Case About IOWH

A New Model for The

Pharmaceutical Industry:

The Institute for One World Health

PREPARED BY SHARANON CHAKMA, ABIR NAEEM, JOBAER JIM,

MRINMOY KANTI ROY, KAYES MAHEDI

Sher-e-Bangla Agricultural University

Summary

Pharmaceutical industry is one of the most profitable industry in the world. In the

year of 2003, the industry generates $466 billion over the world. The industry

obtained the highest value added per employee.

Roughly 20% of revenues in the pharmaceutical industry was spent on R&D of new

drugs because of the high failure rate, high cost of development phase and the use of

sophisticated technology.


Summary

The development process has four main stage.

1st, to identify the new compound and researched whether it is useful or not for

fighting a disease, if yes then it entered the 2nd stage.

2nd, pre-clinical testing of the compound and when the testing complete, if the

company want investigate further. It could file for permission with the responsible

regulatory authority. At the stage, the company also pursued a patent protection for

20 years for the compound.

3rd, the clinical test and after the successful testing the drug applied on field.

4th, the company launch its new drug in the market.


Summary

The costs of researching and developing a new drug was $870 billion. But, only a

few successful products contributed the lion’s share of revenue and profits in the

company.

Intellectual property right is most important in the pharmaceutical industry because

of the high cost of research and development. Due to the absent of the intellectual

property right the compound could rapidly be copied and marketed with no cost by

other companies. The intellectual property right is for 20 years but remain 8-10 years

for the reason of the patient was in the development stage of the compound.


Summary

For the high R&D cost the pharmaceutical industry are not willing to produce the

drug of some disease because of the profitability was low. Such as trypanosomiasis,

leishmaniosis and changes disease e.g., known as neglected diseases after found in

developing and under-developed country.

Dr. Victoria Hale, founded the institute for One World Health (IOWH) with the aim

to develop medicines that addressed major infections global health challenge. In

2002, the foundation contribute $4.7 million for phase III clinical tests of

leishmaniosis. Also. In 2002, Cholera Genomics donate a compound against Chagas

disease. And in 2003, University of California donated the patent to a potential

treatment for schistosomiasis.


Summary

In IOWH, there are several units for executive, financial, regulatory and scientific

function like most of the traditional companies. IOWH has a CEO, Victoria hale and

a board of directors. The boards are responsible for strategic decision. Besides some

full-time research staff, IOWH approaches some experts needed in the project. They

work on the voluntary basis.


Summary

The core strategy of IOWH was,

1st, to create a structure which stimulate the company to donate the intellectual

property rights, so that the compound may further be developed.

2nd, to employ most talented scientists both paid and volunteer basis.

3rd, engage the broadest possible spectrum of support from industry to philanthropy

to the public.


Summary

The customers of IOWH were in developing countries; so that direct access to the patient is very important; IOWH attempt to achieve the access through by the partnership. IOWH develop the drug but not to distribute, so they need the partner to distribute the developed drugs. IOWH also sell the product in two tires; one for the cheaper rate for general people and another regular price.

IOWH business process follow the standard model of pharmaceutical company. It focused on the development of safe, effective and affordable drugs. Then move to the preclinical and clinical trial. After successful trial, IOWH then filed for regulatory approval of the drug. For the manufacturing and distributor IOWH contract a relation with third parties. So, from the partnership between public and private sector IOWH develop manufacture and distribute the drugs.


Critical Factor:

(Work, Success, Failure)

CEO role in IOWH.

Funding

Communicating & working with the experts

Salary management (Cost management)

- For the employee of IOWH


Critical Factor:


Patent protection (Intellectual Property Rights)

Supplying the drugs

Distribution channel :

- Government agency

- NGO

- Local agencies

Pricing

‘Two tired price’ :

- Market price for the private agency

- Reasonable price for the public agency


Critical Factor:


Relationship with other pharmaceuticals industries in the market

The term ‘failure’ risk

-Introducing the model & its sustainability


What is the Ethical Dilemma in the pharmaceutical

Industry? How does Victoria Hale try to resolve a social need?

As pharmaceutical Scientist, our business man, they know that for most of the

dangerous disease occurring in the developing world, affordable medicines are

inadequate because they are not profitable. But, researching, developing and finally

releasing a drug takes a lot of time and funding having high failure rate. So, they

can’t help the people by producing the medicine even if they want to.


What sets the IOWH business model apart from the business

models of regular PPP’s and for profit pharmaceutical

companies?

IOWH is different from regular PPP’s and other pharmaceutical companies because

of its

Nonprofit orientation business model

IOWH’s main concern is to cure the neglected diseases for which market

profitability is low whether PPP’s and other pharmaceutical companies search for

market potential.

The main reason IOWH is different for its own business format strategy.


What are the key risk faced by IOWH? What challenges does it face?

Risk faced by IOWH

It always suffer of uncertainty of funding which is the power wheel of the company.

High failure rate is another risk hugely faced by IOWH.

Challenged faced by

Directly contact with the scientist and experts of different part of the world and managed them work for IOWH completely voluntarily was huge challenge for Dr. Victoria Hale.

Another toughest challenge is to coordinate all the versatile department and project teams.

Reaching the medicine every specific place and keep it affordable was the biggest challenge faced by IOWH.


Do you consider the model a success? Will it work in the long term? Will it solve the problem?

There are many reason for making the company sustainable-

It has its own revenue from many private and public agencies.

Numerous partnerships from the different part of the world makes the funding

richer.

Voluntary involvement of the scientists and experts makes the employment.

Making IOWH wing of some large social organization like WHO, UNESCO,

UNICEF etc. makes it more sustainable.


Do you think that this model could be transferable to other sectors?

Off course, this model could be transferable to other sectors like Education,

Forestation etc. BRAC’s Education Programme also works as the same way. By

collecting funding, it provides books and runs schools at affordable condition for

every children.


If you were Victoria Hale, what would your long-term

strategy for IOWH be? (e.g. sourcing, partnering and products)? What should her (Victoria’s) role in it be?

Dr. Victoria Hale was extra ordinary throughout whole process of identifying,

funding, sourcing, communicating, partnerships and other important activities and

decisions taken by her. She was a tremendous CEO Manager as well as the leader of

such a glorious company.

If a were Victoria Hale, I would try to do the exactly same thing she had done for the

establishment and development of IOWH.


How you could come up with a new way of addressing a social

problem, as Victoria Hale has done with One World Health? Pick a specific problem and explain what you might do?

Tree Planting In Every Cities.

Research

Identify

Funding

Planting in an affordable way


Case About IOWH

Health & Medicine

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