Medication for non-communicable diseases (NCDs) are often not affordable to patients in Kenya due to high drug prices. Hospitals incur high procurement costs as they individually buy small amounts of the medication, instead of buying large quantities that entitles them to volume discounts. These high prices are then passed on to patients.
CDMS ("Cronical Drugs Medical Scheme") decreases the procurement costs of NCD drugs for small and medium-sized hospitals by aggregating their demand. They then obtain quantity discounts from pharmaceutical companies and bypass distributors and wholesalers.
The second component of CDMS’ points of action is a pre-screening program that creates demand for the low-cost NCD medication. In order to enable patients to benefit from the lower drug prices, the pre-screenings raise awareness on NCDs and identify high-risk patients in the community. These patients are then referred to the hospital and can benefit from the lower costs.
The business model:
CDMS receives a commission fee on NCD medication from the hospitals.
CDMS is a registered entity in Kenya. Out of 70 approached hospitals, 50 declared strong interest in the solution. Contract negotiations to start the supply of medicines are in progress. The key activity of reducing the price of NCD medicines has already been piloted in 2019, achieving average savings of 18%. In cooperation with community workers, CDMS has also implemented the second pillar of the business model and is already conducting pre-screenings. Up until now, 6.500 pre-screenings have already taken place, diagnosing hypertension in over 25% of the cases. 1.600 patients have been referred to a hospital.
The team is currently working on securing funding and working capital to buy larger bulks of NCD medication. Until October 2020, CDMS plans a pre-scale phase implementing the whole model and achieving both: long-term price reduction for the end consumers and a larger patient awareness through regular screenings. For the 2020 phase, the team is currently recruiting additional hospitals.
CDMS aims to conduct 19.000 pre-screenings per year; currently 2.500 take place per month
CDMS received a total of 70.000 € of external investment from Merck and Boehringer Ingelheim
Lowering the costs of NDC medication for the end user
Lowering procurement costs for small and medium sized-hospitals
Identifying high risk patients via a pre-screening and referring them to a hospital
Raising awareness among the community on NCDs
Changamka, Boehringer Ingelheim