Because there is little regulation in some African countries, drug prices are marked up by middlemen and often become exorbitant
MPharma, a Ghana-based start-up has received $1.5 million from Ebay billionaire Jeff Skoll to support its work in changing Africa’s pharmaceutical industry to make medicines more affordable.
MPharma is one of five social businesses to receive awards from the Skoll Foundation at this week’s Skoll World Forum, Britain’s leading event for social enterprise.
Pharmacy owners in African countries such as Ghana and Nigeria have to negotiate prices individually with drug suppliers, meaning the same medicine can cost different amounts in different pharmacies, said mPharma founder Gregory Rockson.
Because there is little regulation, drug prices are marked up by middlemen and often become exorbitant, he said.
MPharma works by managing drug supply for multiple pharmacies, so it can negotiate bulk prices and re-distribute medicines as needed. The pharmacists only pay for what they sell, which incentivises mPharma to keep prices low.
“We want every African patient to be able to get access to the medicine they need, irrespective of their socioeconomic background,” Rockson told the Thomson Reuters Foundation.
“We hope that by doing that we can create the largest and most impactful healthcare company in Africa.”
Medicines account for 20 to 60 percent of health spending in low- and middle-income countries worldwide, compared with 18 percent in more developed countries, according to the World Health Organization (WHO).
Up to 90 percent of people in developing countries have to pay for medicines out-of-pocket, making them unaffordable for much of the population, says WHO.
“We have a challenge in many African countries as it relates to the availability of products, the quality and the affordability,” said Tania Holt, who leads healthcare activities in Africa for the U.S. consulting firm McKinsey & Company.
Start-ups as well as governments and donors are working to find solutions to these three problems, she said.
“I think it’s an area that lends itself very nicely to disruption … so it’s exciting to follow the start-up community as they engage in solving a very big challenge,” said Holt.
MPharma aims to eventually supply drugs to public hospitals as well as private pharmacies, cutting out what Rockson says is a large amount of bribery, corruption, and fraud.
It has also launched a micro-payment solution called Mutti for certain life-saving, high-end drugs.
Since launching in Ghana in 2014, the company is now present in Nigeria, Zambia and Zimbabwe and last month bought the second-largest pharmacy chain in Kenya.
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