GlaxoSmithKline (GSK) has a long- standing reputation for excellence and innovation within the global pharmaceutical industry. Not only has GSK been a leader in traditional pharmaceutical markets, but CEO Sir Andrew Witty clearly acknowledges that the future growth of the firm and the industry lies more with increasing emerging market customer bases and sales rather than continued reliance on “blockbuster” drugs.
The Developing Countries and Market Access (DCMA) team’s mandate is to grow the size of GSK’s customer base in the 50 poorest countries in the world. Currently, these types of markets have less than 5% market penetration by Western pharmaceutical companies, presenting large opportunities for social impact as well as sales and revenue growth.
This report was commissioned by GSK’s DCMA team with the objective to identify and evaluate innovative healthcare delivery models for the Base of Pyramid (BoP) that have the potential for significant social benefit and long term commercial returns. The report also provides an overview of the healthcare innovation ecosystem in developing markets together with insight into customer behaviour, brands, supply chains and what kinds of in- vestments need to be made to create impactful, scalable, sustainable health- care delivery programs.
At the outset we expected to find a wide diversity of healthcare delivery innovation across the world, a high demand for investment to support replication and a prevalence of models targeting the BoP. In fact, what we found was numerous early stage or obviously non-scalable programs and that the high quality programs are already well funded by an increasingly competitive investment community. Whilst there are many programs targeting the BoP, the BoP itself needs to be considered in multiple sub-segments and that the focus for commercial programs tends to be the strong emerging middle class. However, there are significant opportunities and enthusiasm amongst a number of developed programs for strategic partnerships with large pharmaceutical companies and other large-scale commercial organisations in order to drive scale, profitability and impact.
Looking forward, the report suggests that pharmaceutical companies should review the needs of potential partners against their own competencies to successfully engage with and develop healthcare delivery models. The report also suggests that pharmaceutical companies should take action to establish themselves as a first-rate strategic partner in BoP healthcare delivery so as to get rapid access to the best emerging opportunities. Finally the report highlights the potential for strategic partnerships with actors in the healthcare delivery ecosystem and other corporate entities with applicable skill sets, e.g. the mobile telecoms sector.
The public version of this report has been created as part of the charitable objectives of the ICSF to act as a catalyst for scaling successful social impact projects. GSK also recognises the value of sharing thought leadership with the sector and seeks to become a partner of choice for innovative health- care delivery projects.
The broad findings of the report are relevant beyond healthcare; similarly, the methodology could be adapted to other sectors.