Patients in Africa spend a lot on the acquisition of medicine. Despite this, the medicine is difficult to access. When available, the quality is often substandard. Pharmaceutical intermediary margins in African countries can be as high as 90%, due to a highly fragmented landscape of dispensers, distributors and wholesalers.
Our client, a private group purchasing organization (GPO) started to challenge this status quo. Their parent company leveraged over 40 years of global public health and supply chain experience to create the company, to fill critical gaps in the pharmaceutical system related to pricing, pooled procurement of quality goods, use of technology, real-time data generation, access to inventory financing, tailored capacity building, expedited business-to-business brokerage, and transparent transactions, replete with counterfeit risk mitigation.
This technology-based company provides a user-friendly pharmaceutical procurement platform that delivers a vetted market to distributors; and negotiated prices, quality-tested medicines and supplies, and inventory financing to dispensers – down to the most remote community drug outlets in Kenya. This is critical because in Kenya, as in much of Africa, the community pharmacy is the first point of call for primary care for about 70% of patients and serves as a critical interface with the health system. It is at the community level that the impact of the company is evident: up to double-digit savings on medicines for customers; service from trained pharmacists and certified pharmacy technicians; and regular access to stocked supplies and quality-tested medicines.
Membership of regulatory compliant dispensers has grown across the country, driven by savings afforded through the use of the platform, and access to an inventory financing scheme that allows members to increase the volume of their purchases, maintain adequate stock levels, and pass on savings to their deserving customers. By all accounts, the company has effectively disrupted the private sector pharmaceutical supply chain. Today, the company boasts of over 200-trained members across three segments; an annual patient reach of 5 million with penetration into 50% of Kenya’s counties; and targeted capacity-building programs that have reached more than 800 practitioners.
Lattice Consulting was honored to have the privilege to work with the company on refining its innovative business model in Kenya and evaluating growth and expansion prospects in the East Africa region. In doing this, Lattice worked closely with management in conducting market research across the East Africa region that is guiding the company’s future plans. Lattice also performed a business valuation and also prepared investment promotion material for the organization as it seeks to welcome investors.