Exertion Toward a Common Object

“I have often admired the extreme skill with which the inhabitants of the United States succeed in proposing a common object for the exertions of a great many men and in inducing them voluntarily to pursue it.”  Alexis de Tocqueville, On Democracy in America (On Democracy).

Back in the day, the ever-quotable Alexis noted the citizens of the emerging US saw individual benefit in pursuing mutual interests through starting and joining associations.  In today’s business and commercial world, it is second nature for us to join professional groups, attend meetings, sign up for newsletters, and generally network, glad-hand, and smooze at every opportunity.  If our common object is conducting the business of global health, what forums do we have?

First, a reasonable question is:  is there a global health business, that is, an opportunity for companies to profit through commerce in products and services for under-served populations?  As a first approximation for the global health market place, I note that about 14% ($115 billion) of the 2009 world-wide sales of pharmaceuticals of $820 billion occurred in the emerging economies of China, Brazil, India, South Korea, Mexico, Turkey, and Russia (2009 Forecast) so  about 17% ($147 billion) occurred in the rest of world including those countries with few resources in health care.  Applying the same ratio to a world diagnostics market of $44 billion (Diagnostics Market), I add another $14 billion, giving a approximate potential non-US/EU/Japan “global health” products market of $276 billion, a reasonable amount of commercial activity for companies to build their business plans on.

To succeed internationally, companies, both those based in the better-capitalized and -resourced countries and those in the less well-endowed regions, need to know the markets they wish to enter.  For example, US companies need to figure out affordable and effective treatments for the diseases of the emerging world, both the infectious (“neglected”) and non-communicative, and how to distribute them and get paid.  Companies wishing to enter “first world” markets need to be equally inventive and knowledgeable.  So not surprisingly, companies have formed international partnerships to gain this knowledge of local markets, distribution, registration, importation, etc.  The number of companies forming these partnerships is considerable.  Researchers at the McLaughlin-Rotman Centre for Global Health (MRC) recently reported on a survey of 500 biotech companies based in the US, Canada, and Europe (aka “the global north”) and found more than half had active collaborations with companies in the developing world (aka ”the south”) (Nature v3n3).  To get an idea of the type of collaborations, the same authors interviewed Canadian biotech companies (of which  25% had non-US/Europe, international collaborations) and found collaborations primarily for, in descending order:  product development (R and D and clinical trials), contract research or manufacturing, and product distribution (Nature v27n9).  The authors also noted that the collaborations were bi-directional, with knowledge and capital flowing both ways, and were self-initiated; government and international group involvement was absent or limited.

So motivation exists for north-south company collaborations and they are happening; how may they be facilitated?  Currently, the major international biotech trade group is the Biotechnology Industry Organization (BIO) which has only a few members from the global south, due to several possible reasons (but probably not the cost of membership dues which is a few thousand dollars for small companies).  BIO supports global health through its annual meeting (which this year has a track on global drug development, BIO GH DD Track) and its support of BIOVentures for Global Health (BVGH).  This year BVGH is aiming to increase collaboration opportunities by holding a Partnering for Global Health Forum (PGH Forum) which is coincident with the annual BIO meeting in May.  Registrants for the PGHF may also participate in the BIO Business Forum (BIO 2010 Business Forum) through which person-to-person business development meetings are scheduled with other BIO attendees.  Since a company would more likely register for the Business Forum through BIO, I’m assuming this opportunity is aimed at the more traditional players in global health (the foundations, academics, non-governmental organizations, and product development partnerships) who hopefully will see themselves as potential collaborators (and sources of non-dilutive funding) and will attend looking to make deals with companies.

BVGH has also proposed Global Health Connect, a program that “will match the needs of those working in the non-profit and academic sectors on product development for neglected diseases with the expertise and technology present in biopharmaceutical companies” (BVGH GHC).  Details are TBD.  One would hope that the GHC will also service companies, north and south, seeking global health product development expertise and collaborations.

In a paper published last fall, the MRC team has also proposed a similar program, the Global Health Accelerator (Health Affairs Abstract), whose “mission would be to help Southern firms get their products for neglected diseases to market” by providing pro bono business planning from “top tier” consulting firms (I’m skeptic about how useful this would be), a prize for innovation (almost completely useless), “access” to venture capital (but VCs are already good at generating their own deal flow), and a list of information sources (likely duplicative).  I’m guessing that this Accelerator won’t go anywhere unless the MRC gets a big grant from a foundation.

In my experience, deal-making is a contact sport so I think that the BVGH approach of sponsoring opportunities for personal meetings will be more productive.  Of course, governments have promoted personal connections through sponsorship of international trips by company representatives (preferably well-prepared to pitch their companies) and business-friendly consulates, but these require motivation and funding.  More 21st century is the potential for connectivity and subsequent deal-making afforded by now almost-ubiquitous internet access.  There are informal online forums for those interested in the global health business but these are individual rather than company-oriented (I belong to two through LinkedIn:  Orchid Neglected Disease Drug Development Community and Network and Pharma Professionals for Global Health).  Given my involvement in business mentoring and coaching, I think there is a place for a online matching service for companies seeking access to expertise and connections that may lead to collaborations (e.g., the Peloton Partnering I mentioned in my posting of 12/3/09).   But my dream model for an international connection hub for the business of global health is Boston’s new one-stop website for (almost) all things entrepreneurial:  Greenhorn Connect (http://www.greenhornconnect.com/).  Are there other ways to promote international collaborations for the business of global health?

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One thought on “Exertion Toward a Common Object

  1. Chris,

    Thanks for the mention. Very interesting thoughts. Hopefully some of what we’re working on at Greenhorn Connect is at least helping at the micro level of Boston.

    Thanks,
    Jason

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