DC International Private Enterprise Group (IPEG) Meeting
On Thursday (2/22/07) I had the pleasure of attending the newly formed IPEG DC chapter meeting. IPEG is the International Private Enterprise Group started by a couple of Columbia students. The DC chapter is hosted by NextBillion and they do a fantastic job of putting it together. IPEG is an opportunity for professionals interested in business and development to network and exchange ideas. You can read more here.
This meeting was focused on success in the health sector. Beth Boomgard from AED discussed her group’s work (Private Sector Health Initiatives) in the area of anti-malarial bed nets. Unfortunately I did not get to hear her full discussion, but you can read more about the NetMark project here.
Based on the case study we wrote, I was able to share my ideas about Aurolab and the Aravind Eye Care System. Both are phenomenal organizations that offer many lessons. The Aravind clinic started in 1976 in a 11 bed rented house and today is probably the largest eye care system in the world. Their mission is to eradicate blindness in developing regions, which is primarily due to catarcts. Aurolab is the non-profit medical device and pharmaceutical manufacturing arm of Aravind. For a quick overview on Aravind see this Wall Street Journal piece or this Fast Company article and/or check out this video if you have time (35 min, Link). Basic facts about Aravind & Aurolab:
– 2/3rds of patients receive some sort of charity care, 1/3 pay above cost
– 250,000 cataract surgeries per year
– 5 hospitals across the state of Tamil Nadu, over 1000 beds
– 1300 community eye camps
– 2 Million outpatient visits
– Export products to over 120 nations
– Reduced price of synthetic lenses (IOL) for cataract surgery to under $10
– FDA compliant facility
– IOL, suture, pharmaceutical, spectacle and hearing aid divisions
– Globally unique due to scale and non profit status
Blindness due to cataracts is a substantial problem in developing countries. Aravind and Aurolab managed to build infrastructure, systems and manufacture core medical technologies at the local level that allowed them to chart their own course. Instead of relying on a non-sustainable donor model, they decided to build their own system and self-manufacture their own technologies and still manage to make a substantial profit. Some of the questions I received Thursday night revolved around replicating and expanding the model:
1) What other disease categories can Aurolab tackle – what other low cost medical technologies can they make?
2) How did they achieve remarkable success? How do we replicate this model?
Regarding the second set of questions – in a nutshell, it comes down to solid management, charismatic leadership, clear socially driven mission and unwavering persistence. Of course there are many other factors, see our case study for more information on how they built partnerships, transferred technology and charted their own direction. Finally, one very important ingredient, is that it takes time (see historical milestones). Aravind was started in the mid 1970s and Aurolab was founded in 1992. They faced various challenges, learned from their mistakes and over the course of 3 decades built a world renowned system. As far as replication, I argued that you do not need a non profit manufacturing facility in every country – for example, Aurolab through NGO partners distribute their synthetic lenses (intraocular lenses) to over 100 countries and have 5-10% of the global market. On the hospital side, Aravind has consulted with over 100 hospitals worldwide to set up clinics and systems to improve their capacity to offer care. For more on that see their “consulting” arm – LAICO. The last thing I will say is that there is not a one size fits all solution, but people really should study the Aravind Eye Care System to see what lessons they can apply to their particular case. As far as the first question, I will have to tackle that in another post.