PHARMA - Mastered the art of serving the lower part of the income pyramid profitably

            ·         Mass-market techniques to deliver complex services

So focusing on the masses isn’t proving any easier than focusing on the affluent elite who can pay for costly new medicines. But that doesn’t mean it’s impossible to make a profit in the growth markets. On the contrary, there’s much pharma can learn from the most innovative organisations.

·         Designing products for people in the lower part of the income pyramid 

           

When Ratan Tata decided to develop a car for India’s urban masses,

 he started with a question: how to produce an affordable – and better – mode of transport for people who normally used motorbikes. The result was the $2,500 Nano, a fuel-efficient vehicle that seats four passengers but comes without expensive frills.

·         Mass-market techniques to deliver complex services

Dr Devi Shetty has perfected the science of high-volume heart surgery. At Narayana Hrudayalaya Hospital, in Bangalore, India,  42 surgeons – each specialising in a single procedure perform some 600 operations a week. Dr Shetty charges about $1,500 per operation. Yet his profit margins are higher than those of the typical US hospital, and his quality as good.

Eye-hospital chain Aravind has also used assembly-line techniques to deliver healthcare. It performs about 350,000 operations a year and its operating rooms have at least two beds, so that surgeons can swivel from one patient to the next.

·         Pooling resources for different purposes

When Simon Berry, founder of British charity Colalife, wanted to distribute anti-diarrhoea products in the developing world, he had a brainwave: Coke gets everywhere aid doesn’t, so why not pack the crates with medicines? Colalife designed a wedge-shaped container that fits between rows of Coke bottles and is now piggybacking on Coca-Cola’s distribution network.

Anticipate that, by 2020, the biggest pharma companies will be pooling resources with health insurers and community care providers in the growth markets to stimulate demand for their products. They’ll also be participating in cross-industry transportation networks to reduce their distribution costs.