South Africa has determined that one of the primary pillars to moving to a knowledge-based economy will be to become a world leader in biotechnology. According to the plan, South Africa has the world’s third largest biodiversity resource base. For those unfamiliar, biodiversity is defined as the variety of all forms of life, from genes to species, through to the broad scale of ecosystems.
Plan Requires Multinational Participation
Unfortunately, though the plan is well thought out with regard to goals and challenges, it comes up short on the execution side. The country has built a plan, but needs participation from industry for it to be successful. Multinational pharmaceutical and biotechnology companies need to see the benefit of doing business in South Africa. Some of the benefits to pharma and bio include significant cost savings regarding executing clinical trials and fewer regulatory hurdles. But there are other benefits as well. I recently had the opportunity to speak with Dr. Debra Barker, chief scientific officer, global emerging markets, Novartis (NYSE: NVS). She notes that some of the benefits of doing research on the African continent include working with clinicians eager to learn how to conduct research. “It’s a pleasure training the clinicians as they are so hungry to learn,” she states. “When you talk to an investigator in London, all they want to know is how much they are going to be paid. In emerging markets, people want to learn the science and the molecule.” Thirst for knowledge is at the heart of innovation, and innovation is the life blood of every successful and sustainable pharmaceutical company. Perhaps this is why Barker sees the business approach being used in emerging markets migrating to the developed world – a form of reverse innovation.
Africa: Breeding Ground For Reverse Innovation
Last year, Forbes magazine published an article, “The World’s Most Influential Thinkers.” Number three on this list is Vijay Govindarajan, a professor at the Tuck School of Business at Dartmouth. Known for his theory on reverse innovation, he has been a chief innovation consultant to General Electric (NYSE: GE). In 2001, Govindarajan teamed up to co-author a blog on the Harvard Business Review website – “How Mobile Phones Can Reverse Innovate Healthcare.” He notes that a pilot program in South Africa is allowing community health workers to input clinical information into their mobile phones, access patient records, and receive recommendations for standard care. Funding for the program is being provided by Vodafone’s (NASDAQ: VOD) Social Investment Fund. Novartis partnered with Vodafone and IBM (NYSE:IBM) to use cell phones to improve medicine inventory management. “Rural pharmacies that carry our antimalarial medicines were running out of the medicine,” says Barker. Poor inventory management and a cumbersome distribution system were resulting in people dying. The solution was very simple – utilize cell phones to save lives. The program, SMS (short messaging service) for Life, is headed up by former Novartis chief information officer, Jim Barrington. The program was initially piloted in Tanzania in an effort to improve inventory management. At the start of the program, 26% of health facilities had no malaria medicines. By the end of the pilot, this had been reduced to 0.8%. Once a week, the SMS for Life system would send an automatic text message to the nominated healthcare worker at each health center asking for current medicine stock. The worker would send a reply via a short code, at no cost to the healthcare worker. Barker refers to this as leveraging technological leaps to improve healthcare. Perhaps we can figure out how to better utilize cell phones to improve healthcare in developed markets. Wouldn’t it be nice to be able to get a test result text message from your doctors? I can’t imagine this happening any time soon. In the Unites States, we are overly concerned with protecting the privacy of citizens, more than half of which have Facebook accounts, posting updates which include medical diagnosis.