VIEWPOINT

Local markets for global health technologies: lessonslearned from advancing 6 new productsDipika Mathur Matthias,a Catharine H Taylor,b Debjeet Sen,c Mutsumi Metzlera

Key components to support local institutional and consumer markets are: supply chain, finance, clinicaluse, and consumer use. Key lessons learned: (1) Build supply and demand simultaneously. (2) Support alead organization to drive the introduction process. (3) Plan for scale up from the start. (4) Profitability forthe private sector is an absolute.

INTRODUCTION

G lobal procurement mechanisms are a majorpotent force in successful global health program-

ming. Such mechanisms purchase key technologies suchas vaccines, antiretroviral drugs, and contraceptives fordistribution across many countries. However, many morecritical technologies, particularly those affecting maternaland newborn health, require advancement of localmarkets for ultimate sustainability and public healthimpact. Unfortunately, many of these markets sufferfrom a basic dysfunction: the lack of sufficient marketincentive to stimulate production and distribution as wellas complicated local supply chains and delivery systemsto reach those most in need.

In this article, we present 6 case studies oftechnologies recently introduced into developing-countrymarkets (Oxytocin in Uniject, careHPV, Helping BabiesBreathe, Woman’s Condom, Safe Water, and Ultra Rice).We use a market introduction framework as an organiz-ing structure to highlight key elements that may havecontributed to varying degrees of success and, whenlacking, to certain challenges in these markets. Throughthese examples, we hope to contribute to the globaldiscussion on best practices for creating healthy marketsas the global health community works together toaccelerate access to lifesaving technologies.

MARKET TYPES: GLOBAL, INSTITUTIONAL, ANDCONSUMER

To cultivate the market for a given commodity, it isimportant to first understand key characteristics of

that market. Although the boundaries between differ-ent market classifications are somewhat permeable,there are generally 3 types of markets for global healthtechnologies:

N Globally coordinated markets, where technolo-gies such as vaccines are procured and financedthrough centralized channels. Typically, in thesetypes of markets a small number of buyers, such asthe GAVI Alliance (formerly the Global Alliance forVaccines and Immunization), the United NationsChildren’s Fund (UNICEF), and the Global Fund toFight AIDS, Tuberculosis and Malaria, purchaselarge volumes of product through pooled procure-ment at low prices, which are then distributedthrough relatively well-organized channels.

N Local institutional markets, in which nationalinstitutions, such as a ministry of health, purchasetechnologies such as drugs used for obstetric care,whether through their own resources or from donorgrants or loans. These markets require strong facilityinputs, such as skilled health workers, complexclinical protocols to ensure proper use of commod-ities, robust logistics systems to ensure commoditiesand equipment remain continuously available athealth facilities, and local health budgets.

N Consumer markets, in which a large number ofdisaggregated consumers buy health goods, such asoral rehydration salts or water filters, for their ownuse. Although the value proposition may be clearerand the products easier to use than those ininstitutional markets, these products require pur-chase by consumers, who often do not considerhealth-related purchases a high priority. Thesemarkets also require significant investments indistribution and marketing by private-sector com-panies that naturally prefer to serve consumers

a PATH, Seattle, WA, USA.b PATH, Washington, DC, USA. Now with Management Sciences for Health,Arlington, VA, USA.c PATH, Washington, DC, USA.

Correspondence to Dipika Mathur Matthias (dmatthi@path.org).

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with higher incomes due to the potential forgreater profit margins and more consistentdemand.

The crucial role of the latter two, or ‘‘local,’’markets is amply demonstrated by the work of theUN Commission on Life-Saving Commodities forWomen and Children (UNCoLSC), which is lead-ing global efforts to improve access to 13 poten-tially lifesaving commodities essential to maternaland neonatal health (Table). The Commission hasdeveloped key recommendations to address themost critical bottlenecks facing product introduc-tion, from innovation and global market-shapingto local delivery and demand generation.

Compared with global procurement, bothinstitutional and consumer markets have lessdefined advocacy and policy pathways and oftensuffer from lack of donor funding to continuepurchasing the product beyond initial introductionpilots, as they do not have large-scale, committedfunding mechanisms behind them. Manufacturersare often left with insufficient demand to continuesupply, while buyers have limited experience withand understanding of the value of the technologyand, hence, have weak motivation to purchase.

Beyond the lack of financing, there areseveral additional reasons that these marketshave not been effectively established. The frame-work we offer attempts to capture the broadrange of elements required for effective intro-duction of global health products into localinstitutional and consumer markets.

MARKET INTRODUCTION FRAMEWORK

A broad search of the published literature revealedthat few market introduction frameworks forglobal health technologies exist. Most playersinvolved in shaping global health markets rely oninformal, unpublished frameworks that generallydescribe the market problems (such as highprice), identify specific causes (such as risk formanufacturers), and then focus on interventionsto address the root cause (such as enhancingdemand through advanced purchase).1 Theseapproaches tend to focus on the traditionalmarket levers of price, volume, information, andquality. They are useful analytical frameworksthat can help us identify which market interven-tions might address the problem most effectively.

However, by defining the market introductionsphere more broadly, we are better able toconsider the larger range of causes for success orfailure in these markets, and consequently, a

broader range of potential interventions. Thisthinking has been captured in some excellentframeworks addressing the diffusion of healthinnovations. For example, Atun et al. point out theneed to clearly delineate the problem, the will-ingness of major stakeholders to support adop-tion, and the readiness of health systemsinfrastructure.2 Free also considers a wide rangeof factors, such as appropriate design of thetechnology and engagement of gatekeepers.3

Our market introduction framework buildson this critical systems-wide thinking; it is amodified version of a framework initially devel-oped by Hozumi et al., through interviews withstakeholders with scale-up experience and

TABLE. Market Classification for UNCoLSC Technologies

Technology

GloballyCoordinated

Markets

LocalInstitutional

MarketsConsumerMarkets

Maternal Health

Oxytocin 3 3

Misoprostol 3 3

Magnesium sulfate 3 3

Newborn Health

Antenatalcorticosteroids

3

Injectable antibiotics 3 3

Neonatal resuscitation 3

Chlorhexidine 3 3

Family Planning

Female condoms 3 3 3

Implants 3 3

Emergencycontraception

3 3

Child Health

Oral rehydration salts 3 3

Amoxicillin 3 3

Zinc 3 3

Abbreviation: UNCoLSC, UN Commission on Life-Saving Commodities forWomen and Children.

In institutional andconsumer markets,manufacturers areoften left withinsufficient demandto continue supply,while buyers havelimited experiencewith andunderstanding ofthe value of thetechnology.

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through retrospective evaluations of globalhealth interventions advanced by PATH.4 Thisempirically driven framework serves as more of a‘‘how-to’’ guide than an analytical framework. Itfocuses on critical market design factors relatedto the introduction of global health products,assuming that external elements, such as astrong leader and relevance of the product tothe global health context, are already in place.(Often, even relevant products with strongchampions still fail to reach market.)

Developing, deploying, and scaling up globalhealth technologies is a multistep, iterative processtaking many years, starting with research/designand development/validation, through regulatoryapproval, introduction, and scale up. This frame-work elaborates only on the introduction phase ofthis typical value chain for technologies.

Introduction, particularly for institutional andconsumer markets, has several elements thatmust come together to ensure both the availabilityof the commodity and its effective use. In fact, theintroduction phase is often where global healthtechnologies destined for local markets falter. Thisphase can be broken down into its essentialcomponents of both supply and demand, asillustrated by the 4 pathways in the Figure:(1) supply chain, (2) finance, (3) clinical use,

and (4) consumer use. The supply chain andfinance pathways are relevant to both institu-tional and consumer markets, while clinical usepertains only to institutional markets andconsumer use only to consumer markets. Thesecritical pathways tend to run in parallel.

1. Supply Chain PathwayWithin the introduction phase, the supply chainpathway in both institutional and consumermarkets focuses on conventional supply-chaindevelopment. For technologies that are capital-intensive or where quality manufacturing cannot beestablished locally, a centralized, global manufac-turer may be the most effective commercializationstrategy. However, as quality improves, technologieshave increasingly been licensed to regional or localmanufacturers, and appropriate manufacturingequipment needs to be purchased. A formal transferof the technology is then conducted and manufac-turing is validated. Also, distribution channels toappropriate clinical facilities, retail stores, and otheroutlets need to be established.

2. Finance PathwayThe finance pathway focuses on enhancingdemand through appropriate financing for thebuyers of these technologies. For institutional

FIGURE. Framework for Introducing Global Health Technologies Into Local Markets

By definingthe marketintroductionsphere morebroadly, we arebetter able toconsider the largerrange of causesfor success orfailure in thesemarkets.

The introductionphase is oftenwhere globalhealth technologiesdestined for localmarkets falter.

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markets, advocacy is often required to ensureappropriate institutional financing mechanisms,whether through government or private facilities,to support ongoing clinical use of the technology.This requires cultivating multiple champions inthe ministries of health and finance to advocatethe necessary budget allocations. Tiered pricingstrategies, vouchers, and full subsidies may needto be considered by institutional buyers who passa portion of their costs to distributors, healthfacilities, or consumers. Consumer products mayalso require financing, sometimes in the form oflow-cost loans, particularly for more costly dur-able goods such as water filtration systems; low-income consumers often cannot pay the full costupfront. These financing mechanisms can beprovided through microfinance institutions andother businesses focused on consumer finance.Sometimes incentives, such as longer paybackperiods, are needed for consumers to takeadvantage of these financing mechanisms.

3. Clinical Use PathwayA third and very important introduction pathway,particularly for institutional markets, is creatingdemand among providers and institutions bydeveloping the clinical capacity to use the technol-ogy within health facilities. This is a rigorousundertaking in itself; it entails generating opera-tional evidence on use of the technology in clinicsettings, developing formal clinical policy to guidehow the technology would be used appropriatelywithin a clinical protocol, training to ensure thathealth workers understand the revised clinicalguidelines, and establishing enforcement mecha-nisms, such as supervisory systems, to ensuresustained use. Lack of movement down thispathway has significantly slowed the adoption ofmany new global health technologies.

4. Consumer Use PathwayThe demand side for consumer markets usuallyrequires social marketing to influence consumerpurchase of products sold through retail channels,which may or may not be partially subsidized.Traditional behavior-change techniques also areused to encourage uptake of consumer productsdistributed through public and private-sectorchannels. For instance, village leaders may discusshealthy behaviors with mothers groups; in doingso, they may encourage the use of health productsfor their family, such as oral rehydration salts totreat diarrhea or soap to prevent infection.

These introduction activities, if carefully orche-strated and pursued in parallel, provide the basisfor successful market introduction of global healthproducts. As noted in the Figure, introductionsuccess is achieved through early signs of marketpenetration, sustainability through public, private,and nongovernmental partners, and, ultimately,health impact in target markets. More significantpenetration of these outcomes would indicateachievement of scale. We use this introductionframework in a retrospective analysis of 6 tech-nologies—3 from institutional markets and 3 fromconsumer markets—each with varying degrees ofsuccess and failure. This framework can also serveas a guide for new market introduction efforts.

CASE STUDIES FROM INSTITUTIONALMARKETS

Oxytocin in Uniject* Injection System:Supply Chain and Financing Hinder MarketIntroductionOxytocin in Uniject is an example of anintroduction pathway complicated by high costs,leading to difficulty in establishing the supplychain with manufacturers and distribution part-ners, and, consequently, a financing pathway aswell. Thus, the market for Oxytocin in Unijecthas not yet been established.

There is a strong public health case for thistechnology. Hemorrhage is the leading cause ofmaternal death in low-income countries, respon-sible for an estimated one-third of such deathsannually,5 and postpartum hemorrhage accountsfor the majority of obstetric hemorrhage cases.6

For prevention of postpartum hemorrhage, oxy-tocin (10 IU) is the drug of choice, recommendedby the World Health Organization (WHO).

Oxytocin is temperature-sensitive and needs tobe injected intramuscularly. Its use has generallybeen restricted to medically trained staff in healthfacilities. Oxytocin in Uniject was developed tosimplify oxytocin administration through a single-use, prefilled device that delivers the correct dose.In deliveries attended by auxiliary health workers,Oxytocin in Uniject provides a feasible alternativefor delivery of prophylactic oxytocin.

There is good-quality clinical and operationalevidence to support clinical policy permitting useof Oxytocin in Uniject by auxiliary health work-ers and outside facilities, including effectivenessand feasibility studies.7–9 The product attributes

A very importantintroductionpathwayis creatingdemand bydevelopingcapacity to use thetechnology inhealth facilities.

* Uniject is a trademark of BD.

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have been tested to ensure that they meet theneed at both the community and higher levels ofhealth service. A recent trial in Ghana demon-strated the feasibility at the community level ofhome delivery for prevention and early treat-ment.10,11 Thus, the clinical use pathway haslargely been followed, even though in somecountries, medical associations have objected topolicies that would allow for task shifting ofoxytocin administration to community healthcare workers. However, the greatest challenge forOxytocin in Uniject has been in reachingsustainable levels of supply and demand-sidefinancing to catalyze the market.

Cost has been the root problem. Currentpricing is more than US$1 per unit, which farexceeds the approximately $0.25 cost of a needle,syringe, and ampoule of oxytocin. To date, buyersare unwilling to pay the premium for oxytocin ina prefilled Uniject device. Furthermore, it is not aneeded product at higher levels of the healthsystem, as facilities are well-stocked with need-les, syringes, and ampoules of oxytocin. A studyin Argentina, however, has demonstrated highercompliance with Oxytocin in Uniject than withconventional administration.12

One of the reasons for the higher cost ofOxytocin in Uniject is that it requires pharma-ceutical manufacturers to invest significantupfront capital to procure and commissionspecialized filling and packaging equipment.Donor funding to defray these costs has notbeen available to the various manufacturers of

oxytocin. Additionally, as with any drug in a newform of primary packaging, the pharmaceuticalproducer would need to apply for and obtaindrug regulatory approval in each country wherethe product would be sold—a long and expensiveprocess that creates further disincentive tosupply. This is especially true for those drugand vaccine manufacturers that are in highlycompetitive generic markets, such as oxytocin, asthe investment may not shift in market share oftheir product.

We have collaborated with a number ofpharmaceutical producers over the past decadeto try to establish a sustainable supply ofOxytocin in Uniject. Three producers went asfar as producing pilot batches and undertakingthe costly stability studies. Due to the lack ofclear demand at a price that would be commer-cially attractive, 2 producers dropped the projectbefore completing development and regulatoryapproval. One producer stated it had cost close toUS$100,000 to conduct the stability studies toWHO’s prequalification standards. If that produ-cer could theoretically earn a $0.20 per-doseprofit above the manufacturing cost, the com-pany would have to sell 500,000 doses just torecoup the cost of the stability study, which isonly one component of the total investmentneeded to produce and sell Oxytocin in Uniject.The one producer that took Oxytocin in Unijectto market in a number of Latin Americancountries has not achieved sustainable sales inprivate-sector channels, and also, as discussed,the institutional markets have not developed. Itis not clear whether that producer will keepOxytocin in Uniject in its product line.

Lack of movement down the finance path-way, also due to price, has further contributed tothe difficulty of establishing a sustainable mar-ket for the product. Various groups have modeledthe cost-effectiveness of Oxytocin in Uniject andhave found that its value proposition remainsvery sensitive to the final price of the product.The current high price has made it difficultto advocate the product’s cost-effectiveness,leading to the lack of financial commitmentfrom institutional buyers.

Lessons LearnedRegardless of the potential public health benefitand apparent elegance of the approach, aninnovation must be extremely affordable relativeto the alternatives for institutional uptake tooccur. Simply put, we now understand the

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Oxytocin in Uniject delivers oxytocin to prevent postpartum hemorrhagethrough a single-use, prefilled device.

For thosemanufacturers inhighly competitivemarkets, aninvestment in anew deliverymechanism maynot shift marketshare of theirproduct.

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difficulty of putting an inexpensive product suchas oxytocin into a relatively expensive injectiondevice such as Uniject.

Additionally, we have learned that, in theabsence of a concerted demand-side intervention,market mechanisms are unlikely to producesufficient demand to yield significant economiesof scale. We had expected the unit price to dropover time as manufacturers achieved economiesof scale through high-volume production. We alsoexpected sales in private markets at higher pricesto cross-subsidize lower-priced sales in public-sector markets. Neither scenario has materialized.

We have also learned to moderate our expecta-tions of how much drug and vaccine manufac-turers in highly competitive generic productmarkets will invest in regulatory and marketintroduction of new delivery mechanisms for theirproducts, even with support from the global healthcommunity, and especially if demand is unclear.

Finally, we learned that, if pricing does not fallwithin the target range for institutional buyers asdevelopment, manufacturing, and introductionprogress, the public health community mustconsider withdrawing further support sooner inorder to redirect energy and resources towardmore marketable endeavors that may conse-quently have more impact. Without marketpenetration, it follows that sustainability andhealth impact have yet to be realized from thisproduct.

careHPV{: Lack of Operational Evidence onClinical Use Slows Pace of AdoptionDespite a clear supply pathway and good evidenceof its effectiveness, use of careHPV remainslimited. The careHPV test is an example of howlack of movement down the clinical use pathway,starting with the need for operational evidence ofuse within facilities, has slowed the pace ofadoption.

The careHPV test is a screening test that detectsthe presence of human papillomavirus (HPV), theprimary cause of cervical cancer, through cervicalor vaginal samples. It was specifically designed foruse in developing countries through collaborationbetween its manufacturer and PATH. Clinicalstudies, involving more than 20,000 women in3 countries, have established that careHPV isalmost twice as accurate as existing screeningmethods, such as the Pap Smear and VisualInspection by Acid (VIA), when used as a primary

screening method.13,14 Although the cost per testfor careHPV is higher than for other screeningmethods, its lower rate of false negatives make it astrong public health tool, considering the highmorbidity and mortality if cervical cancer goesundetected. The lower rate of false positives alsoavoids unnecessary costs associated with followup. Finally, since careHPV can be used with vaginalsamples, it can help avoid a pelvic exam, assumingclinical guidelines are in place for self-sampling.However, no country has yet adopted such apractice.

Stakeholder interviews revealed that, in gen-eral, clinicians in developing countries are notclear about which screening-to-treatment strate-gies to use for patients with HPV, since use of HPVtests as the primary screening method is new toboth developed and developing countries. WHOguidelines were finally released in 2013, statingthat practitioners can go directly from screeningwith careHPV to treatment in low-resource set-tings, without the need for cytology followed by adiagnostic test such as colposcopy.15 It will taketime and effort for these guidelines to be main-streamed into clinical practice.

In addition, policy makers in developingcountries are uncertain about how to design theimplementation program most appropriate fortheir local situation as well as about theimplications of that approach for their humanand financial resources. For instance, sincecareHPV requires processing at a lab, it is unclearhow many lab facilities should be enabled withina given district’s unique size and capacities inorder to maximize both cost efficiencies andappropriate coverage.

Lessons LearnedOne key lesson learned from the careHPVexperience is the clear need for operationalstudies to answer many of these questions, sothat appropriate clinical guidelines can be estab-lished. This evidence is especially important inthe absence of model clinical policies from thedeveloped world that can be followed. In addi-tion, these studies may need to be pursued inseveral countries to test feasibility in differentclinical environments. Simultaneously, financialmechanisms for purchase by ministries of healthneed to be identified and developed to create aviable and sustainable market. However, sincethe financial mechanisms may not be establishedbefore the evidence is generated and clinical usepolicies are modified, additional funding from{ careHPV is a trademark of QIAGEN.

Operationalevidence isespeciallyimportant in theabsence of clinicaluse policies fromthe developedworld that can befollowed.

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the global health donor community will berequired. There is simply insufficient marketincentive for the private sector to invest in theoperational studies and advocacy required forenabling this market. Without these elements inplace, the pace of adoption for careHPV willcontinue to be slow. Again, due to the lack ofmarket penetration at this point, neither sustain-ability nor health impact has yet been achieved.

Helping Babies Breathe: Well-CoordinatedSupply Chain, Financing, and ClinicalCapacity Pathways Provide a Model forSuccessThe Helping Babies Breathe (HBB) initiativeexemplifies the successful introduction of medicalequipment into local institutional markets throughwell-coordinated supply chain, financing, andclinical use pathways. HBB’s success is attributableto the U.S. Agency for International Development’s(USAID) strong Global Development Alliances(GDAs) model, as well as to the commitment ofLaerdal, the key equipment supplier and a found-ing member of HBB, to saving the lives ofnewborns in low-resource countries. As such,HBB took the role of a ‘‘backbone organization’’to orchestrate the various actors and activitiesalong the various introduction pathways.

As a GDA funded by USAID, HBB nowincludes 20 partners from the private and publicsectors. In 2010, HBB began offering evidence-based training and high-quality, affordable neo-natal resuscitation equipment to birth attendantsin developing countries. As of November 2013,60 countries had implemented the HBB curricu-lum, of which 18 have national plans coordinatedby governments. In the 60 countries, approxi-mately 130,000 health care providers were trained.In addition, HBB supplied 120,000 bag-and-maskresuscitation devices, 150,000 suction bulbs, and50,000 simulators on a not-for-profit basis, anddonated another 4,500 HBB training kits.

Laerdal supplies high-quality resuscitationequipment at reasonable cost to HBB partners thatsupport the program. Laerdal has also donatedsimulators and other equipment to enhance useand spark further demand. Additionally, HBB’smaster training programs, a critical element of theclinical use pathway, provides health care person-nel with important operational experience withresuscitation equipment. In selected developingcountries, Laerdal also offers grants to supportimplementation of the training program as wellas guidelines on purchasing and maintaining

equipment. The training not only increases com-petencies of birth attendants but also meets theirlatent need for higher-quality resuscitation equip-ment. This is important groundwork for creatingsustainable, institutional demand from withinpublic-sector facilities.

Lessons LearnedClearly, HBB is a model to follow. HBB hasstimulated the supply side of the market throughaffordable equipment and the demand sidethrough training and implementation grants. Inturn, this has created a viable market, maintain-ing engagement of the many partners andstakeholders involved. While HBB still needs toshift from being mostly donor-driven to country-driven, the initiative’s effective coordination roleand the demand it has helped to establish bynormalizing use of these products in clinicsettings bodes well for adoption and scale up ofthis program by public health institutions indeveloping countries. It is likely that the role ofthe market coordinator is an underused mechan-ism in the uptake of global health products. Thisexample demonstrates clear market penetration,with sustainability now emerging as HBB train-ing guidelines are adopted by various ministriesof health and incorporated into global healthprojects related to newborn resuscitation.Significant health impact is likely to follow.

CASE STUDIES FROM CONSUMERMARKETS

Woman’s Condom: Lack of CoordinationBetween Supply and Demand Limit MarketPenetrationThe Woman’s Condom exemplifies the challengeof trying to establish a sustainable supply anddistribution chain for a new product when it isnot coordinated with an equally well-resourced,demand-generation effort.

The Woman’s Condom is a new femalecondom whose design and early-stage validationwas funded initially by USAID to expand contra-ceptive options for women in developing coun-tries. PATH and its research partners employed auser-centered design process to develop a prod-uct that has proved to be highly acceptable.16–19

User acceptability has been a key barrier to use ofother female condom products.

Female condoms are primarily a consumerproduct, in which the decision to purchase anduse the product lies with the end user. However,

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during the first 20 years of introduction, femalecondom purchasers largely have been bilateraland multilateral institutions, such as USAID, theUnited Nations Population Fund (UNFPA), andministries of health, that distribute condomsthrough government-sponsored programs at freeor highly subsidized rates. Although this is alegitimate strategy for introducing a new productclass in the absence of robust funding to supportdemand generation, it has not allowed femalecondoms to become established as a consumerclass product. Manufacturers have focused moreattention on sales to institutional buyers, andwhile new female condom products, such as theWoman’s Condom, are helping to enlarge anddifferentiate the class, consumers are still condi-tioned to receiving the product for free.

The absence of sustained demand generationis not the only issue. Female condoms are morecostly than male condoms, which further reducesdemand from both institutional and consumerbuyers. For instance, in 2009, donors purchased71 male condoms for every 1 female condom.20

To address these issues, PATH and its manu-facturing partner, Dahua Medical ApparatusCompany of Shanghai, China, have established apartnership to build a sustainable supply chain forthe Woman’s Condom, which leverages bothpublic-sector and commercial retail channels. Themarket penetration strategy is to first generaterevenue from private-sector sales to help coverDahua’s costs, thus allowing the company to offermore affordable pricing to low-resources settingsserved by the public sector in the longer term.

The Woman’s Condom has received SouthAfrica Bureau of Standards certification marking(2013), Shanghai Food and Drug Administrationapproval (2011), and CE (Conformite Europeene, orEuropean Conformity) marking (2010), whichallow for distribution and marketing in private-sector retail channels in South Africa, China, andEurope, respectively. Early introduction efforts inChina and South Africa are underway but havealready faced challenges. One significant challengeis finding in-country distribution partners willingto invest in the extensive marketing and salesrequired to generate demand for an unfamiliarproduct. The cross-subsidy model requires suffi-cient sales in the commercial sector to cover thecosts not recouped through lower prices offered tothe public sector. However, due to the investmentinvolved, the revenue from commercial sales isdifficult to generate. In China, for example, public-sector sales have exceeded commercial sales,

forcing Dahua to sell the product below costs atthis time. This situation further reduces Dahua’sability and incentive to invest in the marketingnecessary to cultivate private-sector markets.

Lessons LearnedA key lesson is the need to pursue aggressivedemand-generation efforts simultaneously whileestablishing supply and distribution chains inorder to create strong incentives for actors alongthe supply chain to engage. Several demand-sideelements have been built into the project, includingmarket research with women in China and SouthAfrica, market tests to target consumer markets,and advocacy with the governments in bothcountries to create a supportive policy environmentfor female condoms more generally. However, theinvestment and scale of the demand generationeffort has likely been underappreciated. In fact, noreal social marketing campaign has yet beenlaunched in either country. Due to the inherentrisks involved for manufacturers and distributors, amore significant investment by the donor commu-nity may be warranted in order to catalyze thismarket. Similar to other examples, without marketpenetration, sustainability and health impact haveyet to be achieved with this product.

Safe Water: Coordinated Supply,Financing, and Consumer DemandDemonstrate Viability of MarketOur Safe Water Project has experimented withseveral pilot strategies for developing the retailmarket to sell household water filters to con-

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The Woman’s Condom employs a user-centered design process to improveacceptability.

A significantinvestment indemandgeneration isneeded fornew classesof consumerproducts.

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sumers at the base of the economic pyramid. Themost successful strategies have involved tightcoordination between supply, availability offinancing, and consumer demand generationefforts for enhancing the perceived value of theproduct.

A pilot study in Madhya Pradesh, India,offered consumers free water filters, manufac-tured by PATH’s commercial partner, HindustanUnilever Limited (HUL), in an effort to drawthem into the market. Although 44% of theseconsumers later took a loan for 2 replacementcartridges from our microfinance partner,Spandana Sphoorty Financial Limited, 35% ofconsumers reported gifting or selling the waterfilter. For those who used the product, currentand consistent use dropped to 19.1% after6 months, and then eventually to zero at10 months.21 Since the water filter was a‘‘giveaway,’’ neither the salespeople nor con-sumers appreciated its value. Therefore, sales-people did not have an incentive to make astrong sales pitch.

In contrast, in Tamil Nadu (Erode), India, thesame water filter was offered to consumers with-out a subsidy. After 10 months, 21% of consumersreported currently using the filters,20 suggestingthat the strategy succeeded in attracting con-sumers who valued the product and decided to tryit based on their perception of its merits.

The strongest results were observed inCambodia, where a water filter (Super Tunsai)manufactured by Hydrologic Social Enterprisewas paired with a loan scheme offered by the

microfinance institution VisionFund. The originalTunsai water filter was not perceived as desirablebecause of its very basic design and large subsidiesto support its use. We worked with Hydrologic toredesign the original Tunsai filter to make it moreappealing to customers—both from an aestheticand functional point of view. The redesignedSuper Tunsai filter was then marketed as adesirable product targeting consumers’ aspira-tions toward attaining middle-class status. Inspite of the fact that the Super Tunsai cost twice asmuch as the original Tunsai filter, customers werewilling to take full loans from VisionFund topurchase the product. After 10 months, 39% ofconsumers reported currently using the filter.21

Lessons LearnedPricing at full retail value is preferable tosubsidies, as it attracts more committedconsumers and avoids undermining the valueof the product, as demonstrated in the TamilNadu pilot. We have observed an even strongereffect in Cambodia when this strategy wascomplemented with social marketing arounddesirability and affordable replacement cartridgecosts. In fact, Hydrologic’s replacement car-tridges are approximately US$5–$10 per yearcompared with $25 for the HUL filter used inIndia. Hydrologic and VisionFund are nowscaling up their winning strategy to 11 provincesin Cambodia. Additionally, PATH is using thebest practices from its water filter pilots tolaunch new programs, including a plan to makelatrines available in Cambodia through similarschemes, as well as cook stoves, solar lamps, andinsecticide-treated bed nets in other markets. TheCambodia pilot, in particular, has demonstratedreasonable market penetration, while signs ofsustainability and health impact are emerging.

Ultra Rice Fortification Technology{:Sustainability Plans for Both Supply andDemand Drive Scale UpEfforts to introduce Ultra Rice in Brazil showhow creating pillars of sustainability on both thesupply and demand sides of the market canenable replication and scale up by local organiza-tions. While PATH’s Ultra Rice technology has a15-year history of fits and starts, the approach inBrazil has created the knowledge and under-standing of how to achieve sustainability before

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A woman in India uses a household water filter.

After marketingthe redesignedSuper Tunsaiwater filter towardconsumers’aspirations toattain middle-classstatus, useimproved amongconsumers.

{ Ultra Rice is a registered U.S. trademark of Bon DenteInternational, Inc.

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the end of each country-specific funding streamunder the umbrella project.

The Ultra Rice technology is a formulationand method for creating reconstituted rice grainspacked with micronutrients such as iron, thia-min, zinc, and folic acid. When blended withconventional rice, typically at a 1:100 ratio, theresulting fortified rice can provide up to 50% ofthe recommended daily intake of a range ofmicronutrients. This helps bridge dietary gaps inmicronutrient intake, especially among popula-tions for whom rice constitutes a large portion oftheir caloric intake.

In Brazil, the market introduction process forfortified rice started by transferring the technol-ogy to local companies, including UrbanoAgroindustrial, one of the nation’s largest ricemillers, and Adorella Aliementos, a medium-sized pasta manufacturer. These companies con-tinue to produce fortified rice kernels, which willnot only be incorporated into their own fortifiedrice products but, as an obligation under PATH’slicense, also be sold to other millers in order tocreate a competitive market. Additionally, wehave directly licensed the Ultra Rice technologyto a preeminent agribusiness university, theFederal University of Vicosa, giving that institu-tion both the right and the obligation to licensethe technology to additional manufacturers inthe future as the market grows. Establishing asmall subset of current suppliers as well as anengine for further growth bodes well for supply-side sustainability.

On the demand side, instead of marketingthe product primarily to lower-income marketsegments, which suffer disproportionately fromthe consequences of micronutrient malnutrition,we are targeting the widest possible range ofconsumers. In order to establish consumerconfidence, the social marketing campaign isbuilt around a quality seal on the packaged rice,conveying aspiration for the product. The FederalUniversity of Vicosa and the national rice millersassociation, Abiarroz, verify the quality of thefortified grains and homogeneity of their blendinto traditional rice. This process is open to allrice brands, including those typically purchasedby consumers with lower incomes. While millersof both higher- and medium-price rice brandshave led the way, lower-priced brands are likelyto move through the verification process in duecourse, thus leveling the playing field withrespect to fortified rice quality. This marketingstrategy avoids any stigma that might develop if

only the lower-cost brands were fortified and hasalready reached hundreds of thousands of con-sumers in the first 6 months since the launch offortified rice in commercial retail markets.

Additionally, to further enhance demand, wehave produced marketing materials for our part-ners and have negotiated rights to use cartooncharacters owned by Turma da Monica (a local‘‘Disney equivalent’’), which are well-recognizedby Brazilians. Prior to the end of the project, weplan to have these rights transferred to Abiarroz, sothat the cartoon characters continue to be used asambassadors to the product in order to stimulatedemand. Also, we have enlisted a number of well-known and highly respected supporters, rangingfrom noted journalists to well-recognized healthexperts, who have now established micronutrientmalnutrition as one of their social causes.

Lessons LearnedAlthough not all elements of this marketpenetration strategy can be replicated across ricemarkets in Africa and Asia, we have learned thevalue of closely coordinating the various intro-duction pathways as well as building sustain-ability into the product introduction plans fromthe outset. Donor-supported projects that aredesigned to stimulate global health markets aremost successful when engines of further growthfor both supply and demand are established wellbefore project funding expires. In other words,planning for sustainability should commence atthe start of the project, not after the pilot project

© H

eng Chivoan/P

ATH

School boys in Cambodia enjoy rice fortified with the Ultra Rice technology tobridge dietary gaps in micronutrients.

Planning forsustainabilityshould begin atthe start of theproject.

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has launched and tested the product. In Brazil,planning for sustainability required identifyingthe array of local organizations that can takeownership of the product and laying out themarket development process well before PATHand partners exit. This example demonstratesearly signs of significant market penetration andsustainability, although health impact in thetarget market may be achieved at a slower paceas fortified rice gains further traction in theBrazilian market.

SUMMARY

While the global health community has decadesof experience bringing technologies, such asvaccines, bed nets, antiretroviral therapies, andmalaria drugs, to scale through global procure-ment mechanisms, we are only now reflectingmore systematically on our experience in devel-oping local institutional and consumer markets,especially in light of UNCoLSC’s focus on thesetypes of commodities. Global procurement mar-kets require complex coordination among WHO,the GAVI Alliance, UNICEF, and other multi-lateral institutions to organize purchase anddistribution at scale; however, the global healthcommunity wrestles even more with local marketintroduction. The lack of incentives on bothdemand and supply sides of the market createsnatural dysfunction, but our accumulated experi-ence can serve as guideposts as we navigate thesechallenges.

Among the salient lessons learned from these6 case studies is the need to design more effectiveprojects (Box). Sometimes, our failure to scale isa failure of design; we either do not recognize allthe critical supply and demand elements thatneed to be pursued or assume other players inthe market ecosystem will take them on. Onecritical design consideration is the need to buildsupply and demand simultaneously, not onlyto avoid a fatal imbalance, but also to ensure thatall relevant demand-side pathways are includedin the technology introduction plan, as capturedin our framework.

Local market introduction of global healthproducts can also benefit from a lead organiza-tion. Too often in the public health arena, eachplayer, whether a nongovernmental organiza-tion (NGO), government, or private-sector firm,supports only a few elements of the requiredmarket-development activity, such as generatingevidence of operational feasibility or pursuing

advocacy for policy change. These small steps arevital elements on the critical path toward scale.Generally, however, no one organization takes onthe important role of driving the market intro-duction process forward—often a necessity inthese largely dysfunctional markets. The lack ofsuch a lead is a natural consequence of thepiecemeal nature of donor funding and the nichecompetencies that NGOs have developed to wingrants. Few general contractors exist in globalhealth markets. Consequently, we often haveample evidence of potential impact, severalinterested manufacturers, and strong data tosupport advocacy, but, despite all this, many ofthese markets have failed to flourish. A leadorganization provides the natural base fromwhich to plan and execute activities along all4 of the introduction pathways captured in ourframework.

Market orchestration also requires a strongvision and intention to reach scale—a goalthat needs to be built into the project design fromits inception and that is embodied within the setof supply and demand-side pathways captured inthe framework. Projects driving toward sustain-ability within their life span create stronger andfaster impact. The project nature of donorfunding is a cumbersome mechanism for devel-oping local markets. We need to develop strongermodels that more closely mirror the requiredprocess for reaching scale, such as longer grantperiods, flexibility to adjust funding levels tochanging market needs, and more holistic projectdesigns.

Finally, but most importantly, we need to paystronger attention to the incentives for profit-ability of the private sector, which will continueto play an increasingly important role in public

BOX. Lessons Learned From Intro-ducing Global Technologies Into LocalMarkets

N Build supply and demand simultaneously.

N Consider the need for one organizationto lead, oversee, and coordinate theentire market introduction activity.

N From the start, have a strong vision andintention to reach full scale through bold,holistic project concepts.

N Pay strong attention to the incentives andprofitability of the private sector involved.

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health. This is a key element of the supply-sidepathway described in the framework. For newtechnologies, the private sector is often facedwith a cost structure that requires pricing abovestatus quo alternatives and uncertain demanddue to such issues as the lack of clear distributionchannels, clinical policies, and value propositionfor the buyer. This most often leads to significantrisk and, consequently, an underinvestment inmarket development by the private sector. Whilethe global health community has developedsome effective risk-reduction strategies for prod-ucts entering global procurement markets, suchas advanced market commitments for vaccinedevelopment, expedited regulatory pathways fororphan drugs, and graduated copays for vaccinepurchases by ministries of health, we need todevelop similar, enabling innovations for thoseproducts entering local markets. We also need tobetter analyze the upfront risks to assess whetherthere would be natural incentives to both supplyand adoption of the technology once the risks aresufficiently reduced through an infusion of grantfunding. Effective market introduction is para-mount and the only way to achieve sustain-ability.

CONCLUSION

Our experience underscores the widespreadunderstanding that there is no universally applic-able market introduction strategy for products ofglobal health importance. The framework intro-duced in this article is a starting point, reflectingthe general elements of market introduction thatmay be emphasized differently for each uniqueproduct, market, and cultural context. We hopethat others continue to build upon the frameworkwith additional insights gained from their experi-ences. Such empirically-driven frameworks mayhelp minimize our missteps in design, which canbe costly and time-consuming and can stymie ourcollective effort to create health impact in the mostvulnerable groups. As a global health community,we need to continue sharing our rich experiencesin developing markets for global health productsto ensure that global initiatives, such as UNCoLSC,with so many important products destined forlocal institutional and consumer markets, max-imize their potential to save lives.

Acknowledgments: The authors would like to thank Patricia Coffey,Steve Brooke, Neeti Nundy, Maggie Kilbourne-Brook, Greg Zwisler,Tim Elliott, Elizabeth Blanton, Lorelei Goodyear, Peiman Milani,Corwyn Ellison, and Amie Batson for their contributions to this article.

The views expressed in this publication do not necessarily reflect thoseof the institutions with which the authors are affiliated.

Competing Interests: None declared.

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______________________________________________________________________________________________________________________________________________Peer Reviewed

Received: 2013 Sep 13; Accepted: 2014 Apr 4

Cite this article as: Matthias DM, Taylor CH, Sen D, Metzler M. Local markets for global health technologies: lessons learned from advancing 6new products. Glob Health Sci Pract. 2014;2(2):152-164. http://dx.doi.org/10.9745/GHSP-D-13-00131

� Matthias et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricteduse, distribution, and reproduction in any medium, provided the original author and source are properly cited. To view a copy of the license, visithttp://creativecommons.org/licenses/by/3.0/______________________________________________________________________________________________________________________________________________

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