Pioneers see opportunity to invest in hard-to-reach patients in Africa – Expat Guide to Switzerland


Donors and investors have invested money in developing drugs and vaccines against Covid-19, but there is a lack of funds to get them to the poorest populations. Some investors want to change this.

Unlike many other diseases, there is an effective vaccine for Covid-19, thanks in large part to the billions of dollars funneled into small biotech companies and big pharmaceutical companies. But with around 1% of its population fully vaccinated, Africa faces a wave of coronavirus cases amid the spread of the highly contagious Delta variant.

Covid-19 has revealed the limited funding available for basic health systems, infrastructure and logistics efforts that ensure vaccines and other drugs reach people in developing countries.

“We have left the vulnerable population in Africa unprotected by vaccines in a context where health systems are already weak,” Mike Ryan of the World Health Organization’s Health Emergencies Program said in a recent report. press conference. “This is a consequence of the current unfair distribution of vaccines.”

While the global vaccine pooling mechanism known as Covax aims to provide enough vaccine for 20% of the population in some 40 countries in sub-Saharan Africa, it is only scratching the surface of what is necessary. The World Bank estimates that 48 African countries will need at least 12.5 billion dollars (11.6 billion Swiss francs) to immunize 70% of their population. About $ 3 billion this amount is for supply chain, cold storage and service delivery. In a country like the Democratic Republic of the Congo, the estimated cost is five times the government’s annual health budget.

Meanwhile, governments have spent 93 billion euros ($ 110 billion) to develop Covid-19 vaccines and therapies in the 11 months through January 2021, according to The figures of the Kenup Foundation. About 95% went to vaccine manufacturers.

“It is important to secure the vaccine supply, but if there is a shortage of health workers and infrastructure to deliver the vaccines, then you will not achieve the goal,” said Maya Ziswiler. , head of social finance at UBS. Optimus Foundation, after having worked for many years at the Geneva-based Global Fund to Fight AIDS, Tuberculosis and Malaria.

“These may be more barriers to access than the availability of vaccines.”

The missing link

Maximilian Martin heads philanthropy and innovative finance at Swiss private bank Lombard Odier. He sees the lack of funding as a problem that can be solved in part through innovation and the help of capital markets. The concept is not new, the so-called “first generation” innovative financing mechanisms having had some success.

The Global Fund to Fight AIDS, Tuberculosis and Malaria, created in 2002 to massively expand access to drugs against the “3 big” diseases, and the GAVI vaccine alliance were founded on the concept of pooling sources. funding and country demand to guarantee purchases from manufacturers, ultimately lowering prices. More than twenty years later, the idea is at the heart of Covax Advanced Market Commitments.

Other mechanisms have been used to incentivize drug development for certain diseases widely present in low-income countries. This type of partnership has helped Basel-based Novartis and Medicines for Malaria Venture develop an easily ingestible version of Coartem, one of the most widely used antimalarial drugs on the market.

“[These mechanisms] always think about how to create greater certainty, assess risk and use financial expertise with a variety of instruments, ”Martin told SWI

But so far, such mechanisms have struggled with health care and basic infrastructure to make not only vaccines, but other drugs, available to the poorest.

There are “excellent philanthropic programs and mechanisms to stop polio and other diseases with free or cheap drugs, but it is difficult to invest in primary health care to fight communicable diseases and not transferable, ”Florian Kemmerich, managing partner of Geneva-based impact investing firm Bamboo Capital, told SWI

“All the efforts to overcome this pandemic are incredible. But unfortunately, this does not help the systemic cause of access to health care.

George Jagoe, who heads Access to Medicines for Malaria Venture in Geneva, said it’s easier to mobilize resources for a one-off campaign like the Covid-19 vaccination. “Once the campaign is over, you still need to have a health system capable of delivering basic health care on a regular basis in really difficult contexts. And this is very often not the case.

In 2017, the WHO estimated that half the world did not have access to essential health services, and 100 million people were pushed into extreme poverty due to health spending. Experts say the pandemic has only made the situation worse.

New generation ideas

One of the challenges in attracting investors is the complexity of working with governments, says Prashant Yadav, health supply chain expert at the Center for Global Development.

“The main challenge is that, unlike in drug development where the actors are largely private companies, the distribution of drugs in many countries is done by the government and it is difficult to design financial mechanisms for them,” he said. declared Yadav.

The Global Financing Facility (GFF), hosted by the World Bank, works to reduce investment risks in order to attract more money for basic care for women and children. Sneha Kanneganti, who leads the GFF’s work in the private sector, says many investors can be put off by political and financial risks in some countries.

“We just have to find the right structures that give investors the incentives they want to make it a manageable level of risk,” she told SWI

Some investors try to achieve this by reorganizing traditional financial tools.

A few years ago, the UBS Optimus Foundation granted a $ 400,000 “impact loan” to Hewatele, an East African start-up that produces oxygen. The loan was tied to clear impact goals for reaching new remote clinics with oxygen cylinders. When Covid-19 hit, the Foundation increased its funding so the business could grow.

The Foundation also developed the very first Health development impact obligation reduce infant and maternal mortality in a region of India. If the social objectives are achieved, the investors are fully reimbursed plus an internal rate of return of 8%.

Likewise, Lombard Odier worked with the Geneva-based International Committee of the Red Cross to create a humanitarian impact bond to build and manage three physical rehabilitation centers in Africa. Private investors pay in money and get reimbursed by donors if social goals are met. It has so far received 22 million euros from investors.

Bamboo Capital and Stop TB Partnership have just launched the HEAL Fund, a $ 75 million fund to invest in both the development and deployment of health technologies that not only tackle respiratory illnesses, but also modernize them. basic community care. Bamboo and StopTB are now looking for key investors such as donors who can reduce the financial risks for private investors to support the fund.

Bring in the giants

One group that has a lot at stake in this area are the pharmaceutical companies themselves, especially as Africa becomes a more attractive market for cancer and other drugs.

“Businesses should support the healthcare system as a precondition for strengthening demand and testing innovative ways of delivering their goods and services,” said Ziswiler of UBS. Many large pharmaceutical companies already have activities to strengthen health systems, but often in the form of enjoyable philanthropic projects rather than sustainable and scalable investments.

Kemmerich said Bamboo has spoken with pharmaceutical companies, but it seems difficult for them to provide the CHF 15 million first loss capital needed to expand access to health care programs.

What if financing instruments could be designed to incentivize these companies? Martin de Lombard Odier does not think this is such a far-fetched idea. Green bonds are already being used to raise funds in debt markets to help companies finance clean energy projects.

“From a financial perspective, it would be interesting to bring together the top 50 companies around the world that have healthcare expertise, supply chain experience or product knowledge and think about how we could develop financial instruments that encourage everyone, as an individual company, to contribute something more to the common good, ”said Martin.

“If you don’t have the drugs, it’s hard to help the patient, but it’s not just about selling a number of drugs.

Leave A Reply

Your email address will not be published.