Digitizing Africa’s health product distribution

A recent report by healthcare consulting firm Salient Advisory has shed light on the rapid growth of tech-enabled approaches to digitizing medicine distribution in underserved areas of Africa. The report highlights the strong investor interest in startups aiming to improve access to medicines by leveraging technology to streamline distribution to pharmacies, drug shops, clinics, and hospitals. The Director of Salient Advisory, Remi Adeseun, discussed the key findings of the report in an exclusive interview with CNBC Africa. Adeseun explained that the innovative business models in the health tech space are transforming the distribution ecosystem by addressing key challenges. One of the prominent strategies is to reduce costs and improve affordability by eliminating layers in the distribution chain. By introducing tech layers, disruptors are shortening the distribution chain from manufacturers to end consumers, resulting in more cost-effective solutions. Furthermore, tech startups have played a vital role in enhancing efficiency and convenience for consumers, especially during periods of lockdown. The report reveals that many innovators emerged during the pandemic to facilitate online ordering and last-mile deliveries, enabling consumers to access medicines without leaving their homes. This shift towards digital platforms has significantly improved the accessibility of healthcare products in remote areas. Another crucial aspect highlighted in the report is the emergence of product data services that focus on authentication and safety of medicines. Companies utilizing mobile authentication methods and track-and-trace technology are enhancing consumer confidence by ensuring the legitimacy of medications. Adeseun noted that these services are particularly significant in combating counterfeit drugs and enhancing the quality assurance of healthcare products. In terms of funding, the report emphasizes a notable increase in investment in the health tech sector, albeit still lower compared to the general tech industry. Over the past 12 months, startups in East Africa (Kenya), West Africa (Nigeria, Ghana), and Uganda have collectively received close to $80 million in funding. This financial support is crucial for driving innovation, improving operational efficiency, and maintaining quality standards in medicine distribution. Adeseun further discussed a groundbreaking $7 million initiative, the Innovating Investing in Innovation (I-3) program, aimed at supporting 60 startups across Africa. The program, sponsored by organizations like the Gates Foundation, Mechca Pandom, AmeriSource Bergen, Nehpad, and WHO Afro region, aims to enhance market access for African founders and women entrepreneurs. By providing funding and mentorship, the I-3 program seeks to strengthen the commercialization capabilities of startups and foster technological advancements in the healthcare sector. Overall, Salient Advisory's report underscores the transformative impact of tech startups in revolutionizing medicine distribution in Africa. By leveraging digital solutions, these innovators are not only improving accessibility and efficiency but also enhancing the quality and safety of healthcare products for consumers across the continent.