Switch to for-profit sweeps mPedigree across borders

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Ghana’s mPedigree, the company behind a pharmaceutical anti-counterfeiting solution, has expanded to Nigeria and Kenya since its 2007 launch, and now has its eyes on launches in Egypt, Zambia, Tanzania, Sierra Leone and Rwanda. But what is now a very successful for-profit business initially started life as a non-profit that had trouble persuading major companies to use its technology.

mPedigree’s anti-counterfeiting solution is a cloud-based system that creates unique 12 digit numbers which are put on single packs of medicines hidden under an opaque layer, only to be revealed when the consumer is buying the product. A customer can then send these PINs by SMS to a special shortcode, and within 15 seconds receive a reply confirming if the product is original or fake.

Like many successful concepts, mPedigree was born from the realisation of a serious need when it came to the authentication of drugs. Founder Bright Simons, now a Marie Curie fellow, experienced a counterfeit incident while during his final year at secondary school when he was prescribed chloramphenicol to treat typhoid. Simons first started to conceptualise this idea when studying in the United Kingdom (UK), though in the first instance it was to certify organic food produce as authentic.

“However, a bigger problem was identified with the many fake antimalarials in Ghana at the time, and a baseline study then brought it to the fore as the most practical solution for counterfeits,” said mPedigree strategy director Selorm Branttie. “A major fake drugs fatality incident in Nigeria opened our eyes to the need to repurpose the technology and pivot to the medical supply chain.”

But the idea was initially held back by its original incarnation as a non-profit organisation. Set up in Ghana and swiftly invited into Nigeria, Simons however found that large pharmaceutical companies were unwilling to do business with a non-profit, leading to the 2009 launch of mPedigree as a business.

“We still have our non-profit arm, and our social mission is embedded into the incorporation charter of our for-profit,” said Branttie. “We are thus a perfect hybrid, a true social enterprise, with the commercial sagacity and technological sophistication of a corporation and the heart and social purpose of a charity.”

Growth has been constant ever since, with MPedigree expanding rapidly across the continent, and also into new domains such as agro-inputs and cables.

“Currently there are operations in Ghana, Nigeria and Kenya, while pilots have been made in Egypt, Zambia, Tanzania, Sierra Leone and Rwanda. Plans are that by the middle of next year those markets will be active,” Branttie said. “So far, over 100 million packs of medicines have been protected by mPedigree in the operational areas. Successful pilots have been conducted in Bangladesh, with a view to expand into Southeast Asia in the short term.”

The major companies have also been snared, with mPedigree’s clients – over 100 of them – including the likes of Sanofi Aventis, Astra Zeneca, Ranbaxy, Dafra, and local Nigerian giants such as May & Baker.

mPedigree’s operations are funded by the revenues the company makes.

“We make money by charging a cost per label given to manufacturers, since consumers and users send the texts for free,” said Branttie. “The cost of the service is borne by the manufacturer, however, strong negotiations with mobile network operators and other stakeholders ensure that this cost is usually less than two per cent of production cost, hence not significant enough to change retail prices of products.”

Though Branttie admits some of the areas in which mPedigree operates – such as medicine and agriculture sectors – have seen profitability constrained by the fact pricing has been designed to ensure the price of medicines do not rise in any scenario, there are other areas in which mPedigree will not be held back.

“Think of the luxury and fashion sector, which we have barely touched. Or the electronics, automotive and electrical sectors, where we are adding volumes in Nigeria, Ghana and soon East Africa at a remarkable pace,” he said. “Or our fast-growing cosmetics portfolio. The prospects here are clearly massive.”

However, Branttie said the purpose of profit for mPedigree was to advance its social and technological missions.

“We are about more than brand protection. We are about quality assurance, supply chain optimisation, and revolutionary mobile marketing. We are about life-touching innovation,” he said.

“Technology has the power to trigger, sustain and grow a healthcare revolution in Africa. However, limitations like poor education, war, poor telecommunication networks and poor leadership can hamper its progress. The best way forward is very simple technology that is easy, secure and fast, and very affordable to maintain and use.

“Therefore, tech for healthcare in Africa will thrive on world-first innovations especially designed for low resource environments, as these will go a long way to sending healthcare to the most vulnerable populations in Africa.”

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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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