Listen to this article
When Gregory Rockson moved to the US to attend university aged 18, he was initially inspired to study medicine. But his impatience to tackle problems he had observed as a child in his native Ghana soon persuaded him to switch course.
“I became more interested in the business side of healthcare,” he says. “I realised if I became a doctor, I could treat a few patients. If I focused on how to create models to allow patients access to care, I would have the greatest impact.”
His own condition — thoracic scoliosis — meant that he saw first hand the frustrations of his parents in trying to secure the medicines he needed. “I knew how many times they had to come back to the pharmacy because they couldn’t get drugs.”
Frequent “stock outs” of drugs and high prices even when they were available — usually paid by patients from their own pockets — were two important obstacles hindering wider access to drugs. Mr Rockson’s business idea came in his final undergraduate year, watching a documentary on a third problem: substandard and fake medicines.
That was also the year mPharma was born. The student entrepreneur’s original idea was to create an electronic prescription system, to solve the sort of difficulty which the airline industry had faced before different carriers interlinked their booking systems. A reservation in one system could result in double booking and uncertainty over availability.
“In Africa, where the pharmacy retail market is highly fragmented, we started a link to the global distribution system,” he said in a recent interview. “mPharma would tell the patient which pharmacy had the drug you were prescribed and direct you to it.”
The system worked, but as he began consultations with customers, friends and potential investors, he saw that it did not address fundamental questions about a system of deliveries to pharmacies beset by sprawling supply chains, low order volumes and high prices.
He began to change his business model in response, refocusing mPharma as a “pharmacy benefits manager” that would buy medicines on behalf of pharmacies (most of them in hospitals), creating greater certainty for suppliers and drug stores alike. By providing working capital and increasing the volumes of purchases, the company was also able to negotiate lower prices with suppliers.
mPharma generates revenues from a commission on the drugs it purchases, and recently launched Mutti, an electronic credit financing service to help patients pay for healthcare. It also sees scope to generate income from sales of its data on medicines use. Mr Rockson says he intends to make mPharma profitable within three years.
He received an initial $5m from Social Capital in 2015. Last autumn, he received an further $6m from the son of Indian industrialist Sunil Mittal, Shravin, who met Mr Rockson at a World Economic Forum event in 2012.
mPharma also received feedback to hone its pitch at a session with investors and consultants at the FT/IFC transformational business awards. The aim of the awards, bolstered this year by the FT’s special report on impact investing, is to identify innovative companies that can help the world fulfil the UN’s Sustainable Development Goals.
“I was really impressed by Greg’s ability to understand that eprescription was not the right solution. It was part of the product but not the be-all and end-all,” says Mr Mittal, a venture capitalist whose other investments include telecoms.
He agrees with Mr Rockson’s focus on the framework of drug provision. “You need to solve the plumbing first. You have to be extremely persistent. It’s an extremely long game. There are more lows than highs for entrepreneurs. You have to start understanding consumer behaviour.” Given his own expertise in telecoms, he adds: “And in Africa, you have to build a credible business in a fundamentally mobile-first manner.”
So far Mr Rockson has raised a total of $10m, which he estimates will fund his expansion for the next two years. With operations across 110 pharmacies in Ghana, Nigeria, Zambia and Zimbabwe, mPharma calculates that it has helped 100,000 patients to date. It is now supporting 20,000 patients a month with drug cost savings averaging 30-60 per cent.
“Our goal is to build the largest African drug retail support network outside South Africa in the next five years. Once we found the right investors, the whole process became easier,” says Mr Rockson. “The question for me is now is not about how we make money but how do we build enough scale, fast enough.”
Get alerts on Retail & Consumer when a new story is published