Scratch and win for authentic malaria drugs

Here’s a problem most people in rich countries don’t often have to deal with: wondering whether the drugs you’ve just picked up from your local pharmacy will kill you, save your life, or give you just enough active ingredients to create a new drug-resistant strain of an otherwise curable disease. Counterfeiting does happen in rich countries, but more prevalently with “lifestyle drugs” like Viagra or allergy meds. Poor countries often have thriving counterfeit markets for drugs needed to combat more life-threatening diseases like malaria—for example in a recent study in Madagascar, Senegal and Uganda, between 26 and 44 percent of antimalarial drugs failed quality tests.

What if consumers could scratch off a panel on a drug package, send a text message containing that package’s unique 10-digit code, and get back a message that the drugs were authentic and safe to use, or fake? This is the idea behind mPedigree, a start-up led by Ghanaian social entrepreneur Bright Simons. According to a recent Bloomberg article mPedigree is planning a trial of their system using 125,000 packets of antimalarials in Ghana and Nigeria later this year. A rival service called Sproxil, started by another of mPedigree’s founders, Ashifi Gogo, is being deployed in Nigeria.

The idea’s brilliance lies in its reliance on two existing, affordable, and familiar technologies: the cell phone and the scratch card. Access to cell phones in Ghana and Africa as a whole has increased rapidly over the last decade, and scratch cards are a common way for people to top up their pre-paid cell phones.

The potential benefits are clear. From the perspective of the consumer, mPedigree is a quick, easy and cheap way to discover whether just-purchased drugs are real or fake. For drug makers, the new service will allow them to capture a greater share of the market as they drive out fakes and low-quality competitors.

On the other hand, this raises the question of who will be protected and who will be excluded if the services become widespread. If the idea spreads to drugs for which there are locally-made versions or legitimate generics available, will larger drug makers who use mPedigree be able to drive smaller firms who can’t afford it out of business? Or will mPedigree strive to include all the legitimate drug makers in the market?

mPedigree’s scratch and win panels are no permanent substitute for what’s missing in those markets where counterfeit antimalarials flourish—namely a well-functioning drug regulatory system, good consumer education about the danger of fakes, and a plentiful supply of effective antimalarials that are affordable and available to all who need them. But as a stopgap measure, they might be a winner.

You want cell phone entrepreneurs, we’ll give you cell phone entrepreneurs

Last week we posted some cool maps showing the spread of cell phones especially in Africa over the last decade. We called this “a triumph of bottom-up entrepreneurial success,” but you weren’t convinced. You thought it was foreign direct investment (FDI). Provide more evidence that entrepreneurs are part of this picture, you said. Aid Watch never declines a challenge: 1) OK, it’s true that 52 percent of the African Market is dominated by 6 multinationals: Orange (France), Vodafone/Vodacom (UK/South Africa), Zain (Kuwait), MTN (South Africa), Moov (UAE), and Tigo (Luxembourg).  But that other 48 percent is the battleground of dozens more, many of them home-grown.  (Also we heard a rumor that South Africa is located somewhere in Africa.) To give an example from The White Man’s Burden:

Entrepreneur Alieu Conteh started building a cellular network in the Democratic Republic of the Congo … when it was still in the midst of its civil war in the 1990s. He couldn’t get foreign manufacturers to ship cellular towers into the country with rebel soldiers around, so he got local men to weld scrap metal into a makeshift tower. Demand exploded for Conteh’s phones, and in 2001 he formed a joint venture with the South African firm Vodacom. One illiterate fisherwoman who lives in the Congo without electricity relies on her cell phone to sell her fish. She can’t put the fish in a freezer, so she keeps them alive on a line in the river until customers call to place an order.

Sudanese-born entrepreneur Mo Ibrahim is another example. His mobile telecom company, Celtel, had about 5 million subscribers in 13 African countries when it was sold in 2004 for $3.4 billion. 100 Celtel employees, most of them African, earned more than $1 million from the sale. Celtel is now part of Kuwaiti-owned Zain, which serves 40 million subscribers in 17 African countries.

2) Being a successful mobile operator often requires big infrastructure investments, so it’s no surprise many of the first telecom firms to enter the African mobile market have been large. Multinationals investing in Africa to provide millions of Africans with essential service is a GOOD thing. Yes, the market needs more  effective regulation, increased competition, and lower end-user costs, but those trends are now happening.

3) Multinationals spur smaller entrepreneurs. The Nigerian telecom sector has created some 450,000 indirect jobs since it was liberalized in 2000. And Uganda’s five mobile operators provide employment for more than 100,000 people, who work for the operators directly or indirectly, selling airtime or handsets. An Economist article noted:

In 2003 Ms [Mary] Wokhwale was one of the first 15 women in Uganda to become “village phone” operators. Thanks to a microfinance loan, she was able to buy a basic handset and a roof-mounted antenna to ensure a reliable signal. She went into business selling phone calls to other villagers, making a small profit on each call. This enabled her to pay back her loan and buy a second phone. The income from selling phone calls subsequently enabled her to set up a business selling beer, open a music and video shop and help members of her family pay their children’s school fees.

4) Finally, farmers and fishermen now check prices in markets across the country before selling their goods, while unbanked buyers can make payments with mobile banking technologies. Individual entrepreneurs are beneficiaries of mobile technology’s spread in a big way.

Who ya gonna call? Entrepreneurs!

Just a decade ago it seemed we were stuck with landlines. State-owned telephone companies were largely entrenched, sclerotic organizations that provided poor, delayed, or simply unavailable service —even in some rich European countries, and nearly universally in poor countries. These maps (with data from 2001, 2004, and 2008) show how cell phones have quickly bypassed the dysfunctional landline companies and emerged as a triumph of bottom-up entrepreneurial success.

The measure is cell phone subscribers per 100 population, with darker shades of blue indicating movement from 0-20 to 20-30 to 30-40 to above 40 (above 40 is the dark blue shade that is most evident in all the graphs).

Note the darker blue color now encroaching on all sides of the African continent. This gives us hope that the dynamism of the bottom from entrepreneurs can overcome sclerosis at the top.

2001:

2004:

2008:

Data source: World Development Indicators