This is a joint post with Prashant Yadav, University of Michigan
The most valuable currency in global health programs today is accurate and reliable data, but such data—abundant in rich countries—does not exist for most low-income and lower-middle-income countries. And without data on past consumption and unmet needs, program planners and global financiers cannot budget appropriately, pharmaceutical and vaccine companies cannot plan investments, and it is harder to understand how programs are performing and how patients’ needs are changing over time.
In OECD countries like the United States, Japan, and those of the European Union, organizations such as IMS Health collect data from a wide array of data sources throughout the health-care delivery chain. These data sources include medical claims submissions, retail and hospital pharmacy transaction records, electronic medical records, market research, and physician panels. Having data from different sources and from different points of the health-care process allows for an in-depth understanding of how the overall health system functions and enables all stakeholders in the system to identify and better understand the unmet needs of patients and to improve service (through benchmarking cost and quality across providers). It also allows for advanced forecasting methodologies, innovative pricing models, “market-shaping,” and strategic contracting.
Data is harder to come by outside rich countries, and the reasons are simple: collecting and collating such data is costly. When organizations such as IMS Health see a market for such data, they make the upfront investments to routinely and systematically collect this data. None of IMS Health’s conventional customers (health plans or payers, pharma companies, or government agencies) presently purchase such data for low- and lower-middle-income markets.
In recent years there has been increased recognition that systematically and routinely collected market data can provide a rich source of information to improve value for money. A 2006 CGD report on demand forecasting also stressed the need for collecting relevant, timely, and comprehensive information about global health markets. Since then several new initiatives have been created that focus on systematically collecting data. The ACT Watch project was a multi-country project designed to collect availability, price, and use data on malaria medicines and diagnostics in the private and public sectors. UNITAID has funded different groups to collect different data elements that are relevant for a deeper understanding of market shortcomings. Together these “push” mechanisms have jumpstarted a market for such data. Large data suppliers are slowly waking up to realize that this may be a market opportunity worth the investment.
However, the need for data on health markets in low-income countries cannot be met with ad hoc one-time fixes or the slow waking up of data suppliers. The needs for data will only increase in the future, and new technology may lead to new data sources becoming available. In order to truly catalyze the market, both large data suppliers like IMS Health and small innovative data suppliers that might emerge over time need to see the real potential of the market for low-income-country data.
Therefore it is important to be more ambitious about the efforts to collect market data in the long term. In recent years many new innovative pull financing mechanisms have been designed to create and catalyze markets through partial risk sharing with a private-sector entity (a pharma company or vaccine manufacturer). These include the advance market commitment for pneumococcal vaccine, volume guarantees for rotavirus vaccine, and volume guarantees for contraceptive implants. The rationale for such arrangements is simple. They share some of the manufacturers’ demand-side risk and, as a result, give manufacturers an incentive to make upfront investments in the market and in return the mechanisms also negotiate lower prices in the long term. Overall, these new vehicles help to jump start small markets by accelerating the flow of upfront private investment. When designed well, such schemes also give governments an incentive to provide the data which can help reduce the demand-side market risk.
Can’t such a scheme be designed to catalyze the market for global health market data? Something like an advanced market commitment for global health market data? It could be a market commitment for data that is made jointly by global funding agencies, pharmaceutical and vaccine companies, and other groups that have the potential to derive the most value from such data. Such a commitment would stimulate large data suppliers to invest in low-income markets and would also create the market for smaller data providers, who do not presently engage in such markets but may be more efficient and cost effective. Most of the grant-funded multi-country global data collection projects are currently carried out by large global health organizations.
Admittedly, figuring out the operational mechanics of such a market commitment is challenging, but the potential benefits from a partial risk sharing mechanism are high, making it certainly worth a deeper exploration.
Nudging markets requires quick and timely information about past consumption, prices, unmet need, preferences, and supply landscape. Shaping the market for such information should be the first order of business for those who endeavor to shape global markets for health technologies.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.