channel strategy in the developing world

Effective channel strategy makes sure devices get used on patients.

Our Vascular Care group constantly talks about channel strategy (that is, how our devices make it to the bedside and ultimately to patient use). We know that designing the right product is not enough - we have really strong clinical efficacy evidence and a proven value proposition. Our products work, and clinicians that you talk to know the benefits. And yet we still have trouble driving compliance across a hospital. If a nurse knows that this device provides better clinical outcomes for patients and saves complication costs for the hospital, why do they neglect to use it with every IV insertion?

A usable device discarded by a hospital (at MedShare International).

Channel strategy is not just a medical device challenge. I'm currently rereading Prahalad's The Fortune at the Bottom of the Pyramid. In it, he argues that the poor - the consumers at the base of the pyramid - pay a "poverty penalty"that causes goods and services to be more expensive than they would be in corresponding areas of town that are more developed. The interest rates on credit in Dharavi are between 600 - 1000%, whereas on Warden Road it's a more reasonable 12 - 18% -- 53 times more expensive. Municipal grade water is 37 times more expensive, medications are 10 times more expensive, and rice is 1.2 times more expensive (see chapter 1).

Access and distribution channels in the developing world are just as complex as they are in a field like developed world healthcare. No one strategy will work. In poor areas, inadequate infrastructure makes it even more difficult (and even more expensive) to grant access to technologies and services by people who cannot afford to pay more for them.

Prahalad is not the only one who talks about access and distribution. There's a book by Frost & Reich available for free online called Access: How do good health technologies get to poor people in poor countries? It's sort of an interesting framework for why some technologies gain a foothold and some don't, from a distribution perspective (sort of similar to my own research).

So how do we lower the poverty premium? It's not necessarily by designing products for poor people (although that helps). It's by doing the basic, unglamorous things. System design. Capacity building. Effective training. These things are so needed and neglected in the developing world, but doing them can increase bandwidth and innovation in the developed world as well. As Prahalad liked to say, "If you build it for the poor, the rich will come. If you build it for the rich, the poor can't come."