To my simple way of thinking, commercialization is the final step of innovation: all the steps needed to sell a new product or service and at an affordable price to a customer for whom it fulfills a need. Ideally, the sales revenue allows recouping of the expenses the product’s development, manufacture, distribution, and marketing plus an increment as profit to investors and to “refuel” the process, making the company sustainable (in business speak, a “going concern”). Although the conventional wisdom is that products and services for global health are not commercialized and that a for-profit approach does not work, the failure of the traditional, non-market approach (multi-year, multi-million-dollar aid programs) to generate sustainable solutions has stimulated interest in considering and adapting a commercialization approach.
In the “product development program” (PDP) model for innovation in treatments and diagnostics for the neglected diseases, the development costs are supported by a grantor (foundation or government) rather than investors and, eventually, the manufacturing and distribution costs will recouped by sales to intermediary (a donor organization, international or national agency) who provides the product to the customer with no out-of-pocket (like in the US where most of us have insurance and minimal out-of-pocket costs). The long-term effectiveness and viability of the PDP model is yet to be known (the first PDPs started in the early 1990s). A variation on this model, and one the PDPs are pursuing, is for the commercialization process be competed by a for-profit company, a partner with the know-how and infrastructure to make a profit and hence sustain the delivery of the needed product or service at an affordable price. I thought it would be worthwhile to look for examples of global product commercialization especially where for-profits were involved.
As a starting point, I revisited two recent reports on innovation in products and programs in global health. Unfortunately, neither, while impressive for the useful information they provide, have little in the way of examples of commercialization. Last year, BIO Ventures for Global Heath (BVGH) published a report called “Global Health Innovators” which descried six collaborations between companies, academic groups, and the PDPs. All interesting, but none of the six have reached commercialization stage yet (GH Innovators). Also last year, the Alliance for Case Studies in Global Health, an ad hoc group composed of the Association of University Technology Managers, the Bill & Melinda Gates Foundation, Global Health Progress, the International AIDS Vaccine Initiative, and Tropical Disease Research published its “Case Studies for Global Health” (GH Case Studies). Of the 33 studies, eight involved technology or product development (most were programs of various sorts); there were: five vaccines, one diagnostic, one glaucoma treatment, and one vaccine vial monitor. Of these, only the monitor has been commercialized (more below). So not much help.
The only organization that I found with a track record in global health product commercialization, albeit a modest one, is PATH (PATH), which is the Gates- and government-funded, Seattle-based organization with 25 years of experience in global health (and which was the topic of my posting of February 25, 2010). PATH has a Heath Technologies Group that is working on range of solutions (Health Technologies), some of which, according to PATH’s write-up, Technology Solutions by the Numbers (By the Numbers), have been distributed in the billions of units. Impressive, but to understand PATH’s distinction between “distribution” and “selling,” which is the goal of commercialization, I looked for details in the Group’s Technology Updates (Updates). Of the 31 products described, I excluded three as variations, leaving 28 unique products, and of these, five had been commercialized:
-two syringes (Uniject and Soloject) had been licensed to Becton-Dickinson (BD) and are being used widely in global immunization programs (I estimated to give 300-400 million doses each year);
-two diagnostics (for malaria and HIV) which had been licensed to companies in Germany, India, Argentina, Indonesia, and Thailand were selling in about 300 thousand and one million units, respectively, each year; and
-the vaccine viral monitor mentioned above which is sold by the Temptime Corp. (Temptime) (apparently PATH provided “guidance” in this product’s development since licensing is not mentioned) and which is used on about 140 million vials per year (my estimate).
Bottom line: PATH has a limited record on commercialization and, if it is to be successful with the other 25 products in its pipeline, some of which have been under development for multiple years, needs to improve its commercialization process. I would suggest the management of the Technology Solutions Group implement a best practices review and adoption process, thin out its pipeline, and concentrate on getting its products in the hands of those that need them.
The other bottom line is that the how, who, and what of global health product commercialization is under development and, therefore, is ripe for innovation of its own. Potential innovators, including those previous noted, are:
-BIO Ventures for Global Health, e.g., through its Partnering Forums (Compelling Business Models);
-PATH, since commercialization is stated as one of its goals (2008 Annual Report);
-Research Triangle Institute which has a Gates-funded program to help in commercialization (Venture Investment Technical Assistance, VITA)
-the many companies who are selling health care products in the ROW (rest of the world), non-“major” markets, e.g., vaccines (DCVMN), pharmaceuticals (Moksha8), and diagnostics (RDT Manufacturers); and
-self-employed consultants like me if given a chance.