Nigeria: Current Innovations and Trends in the Digitization of Health Commodity Distribution in Nigeria
Digital technology has become an integral part of daily life, and healthcare delivery can be improved by taking full advantage of the interdependence that technology enables.
To explore how digital health is being leveraged to improve access to medicines in Nigeria, Salient Advisory, in partnership with Nigeria Health Watch, hosted a webinar titled “Innovations in Digitizing Health Product Distribution: Exploring the landscape and opportunities in Nigeria”.
The Covid-19 pandemic has highlighted the important role of innovation in health systems, said Vivianne Ihekweazu, chief executive of Nigeria Health Watch, in her welcome address. This, she added, underscored the critical need to digitize and bring efficiency to the pharmaceutical industry, as well as improve supply chain and last mile distribution.
Discussions during the webinar explored Salient Advisory’s 2022 report titled “Innovations in the Digitization of Health Product Distribution: Current Trends in Nigeria, Ghana, Kenya and Uganda”. This market intelligence report is part of a longitudinal study conducted in Kenya, Ghana, Nigeria, and Uganda.
An overview of some of the report’s key findings and recommendations is presented in this article.
More than 80 companies are digitizing the distribution of health products in Nigeria, Uganda, Kenya and Ghana. These innovators offer a range of services such as digitization of distribution to suppliers and consumers, and product data services. The trend has shown that innovators digitizing vendor distribution appear to be growing, with a strong user retention rate estimated at 46%.
In 2022, in addition to start-ups and e-commerce giants, physical pharmacies have also launched online operations.
The digitalization of distribution to consumers remains of great interest to innovators, but the impact of distribution on over-the-counter and prescription products is still unclear.
Innovators offering product data services are few but well established; counterfeit drug detection and track and trace services being the most common offerings.
All four focus countries have devoted efforts to strengthening e-pharmaceutical regulation over the past 12 months. These regulations are changing in real time and will impact business models and ecosystem growth.
Recent investment momentum has been strong in target country ecosystems, as 36% of all external funding ever raised entered the ecosystem in the last 12 months.
Although funding is increasing, it is very concentrated. 72% of all funding reported in the last 12 months involved 4 companies. Such a concentration of funding in a few top companies could lead to gaps in the ecosystem. This is something that needs to be watched closely and avoided in the future.
Equity investments accounted for 73% of financing over the past 12 months. This shows that investors are confident in the promise and commercial viability of African health start-ups.
Exclusionary trends have remained evident over the past year, with the greatest impact on race and gender. At the intersection of race and gender, black female founders have only been able to raise $1.6 million (just 2%) in funding over the past 12 months.
Local funding sources are emerging and 58% of innovators who have raised funds in the last 12 months cite African-led investors as a funding source. Over the past 12 months, there has been an increase of more than 50% in the number of active African-led investors in the space. This trend can be leveraged as donors seek to channel funds optimally to investors.
Africa’s technology and digital health ecosystem is maturing, providing an opportunity for targeted action to support well-positioned innovators to scale their operations and impact. This can be done in the following ways:
Partnerships with innovators demonstrating transformative potential are essential. Now is the time to connect top innovators with clients from donor-funded agencies, governments and industry. This will help them set up pilot projects to distribute subsidized medicines and other essential health products, explore their potential to reduce prices, ensure affordability and improve visibility.
Major buyers such as governments, donors, and donor-funded agencies should articulate critical distribution needs and create mechanisms to purchase innovations that match their specifications.
Establish a multi-country regulatory working group and provide demand-driven technical assistance to support rapid country efforts to define and implement regulations for digital distribution and related services such as telemedicine.
Support key governments to test aggregation of global, regional and local supply chain data to develop pharmaceutical data platforms, including data from digitized distributors operating in the private sector, to inform planning for public health supply chain and broader visibility.
Test if and how early-stage digital payment innovations can facilitate pharmacy engagement in primary care delivery.
While regulation, which will help guide the digital pharma ecosystem and its growth trajectories, continues to take shape, efforts are still needed to ensure that it remains innovation-friendly, both in the short and long term. .
It is hoped that this report will inspire global health actors to prioritize targeted actions to support innovators who are well positioned, to help scale up operations and strengthen impact.