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Monday, March 26, 2007

TN4B: Focus on Health

By Julia Tran

TN4B Pharma ImageWe've all heard of the dire situations: "Every x seconds, y children/women/people die of z disease around the world."? For many years, health crises--HIV/AIDs, malaria, diarrheal diseases, etc.--have been a prominent focal point for the efforts of the development community.? Only recently, however, have people begun to consider private sector strategies for helping to stymie the overwhelming need for more adequate healthcare delivery to the BOP, often considered the province of governments and aid.? But there IS some willingness and ability to pay among the BOP for healthcare.

This idea isn't so monstrous when one considers that the BOP already must spend for healthcare and that often, available options are of poor quality and costly to access, especially for rural dwellers.? The size of the BOP health market worldwide is estimated to be at least $158.4 billion.? How could the private sector provide high-quality, accessible, affordable treatment and medication to this market?On NextBillion, we have already discussed the ability of microfranchise models, such as CFWshops Kenya (affiliated with Healthstore), Mi Farmacita, and Janani, to overcome many of the challenges of operating in BOP markets.

The data in The Next 4 Billion suggest that there is a ready market for such private sector interventions.? Pharmaceutical spending comprises the bulk of BOP health spending.? In the report's 34 measured health markets, pharmaceutical purchases tally up to $56.7 billion, well over half of all measured health spending.

The data also suggest that rural markets account for substantial shares of national BOP markets, especially in Asia, where rural spending is 2.4 times that of urban spending, and in Africa, where urban and rural market sizes are roughly comparable.? Business models that seek to reach rural customers must be decentralized, a characteristic of many direct sales models such as Hindustan Lever and Scojo's.

Other significant data points and corresponding business models in the health sector are available in the full publication.
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