Among the successful BLCF applicants were companies who committed to developing and marketing affordable health solutions to consumers whose needs were previously unmet. The supported enterprises have worked on technological innovations and transfers of technology which have resulted in increased access to and affordability of health care packages for the poor. All the work has been performed on a commercially sustainable basis, leveraging private sector investment, knowledge and interests.
The companies involved have expanded their operations and have created both direct and indirect employment (and in some cases even new local industries), while positively impacting public health directly. The direct links between improved health, earnings and economic growth have been well recorded and the BLCF projects provide relevant data.
Unique risks
It is worth noting that before the BLCF, the private sector had not invested in its own commercially viable ideas contributing to public health. By their very nature, public health solutions and initiatives demand up-front investment in Research & Development, testing, licensing and marketing the safety and health impacts of a product. The process can be lengthy and costly. Where such products have been targeting the poor, companies have been less willing to invest as the risk on low returns is high. The BLCF has demonstrated how very limited risk-sharing arrangements can catalyse innovation, transfers of technology and partnerships aimed at serving the needs of the poor and vulnerable.
Unique partnerships
Another key experience is that the potential for public health gains has created synergies between commercial companies, governments, donors and NGOs. These links have proven natural and sustainable as all sides have benefited from each others’ respective focus areas. The technology innovations have given NGOs, governments and donors access to better and cheaper products. The NGOs and public entities have provided a stable market and clientele to the private companies, helped navigate the market, provided access to established distribution channels and fostered community buy-in and product acceptance.
All partners have contributed to demand creation, since advertising cheaper and more accessible health products is a shared goal. At the same time, partnerships help understand the real needs of the market and not simply those perceived by external forces. For example, NGOs have been helping Wagtech to improve its marketing of water purifying and testing kits in rural communities. UNICEF, the WHO and many national governments will benefit from having access to a stable and pentavalent vaccine as result of the work performed by Cambridge Biostability.
Unique results
- 27 new products, targeting the poor - the BLCF-supported health and pharmaceutical projects have resulted in 27 new products, despite some lengthy R&D tests and licensing periods.
- More than 80 new business links - the BLCF competitive process encouraged links between public and private health service providers. Many new contacts and partnerships were established in order to meet the commercial and social impact criteria.
- Sustainability of services – the BLCF provided an incentive to NGOs to re-think their activities and introduce commercial sustainability in their service delivery, while expanding their coverage and services. An example of this is the Ghana Franchise of Chemical Sellers – a commercial initiative started by GSMF, an established NGO which had previously relied on donor funds for more than a decade. GSMF established its first for-profit independent subsidiary, partnered with relevant professional associations, and launched a social franchise initiative that was supported by the BLCF.
Examples of BLCF investments in the health sector are:
The Female Health Company - which has partnered with Hindustan Latex to transfer the manufacturing of the Female Condom to India. Many vulnerable women now have access to an affordable form of contraception which empowers them to protect themselves.
- Cambridge Biostability has linked with Panacea Biotec to develop stable liquid vaccines to help children, even in remote areas, to receive cheaper and safer immunisation from preventable killer diseases. Panacea Biotec will use the technology to produce and distribute vaccines locally.
- Wagtech has worked with local producers in Bangladesh to manufacture and market arsenic testing kits for local water supplies. The domestic manufacture of the kits has made them affordable to local communities, reduced the amount of contaminated water consumed, and improved the health of local populations. Wagtech is working increasingly with NGOs trying to reach out to more communities.
- In South Africa the BLCF supports private public partnerships bringing healthcare products to communities and in Haiti marketing water NGOs’ purification tablets.
- Ghana Franchise of Chemical Sellers- chemical sellers in rural and peri-urban areas have been recruited, trained and assisted with drug supplies to improve their services to customers. GSMF has also negotiated bulk purchases for the franchises and organised transport to achieve economies of scale. This has resulted in lower supply costs and lower retail price. To have access to the scheme, the chemical sellers had to pay a small fee.
BLCF and the ‘BoP’.
Building off the recent Base of the Pyramid literature, many of the BLCF Health projects fall into the category of inclusive private sector initiatives helping to sustainably address the BoP’s basic human needs, which include housing, nutrition, energy, water delivery, sanitation and healthcare. A common criticism of the Base of the Pyramid theory is that if the private sector could genuinely find value at the BoP, surely they would already be doing it? The BLCF demonstrates positive examples of how the private sector appetite for this kind of commercial programme does exist.
For more information contact BLCF fund manager, the Emerging Markets Group at this address