Business strategy design and implementation for Africa’s largest Group Purchasing Organization
E&K Consulting Firm was commissioned by a global NGO and USAID Implementing Partner to co-lead the design and implementation of the business strategy of Africa’s largest Group Purchasing Organization (GPO) in the private pharmaceutical sector. E&K led market feasibility, commercial due diligence, strategy design and implementation as well as supported the implementing partner to raise US$ 25 million in capital for the GPO. The GPO is cutting back on inefficiencies in the pharmaceutical supply chain in Africa to provide access to essential medicines at a fraction of their original price thus contributing to universal access to health and SDG 3in Africa.
The price build up in essential medicines (from factory gate through the supply chain to the patient) in Kenya and other African countries is as high as 400%. This disproportionately high price build up means that essential medicines are inaccessible to a majority of Africa’s population. E&K Consulting Firm led the design and implementation of the business strategy of a Group Purchasing Organization that aggregates procurement of medical products by pharmacies and hospitals in the private sector (which are largely stand-alone and fragmented) under one entity that leverages on economies of scale to secure preferential pricing. The Firm negotiated health financing options to support bulk procurement of medical products for private hospitals and pharmacies within the GPO; designed a supply chain model and business models to support pooled procurement; negotiated pricing for medical products for the GPO; and secured the endorsement of the GPO by major pharmaceutical and medical associations in Africa such as The Kenya Pharmaceutical Association (KPA), Kenya Alliance of Private Hospital (KAPH) and Africa Health Federation Importantly, E&K Consulting Firm supported the sponsoring company (a global NGO and USAID contractor) to raise US$ 25 million that has driven the GPOs rapid growth in Africa.