Ashifi Gogo came straight from an awards ceremony at the White House to speak at the HealthXL Global Gathering in Dublin last month. A native of Ghana, educated in the United States, he received an award from the Obama administration for being a "Champion of Change" in his role as CEO of Sproxil, a company tackling counterfeit medicine distribution in developing countries.
With a background in mathematics and physics and a PhD thesis in "Authentification technologies in emerging markets", Gogo incorporated Sproxil in 2009. The company now has headquarters in Cambridge, Massachusetts, and employs 25 people between there and offices in Bangalore and Mumbai, India, Nairobi, Kenya, Accra, Ghana and in two other undisclosed locations. "We are not saying where they are at the moment," says Gogo, "Because if we do, the counterfeiters start preparing."
Scratch-and-text
The Sproxil system employs the simplest of mobile phone technology and takes advantage of the fact that SMS messaging is available on pretty much all mobile phones. It employs a system which allows the consumer to text a number revealed by scratching the panel on a box of medication in order to authenticate whether that medication is a legitimate product or not. The consumer doesn't need to download a special app and the SMS text is free, being paid for by Sproxil, which then makes its money from the large pharmaceutical manufacturers and distributors which gain when people purchase legitimate products rather than their illegal counterparts. "It's like a 999 call for drugs," says Gogo.
The company has won a "Patents for Humanity 2013" award from the US department of commerce which recognises innovations that solve "global health and standard of living challenges" and was voted number seven in Fast Company magazine's worldwide "Most Innovative Company" list for 2013, coming first in the healthcare category and pipped at the post by Nike and Amazon. Sproxil's clients include Johnson & Johnson, GlaxoSmithKline and a major generic drug manufacturer in India.
An International Policy Network report from 2009 estimated over 700,000 people die every year from taking fake anti-malarial drugs and fake tuberculosis drugs alone and suggested that up to a third of the drug market in certain African countries can consist of substandard or fake medicines. The report said most fake drugs originate in China or in India and that many drugs constitute insufficient quantities of necessary active ingredients.
"The greatest adoption of our product so far had been in Nigeria. That's not surprising because in the past Nigeria has had a huge problem with counterfeits where significant percentages of drugs on shelves failed testing," says Gogo. "In 2009, 84 infants died from teething syrup which was tainted with antifreeze so working with the government we have been able to implement a solution which helps their own citizens verify products before they buy."
Gogo says the Nigerian government recognised that when pharmaceutical companies started using the Sproxil product they started falling off the top 10 most-counterfeited products list.
“The agents spend a lot of time hauling in specific brands that counterfeiters like to target but when these companies started using our service they started falling off the charts.”
The product was made a requirement for some of the most counterfeited drugs on the Nigerian market and is also endorsed by authorities in Kenya as the mark of quality for certain types of agrochemical.
Gogo says that the problem in many of the emerging markets Sproxil targets is lack of regulation and weak law enforcement. “The supply chain for pharmaceuticals is extremely fragmented,” he says. “Any ‘mom and pop’ type outfit can borrow a pharmacy licence and set up shop. There are no huge chains but lots of family-owned shops and selling off the back of carts.” He says that there are more shopkeepers than true pharmacists – people out to make a profit rather than those who genuinely care about the health of the customer.
Sproxil’s technology has implications for non-pharma industries too. Manufacturers and suppliers of agrochemicals have become interested in how the SMS system can deal with counterfeit fertilisers and seeds. The system is also being used in the automotive industry against the counterfeiting of brake-pads and surprisingly the company is currently in negotiation with a global underwear company to combat counterfeit lingerie sales.
“We have a client in Kenya who loses $3 million per year due to fake electrical cables which can cause house fires,” says Gogo. “There is an estimated $600 billion of counterfeit goods sold every year out of which a third every year is in pharmaceuticals. $200 billion is a lot of money.” There is also the possibility to use the scratch-and-text SMS model to engage with customers, not just for health reasons but for marketing and loyalty programmes. “Prior to Sproxil there has been no way for these large companies to connect with their consumers in a scalable way at an affordable price,” says Gogo.
Human health policy
Gogo says that one of the main challenges for start-ups in emerging markets is the perception of risk by investors. "Start-ups have to keep costs down, invest the little that they have and as quickly as possible start generating revenue with customers. Customer revenue is essential not only to validate your business model and attract more investors later on but to keep the lights on in the early days," he says.
The potential to really impact on human health policy is, he says, one of the very positive aspects innovative businesses can have in emerging markets with the support of government and accelerator programs such as HealthXL.
"Companies like Claimsync [HealthXL finalists from Ghana who have developed software to help automate patients' records and process them electronically] are just the tip of the iceberg when it comes to digital health in Africa, " he says. "Our firsthand experience has been that if companies can innovate and fill market and societal need, they have the ability to influence policy and government action in a way that is swifter than in developed markets."
