increase access to lifesaving treatments for millions of HIV/AIDS patients across the world.
The drop in prices can be attributed to 2 significant developments. The first was the introduction of generic copies of the more expensive originator products. India, often referred to as the “pharmacy of the world”, was allowed to hold off on implementing the controversial TRIPS agreement, which mandated signatories respect US IP laws, until 2005. By deferring the implementation of the agreement, it enabled generic companies like Cipla to perfect the manufacture of high-quality generic ART drugs and provide $1 a day treatments to patients. However, this was not enough to increase patient access, as the only way generic companies could scale production and still make a profit was through an increase in purchasing volume.
This led to the 2nd significant development in reducing HIV/AIDS drugs. After President Clinton left office, he setup the Clinton Health Access Initiative (CHAI) which, among other things,brought together African countries to act as one purchasing unit that could negotiate pricing with generic companies. Creating a single procurement source increased the aggregate patient volumes, which then allowed generic companies to accept lower margins in exchange for an increase in procurement.
Organizations like the Global Fund for Aids, Tuberculosis and Malaria (The Global Fund) and Pepfar were established by donors to provide significant financing to governments to allow them purchase more drugs for patients in their countries. By 2011, the number of patients on HIV/AIDS treatment in Sub Saharan had grown to more than 5 million people, as shown in the graph below.
Why does this matter?
We are seeing an unprecedented growth in the Non-communicable diseases (NCD) incidence rates. According to the WHO, out of the 56 million global deaths in 2012, 38 million were due to NCD’s. 48% of NCD deaths in low to middle income countries occured before the age of 70. By 2030, 46% of total deaths in Sub-Saharan Africa will be attributed to NCD’s.
Just like the HIV/AIDS epidemic in the late 1990’s, we are at the cusp of an NCD insurgency across the developing world. While there is a lot that needs to be done to claw back this rising incidence rate, mPharma intends to focus on the issue of drug affordability and accessibility.
We want mPharma to become the largest dispenser of NCD drugs in the developing world. mPharma will lead the industry to build a new “Global Fund” for NCDs. It is imperative that we achieve this vision. We need not wait until it is too late to come up with solutions to address the rising incidence rate for NCDs.
In 2016, we have been learning how to build a PBM and what models work in our markets. In 2017, we will expand our network rapidly to enable our health insurance partners to save more on their reimbursement. However, we won’t end there. We will build products that allows us to use our pricing advantage to enable patients who don’t have health insurance to also save money on their prescriptions. In the future, we want to enable governments to use our pricing system to increase access to NCD drugs across their public hospitals.
If you are at the Summit and want to chat, send me an email at gregory (at)mpharma.co