The Fortune in Commercialization of African Biosciences
Tuesday, August 7, 2007
Commercialization of African science is the fundamental solution to healthcare development in Africa and a sustainable solution to the global health challenge. This transformational insight issued out of the KDNC Fourth Business Workshop (KB4W) which took place in Washington, D.C. in August 2006. Previous workshops (KDNC Second Business Workshop [K2BW], and KDNC Third Business Workshop [K3BW]) firmly established that market failure was the primary reason of underdevelopment in Africa, and failure in global health: the development of a robust market was critical to improvements in health.
The K4BW participants observed that countries like Kenya and the rest of Africa lagged behind the developed world in reaping the benefits of the biotechnological development. Biopharmaceutical products manufactured in the western countries were expensive, and rendered them unaffordable by many people living in Africa. Large pharmaceutical manufacturers in the developed countries are not excited by this market, which is mainly funded through grants, and development aid coming from western nations. The high prices of biotechnology based biopharmaceutical drugs and diagnostic reagents render them inaccessible to the local people. A traditional culture of dependency created by the postcolonial political leadership of the country worsens the situation.
The rate of emergence of relevant knowledge that is critical to technological development was very slow in African countries like Kenya. The local knowledge was not effectively exploited to enable the country deal with diseases such as malaria, HIV, AIDS, TB, typhoid, tetanus, hepatitis, diabetes, and cancer. The lack of proper follow-up of patients with acquired immunodeficiency syndrome, tuberculosis, and malaria led to emergence of multi-drug resistant variants of the infectious agents. The problem is however deeper than it looks, and it lies within the traditional structure of financing biopharmaceutical development in the world.
The traditional methods of financing biopharmaceuticals frustrate the emergence of the right kind of knowledge that would allow the development of a thriving bio-pharmaceutical industry in a country like Kenya. In the traditional model, a multinational corporation (MNC) from a western country develops the intellectual property associated with a medical or biopharmaceutical product. The MNC obtains the raw materials from the developing country such as Kenya. For example, SC Johnson, Inc., a giant US multinational obtains raw pyrethrin extract of pyrethrum harvested from the highlands of Kenya. SC Johnson ships the extract to the US for packaging and distribution into the US markets. In order for Kenyans to use the pyrethrum, they would have to re-import the finished product from SC Johnson. The imported, value added pyrethrin is very expensive for the local people. Poor pyrethrum farmers in the highlands of Kenya do not afford the value added insecticide product marketed by SC Johnson. For their insecticide needs, Kenyan farmers have to rely on the World Health Organization?s Roll Back Malaria initiative for donations of synthetic pyrethroids manufactured in Japan by Sumitomo, a Japanese conglomerate. The World Health Organization (WHO) donates synthetic pyrethroid for use in the insecticide-impregnated nets and insect repellents for mosquito control in the fight against malaria. The synthetic pyrethroids used in this WHO global health initiative are non biodegradable.
Although malaria is a disease of global health concern that affects the very farmers who produce pyrethrin, the SC Johnson is not concerned with malaria control, and ships the pyrethrin out for US market. On the other hand, the WHO is unaware of the local production of pyrethrum. Flooding the market with donated synthetic pyrethroids by the WHO destroys the local market for naturally growing pyrethrum, robbing the local people of their very means of subsistence. This practice subverts the capacity for local development of preventive, diagnostic reagents and treatment products. The poor people are unable to afford a consistent supply of expensive imported products, and the consumption is erratic leading to an explosion in the number of drug resistant parasites, bacteria, and viruses.
The opportunity lies in the development of a homegrown biopharmaceutical manufacturing. A homegrown biopharmaceutical industry would deliver products to the affected individuals at cheaper prices, and generate employment in the local community, affecting positively the quality of life of the local people. Harnessing scientific technology and resources from the local scientists and the Diaspora community can be critical to the establishment of sustainable locally developed biopharmaceutical industry. The local biopharmaceutical company would manufacture molecules that are affordable to the local people in the country. Delivering products from industries established by local people themselves could alleviate poverty and liberate the country from recurrent fixes that fail. Such a process would overcome the provider practice by the WHO which only leads to temporary relief of problems in the short term which usually resurge with a bigger force. The side effect of the provider practice is always much larger than the original problem itself, and ends up causing more human suffering, and loss of life primarily due to the temporary disturbance of the socioeconomic framework. Local biopharmaceuticals manufacturing would serve the health needs of the local people and produce surplus for export to people struggling with similar medical problems in other regions of Africa. The locally developed industry would provide jobs, for science and engineering graduates, and other skilled professionals, who would in turn afford better housing, and move out of the slum dwellings.
The Business Opportunity for Multinationals and the African Diaspora
The local people may not have the knowledge and financial resources for a full-scale biopharmaceutical manufacturing, and must seek this knowledge from an external source. They must develop a capacity to collaborate with people, or organizations that have such knowledge. One of the greatest opportunities lies in establishing collaboration between the local people and multinational corporations in the biopharmaceutical production process. In order for the collaboration to be sustainable the local nationals would have to be involved in the entire value chain of product commercialization unlike in the traditional model. This means that the local nationals would have to be involved in the discovery of the molecule, or recognition of the product, ensuring protection of the intellectual property rights, obtaining the regulatory licenses, product development and refinement, market research, market strategic planning, product processing, global distribution, and multi-national operations. In the collaborative model, the multinational corporation would have to move away from the traditional model where they used the local nationals as a source of cheap labor for manufacturing, processing, and reshipping of the finished products to the consumer markets in the west.
Emergence of a Diaspora
The traditional model stifles creativity, and knowledge emergence from within the local nationals. The local nationals do not develop the economic strength to purchase health products. The local nationals do not afford to pay for products imported from rich nations, diseases are neglected to fester in the local community, stifling even further the economic development feeding in a reinforcing loop of poverty. Spiraling poverty leads to increased crime and political unrest as people agitate for reforms. The grinding poverty, decreases security, and political unrest causing local nationals to migrate to the richer countries in the west forming the new African Diaspora. Migrant Diaspora nationals are relentless in their pursuit for education, and have obtained career distinction in major multinational corporations. The Diaspora nationals have also exploited the rapidly proliferating information and communication technologies to establish powerful links for interacting with local nationals in the home countries. This has enabled them to establish companies back home. The Diaspora community now constitutes a powerful resource for its deep first hand knowledge of Africa terrain, and the high level of career, and academic achievement.
Sustainable biopharmaceutical manufacturing must gain access to these two knowledge resources which are traditionally excluded in the construction of the traditional biopharmaceutical value chain. Sustainable biopharmaceutical manufacturing for global health is predicated upon cultivation of the knowledge residing within the people of Kenya and other African countries, and the Diaspora nationals of African countries. The collaborative process would involve working with entrepreneurial individuals or companies from Kenya to establish a branded product in a model proposed by Marsha Wulff of Wulff Capital, Dallas Texas. In Wulff?s model, The multinational corporation must then work with the local company to establish upstream demand and secure government incentives for creation of new jobs. The local company must collaborate with a multinational corporation to refine and co-brand the product for the global markets, ramp up manufacturing, and distribute globally.
In the collaborative model, all the steps in the value addition process must take place in Kenya. These steps would include the discovery, prospecting and identification of potential product, securing of intellectual property rights, securing of regulatory licenses, product development and refinement, market research and planning manufacturing and processing, global sales and distribution, multi-national operation. In the collaborative model, the local company and the multinational corporation would share the corporate ownership. This collaborative approach to commercialization of biopharmaceuticals would solve the reinforcing loop of disease-poverty-disease. The local nationals would become wealthy and generate financial strength to buy their own products. The local nationals would gain access to the global market place. The poverty cycle would be broken, and the local nationals would develop political, social, and economic stability.
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