Making Markets for Health Care Work: A Conversation with Market Access Africa Managing Partner, Olawale Ajose

‍Question One: Market Access Africa has distinctly taken the position that the private sector is an underutilized force in delivering quality, affordable, lifesaving products to African communities. Why is the private market important and in what ways has its potential been untapped in global health?

Olawale Ajose: The evidence on this is clear and irrefutable - a significant fraction of Africans rely on the private sector for healthcare. Access to medicines, healthcare supplies and even the primary points of care, both urban and increasingly rural, is facilitated by private entities. Additionally, the logistical backbone that supports these systems largely lies in private hands. It's evident that any vision of healthcare transformation in Africa is incomplete without the private sector playing a pivotal role.  

Global health programs traditionally focus on diseases such as HIV, TB, and Malaria, and have generally seen the public sector as the primary access point. This is in part because these programs aim to target the most vulnerable populations who often lack access to healthcare and cannot afford higher fees in the private sector. Consequently, since these programs provide drugs and services free of charge - funded by donors – and so they have naturally gravitated towards the public sector for reasons of equity.

African countries too haven’t always had a vibrant private sector healthcare market. Many African nations had efficient public healthcare systems that provided quality care up until the 80s and 90s. However, due to an increasing population, urbanization, and a corresponding lag in public healthcare spending, a gap emerged that the private sector has stepped in to fill.  

"The evidence on this is clear and irrefutable - a significant fraction of Africans rely on the private sector for healthcare."

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I also think we haven't sufficiently studied the unique characteristics of healthcare markets in many of these countries to truly comprehend the vital role of the private sector in healthcare delivery, and how we – global health actors – engage with it in a meaningful way. This oversight can be attributed, in part, to the prevailing perception within global health circles that the private sector is an adversary rather than an ally. Our reluctance to enlist individuals with private sector expertise has compounded this issue.  

Global health initiatives – more so the large HIV, TB, Malaria programs – are now at a crossroads. Shrinking funds, increasing program complexity, and a more discerning and demanding user base require innovative solutions and new partners. I believe this will necessitate closer collaboration with the private sector and other non-traditional actors to achieve desired outcomes.  

"We need healthy markets where other products can be made available at an affordable price, where innovators and distributors and pharmacies compete to bring us the most affordable quality insulin, vaccines, antibiotics, blood pressure medication, etc. But these private markets have been neglected and sometimes even undercut and are not thriving in the way they should."

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HIV testing serves as a prime example. For two decades, initiatives like the Global Fund have funneled billions of HIV tests through the public sector, leading to significant increases in awareness of HIV status globally. However, only recently have alternate avenues like pharmacies been prioritized as testing points. As we approach saturation through public sector channels, we are recognizing that the patients we are trying to reach, the so-called missing 10%, are changing their healthcare-seeking behavior. They are turning to pharmacies, online ordering, and private sector facilities that offer greater privacy and convenience. The solution to reaching them is to leverage these new channels by offering self-tests. We need healthy markets where other products can be made available at an affordable price, where innovators and distributors and pharmacies compete to bring us the most affordable quality insulin, vaccines, antibiotics, blood pressure medication, etc. But these private markets have been neglected and sometimes even undercut and are not thriving in the way they should.

Question Two: There is a lot of momentum to bring innovation and the latest drugs and health devices into the African market, a lot of this still driven by the public sector and shaped by development agencies and donor programs. What are the missing pieces in the current market shaping strategy?

Olawale Ajose: Several crucial elements are currently missing in the existing market shaping strategy. To begin with, we often separate the public and private sectors as two distinct markets. Instead, we should perceive them as a single market, with different segments interdependent on each other. Without pharmaceutical innovation and local distributors for distribution, healthcare systems are left lacking in vital supplies. Conversely, without global health access programs, innovations are exclusively targeted towards the affluent, leaving behind those without resources.

Moreover, these access initiatives are usually driven by individuals lacking on-the-ground, real-life experiences in the countries where the programs are implemented. Frequently, you will find industry experts at the helm who are versed in managing a global pharma program but are detached from the specifics of individual markets because they operate from headquarters. Essential stakeholders like ministries of health, importers, distributors, etc., are often left out of the critical conversations about making drug markets accessible for all.

"To begin with, we often separate the public and private sectors as two distinct markets. Instead, we should perceive them as a single market, with different segments interdependent on each other."

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We have popularized the term “market shaping” in global health, to mean interventions aimed at influencing market dynamics for a social or developmental goal. However, most market shaping strategies primarily focus on global or manufacturer-level solutions, failing to effectively address country-level interventions. This can be attributed to the lack of local market understanding required to design a robust strategy for the private sector.

One big problem is that the private sector is also highly fragmented. This makes it unclear as to where to start to engage even when you are well intentioned. With no clear point of engagement, even well-intentioned initiatives face difficulty. In many countries, associations for distributors and drug imports are absent, making it challenging to understand and address the problem of organizing and shaping the private sector to facilitate affordable access to drugs. Therefore, the private sector also needs better organization for easier engagement.

Furthermore, we must be prepared to face local market dynamics realistically and respond with tools that are fit for purpose. The phrase “fit for purpose” is critical here as we often try to impose preconceived solutions rather than understanding the problem and developing suitable solutions. Some of these solutions might not be glamorous or part of the global health market shaping vocabulary, but their efficacy should encourage us to explore them, undeterred by corporate definitions of what's acceptable.

"One big problem is that the private sector is also highly fragmented. This makes it unclear as to where to start to engage even when you are well intentioned. "

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An inconvenient truth in global health is that local distributors are an essential part of the product value chain and their intent, unlike global health professionals, is to achieve sustainable commercial returns. The intent here is not to absolve distributors from all their wrongdoing, because they do wield a lot of influence and tend to misuse it for financial gains. However, we should also acknowledge the risks that distributors take, which contribute to product markup. These risks include high-interest loans for product procurement, significant import and regulatory approval costs, increased distribution and marketing costs in remote areas, potential losses due to theft or leakage, and kickbacks. Therefore, addressing these local market challenges with appropriate market shaping instruments is of paramount importance.

Question Three: Let’s come back to this issue of local or autonomous manufacturing of drugs and other health products in African countries. There is great momentum and we are seeing fantastic plans and positions taking shape around African science, innovation, and drug discovery, but still a major gap in the thinking and experience on what it means to commercialize those. What is your assessment of this?

Olawale Ajose: In the past couple of years, we have seen a significant influx of funds, both from donors and private entities, aimed at augmenting Africa's manufacturing capacity in vaccines, therapeutics, and diagnostics. Organizations like WHO are making strides in enhancing the skills and knowledge of Africans to operate within these manufacturing plants. I think this is great for us as a continent. We need to be self-sufficient and having the infrastructure and expertise is a critical first step. We need other things too (e.g. increasing activity of drug discovery and clinical trial) but that’s a conversation for another day.  

From my involvement in numerous discussions, it has become evident that the dialog around the commercial resources and requirements needed to actualize these ambitious projects isn't sufficient. The crux of the matter is: who will purchase the vaccines or diagnostics manufactured on the continent? Do we intend to sell exclusively within Africa, or do we foresee a future where we can export beyond the African continent? Understanding what it would take to sell and distribute both within and outside of Africa is crucial, as is identifying the kind of commercial structures and expertise these companies would need. Questions about how to finance the working capital required before breaking even and creating demand for the products produced are also vital.

"However, we should also acknowledge the risks that distributors take, which contribute to product markup. These risks include high-interest loans for product procurement, significant import and regulatory approval costs, increased distribution and marketing costs in remote areas, potential losses due to theft or leakage, and kickbacks."

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The other significant concern is our ability to compete with Asian prices and the implications for the private sector markets. If our strategy involves selling vaccines to entities like Gavi and/or local governments, then perhaps buying a more expensive locally manufactured vaccine makes sense to sustain the local economy. However, if we intend to sell to the private market, pricing becomes a critical factor. Hence, if we want to help African countries reduce reliance on global supply chains and enhance sustainability through local manufacturing, we may need to design specific policies and market shaping instruments to incentivize local private sector players to purchase pricier made-in-Africa products.

If an African private buyer or government agency needs to purchase a large quantity of vaccines and realizes that it's more cost-effective to buy from Asia, the likelihood is that they will opt for the cheaper alternative. The point here is that despite the ongoing manufacturing efforts, there seems to be a lack of understanding of the complexities of Africa's private sector market. Many well-intentioned efforts, primarily driven by a public health perspective, overlook the central role and intricacies of our private markets. Political and regulatory factors could also influence procurement decisions and may not necessarily favor "Made in Africa" vaccines or diagnostics. We have seen instances where African countries preferred vaccines from other countries over the ones manufactured locally. This shows that operating under the assumption that local manufacturing automatically results in procurement orders is a fallacy. It is critical to have the right policy framework in place that prioritizes and enforces the procurement of locally made healthcare products.

What I find concerning is that there is not enough focus on the commercial aspect of these endeavors. I also worry about the sustainability of procurement promises made by agencies. The need for robust contingency plans cannot be overstated—we simply cannot afford to fail.

"The point here is that despite the ongoing manufacturing efforts, there seems to be a lack of understanding of the complexities of Africa's private sector market. Many well-intentioned efforts, primarily driven by a public health perspective, overlook the central role and intricacies of our private markets. "

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Question Four: Where do we stand with regulatory harmonization, and what role is Market Access Africa playing to accelerate product introduction through regulatory support?

Olawale Ajose: There has been considerable progress on the regulatory harmonization front, particularly with the establishment of the African Medicines Agency and the regional harmonization activities. There 'is also growing ambition among national regulators to achieve maturity levels 3 and 4.  

"A robust and autonomous regulatory authority is essential for public health, tasked with safeguarding our nations from substandard and counterfeit products. Many of these agencies are currently challenged by limited revenues derived solely from registrations. Therefore, it's crucial that they develop other revenue streams."

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Given the current landscape, which is not fully harmonized yet, the available options for companies are to identify their target markets and submit their dossiers to each National Regulatory Authority (NRA), or to explore a regional harmonization mechanism. This implies familiarizing themselves with the regulatory processes in their target markets or relying on a third-party organization for assistance through this process. At Market Access Africa, we aim to accelerate this process by assembling a team of regulatory experts who can guide innovators through the registration process, ensuring that new innovations reach the African market faster than in the past. Our pool of regulatory experts, located across the continent, collectively have a vast amount of experience in registering numerous products in multiple markets throughout Africa.  

In parallel, we're also collaborating with regulatory agencies to help them rethink their business models for increased sustainability and independence. A robust and autonomous regulatory authority is essential for public health, tasked with safeguarding our nations from substandard and counterfeit products. Many of these agencies are currently challenged by limited revenues derived solely from registrations. Therefore, it's crucial that they develop other revenue streams. To this end, we are working with various regulatory bodies to explore potential partnerships and additional service operations that can generate income, thereby reducing their reliance on industry fees and foreign funds for fulfilling their mandate.