We recognise that markets for many healthcare products are inefficient and require re-shaping to deliver life-changing products to people in underserved communities.
A healthy market has:
A United States Agency for International Development report provided the following definition of a well-functioning healthcare market:
A well-functioning healthcare market with public and private sector participation requires manufacturers to produce high-quality products, distributors to deliver the necessary quantities, providers to administer them correctly, and patients to be educated and active participants in their own health.
Inefficient healthcare markets result in lower access to and availability of healthcare products. The real-life impact of lack of access and availability can be counted in worse health outcomes and lives lost.
Market inefficiencies are often driven by high transaction costs, missing or incomplete information, market psychology and inaccurate risk perception.
These market inefficiencies lead to higher prices, lower supply allocations, shorter-term supply agreements and, in some cases, decisions not to enter a market at all.
Market inefficiencies can lead to complete market failure.
Market shaping uses tools or interventions to address market failures and inefficiencies. Used correctly, the result is a sustainable market that facilitates the buying and selling of healthcare products.
Market shaping has demonstrated its potential to enhance donor or national governments’ value for money, diversify the supply base, increase shipment reliability, and ultimately increase product access for people.
We use market-shaping tools to secure more affordable products, with improved supply security, for people living in underserved communities. As a result, donors and national governments can maximise the impact of their health investments by increasing the efficiency of the use of funds. For suppliers, the resulting visibility of demand can reduce the risk premiums that are included in their costs, enable investments in higher-volume, lower-cost facilities, and therefore allow for lower prices and a more sustainable commercial operation.
We monitor and analyse healthcare market dynamics and trends in innovative finance. We also engage with a wide group of experts from across the healthcare ecosystem and with governments to understand their healthcare priorities. Using this information, we identify and evaluate opportunities to deploy our guarantees.
By building productive partnerships with procurers and manufacturers, we create a catalytic relationship that leads to sustainable and affordable access to medical supplies.