How can Africans receive greater access to quality healthcare? That’s the problem we’ll attempt to explain in this episode, and it’s a wicked problem.
In this episode, we go deep into the healthcare value chain from diagnostics to labs to clinics and pharmacies, to better understand how it all works and how those we speak to in this episode are working to get improved care to Africans across the continent.
[04:49] – Today, there is a greater trend towards reactive, not proactive medicine, due to high out-of-pocket spend for medical care, as 54gene’s Dr. Jumi Popoola explains.
[07:01] – The high degree of out-of-pocket spending coupled with low incomes ultimately creates the problem of low accessibility to high-quality healthcare, about which we speak to Ilara Health’s Emilian Popa.
[11:05] – Medical care starts with diagnostics. How do we get cheaper and more accessible diagnostics to the last mile? And why are diagnostics so important in the first place?
[16:39] – Also, how do we get more payers into the healthcare ecosystem to pay for diagnostics?
[21:39] – Fragmentation of pharmacies and healthcare facilities at the last mile is also a problem. We hear from Suleman Sule with Field Intelligence.
[25:46] – We speak to Zipline’s Israel Bimpe. When it comes to high-value essential medicines, perhaps on-demand delivery is required to increase availability and reduce waste.
[32:47] – 54gene’s ultimate mission is to ensure the treatments being used on the continent are the right treatments and, through their biobank, to participate in the research process to develop new drugs and treatments for Africa and beyond.
[36:45] – A retrospective conversation between The Flip’s Justin Norman and Sayo Folawiyo.
This season is sponsored by MFS Africa.
All this season, we’re exploring value chains. And in the payments value chain, no fintech has a wider reach on the continent than MFS Africa. Through their network of over 180 partners – MNOs, banks, NGOs, fintechs, and global enterprises – MFS Africa’s API hub makes connects over 320 million mobile wallets across 30+ countries in Africa.
This episode features:
Dr. Jumi Popoola – VP, Molecular Genetics & Biobank Operations, 54gene
Emilian Popa – Co-founder & CEO, Ilara Health
Suleman Sule – Director of Pharmacy Services, Field Intelligence
Israel Bimpe – Director of Africa Go-to-Market, Zipline
Julius Tichelaar – Partner, AfricInvest
Sayo Folawiyo – B-mic, The Flip
Justin Norman – Founder & Host, The Flip
Audio Production by ZVUK Studio
Dr. Jumi Popoola: My hope and the hope of the company is that healthcare becomes affordable and accessible.
Justin Norman: That’s Dr. Jumi Popoola. She’s the Vice President for Molecular Genetics and Biobank Operations at the Nigerian healthtech and genomics startup 54gene.
Dr. Jumi Popoola: And then ultimately it has to be personalized. So people should have that confidence that the treatment they are given will work for them the first time round. We need to move away from umbrella approach by just using a drug that works for everybody else. We need to confirm that it works for the African man, for the African woman. If it doesn’t, we need to design drugs that are unique to them. These are the biggest barriers today to how much progression has happened on the continent.
Justin Norman: Whenever we talk about progress in the global context, there are two categories related to health – child mortality rates and life expectancy – that are used to determine how far we’ve come. Child mortality rates globally sit at 3.91%, according to the World Bank, down from 18.5% in 1960 and 36.2% in 1900. We’ve seen tremendous progress, but unfortunately, African countries are still lagging behind their global counterparts.
The rate of infant deaths in Sub-Saharan Africa is almost twice as high as the global average, at 7.58%. There are 53 countries with child mortality rates worse than the global average. 44 are African countries. The bottom 21 are African countries, as well. And as for life expectancy, the global average is 72.74 years. And in Sub-Saharan Africa, it’s 61.62 years. 43 of the bottom 50 are African countries. And the bottom 27 are African countries as well.
Now, there are surely many macro factors that contribute to these statistics, and healthcare is undoubtedly a major contributor. Low rate of insurance coverage coupled with high out-of-pocket spend and low incomes all lead to more reactive and less effective medical care.
But healthcare is a complicated space, spanning multiple stakeholders and varying by country and even disease. So in this episode, we go deep into the healthcare value chain from diagnostics to labs to clinics and pharmacies, to better understand how it all works and how those we speak to in this episode are working to get improved care to Africans across the continent.
Justin Norman: Before we start, we’d like to thank MFS Africa for their sponsorship of the entirety of this season of The Flip.
MFS Africa recently announced their $100 million Series C to further expand their hub – which already connects over 330 million mobile wallets across 30-plus countries – to further expand that network across the continent. The round was co-led by the private equity firm Africinvest, out of their perpetual fund called FIVE or the financial inclusion vehicle. And I had the opportunity to speak to its partner, Julius Tichelaar about this investment and their vision for financial inclusion on the continent.
Julius Tichelaar: So for Africinvest as a firm, for financial services, we have been investing in the sector for almost three decades and what we have seen, especially in the last, let’s say 10 years or so, is really this accelerated transformation of the sector. And our strategy here is really to support companies in their journey to take advantage of this development. We as a firm believe that payments are still to grow in Africa for a very, very long time. We are just starting, when you compare most African markets to the rest, I have to say, I think we’re just starting in Africa.
And MFS has really positioned itself really in the middle of all this. I think the company management, the founder have really built an extremely powerful network over the last years, not only focusing on the key or on the largest markets, but really going everywhere, and really building the reach of the network. And I think that’s really what we liked and what we found interesting, as well, is that it’s not only P2P or remittances but that a significant part of volumes is actually trade-related. And that means that MFS solves a real problem in Africa today because cross-border payments are still a real pain point, especially in markets with less developed financial systems. And connecting all these wallets and providing payment services to everyone with a mobile wallet in Africa is super important.
Justin Norman: We’ll hear a bit more from Julius on investing and time horizons later in the show.
VO: You’re listening to The Flip. The podcast exploring more contextually relevant stories from entrepreneurs around Africa.
Justin Norman: Welcome back to The Flip. I’m your host, Justin Norman.
How can Africans receive greater access to quality healthcare? That’s the problem we’ll attempt to explain in this episode, and it’s a wicked problem. One that’s caused by a variety of different intertwined factors.
First, let’s talk about how healthcare is supposed to work. When you’re healthy, you’re nonetheless encouraged to get regular checkups, especially when you reach a certain age. The goal is to catch diseases early, making it easier and more affordable to treat them. But to understand the nature of a disease requires diagnostics. Depending on the disease in question, it might require a saliva test or blood test or, in the case of cancers, more invasive tests like a biopsy.
Then when you’re sick, you go to a doctor or a hospital. And again, they prescribe various diagnostic tests. And these doctor’s visits or hospitalizations or tests, they cost money. In one part of the world most people are insured, either through private or employer insurance or public health schemes. But most medical care in African markets is out of pocket. That’s the first problem.
Dr. Jumi Popoola: Right now there is a trend towards reactive medicine for the reasons of healthcare being private.
Justin Norman: That’s 54gene’s Dr. Jumi Popoola, who we heard from in the opener.
Dr. Jumi Popoola: So that will be the reluctance for an individual, as soon as he develops a simple disease or a simple symptom, to want to self-medicate because that will be ultimately cheaper for him.
Justin Norman: This is particularly problematic when patients actually have a disease that can’t be treated by self-medicating.
Dr. Jumi Popoola: So what happens is diseases present in hospitals at a much later stage, where the patient has probably self-medicated, has gone to pharmacies to get some symptom-relieving medication, but not necessarily treatment medication, and then has not been successful and then they go to clinic.
Of course, the fear given the average earning for an individual in Africa, the fear is the cost. Let me exhaust everything that I can before I escalate to my doctor. They’re managing symptoms, they’re doing treatment within their financial capacity, but these aren’t necessarily the right or the appropriate treatment strategies for them. So by the time the doctors are seeing these people, their symptoms have probably gone beyond simple treatment.
Justin Norman: So a high degree of out-of-pocket spending on healthcare coupled with low incomes of patients leads to reactive treatment. And it also leaves patients with limited accessibility to high-quality healthcare.
Emilian Popa: So the healthcare issues in Africa actually, and in emerging markets, are actually very different than what we see in the Western world. In Africa it is actually access, it’s a lack of access to quality healthcare.
Justin Norman: That’s Emilian Popa, he’s the Co-founder and CEO of Ilara Health. Lack of access to quality healthcare is a function of several things. First, much as we’ve talked about earlier in the season, the first has to do with last-mile fragmentation and distribution.
Whereas in developed markets there are larger and more equipped and staffed hospitals or clinics, that there are tens of thousands of primary care centers in a market like Kenya helps with accessibility, but it creates a problem from a quality perspective.
Emilian Popa: There are 15,000 small primary care centers in Kenya, so a lot, but most of them are run by a nurse and none of them has anything else then, you know, it might be very, very basic tools. And they can’t do much.
Justin Norman: And that’s the second problem. Diagnostics requires equipment and expertise, which many of these care centers lack. And they lack in particular due to the lack of payers in the healthcare system.
Emilian Popa: And the second biggest issue is actually the fact that most of Africa is actually out of pocket in terms of medical spend. Kenya has 2.7% or something like that. South Africa has 15-plus percent, but most of the rest of Africa is in the 1 or less than 1%.
So when someone spends $70 per year in healthcare and 80 to 90% of this is actually medication, and you compare that to, I don’t know, $700 in South Africa and then $10,000 in the US, you can imagine the challenges. What can you really get for $70?
Justin Norman: For Emilian and Ilara Health, access to quality healthcare means access to providers treating patients using quantitative measurements.
Emilian Popa: When you go and see your doctor if that doctor or nurse just looks at you without doing any quantitative measurement of your health state and your baseline, it’s a problem. So diagnostics should be the beginning or at least part of the decision-making in healthcare. And we often say, there are papers saying, you know, 70% of the clinical decisions should be based on diagnostics. And the reality is that in the places where we are, very few decisions in healthcare are made on proper quantitative biomarkers.
Justin Norman: Now in a higher-income environment, there are labs that run the tests that doctors conduct. But just building labs alone won’t solve the problems in question.
Emilian Popa: When I started Ilara, I was going into low-income areas of Nairobi and there was no lab. I was Google Mapping for labs and there’s no labs. So my immediate entrepreneurial conclusion, well, there is no lab, there should be a lab so let me build labs. But the reality is that you can’t just build labs because if you just be labs and there is no one to prescribe tests, you’re not going to solve the problem. So we saw that how can we actually bring those labs on the desk, very, very close to the patient?
Justin Norman: The opportunity for Ilara Health is, first and foremost, to get diagnostic devices to the last mile.
Emilian Popa: What we are doing is not only that we scout the world for these point-of-care diagnostic technologies, which is evolving very, very fast, in the same way, you know, our iPhones and our phones have evolved in the past 10 years. It’s evolving very fast, it’s become cheaper and cheaper.
So we’ve identified, we’re curating those devices, we bring them into Africa, we finance them. So we place them door-to-door into those nurse-led medical facilities, but with a leasing model to make it affordable to them to have those devices, to be able to deliver better diagnostic and cheaper diagnostics, and obviously to be able to make revenue and to be able to pay us back that leasing fee. And on top of this, we connect those devices with a piece of technology to be able to get the results in a centralized way and communicate them back to the clinician and eventually back to the patient.
Justin Norman: Now let’s take a step back for a moment to talk about diagnostics. There is a need to avail a wider degree of diagnostic tests and services to African patients. But why? Why are diagnostics so important?
Dr. Jumi Popoola: When we talk about molecular diagnostics, rather than your doctor or healthcare practitioner just looking at the symptoms that you’re expressing or, you know, the physical manifestation of your symptoms, he’s looking at the causal effect. It’s going to the genes.
Justin Norman: Doctors need to look at this molecular level to best diagnose and treat the disease in question.
Dr. Jumi Popoola: So what you see as a symptom originates from a gene or a protein in the first instance. So when you say molecular, we’re looking at what is the gene or what is the protein in your body that is giving you the symptom that the doctor can see, can observe and can measure. And oftentimes tackling a disease or disorder from the molecular level, from the genetic level, gives you a much broader picture and a better opportunity to treat it effectively because symptoms are shared between diseases, as you know. Many diseases can present with similar symptoms. For you to know the exact disease that is driving the symptom of your patient, if you go to the genetic level, you have a better chance of treating it in one round successfully.
Justin Norman: And different diagnostic tests require different types of samples.
Dr. Jumi Popoola: A lot of molecular diagnostics tests can be done using non-invasive samples. By non-invasive samples, I mean something that doesn’t require the patient giving their blood sample. They can collect saliva as a sample type. They can collect hair or nails in some of the tests like kinship analysis, you know, human identification, and even genetic predisposition to diseases, we can use simple sample types like saliva.
Justin Norman: These might be tests that can be done at any clinic or pharmacy, and increasingly pharmacies have access to cheap diagnostic tests for that purpose. But other tests require increasing levels of expertise and equipment.
Dr. Jumi Popoola: When it comes to tests that require a bit more in-depth analysis, it means we need a lot more DNA, not just a small quantity found in saliva and hair and nails, and for those we will need blood. So when we talk about cancer, heart disorders, sickle cell, and some allergy tests, when we want to go all out, we might need blood, simply because blood is a much richer source of DNA. It will give us a lot more DNA of higher quality and allow us to do a lot of analysis. Multiple genes, multiple mutations can be measured using blood. And of course, for some diseases like cancer, you don’t just want to look at what is happening systematically throughout the person’s body, which you can get from the blood, you want to know what is happening in the tumor itself. So you might need a tumor sample.
Justin Norman: And like Ilara Health, 54gene is on one hand working with frontline healthcare workers to get more affordable diagnostic tests closer to the last mile.
Dr. Jumi Popoola: A lot of the first line of treatment for Africans is their pharmacy. That’s their primary care facility. 54gene is also looking to leverage this fact by engaging pharmacies early on, not just engaging pharmacies, but empowering them to be able to help with the diagnostics tests that patients might require.
Justin Norman: Then on the other hand, they’re also building a laboratory and local infrastructure to ultimately reduce the cost of diagnostics altogether. Because Nigeria today lacks the infrastructure.
Dr. Jumi Popoola: So today in Nigeria, when a patient gets diagnosed for cancer, the first thing is that oftentimes the disease has progressed beyond sort of early stage. So by the time the patient goes to hospital, they’re really sick. And up until now, there has not been infrastructure in Nigeria to test specifically for those diseases. And so clinicians and oncologists, cancer doctors are collecting samples of the tumor and have to send them to either their own partner laboratories outside of Africa, or they have partnered with university teaching hospitals elsewhere, or private laboratories outside of the continent to send a sample for processing. What that does is it drives up the cost of the test in the first instance. They have to wait longer for their diagnosis or confirmatory diagnosis, and then even in terms of access to the drugs they need for those cancers, because there isn’t a robust testing program for some of these drugs to understand which patients will benefit from it, there’s not many pharmaceutical efforts to have those drugs available on the continent.
We want to establish those laboratories and those testing capacities in-country and in-continent. We want to train the staff. We need to be able to do those tests. We want to ensure that our labs are internationally certified so that any oncologist, any cancer doctor feels confident that they can send a sample to us and get the same results as they would if they sent that sample to the US or to Europe, as an example. And when we do that, what we ultimately provide the doctor and the patient is faster access to results, lower cost because the logistics of even shipping, the cost is no longer transferred to the patient, and accessibility to tests that are specialized that would otherwise not be available in-country or in-continent, both for the doctor and the patient.
Justin Norman: Now a bit earlier in the show we talked about out-of-pocket healthcare costs. The challenge for all that we just described is that there are a few payers in the system. The hope is that with technology and through investments of this kind, it can bring more payers into the system. And it raised a question in my mind – if we need more diagnostics in order to properly diagnose and prescribe treatments, and if a barrier to diagnostics is costs, why don’t pharma companies, for example, subsidize the cost of diagnostics, assuming that it would lead to an increase in prescriptions? Here’s Emilian again.
Emilian Popa: One of the things to solve is bringing payers in the system. So where do you get the payers? The payer can be an insurance company or a medical scheme or can be a pharma company, or it can be anyone else, can be an organization. So why would those people pay for anything? You brought up a great point, right, the pharma company would want actually to subsidize a diagnostic device, to be able to deploy a certain medication, which may be paid by the government insurance scheme in a certain market. And that’s actually one of the partnerships that we currently have.
Justin Norman: But there’s a quantitative and data problem that needs to be solved. And not just for the pharma companies, but for insurers, as well.
Emilian Popa: The second thing is insurance companies. One of the reasons there is so little insurance in those markets is that it is very difficult for an insurer to price a policy when they don’t know anything about those individuals.
So that’s where it’s very, very important to be able to measure basic biomarkers, to understand the health state of those patients, to be able to potentially go back to insurance companies and then tell them, look, those people living in that area or coming to this clinic, there’s this many people who, you know, may be healthy or may have a problem, then you can know exactly how you price your policies depending on what’s out there.
Justin Norman: The goal of all of this, ultimately, is to change the culture of both doctors and patients, to approach healthcare from a more proactive perspective than at present.
Dr. Jumi Popoola: But right now, just given the sheer cost and lack of access to some of the programs and tests, nobody can even benefit from it. So if you can change the way we approach reactive health care, you also liberate people’s minds to be able to think proactively about how they can improve their health. That even the doctors can start to give people more information about proactive ways of preventing worse diseases.
It’s a mind, it’s a paradigm shift, and it will happen in trickles. You have to tackle the reactive medicine or implement reactive medicine first, simply because of the current situation and the sheer cost of some of these specialist tests required. And then slowly, when you unravel and resolve that you can start to bring in a lot more proactive medicine initiatives into the countries and into the continent.
Justin Norman: When we come back, we’ll get into the logistics side of the healthcare equation. But before that, here’s another word from our sponsor, MFS Africa.
Justin Norman: Earlier in the show, we heard a bit from Julius Tichelaar, a partner at Afrinvest on their recent investment in MFS Africa’s $100 million Series C. One thing we talked about – that is something we’ve talked with MFS Africa’s CEO Dare Okoudjou about in our interview episode with him, and that is a common theme when discussing infrastructure and development on the African continent – is time horizons, and just how early we truly are in the African fintech space. And for that reason, Afrinvest takes a specific approach to investments, as much needed patient capital in the ecosystem, as well.
Julius Tichelaar: We started investing heavily in financial services in 2007, 2008. Here we managed an early growth VC fund and the sector-specific fund for financial services, the financial services fund is called FIVE, which stands for financial inclusion vehicle. And, let’s say the unique feature there is that it’s an evergreen or preferential vehicle. So we’re basically quite patient investors with that vehicle. And it allows us to deploy capital in slightly different ways. And we’re able to stay with our portfolio, build partnerships and build real long-term value, which is really powerful, I think, in our sector. And we found that a limited time window was quite limiting on the companies, but also on us as an investor. We felt that we needed more time. Also towards regulators, knowing that a patient investor is coming in, I think brings a lot of comfort to regulators and also to management teams and founders.
We as a firm believe that payments are still to grow in Africa for a very, very long time and we are just starting when you compare most African markets to the rest, I have to say, I think we’re just starting in Africa, and MFS has really positioned itself really in the middle of all this. And there’s so much more growth potential in the payment space, the online and e-commerce market is also just starting in Africa, and being at the heart of all this with our investment in MFS is really exciting.
Justin Norman: Before the break, we talked a bit about bringing more payers into the system, which is crucially important in increasing the level of care we hope to achieve across African markets. But even then, there’s still a last-mile distribution problem given the fragmented nature of pharmacies and small healthcare facilities, and there’s, therefore, a drug availability problem for the pharmacies’ customers.
Suleman Sule: My name is Suleman and I’m the General Manager on the operation side of things for Shelf Life at Field.
Justin Norman: I spoke to Suleman Sule at the Nigerian healthtech startup Field about this very problem.
Suleman Sule: 55% to pharmacies still regularly stock-out, still need more finance in order to carry more inventory. As it is, community pharmacies are only able to stock about 30% of what the registered products in the market is. So there’s still, first there a gap in the number of products they carry, and when you combine that with access to finance, there are fewer treatment options available for the end-users when they walk into the pharmacy.
Justin Norman: Much like the B2B commerce platforms we heard from in episode five of the season, Shelf Life aggregates pharmacies at the last mile, handles orders and delivery for them, and provides access to finance through a pay-as-you-sell model.
Suleman Sule: What we’ve done is we’ve curated a list of over a thousand unique products, which would constitute what a subscription is. From the moment that is done, Shelf Life basically takes over the management of those products. So now we begin to use our data planning tools to figure out how much quantity you need on a week-by-week basis, we show up with a box of products, at the same time we do an inventory count on what you’ve sold and that’s how the data gets back into the system on what’s moving, what type of products, where it’s moving, what are the attributes of the area that’s moving. And then that is used to plan your supplies for the next period. So it’s all automated.
Now pay-as-you-sell, all of these inventory we are advancing to the pharmacy comes at no upfront costs. So that basically solves the financing problem, as well as brings a layer of intelligence into how we plan the products they stock.
Justin Norman: Now beyond the fact that this creates a wider availability of prescription drugs for consumers, it does another important thing in the context of pharmacies being the first point of care for many Africans when they are sick. Shelf Life helps them grow their revenue, allowing them to provide additional healthcare services to their customers.
Suleman Sule: We’ve seen pharmacies would start with typically a hundred subscriptions. Over time it goes to an average of 300, 400 subscriptions. This for us, the biggest thing is more treatment opportunities for people out there. The average pharmacy would spend about 15% of their work week in procurement-related activities. Now, this is not providing pharmaceutical care. This is trying to compile that list, making that drive down to the supplier. So this is something we’ve been able to eliminate or reduce to a very minute degree.
At the core, the pharmacies we work with have pharmaceutical care at the core of their practice. And what you begin to see is in addition to them offering like a minor ailment service where you’d have your BP machine, you come in, you get your blood sugar taken, you get your weight, and all of those parameters measured, there’s also sales of these products sitting on the shelves as part of what we offer. So an interesting part is say, malaria, and trust over time now you see a shift from empiric treatment to people now saying, okay, why don’t you get a quick malaria test before we know what to prescribe to you or for you to manage this?
So I think it’s, there’s definitely that shift. It’s less reactive. With the proliferation of these rapid diagnostic test kits coming in, whether that’s typhoid, for malaria, you could get it for some stuff like hepatitis, HIV happening in the pharmacy, as well. That has been really localized now and we’re hoping that that trend continues.
Justin Norman: Now there’s one more thing to talk about with regards to logistics and drug availability. Back to the question of who pays. In many cases, it’s governments. And governments, in particular, need help with distribution. And many of the supply chains in question include not only drugs but medical supplies and products like blood. So while Shelf Life is tackling this problem on the ground, another company is taking an aerial approach.
Israel Bimpe: My name is Israel Bimpe. I’m currently a Director of Africa Go-to-Market at Zipline.
Justin Norman: Zipline is known for its autonomous drones that deliver medical and other essential goods in hard-to-reach areas in Rwanda and Ghana.
Israel Bimpe: We really work in this broad supply chain system that is very government-focused and it’s all the products that citizens usually receive for free or run by national government schemes. It’s mostly generic products and it’s mostly supplied through a government-owned entity.
Justin Norman: The problem with how governments distribute these products, given their limited resources, is problematic for outlying hospitals and pharmacies.
Israel Bimpe: What’s disruptive or different about our service is that a traditional supply chain has a way, especially in healthcare, in pharmaceutical services, has a way of not favoring the hospitals or the health facility. So usually a government buys a ton of products, centralizes it, then distributes it on a regional level and then the regional, based on so many inputs, kind of building an outward supply chain to go distribute to a hospital-based on infrastructure, quality, how many products they have, payment structure. They kind of do that distribution on a monthly basis, on a quarterly basis, or on a yearly basis. And so what Zipline kind of came up with is we centrally located ourselves somewhere in the country with the ability to have a radius and the service area of about 20,000 square kilometers. And we can deliver to any of those health facilities from that central point.
When we started in Rwanda, I think we started with blood products. That was a no-brainer usually to start with three drones because of the nature of blood production in terms of being hard to store and sporadically used and just generally difficult in supply and demand.
Justin Norman: So here’s how Zipline works.
Israel Bimpe: We build what we call a distribution center or a hub somewhere in the country, often outside the city, two to three hours drive outside the city, to make sure that we are able to maximize the radius, a full circle that we can serve of health facilities. And that distribution center is part drone port, part warehouse. And so the drone port side is everything that has to do with flight operations and the warehouse is inventory management, is a customer service call center. And then for us to be able to serve a hospital, a hospital has to show us about two parking slot space where each of our deliveries will be happening. And so we understand the need and demand of about 300 hospitals per hub that we get to serve.
And then we get the suppliers or usually either the central medical store, the national center for blood transfusion or the vaccines program, they bring us supply almost once a week or once a month, depending on how we agree with them per SKU. And then the hospital places an order via phone, via WhatsApp, via text, or via web interface. Zipline quickly processes and picks and packs the package in the fulfillment warehouse, it’s then handed over to the flight operator who will load it on the drone, and then it takes off. And usually, we communicate to the hospital in that process of when the drone takes off, five minutes before landing and as soon as it delivers its package and the drone returns. But delivery from when the order is received to when the plane takes off, we try and make it in under 10 minutes.
Justin Norman: And then the delivery from warehouse to hospital, it takes place in under 45 minutes.
Now everything from the warehouse design to the design of the drones – which are fixed-wing drones that drop off the packages to maximize battery life – as opposed to multi-rotor drones that take off and land, it is all designed in such a way to fulfill on-demand demand. Which is important, ultimately in reducing the cost of delivery, in particular, of high-value products.
Israel Bimpe: From a cost perspective, we believe to be at par with the existing cost. Usually, everything that goes into the cost of service that the patient has to pay, or the hospital has to pay on behalf of the patient, really includes things like, apart from driving the nurses, the driver and other people will have to go pick the product, and so on.
And so I think one of the ways we’ve gone about it is one if it’s a high-value product, we are actually cheaper compared to the current cost because they usually tend to overstock on high-value products. Blood, for example, or injectables, I would say anti-snake venom, oxytocin injectables. Those are all really high-value products. And so what the hospitals do is they never want to run out. So they usually overstock with the ability to kind of, they allow themselves to waste some of those products, which means that they are taking on the risk.
Justin Norman: And these products are expensive.
Israel Bimpe: I’ll give you one example. One blood unit is usually platelets or cryoprecipitates kind of blood unit costs about $100 to produce. And so if a hospital only consumes one of every five that they get themselves, that’s $400 that could be wasted across, I don’t know, 70 to 100 facilities that are transfusing across the country. And so we kind of factor all those costs into it. I think in a transport-to-transport comparison, we can be a bit more expensive, but if you look at the entire ecosystem, I would say we tend to now go at par or sometimes get very cheap.
Justin Norman: And the idea is not to leapfrog infrastructure, but to rethink medical supply chains and on-demand logistics, which like we spoke about with Shelf Life, frees up time and capital for these healthcare facilities to invest in greater care for their patients.
Israel Bimpe: One thing we’ve seen is a lot of these small clinics tend to have three months’ worth of stock on their shelf. That’s usually 10 times their capital, for example, instead of investing that money that they have on their shelf into maybe buying a better machine for eyecare or in an echography machine or something like that.
And so I think our role is to really get the government and the hospitals and the hospital system to re-think that process. I think that’s one end of the spectrum of like, can you change your supply chain system in a way that you don’t need to overstock every single small clinic, for example, and just leverage instant logistics with centralized stocking so that everyone has access to what they need exactly when they need them? So I think for us, we really want people to think differently about how each hospital access and stock and store and kind of use medical products and pharmaceuticals, and how much more they tend to do and spend on that.
Justin Norman: Now, while we’re at the frontier of health tech, I want to talk about the ideal state and what will become possible on top of that which is being built by the entrepreneurs and companies we’ve spoken to in this episode. It’s one thing to bring diagnostics closer to patients at the last mile, or to solve distribution problems, or bring more payers into the healthcare ecosystem. It’s another to rethink on-demand last-mile logistics. Then it’s another thing altogether to cure cancer or other diseases. And that’s ultimately what 54gene’s biobank is hoping to do.
Dr. Jumi Popoola: The 54gene biobank is in effect a repository of samples of different types, from different ethnic groups, from different diseases, and from different healthy communities, because you also need samples from healthy people to understand what is different in the disease samples collected. And we have established this biobank with approval from the National Health Research Ethics Committee in Nigeria, but also in partnership with teaching hospitals.
Justin Norman: In medical research, the diversity of African genes could play a role in the discovery of new drugs. Yet Africans have historically been left out of research and drug trials. A major part of 54gene’s mission in conducting diagnostics and collecting samples is also, with the patient’s permission, using those samples for research purposes.
Dr. Jumi Popoola: What that means is we have multiple sample types from across Africa, represented in our biobank. I think up to date, it’s covering about 300 ethnic grou, which is about a fifth of all the ethnic groups represented on the continent. And from that diversity in sample types, we can start to look for patterns. Is a genetic profile of a disease the same in this group of people versus another group? Are they the same as what we see as the map in Caucasians or non-Africans? Does that genetic profile look worse in some patients and can we relate the severity to how ill the patient is?
So together with the genetic data that the lab generates, we can start to make meaningful insights, better ways to treat diseases or targets that we can develop new drugs for to help patients.
Justin Norman: This objective first and foremost has possible implications for African patients.
Dr. Jumi Popoola: The reason we’re doing all of this in the first place is one, to understand whether the drugs that are currently in use for treating some diseases are the right drugs. Are there the right drugs, are they the right dosage for Africans? Because of the fact that African data wasn’t well represented in the drug discovery efforts for many drugs that are in Africa today when patients get treated with these drugs, sometimes they don’t benefit well enough or at all. So the genetics, the information we are harnessing will tell us if those drugs should be the correct drugs for use in the first place and whether the dosing is sufficient for the African population. So with all of that in mind, what we’re trying to achieve is when a patient goes to their doctor in Nigeria, in Africa, they get the best drug for them.
Justin Norman: And beyond local implications, the research could have global implications as well.
Dr. Jumi Popoola: The other thing that we might also achieve is novel targets. Africa is the home of every other population. So in the migration of different people, outside of Africa, that genetic pool is diluted out, right? And anthropologists will give you more in-depth details about this. But when you go to where the pool originated from, there will be regions that have never been tapped, that will not just benefit Africans, but non-Africans alike, given that every, you know, the origin is Africa. We might unravel a target that gives us a better chance of discovering or manufacturing a drug that treats a disease even better, or that cures it the first time round.
Justin Norman: Now, with all that being said, as my b-mic Sayo Folawiyo and I sat down for this episode’s retrospective, there were still some new or outstanding questions that were raised. We said at the top of the show that poor healthcare is a wicked problem, one that’s caused by a variety of different intertwined factors, and we certainly believe that to be true as Sayo and I reflected on this topic, and asked a few more questions that weren’t covered in this episode. Take a listen.
Justin Norman: I still think the most interesting thing to me is this idea about market development for diagnostics. So on the one hand, you know, an increase in technology reducing the price of diagnostics. But then, on the other hand, you have this question around whether pharma companies should subsidize the cost of diagnostics.
Sayo Folawiyo: Ok, so why pharma and not insurance companies?
Justin Norman: First of all, pharma has a product to sell.
Sayo Folawiyo: But there’s like a moral hazard, right?
Justin Norman: Yeah. So that’s also what Emilian talked about is that you could better price insurance policies by knowing more about the patients in question or the customers in question. And so I wonder if it should be both, right? So, I don’t know, like what would we rather see? Would we rather see people insured? I guess that’s the… we’d rather see them insured than just buying more drugs from pharma companies?
Sayo Folawiyo: Yeah. So like the insurance seems like more natural, what do you call it, I like that, the payers. Because I think that was the question I was asking myself through the episode as well, it’s just like, this is a lot of stuff. Who is the customer for what? And who pays for what? Or who’s the end customer and who’s the payer in all these different parts of the value chain? Cause, and clearly, in our environments, it’s not even slightly feasible for the individuals to be the payers.
Justin Norman: No, but it’s also not slightly feasible for the individuals to be the payers anywhere, right? I mean the insurance companies are the payers, not the individuals, you know?
Sayo Folawiyo: Hmm.
Justin Norman: But that’s the problem is when people are uninsured…
Sayo Folawiyo: Yeah, there were a lot of questions that I had that I actually would have wanted to ask the guys talking as well. Like what is the prerequisite for an insurance product? The problem was like, there wasn’t enough data, so you can make models that make sense, right? But you would have to imagine that there’s enough like you could price in uncertainty, let me put it that way.
So you could take a very safe approach, but it doesn’t seem to exist at all. And that seems like an excessive… and I was wondering, is that just because the product itself, like what you would claim from your insurer, is just not yet at a point where it’s even a good enough product, do you know what I mean?
People understand the concept of saving. I don’t think that’s… and they’re able to do so. The thing is like, is it worth it? And that sounds like the same thing, but it’s not. The calculus is where I think the… I don’t think conceptually people don’t want it, it’s the calculus – what am I getting in return? What are my short-term needs? What might be my long-term needs?
Justin Norman: There’s also trust of the insurance companies and, and that they’re, you know, when people file claims that they actually get paid out and they get paid judiciously. And then, yeah, I think it’s also in that respect product as well, because if the calculus is it’s not worth it, is that because in the case of a very low-cost insurance, that a lot is actually out-of-coverage, you know what I mean? So you’re paying for this thing and maybe you get your prescription drugs or whatever or hospitalization for free or covered, but then your prescription drugs are not included. And so I wonder if… I mean, just going back to, again, like that’s the world we want to see, right, is everyone insured.
Sayo Folawiyo: Yeah, I think the interesting thing of just to bring it back to the episode, I think the interesting thing about that I didn’t quite get a sense of was what are people’s… what are they noticing about the end customers attitudes to health care? The thing you just spoke about a little bit about like the level of trust in the healthcare institutions, the education, and understanding about, you know, they spoke a lot about proactive health care. And more from a soft perspective, what shifts need to be made? They’re starting with reactive medicine first because that’s where, you know, the low-hanging fruit is, or the big wins are. And then that now gives you the room to start thinking about proactive. And I was just kind of wondering if you can’t do both at the same time? And actually just what comes into that understanding, cause insurance is also a proactive kind of health management, right? And then also kind of a little bit of chicken and egg, right? Rou need payers, payers need a product to exist and so you have to make, do you make the product or find the payers? Like what is the balance between those two things? Because it feels a bit chicken and eggy.
Justin Norman: Well, just on the soft stuff, like think about it for a second though – we live in a world where people readily smoke cigarettes and drink alcohol and half the world thinks that vaccines are bad. You know what I mean? So like, it’s the same sort of question about how do you convince people… and that’s a weird thing to me about health. Like you would think that people would care a lot more about their own health, but I don’t know, it’s a really wicked problem in that sense.
Sayo Folawiyo: It really is. And there are ways, I think. I think there are ways. South Africa is a very interesting example. I think people in South Africa are fairly, well, it’s reactive, but in the reactive probably has developed a fairly proactive, maybe not proactive… at least the infrastructure around health is quite pervasive compared to anywhere else I’ve seen on the continent as a response though, I guess…
Justin Norman: Well, as a response to what like the biggest HIV and TB rates in the world?
Sayo Folawiyo: Yeah, exactly. Yeah.
Justin Norman: And then I have no sense of, but it’d be interesting to see how much of the funding for that infrastructure came from Gates or the World Health Organization or…
Sayo Folawiyo: That was another thing I was interested in. I was wondering as a payer, what role are these DFIs because, I mean, I don’t know how much more development you can get than healthcare, right, and access to healthcare. So what role are those guys playing? I imagine it must be a huge role, but you guys didn’t really discuss that.
Justin Norman: In this context, maybe we should have, but the thing on that actually is like – and this goes back to when we did the interview episode with Goke and also with Zipline in this episode – was like on the one hand, there’s availability of money in the system to do certain objectives or outcomes, but then there’s an efficiency element that exists or doesn’t exist in the context of like everything is made on vibes, right?
There’s not enough diagnostics, there’s not electronic medical records. And then also in the context of Zipline and the availability of essential medicines, like if they’re stocking, you know, whatever percentage greater of their working capital and inventory, and a lot of that’s going to go to waste like there’s a lot of other problems above and beyond just the availability of money or the availability of supplies that are bought with the money that these grant-funded organizations provide. And that is perhaps, you know, the role that technology is playing is like, maybe there actually is some good money in the system, not just from the development institutions, but also from, you know, pharma and from insurance. But the efficiency and the input-output, the data, you know, the logistics, like all of that struggles to deal with the fragmentation of the systems.
Sayo Folawiyo: Yeah, it’s very complicated. Whew. I was like, man, this is like so many moving parts. Even still now I don’t feel, you know, generally, I can kind of wrap my head around stuff. I didn’t feel my head is wrapped around this value chain at all.
Justin Norman: Well, it’s the same thing as earlier in the season with fintech where we said it’s very hard to create a podcast episode. And we were talking about fintech in the midst of a three-part series that we did. So maybe moving forward, if we want to cover a topic, it needs to be a full season.
Sayo Folawiyo: Yeah. And I think that’s the cool thing about this season, as well is like, shit, we don’t know shit.
Justin Norman: We really don’t know anything.
Sayo Folawiyo: Let’s go deeper, you know, which is cool. I like that.
VO: That’s it for this week’s episode of The Flip. Next week we explore another topic that we don’t know anything about: farming and agriprocessing. We’ll see you then.