Harvard Case - Artepharm: Commercialising the Malaria Cure in Africa
"Artepharm: Commercialising the Malaria Cure in Africa" Harvard business case study is written by Hao Liang, Dongning Yang, Han Jiang, Adina Wong. It deals with the challenges in the field of Economics. The case study is 19 page(s) long and it was first published on : Feb 9, 2019
At Fern Fort University, we recommend Artepharm pursue a multi-pronged strategy to commercialize its artemisinin-based malaria treatment in Africa. This strategy should focus on building a robust supply chain, engaging with local governments and communities, and leveraging partnerships to ensure affordability and accessibility.
2. Background
Artepharm, a family-owned Chinese pharmaceutical company, discovered and developed artemisinin, a highly effective antimalarial drug. The company faces the challenge of commercializing this life-saving treatment in Africa, a region heavily burdened by malaria. Artepharm must navigate a complex landscape of poverty, limited healthcare infrastructure, and varying government policies.
The main protagonists in this case study are:
- Artepharm: A family-owned Chinese pharmaceutical company with a groundbreaking discovery and a desire to make a difference in Africa.
- African Governments: Facing the challenge of managing malaria outbreaks and seeking affordable solutions.
- Local Communities: Suffering from the devastating effects of malaria and needing access to effective treatment.
- International Organizations: Playing a key role in funding and supporting malaria control programs.
3. Analysis of the Case Study
This case study can be analyzed using the following frameworks:
1. Porter's Five Forces:
- Threat of New Entrants: High, due to the potential for generic drug manufacturers to enter the market.
- Bargaining Power of Buyers: High, as African governments and international organizations have significant purchasing power and are price-sensitive.
- Bargaining Power of Suppliers: Low, as the raw materials for artemisinin are readily available.
- Threat of Substitutes: Moderate, with alternative antimalarial drugs available, albeit less effective.
- Competitive Rivalry: High, as several pharmaceutical companies are competing in the antimalarial market.
2. Value Chain Analysis:
- Inbound Logistics: Artepharm needs to establish a robust supply chain in Africa to ensure timely and reliable delivery of its product.
- Operations: Manufacturing processes must be optimized for cost-effectiveness and quality control.
- Outbound Logistics: Distribution networks need to reach remote areas and ensure accessibility for all.
- Marketing and Sales: Effective communication strategies are required to educate healthcare professionals and the public about the benefits of artemisinin.
- Service: Post-sale support and monitoring are crucial to ensure proper treatment and minimize resistance.
3. PESTLE Analysis:
- Political: Political instability and corruption can hinder access to healthcare and create challenges for distribution.
- Economic: Poverty and limited access to healthcare infrastructure make it difficult to reach the most vulnerable populations.
- Social: Cultural beliefs and practices can influence the acceptance and use of artemisinin.
- Technological: Innovation in drug delivery and diagnostic tools can improve treatment outcomes.
- Legal: Government regulations and intellectual property rights need to be carefully navigated.
- Environmental: Sustainability considerations are important for sourcing raw materials and minimizing environmental impact.
4. Recommendations
Artepharm should adopt a multi-pronged strategy to commercialize artemisinin in Africa:
1. Build a Robust Supply Chain:
- Establish manufacturing facilities in Africa: This will reduce transportation costs, improve accessibility, and create local jobs.
- Develop a network of distributors: Partner with local companies to ensure efficient distribution and reach remote areas.
- Invest in cold chain infrastructure: Ensure the proper storage and transportation of temperature-sensitive medications.
2. Engage with Local Governments and Communities:
- Negotiate favorable pricing strategies: Work with governments to establish affordable pricing structures that consider the economic realities of the region.
- Develop public awareness campaigns: Educate communities about malaria prevention, treatment, and the benefits of artemisinin.
- Collaborate with local NGOs: Partner with NGOs to provide training and support for healthcare workers and community health programs.
3. Leverage Partnerships:
- Seek funding from international organizations: Secure grants and investments from organizations like the Global Fund to Fight AIDS, Tuberculosis and Malaria.
- Collaborate with pharmaceutical companies: Partner with other companies to develop innovative drug delivery methods and improve access to treatment.
- Engage with research institutions: Collaborate with African research institutions to conduct clinical trials and develop new antimalarial drugs.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: Artepharm's core competency lies in its expertise in developing and manufacturing antimalarial drugs. These recommendations align with the company's mission to improve global health.
- External Customers and Internal Clients: The recommendations address the needs of both external customers (governments, healthcare providers, and patients) and internal clients (employees and shareholders).
- Competitors: The recommendations aim to differentiate Artepharm from competitors by focusing on affordability, accessibility, and social responsibility.
- Attractiveness ' Quantitative Measures: While quantifying the financial return on investment is challenging due to the complex nature of the market, the recommendations are expected to lead to increased sales, market share, and positive social impact.
6. Conclusion
By implementing these recommendations, Artepharm can effectively commercialize artemisinin in Africa, contributing to the fight against malaria and improving the lives of millions. This strategy will require a long-term commitment to building sustainable partnerships, investing in infrastructure, and engaging with local communities.
7. Discussion
Alternatives:
- Selling artemisinin at a high price: This would maximize profits but limit access to treatment for the most vulnerable populations.
- Donating artemisinin: This would ensure accessibility but would not be financially sustainable for Artepharm.
Risks and Key Assumptions:
- Political instability: Political instability can disrupt supply chains and hinder access to healthcare.
- Currency fluctuations: Exchange rate fluctuations can impact the profitability of the business.
- Resistance to artemisinin: The emergence of artemisinin resistance could render the drug ineffective.
8. Next Steps
- Develop a detailed implementation plan: Outline specific actions, timelines, and resource requirements.
- Establish a dedicated team: Assemble a team with expertise in international business, healthcare, and development.
- Conduct pilot programs: Pilot programs in selected countries can test the effectiveness of the strategy and identify areas for improvement.
- Monitor progress and adapt: Regularly monitor progress against key performance indicators and make adjustments as needed.
By taking these steps, Artepharm can successfully navigate the complex challenges of commercializing its malaria cure in Africa and make a significant contribution to global health.
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Case Description
This case is set January 2019. Song Jianping is senior advisor to Chinese pharmaceutical firm Artepharm, which has been engaging in malaria elimination in Africa since 2003. With a deep understanding of the African market, the company has developed an innovative approach to malaria elimination, stemming from traditional Chinese medicine. It created a combination drug marketed as Artequick and put forward an innovative programme called Fast Elimination of Malaria by Source Eradication (FEMSE). Despite the success of the FEMSE programme, which had been tested in the Comoros and eliminated about 95% of the malaria cases there, Artepharm had been facing a lot of challenges in commercialising its innovative and effective solution. These challenges include a lack of presence in the public market which was dominated by multinational corporations such as Novartis and generic pharmaceutical companies from India. Artepharm recognises that it has realised only a small fraction of the potential sales of antimalarial drugs on the African continent. Song is thinking about the next steps to increase Artequick sales, so that the company can become profitable and not rely on funding from its parent company and the Chinese government.
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