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Distribution at the Base of the Pyramid

This article explores the delivery and distribution of goods at the “base of the pyramid”.  Certain commodities, such as beverages, matches and cell phones, are available in abundance in rural communities throughout the developing world.   What enables widespread distribution of these products in remote areas? Furthermore, what can be learned and applied to the delivery of essential medicines and other health services?   It is clear that practical lessons can be gleaned from business models and applied to the public health sector.  However, the exact mechanisms that drive the success of the private/corporate sector are not clearly understood.  Can these same mechanisms be applied to the delivery of health care?  What unique aspects of health care distinguish it from other commodities?  We can gain insights into these questions by examining the distribution model of Coca Cola as well as the pervasive delivery networks for products such as matches and cell phones.

Coca-Cola

In remote places in the developing world where it is impossible to access the most basic medications, one can walk across the street and buy a soda.  As one health worker puts it:

“Thousands of smart people spend millions of dollars trying to get life-saving medications to the people who need them. And too often, we fail. But Coke is everywhere in this country, from the fanciest hotels in Dar es Salaam to little shops in the Serengeti. They're doing something right.  My co-worker told me that Coke Tanzania has teams dedicated to tracking which vendors buy from specific distribution centers and exactly where bottles are sold. If things aren't working, they identify the kink in the chain and fix it, as soon as possible”.(1)

In fact, there has been a movement directed at using Coca-Cola’s distribution lines to deliver essential medicines.  David J. Olson, Director of Policy Communications for the Global Health Council, has suggested harnessing Coke’s delivery networks to deliver malaria drugs, bed nets, condoms and other essential health products.  In addition, one organization, Colalife, is trying to develop an “aidpod” that fits between coke bottles and carries “much needed social products such as oral rehydration salts and high-dose vitamin A tablets.”(2)   More attention to this idea came as the result of a controversial article published in The Guardian.  The author, Sarah Boseley, wrote about the omnipresence of Coca-Cola products and simultaneous lack of basic medicines in the developing world:

“The new battle is now not just to get HIV medicines to people with AIDs, but to get a consistent, affordable supply of essential drugs to all who need them. That means that governments in the west, as well as in developing countries, need to make money available, and turn their attention to supply systems. It can't be left to Coca-Cola barons. It's too important to leave to the market. Not just for Uganda, or Africa, but for all of us.”

In a preemptive response to potential accusations of poor standards of corporate social responsibility, Coca-Cola representative David Cox replied:

“Like Sarah Boseley, Coca-Cola is concerned about the lack of vital medicines reaching Katine and other communities throughout Africa. So we are examining if it is possible to use the success of the distribution system for our drinks, and the expertise behind it, to help tackle this challenge. It is not as easy as it may seem. The reason that Coca-Cola and our other products are so widely available in Africa is largely because of the efforts of independently-owned small businesses that make money for each case they deliver. Any initiative to distribute medicines or other essential public goods has to maintain these commercial incentives or they simply will not work.”(3)

The sentiment expressed by Cox highlights the reality that the Coca-Cola Company is first and foremost a commercial outfit.  Thus, the distribution chain works through commercial incentives.  While Coca-Cola has used their distribution network to deliver emergency aid in response to local disasters and crises, the sustainable delivery of health care services and/or educational material would need to maintain those incentives.  Yet as Boseley mentions in her article, many people believe that market forces are neither sufficient nor stable enough to guide the sustainable provision of health services.

Matches and Cell Phones

Like Coca-Cola, matches are a unique product because of their high demand and low price.  In fact, 97% of rural households purchase matches on a monthly basis.(4)  The near universal presence of matches provides an opportunity to reach underserved markets.  By tracking the flow of matches from manufacturers to consumers, we can better understand the distribution system and evaluate the potential for using and replicating such channels.

However, this systematic tracking has not yet been done.  Systems research is needed to understand the underlying distribution network for products like matches and Coca-Cola. How do they reach the end-user?  How many distributors do they go through and how long does this take?  The answers to these questions can provide insights for scaling up other products and services.

Another idea to improve the delivery of health care in the developing world is by harnessing the power of cell phones. The number of cellular subscribers worldwide has surged nearly 25% annually for the past eight years, growing to reach over 60% by the end of 2008.(5)   Researchers at MIT’s Legatum Center are investigating new ways to harness cell phones to help people in developing nations.  Michael F. Maltese, the center's managing director, comments on the goals of the project:

 "Since mobile phones are dispersed throughout the developing world, they now constitute a platform atop which other services - mobile banking, mobile health, etc. - are now possible." (6)

Improving the delivery of health care in rural areas has been the major focus of these research efforts.  Patients in rural areas, for example, often spend an entire day traveling to the nearest clinic in order to receive basic health services. By using a menu of questions downloaded to a cell phone, the idea is that a patient can transmit enough information to a doctor or nurse to get a preliminary diagnosis and to find out whether the condition warrants a trip to the clinic.  Like matches and Coca-Cola, the far-reaching penetration of cell phones into rural areas of Africa and other developing countries may provide a unique opportunity for the delivery of health care.

Health Care

It is clear that the distribution channels for commodities like Coca-Cola and matches are pervasive, and that the idea of harnessing these networks for the delivery of health care has potential.  However, in many ways, health care services are a far cry away from beverages and matches.  The complexities of health care may hinder it from achieving the same widespread distribution.

One concern is whether or not health care services should be marketed as commodities. This concern was recently expressed in the New York Times in 2007, when Arata Kochi, director of WHO’s Malaria Program, wrote: “I’m not sure whether the poorest of the poor actually drink Coca-Cola.  Yes, the soft drink has great market penetration, but the world’s poorest remain too poor to actually buy it.”  In other words, if basic health care services are to be understood as commodities like Coca-Cola, there will be implications for those who are unable to afford such services.

On the other hand, if we chose to frame health care as a public good, using for-profit businesses to distribute health services could create a real or perceived conflict of interest. This could occur if a company interprets the piggybacking of health materials as an additional marketing opportunity.  Furthermore, the soft drink and fast food industries are not known for public health promotion.(7) As The Lancet editors wrote in an editorial highly critical of the industry’s marketing tactics, “if the industry continues on its present trajectory, the public’s opinion of Big Food is going to follow that of Big Tobacco and decay as quickly as a Coca-Cola-drinker’s teeth”.(8)

Another complexity lies in the fundamental difference between the structure of corporations and public health systems.  Coca-Cola is a large and powerful company.  In comparison, the health care field is much more diversified in its products and fragmented in scale.  Local health care needs vary from place to place, which makes utilization of mass distribution channels more complex.  Furthermore, sustainability remains a real issue.  Essential medicines could be delivered through Coca-Cola lines, but who would pay for this sustained distribution?  

Perhaps most importantly, the provision of health care requires trained health workers and physicians.  In order for essential medicines to be effective, patients must be educated on when and how to take them.  Effective health care cannot merely be delivered without providing the follow-up needed to assure adequate rates of adherence and resolve potential complications.  In order to address the issue of access to health care in the developing world, we must remember that “delivery” is only part of the solution. 

Footnotes