IVD & Developing Countries
A Moral Driver with Commercial Return for IVD Companies in the Developing World
5 October 2011
Diagnostics and their place in the world
By developing innovative new technologies and products that address the health needs of developing countries, the in-vitro diagnostics (IVD) industry has the opportunity to not only address world poverty, but also achieve strong commercial return through the application of these technologies back into markets in the developed world.
Since the drafting of the Millennium Development Goals in 20001 the world has focused efforts to quantifiably reduce global poverty by 2015. Key to this effort is management of the big pandemic diseases that are responsible for huge human, and hence economic, losses among populations that are least able to afford them.
Millennium Development Goal No. 6 identities Malaria, HIV and TB as major contributors to extreme poverty and constitutes a continuing threat to global health security. Through the development of technologies that address these specific diseases in developing nations, the IVD industry can play a vital role in closing the gap in healthcare for the poorest countries on earth and in doing so also re-shape the IVD technology industry.
Addressing child mortality to create a stable future
Hans Rosling has graphically demonstrated the connection between GDP, life expectancy and population growth. He illustrates that as nations get richer and healthier, fertility rates actually fall toward replacement level, which is the path to a sustainable population for the world. Control of debilitating diseases and those that contribute to high infant mortality in the lowest income nations is therefore essential to improving child survival and ultimately creating a stable future for mankind2, 3.
The places of greatest need most often lack infrastructure, have poor telecommunications and roads, unreliable or non-existent electricity and water supplies, and frequently have "at-risk" populations that are already displaced or migratory. These conditions are great challenges to cost effectively conducting IVD testing.
IVDs need to be robust in transport, self validating, cheap and easy to use. Results need to be available in time to influence treatment decisions.
These requirements tend to be fueling the notion that all such tests should exist as rapid strip tests (RDT). However, challenges in turn-around time, data logging, and quality control are driving a renewed interest in instrument platforms, which are more expensive on a per test basis but offer great cost efficiency.
One example of this is the World Health Organization (WHO) endorsement (Dec 2010) of the Cepheid Gene Xpert MTB/RIF molecular test as the initial test for TB diagnosis in areas where HIV and multi-drug resistant TB are endemic4. TB testing can be conducted using a sputum smear or the in vivo Mantoux Test. However limitations in turnaround time, sensitivity and the degree of operator education required for successful microscopy, combined with errors in validation and data logging, significantly reduce the efficiency and availability of these low-cost tests.
Additionally the high specificity of molecular testing in the more sophisticated micro test environments that a well designed, field ruggedised instrument can provide is key to managing the emergence of multi drug resistance and protecting the efficacy of available treatment options.
The Cepheid test has attained WHO endorsement at US$16 per test. Considering that the annual health budget of many sub-Saharan nations is less than US$10 per capita5, this requires significant international support to reach the people most in need. It is interesting to see that the Millennium Project is successful in attracting funds to support this technology delivery at this price.
Cepheid has followed a path pioneered by Becton Dickinson (BD) in delivering IVD technology at steep discounts of up to 75% to the world's neediest nations6. BD boosts employee morale with this action and has set up opportunities for employees to do volunteer work in selected African nations. Cepheid has significantly increased the number of instrument platforms produced and is able to reap a benefit in the economy of scale and the technology improvements that come with larger volume production.
In another endeavour, Invetech has been involved in designing the field ruggedised molecular platform known as DxBox, led by the University of Washington and set by the Gates Foundation7 under Grand Challenge No. 14. This next generation of this device, now being commercialised as the PanNAT™ by Micronics8, initially offers molecular testing in malaria diagnostics and diarrhoeal diseases, which are also a major cause of infant mortality in low income nations.
Disruptive innovation will re-define IVD technology
Aside from moral obligation and the incentive of the triple bottom line of corporate social responsibility that drives BD's engagement, there is directly commercial logic motivating IVD companies to engage in low and middle income markets. There is a well documented tendency of incumbents in any industry to defend the high margin sectors of their market9. In contrast, new comers bringing lower cost solutions to low margin segments often draw no reaction at all, because executive attention and research dollars remain focused on the top end of the market. Left unchallenged, in the low margin segments, new entrants master the art of low cost delivery in demanding environments. Success provides the capital to investment in technology advancements that are then applicable in higher margin segments. Successful new entrants with low cost solutions can eventually move up the market to challenge their incumbent competitors from a lower cost base.
A great example of this is the progress of the globally operating IVD company, Mindray10, which began in China in 1991 and has advanced in twenty years via Brazil and India, from that difficult low cost market to a listing on the NYSE and the operation of R&D facilities in New Jersey, Shanghai and Stockholm.
Similarly, companies that can successfully bring cost effective IVD technology to sub-Saharan Africa will be in possession of a suite of technologies and knowledge that is highly likely to transform the way IVD testing is performed everywhere. Those IVD companies unwilling to leave the comfort zone of their high margins, big infrastructure and central lab environments may just fail to learn the critical lessons they need to survive in this new future.
- United Nations Millenium Development Goals — Background, UN Web Services Section, Department of Public Information, NY 2010 viewed 20th August, 2011 http://www.un.org/millenniumgoals/bkgd.shtml
- H. Rosling Two Hundred Years that changed the World, http://www.gapminder.org/videos/200-years-that-changed-the-world/
- J. Sachs Common Wealth: Economics for a Crowded Planet, The Penguin Press, New York 2008 p322
- WHO Automated Real-time Nucleic Acid Ampli. cation Technology for Rapid and Simultaneous Detection of Tuberculosis and Rifampicin Resistance: Xpert MTB/RIF System — Policy Statement World Health Organization 2011, viewed 12 August, 2011 p10 http://whqlibdoc.who.int/publications/2011/9789241501545_eng.pdf
- Sachs p322
- Sachs p318
- B&M Gates Foundation Grand Challenge No. 14 Gates Foundation Oct 2003 viewed 1st September, 2011 http://www.gatesfoundation.org/press-releases/Pages/announcing-grandchallenges-in-global-health-031016.aspx
- Micronics PanNAT™ Molecular Diagnostic Platform Micronics Inc., Redmond, WA USA 2011, viewed 1st September, 2011, http://www.micronics.net/products/diagnostic-products/PanNAT
- Christensen C. M., The Innovator's Dilemma — When New Technologies Cause Great Firms to Fail Harvard Business School Press 1997
- Mindray About Us Shenzhen, P. R. China 2011, viewed 1st September 2011, http://www.mindray.com/en/aboutus/aboutus.html