1. Private Sector Strategies for Providing
Healthcare at the Base of the Pyramid
John Paul
November 2005
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Despite their best efforts, government and NGO programs have generally failed to achieve the
scale and sustainability necessary to provide adequate and affordable healthcare to many living
below the poverty line. But as the Time Global Health Summit recently illustrated, the role of the
private sector in improving the delivery of healthcare in developing countries is still being
debated. Although private sector strategies may improve efficiencies and lower costs, some fear
that turning healthcare entirely into a consumer service will marginalize the poor even further.
There is also the question of whether or not providing healthcare to low income communities can
be done profitably.
The debate may finally be settled based on the success of several new business models that are
blurring the line between NGOs and the private sector. This report highlights a number of
innovative enterprises that leverage cross-sector partnerships to provide affordable healthcare to
the poor. They are organized in four broad categories: franchised networks that provide health
services, ventures that produce health-related consumer products, enterprises that provide
financial services and health insurance, and entities that are using the latest technologies to
provide world class healthcare.
Franchises Solutions
The franchise system is one of the most successful private
sector business models: its decentralization enables rapid
scaling and replication, and may be particularly suited for
penetrating rural underserved areas; and the size of a
franchised network can also be leveraged for cost savings
and greater government and private sector support. Several
initiatives are already demonstrating their effectiveness in
providing healthcare to low income communities.
In Bihar and Jharkhand, India’s two most impoverished
states, the NGO Janini is leveraging partnerships with the
private sector to supplement the government’s efforts and make healthcare and family planning
services more affordable.
The program has reduced health costs to half the market prices by playing the role of an
intermediary between the government and three interlinking franchised healthcare delivery
networks: doctors who deliver clinical services; rural centers that sell over-the-counter products
and services, and counsel and refer clients to doctors; and shops that sell products to urban
clients and replenish supplies to doctors and rural centers.
Janini uses a combination of social marketing and franchising techniques to provide value to its
partners and ensure the sustainability of its networks, which currently consist of 260 franchised
medical clinics, 39,000 rural health centers and 40,000 shops. By purchasing government
subsidized healthcare commodities in bulk for its franchisees, the NGO reduces prices and
increases the earnings of its providers. Janini further reduces costs by increasing the volume of
patients utilizing its franchised services. The network is heavily advertised through local and mass
media, as well as through direct outreach activities in slum areas.
Although the reduced prices are still not affordable to the poorest of the poor, Janini is leveraging
its strong linkages with the government to offer further subsidies to the most vulnerable. Added
value is provided through additional training and support of its franchisees.
The program is the first of its kind in the world, and demonstrates a scaleable model that has
been recommended by the Indian government as an effective strategy for public-private
partnerships. Over the past nine years, it has provided healthcare and family planning services to
4.3 million couples. Although operational costs are still partially funded by donations, Janini is in
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the process of scaling up. Discussions have begun to expand to two other states of India and to
another poor country in Asia.
A new enterprise in Africa is also using the incentives, controls and scale of the franchise model
to provide high quality primary care at very low cost. The non-profit HealthStore Foundation
(HSF) currently operates a network of 68 independently owned and operated HealthStore
pharmacies in Kenya employing the same principles driving successful multi-national
franchisers, namely consistent quality and care through tight franchise systems and controls, and
efficiency through scale and standardization across the entire network.
With locations in underserved villages and urban areas throughout Kenya, the HealthStores
provide access to much-needed healthcare, while generating enough revenue to pay their nurse-
owners and staff a competitive annual salary. HSF leverages the combined buying power of the
full network to obtain quality medicines at the lowest possible cost and strictly controls prices at
retail.
Like Janini, the organization works closely with the
government. It collaborates with the Kenya Ministry of Health
on health education and outreach, particularly though free
primary school health screenings. The government also
licenses each franchise.
Its network of 68 independently owned and operated health
outlets served more than 224,000 in 2004, and is now in the
process of scaling up. The foundation aims to triple the
number of its franchises in the next three years, expanding to
cover all of Kenya and eventually replicating its model in
other African countries. At scale, the cost to improve access to basic medicines with the HS
model will be less than US $1 per person per year.
In Costa Rica, ASEMBIS has established five clinics and a mobile unit that brought medical
services to 350,000 clients last year. The network utilizes a high level of technology and first class
professionals, but is still able to price services 70% lower than market rates. The high quality
service attracts people from all social levels to the clinics, allowing the network to have a scale of
prices tied in with the ability to pay. Although the majority of their clients are low-cost patients –
some even receive care for free - ASEMBIS has been self-sufficient for the last 10 years; 95% of
their budget is composed of resources brought in by customers.
Up to now, ASEMBIS has had control over all the branches, but according to founder Rebeca
Villalobos Vargas, that may soon change: “Work capital is necessary to open a clinic, but since
attending the Pyramid Business Opportunities conference in Mexico, I would consider
franchises as an option as they would allow for a faster scale up and would allow for people to
succeed through their own businesses while perpetuating ASEMBIS at the same time.”
Another franchised venture that also attended WRI’s Mexico BOP conference is Farmacita
Nacional. The nationwide pharmacy chain provides low-cost generics, consultations, and pre-op
services to underprivileged individuals. To supplement their income, the independent franchises
also provide additional services like telephone and Internet. Each pharmacy serves an average of
2,500 households.
The government of Mexico supports the venture by providing generous tax exemptions to
franchised networks. Like the other examples discussed, the pharmacy chain also generates cost
savings due to its size, allowing it to expand into markets currently underserved by the private
sector.
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Consumer Products for Disease Prevention
An ounce of prevention is worth a pound of cure. The old adage is particularly applicable to
healthcare in developing countries, where millions of people die or get sick each year from
illnesses that are easily preventable. The financial costs of these illnesses far outweigh the
minimal costs of prevention, yet even these expenses are currently out of reach for the poorest.
Today however, a number of new initiatives are seeking to address this paradox by producing
consumer products that prevent diseases and are affordable to the masses.
Indoor Air Pollution
More than half of the world’s population relies on biomass
(dung, wood, or crop waste) for their cooking needs. Although
they are inexpensive, burning such solid fuels indoors without
chimneys or proper ventilation produces a range of harmful
indoor air pollutants, including small particles that are up to
100 times acceptable levels. This pollution currently results in
1.6 million deaths annually due to pneumonia, chronic
respiratory disease and lung cancer. With populations growing
and alternatives such as kerosene or liquid petroleum gas
becoming more expensive, the numbers of people relying on
such fuels – as well as the negative health effects - are set to grow.
To address this problem, the Shell Foundation has committed US$ 10 million to tackle indoor air
pollution through a new program called "Breathing Space." Shell’s approach is to identify, test
and diffuse market-based solutions that provide a viable alternative to the high polluting biomass.
Under this program supply- and demand-side interventions based on business and market
principles are being piloted in eight developing countries.
One such solution that Shell is sponsoring is Project Gaia. The program
seeks to create a model by which a household market for locally-produced
alcohol-based fuels like ethanol and methanol can be developed on a
commercially viable scale throughout developing countries. The initiative is
being piloted in Ethiopia, where a thriving sugar cane industry can provide
the biomass used to create the fuels. The project is also developing a
CleanCook stove powered by the fuels.
Other ventures are also producing cleaner-burning stoves. The Upesi
Project, supported by the Intermediate Technology Development Group
(ITDG) and Shell, was initiated in 1995 to promote the adoption of more
efficient wood-burning stoves in rural areas of western Kenya. More than
16,000 of the fuel-saving stoves were sold during the first 5 years of
operation. In neighboring Ethiopia, Mirte Stoves have been specially designed for the production
of injera, a household bread that is the country’s staple food. The Mirte Stove reduces energy
consumption by 50% and eliminates the smoke emitted inside the house. By late 2000, over
90,000 Mirte stoves had been sold in Addis Ababa and a number of smaller urban and rural
areas, leading to wood savings of over 45,000 tons each year, and an estimated cumulative
woody biomass savings of over 80,000 tons.
The need to reduce indoor air pollution is not limited to Africa, and neither are the solutions. In
Nepal, the Biogas Sector Partnership has developed a cooking stove that operates on the
methane produced when cow dung ferments. Over 50 independent companies have installed
more than 124,000 of the stoves and biogas production systems in households throughout the
country. Although there is a high upfront cost for Nepalese families, microfinancing schemes and
savings from ceased daily dependence on wood fuel make it affordable. Subsidies are also
provided by the Dutch aid agency DGIS.
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What’s interesting about all of the models discussed is that they are affordable solutions that rely
on local resources for their manufacturing and use. So in addition to the health benefits, the
projects also create a number of sustainable local jobs relating to the production, selling, and
servicing of the stoves. Also, with the exception of the Gaia project which is just now deploying its
prototype stoves, each model seems to have traction, demonstrating the viability of providing
such solutions on a for-profit basis. Finally, beyond the health and economic benefits the stoves
bring, there are also the added environmental benefits of creating less pollution and using less
biomass, a resource that is becoming increasingly scarce in some areas.
Anti-Malaria Bed Nets
Malaria is another disease responsible for more than one million deaths annually. The social and
economic impacts are particularly devastating in Africa where 90% of deaths occur and poor
children under the age of five are most at risk. Africa’s GDP is thought to be 32% lower than it
would have been if malaria had been effectively controlled 35 years ago. While the race for a
vaccine is on – GlaxoSmithKline recently said one could be licensed by 2010 – current
prevention techniques are inadequate.
Seeing a market opportunity, the Vestergaard Frandsen
Group has developed, patented, and is currently marketing an
insecticide-treated net called PermaNet. The polyester
bednets fully comply with the specifications and requirements
of international aid and health organizations, and lasts for
three to four years without needing to be re-treated. The
company also produces ZeroFly, an insecticide incorporated
plastic sheeting used to provide emergency shelter in disaster
situations.
Another highly-effective and long-lasting insecticide-treated malaria bednet is being
manufactured, produced and sold by for under $5 in east Africa. Tanzania-based A to Z, the
largest privately help manufacturer of bednets in Africa, employs approximately 600 workers and
currently produces 5 million bednets annually for distribution in Tanzania and other African
countries. A to Z is also the lowest cost manufacturer in Africa due to an intense focus on
innovation and productivity.
Both bednets are manufactured locally – PermaNet in Asia and A to Z in Africa – creating local
jobs. Both products were also developed specifically for cash-poor consumers who require
reliable long-term solutions. And like the cooking stove examples above, both companies
demonstrate the viability of businesses that produce products for low-income communities, if
such goods have a clear and demonstrated value to the consumer.
Nutrition
More than 350 million children and adults worldwide are suffering from malnutrition,
a problem which accounts for more than half of child mortality in low-income
countries. In addition to making a person more susceptible to illness in general, a
diet bereft of proper nutrients can result in otherwise easily preventable diseases.
For example, a lack of iodine and iron - normally found in foods like meat that are
often too expensive for the poor to buy - severely impacts child growth and
intellectual development. Vitamin A deficiency is also the main cause of preventable blindness.
Two of the world’s largest consumer goods companies are now developing products aimed at
combating poor nutrition. Proctor & Gamble (P&G) has created NutriStar, a powdered health
drink designed to help kids grow better while also boosting their mental alertness and
performance, while Hindustan Lever Limited (HLL) has developed a more stable iodine for salt
that is effective in preventing iodine deficiency disorder.
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The NutriStar roll-out is an excellent example of how a multinational can iteratively develop a
strategy for succeeding in markets at the base of the pyramid (BOP). The product was originally
marketed as NutriDelight in the Philippines, where P&G tried unsuccessfully to both educate the
public on the health benefits of micronutrients as well as manufacture and distribute the product -
all on its own. The company did not possess the local knowledge and reach to deliver
NutriDelight to the poorest communities, and affordable price-points were never attained because
money that would have been better spent creating demand was diverted to public education
campaigns. Eventually, a lack of intellectual property rights allowed local competitors to market a
similar looking but less expensive product that claimed to have the same health benefits.
Undeterred, P&G then launched the re-branded NutriStar drink in Venezuela. Rather than going it
alone again, this time the company began to build a network of partnerships with NGOs,
multilaterals, and local pediatric associations in order to develop its information and product
awareness. P&G also sought partners with expertise in production and distribution, or with
government or NGO agencies involved in education or social marketing. Unlike the Philippines,
P&G also relied on local enterprises to manufacture and distribute the product, adding additional
value through regional job creation.
Despite these efforts, it proved difficult to reach the people who could benefit most from the
product. Political instability impeded P&G’s ability to refine the model further, eventually leading
the company to pull NutriStar out of the Venezuelan market all together. However, P&G continues
to press on: through a partnership with USAID, the drink is now being marketed in Nicaragua.
In India, HLL is selling an affordable iodized salt aimed at
eliminating iodine deficiency disorder (IDD), a condition that
hinders the growth and intellectual development of 70 million
people worldwide. Like P&G, HLL has added local partners to
its value chain. By using village-based entrepreneurs to sell
products in remote areas, HLL is ensuring its availability, as
well as providing jobs, income, and self-respect for the poor.
The product has since been replicated in Africa, where the
Unilever Africa Regional Group created a separate business
unit called Popular Foods to target mass-market consumers with nutritious foods at affordable
prices. Marketed under the brand name Annapurna, the salt is sold in small sachets to help
preserve the iodine and keep costs low. In conjunction with NGOs and governments, Unilever
also sponsors a project to educate rural populations about the health benefits of iodized salt.
Both P&G and HLL were able to get a foothold into new markets by entering into a number of
unconventional partnerships. They relied on local expertise to create awareness and demand for
their products, and utilized local distribution chains to penetrate rural areas they otherwise could
not access. In the process, they added value to the local economy by creating a number of
sustainable livelihoods. The partnerships also allowed both companies to focus on their
strengths, namely product development and branding, rather than trying to do everything on their
own.
Water-borne Illnesses
According to the UN, 1.3 billion people already lack access to “safe” drinking water, and with
global consumption of water currently doubling every 20 years, 48 countries are expected to face
chronic water shortages by 2025. In developing countries, this means higher prices for clean
water, and as a result, higher rates of diarrhea and other illnesses; at any one time, it is estimated
that half of the world’s hospital beds are occupied by patients suffering from water-borne
diseases.
One company, KX industries, has recognized the growing need, and seized upon the market
opportunity by developing a nanotech microbiological water filter specifically for emerging market
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economies. The gravity-flow device known as the “World Filter” is expected to cost as little as
$6, and remove chemicals, bacteria, and viruses to provide clean and safe water for an entire
family for only $ .02 / day. To keep costs low and quickly scale their operations, the US-based
company is establishing local partnerships for both manufacturing and distribution, using a model
similar to the beverage bottling industry. While other competing technologies do exist – such as
ceramic or reverse osmosis filtration – the KX filter is one of the least expensive, due partially to
the fact that it was developed explicitly for BOP markets.
Like the P&G and HLL examples above, Indian water filter manufacturer Mytry
faced challenges raising awareness about the usefulness of its product to rural
populations; in this case, the potential dangers of drinking water that contains
high flouride levels. Developed at the IIT Kanpur, the filter technology has been
proven to remove fluoride, making groundwater safe for consumption. To
educate the market, Mytry developed a marketing strategy that included hiring
an award-winning group of entertainers to travel to different communities and
educate people about the benefits of its fluoride removal filter.
Finally, Proctor & Gamble is also producing a water filtration
system for low-income households. Marketed under the brand
name PuR, the company sells single serving sachets that
contain the same ingredients that are found in municipal water
treatment systems. Each sachet is capable of treating up to 10
liters of water. Adding one sachet to a bucket of dirty water
forces all the bacteria, viruses and pollutants to aggregate at
the bottom, leaving pure and safe drinking water at the top.
The sachets are ideal for BOP markets; their small size makes
them convenient to transport and store, and their low cost -
about US$ 0.10 in the commercial model – ensure that even the poorest families can make use of
them. P&G is now working in collaboration with non-governmental organizations and
governments to develop a sustainable market-based approach for delivery.
Like the nutrition examples above, each water filter company relies on local partners for
manufacturing and distribution. In areas where potential customers need to be educated on a
product's utility, local partnerships have also proven beneficial.
Insurance and Finance
In developing countries, there is a strong correlation between access to finance and access to
healthcare. Getting the poor to bank, and bank profitably, could push rural finance and healthcare
past a tipping point: from philanthropy with a hint of business logic to real commerce with a hint of
compassion. To test this assumption, a number of new initiatives are using private sector
strategies to increase the availability of both.
One such model in Africa is piloting an approach to health
insurance arising from principles of solidarity and mutual
assistance. With support from USAID, groups called Mutual
Health Organizations (MHOs) are being set up in 11
countries to provide affordable general and reproductive
healthcare to women. Their structure is similar to microfinance
self-help groups (SHGs), where women make monthly or
semi-annual contributions that are pooled to cover future expenses of its members. The
Organizations also leverage their combined bargaining power to negotiate better rates for a
predetermined set of health services provided by affiliated clinics and hospitals.
Enrollment numbers are growing exponentially. In Rwanda alone, membership grew from 88,000
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to more than 200,000 in just three years. The rapid growth is partly attributable to the fact that,
unlike many government or NGO health initiatives, Mutual Health Organizations are viewed as
legitimate because they are completely indigenous, often stemming from local solidarity networks
that already exist.
Although MHOs are financially fragile for at least five years, research shows that they are
increasing access to healthcare services in poor countries. In Rwanda, pregnant members were
up to 65 percent more likely to visit modern healthcare providers than pregnant non-members.
Efforts are now being made to coordinate the involvement of the government, donors, and non-
governmental organizations (NGOs) whose support is critical to the survival of young MHO.
Also in Africa, a consortium comprising AAR, K-Rep Bank and K-Rep Development Agency has
initiated an innovative, private sector driven, commercially viable and replicable health financing
scheme. The project has made great strides in developing two key products in Kenya: the Afya
Card and the Afya Loan. The Card is a family based health plan designed to provide for basic
healthcare needs for the entire family. The Loan product makes the Card affordable, giving clients
the ability to pay for the health plan in flexible installments.
Insurance plans are also being offered to the poor. ICICI, India’s second largest bank, has made
providing financial services to the poor an integral part of their long-term growth strategy. Through
its rural banking division, the company is offering a wide variety financial services that meet both
the needs and income levels of its clients, predominantly farmers and day laborers that are
particularly vulnerable to injury, illness, and exploitation. For example, ICICI sells personal-
accident insurance at its rural branches for $2 a year, with a payout of about $2,200 in case of
death and half that in case of debilitating injury. By stepping in where government and NGO
programs have failed, the bank is helping to address the root causes of poverty.
Also in India, the Jana Suraksha Scheme is providing affordable life insurance specifically
designed for the lower income group in rural areas of Andhra Pradesh. The product is being
offered by Aviva Life Insurance, a joint venture between Dabur, India’s leading producer of
traditional healthcare products, and Aviva, the world’s sixth largest insurance Group. In
partnership with Laskshmi Vilas Bank, the scheme has also been extended to SHGs, giving the
female members special credit protection against their loan in the eventuality of an unfortunate
incident.
Expenses from illness, injury or death can leave a family permanently indebted. Through a
combination of cross-sector partnerships and income appropriate solutions, the examples above
provide affordable options that give the poor greater control in managing these risks.
World Class Service
Healthcare for the poor is typically regarded as substandard, and it sometimes is. But a number
of new initiatives are turning this assumption on its head, proving that affordable world class
healthcare can be affordable to markets at the base of the pyramid.
Hi-Tech Healthcare Delivery
Hardly a day has gone by recently without a flurry of news stories about the bird flu and the
inevitability of a human flu pandemic. If the locations of recent outbreaks are any indication, this
pandemic will likely start in a rural developing area where healthcare and infrastructure is limited,
and then spread quickly throughout an increasingly connected world.
One company has pioneered an approach to stop such a pandemic before it starts. In Peru, the
for-profit Voxiva has developed and implemented a technology platform that enables medical
professionals to collect health data in real-time and communicate with one another in order to
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effectively monitor and respond to disease outbreaks. In such a situation, active surveillance is
critical to early detection. The Voxiva platform utilizes phones and the Internet to ensure that
appropriate action is taken, enabling local communities to use scarce resources effectively.
The Uganda Health Information Network is also providing
practitioners with real-time access to vital information through
the use of Personal Digital Assistants (PDAs) connected via
the local GSM cellular telephone network. The technology
allows for easier consultation, real-time ordering of medicines,
and access to medical journals - all of which improves the
quality of Uganda's health care system. Developed by
SATELLIFE, the project has successfully transitioned from a
grant-funded project to a stand-alone non-profit organization,
in part due to its ability to secure support from the Ugandan
government.
Even the best healthcare schemes suffer undue costs due to patients who fail to follow their
doctor’s orders. It is estimated that no more than 50% of patients with chronic conditions take
their medicines properly. In the medium-long term, the costs of this non-compliance are
significantly greater than the costs of the medication itself. On-Cue Compliance addresses this
dilemma by using text messaging to send patients timely medication reminders via their personal
cell phones. The technology used to send out the messages is extremely low-cost and robust: an
open source software operating system, Web server, mail transport agent, applications, and a
database. Currently, the system is being used in the treatment of tuberculosis patients in Cape
Town, South Africa, with almost a 100% success rate.
A number of other examples of initiatives that use information and communication technologies to
provide world class health service to low-income individuals can be found in Lessons from the
Field: ICTs in Healthcare.
Disease Detection
Recognizing that conventional laboratory diagnosis of diseases can be prohibitively expensive in
developing countries, San Francisco-based Sustainable Sciences Institute (SSI) is helping
public health workers in poor areas take advantage of the latest advances in molecular and
biological technology. The group has demonstrated how - with a basic knowledge of the
processes - DNA, blood and urine analysis can be done without expensive equipment for one-
hundredth the cost of traditional methods.
With support from the Acumen Fund, SSI is also testing a portable disease detection device
capable of diagnosing major illnesses such as dengue fever, HIV, malaria, and measles in the
field, for one-third the cost of existing technologies. Other companies are also producing
equipment designed to rapidly and accurately make diagnosis in the field. In India, for example,
the TeNeT Group at the IIT Madras and Neurosynaptic have developed an affordable
telemedicine solution which includes a remote diagnostic kit called ReMeDi. The device
incorporates an electronic stethoscope, and can conduct physiology tests including temperature
and blood pressure measurements, and ECG.
Freeplay is expanding beyond just wind-up radios and torches. The company has teamed up
with a group of doctors at University College London to redesign four pieces of standard
neonatal-care medical equipment to better suit developing country environments. The portable
hand-powered devices include: a pulse oximeter to measure levels of oxygen in the blood, a
syringe driver for delivering small amounts of fluid and drugs in tightly timed doses, a micro-
centrifuge, and a hand-held fetal heart monitor. Several prototypes of each apparatus are now
being tested in hospitals in South Africa.
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Disabilities
In developing countries, where social safety nets are limited or non-existent, being born with or
acquiring a disability often relegates a person to a life as a beggar, and prevents them from living
up to their full potential. Several initiatives are combating this inevitability by developing low-cost
technologies aimed at helping the even the poorest overcome their disabilities and live a
productive life.
The Affordable Hearing Aid Project (AHAP) has produced a
digitally programmable analog hearing aid named Impact 1.
Designed to minimize component cost, the device wholesales for as
little as 1/12th the price of comparable models in the US. Through a
multi-tiered pricing model, the device retails according to the
patient's ability to pay, where profits from wealthier customers are
used to offset losses from poorer ones. The project has further
reduced costs and maximized benefits by distributing the Impact 1
through socially franchised partnerships with other non-profit
organizations already working in the fields of health care, disability,
and hearing impairment.
Comcare International is also producing a hearing aid aimed at the
BOP. The solar-powered device has an extremely strong case that
seals the internal parts from dirt and moisture, an easy to use rotary volume switch, and larger,
more reliable and less expensive components. Distribution is accomplished through onsite clinics.
For amputees, the Jaipur Foot is a cheap, durable prosthetic foot, whose lightness and mobility
allows the user to run, climb trees and pedal bicycles. Developed in India, the device costs only
$30, compared with several thousand dollars for a similar device in the US. The prosthetics are
primarily fabricated and fitted by the NGO BMVSS, which annually provides fittings to 16,000
people and services another 44,000 through seven centers within the country. BMVSS is
expanding the reach of Jaipur Foot by organizing mobile camps throughout India and in 19 other
countries abroad, where a temporary facility is set up to fit and manufacture the prosthetics on
site.
Nearly 1.6 billion people living in the developing world need reading glasses, but less than 5%
have access to affordable options. Scojo, a world leader is manufacturing lenses, is addressing
this shortfall by providing affordable reading glasses to people in Guatemala, El Salvador, and
India. The Scojo Foundation adds additional value by identifying, training and supporting
community-based women entrepreneurs as "Vision Advisors", who are able to double their
monthly income by selling the glasses.
Also in India, the Aravind Eye Hospital uses a tiered pricing system to perform low-cost or free
cataract surgeries for thousands of poor each year while still remaining profitable. The hospital
network has also started a telemedicine initiative. Aurolab, Aravind’s manufacturing division,
helps keep costs down by producing high quality ophthalmic consumables at affordable prices.
Since its inception in 1992 as a non-profit charitable trust, Aurolab has set up facilities to produce
intraocular lenses (IOLs), suture needles, pharmaceuticals, spectacle lenses ($4 vs $150) and
hearing aids ($60 vs $1500).
As the above examples illustrate, there is a growing market opportunity in providing healthcare to
the underserved in developing countries. Their needs are as vast as the solutions are diverse:
existing products and services are being scaled down to affordable portions; new products and
distribution models utilizing the latest technologies are tailored to local needs and infrastructure;
and innovative cross-sector partnerships are being employed to ensure local ‘ownership’ of
solutions. Together, the models demonstrate that private sector strategies have the potential to
sustainably provide healthcare to communities at the base of the pyramid.
