Welcome to our Innovators Creating Prosperity series, spotlighting organizations across the globe that are positively impacting economic development.
A World Economic Outlook study showed that there are currently fewer than 25 pharmacies in Nigeria per million people. To put that into perspective, there are more Walgreens stores (over 8,000) in the United States than there are pharmacies in Nigeria (less than 5,000). If the United States seems an unfair comparison, consider that Ghana, a poorer country than Nigeria, has four times the number of pharmacies per capita as Nigeria.
This is partly due to the fact that many pharmacies are independently run and constrained to serve the wealthy since margins for this segment of the market are higher. As a result, tens of millions of Nigerians are left out of the market, unable to access affordable drugs. Those who search for cheaper prices risk purchasing counterfeit drugs, which make up as much as 17% of medications sold in the country.
But access to affordable drugs isn’t the only issue. In Nigeria pharmacies play an elevated role in delivering primary healthcare to the community, with people often treating pharmacists as the first port of call for many basic illnesses and health conditions. Yet many pharmacies lack the systems and support to deliver timely and appropriate advice. They also struggle to capture patient data consistently, manage back-office operations, and provide value-added services for their patients.
Enter Lifestores Healthcare.
Lifestores Healthcare is democratizing healthcare access in under-served, low-income urban areas in Nigeria. By using technology to transform the effectiveness of pharmacies and securing partnerships with medication manufacturers, the Lifestores team aims to provide reliable and affordable medicines to more people. The team now operates three pharmacies in Lagos, Nigeria and has launched an affiliate program to support mom-and-pop dispensaries. It also operates a market-leading chronic management program, providing nurse-led coaching and discounted medicines for patients with chronic conditions such as hypertension or diabetes.
What might happen if Lifestores develops into a Walgreens of Nigeria? In addition to the tens of thousands of jobs that would be created, this new market would ultimately lead to a nation where life-saving drugs and healthcare services are more available, resulting in improved health outcomes for the public. In this installment of Innovators Creating Prosperity, we caught up with Bryan Mezue, CEO and co-founder of Lifestores Healthcare, to learn how the company has evolved.
1. Where did you get your idea? How did you know there was opportunity?
Growing up in Nigeria my uncle owned a small-scale pharmacy business. While the business was successful, like others it catered primarily to the middle and upper-middle classes. I knew there would be significant opportunity to expand access if someone built a chain of stores that could scale to solve the nation’s problem.
Theory insight: When new industries emerge, products and services are typically sold to the wealthy, so one way to uncover opportunities to create a new market is to observe what the wealthy are consuming. If innovators develop a solution to provide the product or service to the mass market, they’ll enjoy the benefits that come with being first to market.
2. What was your initial target market? My initial target market was the tens of millions of people for whom existing drugs on the market were too expensive or inaccessible. We also wanted to target those who could afford drugs on the market, but fell victim to the epidemic of counterfeit drugs.
Theory insight: When a new market is created it often solves other problems. Although Lifestores is targeting nonconsumers—people who would benefit from affordable and quality drugs but are unable to access them—the company may also help solve the counterfeit drug epidemic that plagues Nigeria.
3. What did your target market do/use before your innovation was available? Many people in our target market waited until they got really sick before purchasing medication. Others sought medicine from unregulated pharmacists who typically sell counterfeit drugs, while some looked to traditional healers.
Theory insight: What Bryan describes here is called delayed consumption; this happens when customers see purchasing a product as a last resort. Workarounds like this are a powerful sign that opportunity exists to create a new market.
4. Where did you raise funding, and what advice would you give others regarding fundraising?
We initially raised funding through networks of friends and mentors. Some of the mentors included other entrepreneurs who have built businesses in Nigeria. Once we were able to articulate the opportunity in this space, they were willing to give us a shot. We have since focused on getting the business to profitability as quickly as possible, thus enabling us to approach larger institutional investors from a position of strength.
5. Innovators often feel that the lack of an enabling environment in emerging markets—poor infrastructure, inadequate institutions, and little government support—is insurmountable. How did you overcome these challenges?
Our field is highly regulated and the primary beneficial role of the government regulator has been to enforce laws to limit the proliferation of fake drugs. Nevertheless we regularly deal with market-specific challenges such as erratic power supply, poor logistics infrastructure, and human capital challenges. Our strategy is to overcome these challenges by embracing workaround technologies (e.g. solar power) or extending our capabilities (e.g. designing bottom-up training continuous training programs for pharmacists).
6. What can other innovators take away from your experience? Is there anything you’d do differently?
Fundraising to create a market that doesn’t exist yet can be challenging. However, entrepreneurs can improve their success rate in this arena if they focus on getting to profitability as early as possible so that the opportunity is de-risked for investors. Also, creating a new market, especially in a difficult environment, takes time. It’s important to observe the existing structures first—there’s often a reason the market has evolved the way it has—and then apply the relevant lessons to your own solution.