Can frugal innovation save lives?
On 26th January 2001, there was a devastating earthquake in the Indian state of Gujarat. It is claimed to have taken up to 20,000 lives, injured a further 160,000 and destroyed nearly 400,000 homes. When a local newspaper’s photo coverage included an image of a broken water filter, its creator, Mansukhbhai Prajapati, realised that he needed to create a fridge that worked without electricity [i]. Just four years later, the Mitticool fridge was a reality, going beyond the immediate needs after the earthquake in Gujarat and creating opportunities for people around the world to preserve food without electricity.
This is an example of frugal innovation: a way of treating constraints as a creative advantage and creating new, high quality products at a fraction of the traditional cost [ii]. This can be done by starting from scratch, creating a less complex good with only the features essential to the end-user, in order to sell them at a lower cost. It’s often associated with developing countries such as India and China where a pragmatic attitude to innovation is often coupled with low-income buyers. Some of these innovations have been so successful they have been subsequently sold in developed countries [iii] — the most popular examples being GE Healthcare’s $500 ECG machine brought to the USA from India.
The fact that such radical innovation comes from these countries is hardly surprising. I was recently in Mumbai, where I saw first-hand the ingenuity of the workers in Dharavi, one of the largest slums in the world. Contrary to any perceptions you might have from Slumdog Millionaire, it’s an efficient and functioning marketplace with total annual turnover estimated at $1 billion. The industries within this include plastic and cardboard recycling. All the materials, including machinery, were made by the workers and often out of recycled products. Even used and dented paint cans were re-shaped, re-painted and sold back to paint manufacturers. Waste not, want not (as my mother would say).
Frugal innovation in healthcare
Frugal innovation seems to occur when there are constrained customers and smart innovators. This is certainly the case for healthcare. The 2020–2021 NHS funding gap is forecast to reach £30 billion and a rise in chronic conditions expected to cost £5 billion per year by 2015 [iv], creating a payer mantra of ‘more for less’. Add this to the plethora of digital health start-ups and funding activity in the UK, and it starts to feel like a perfect storm. Even without UK born-and-bred innovations, there is always the option of taking high-quality innovations from around the world and applying them here.
So why aren’t we living in a world where great products are used everywhere at a fraction of the price?
As I mentioned in an earlier blog post, I think emerging markets are often a more attractive market for healthcare innovations as they have higher (regulatory) risk tolerance and higher unmet healthcare needs. I think this provides a unique opportunity to scale and embed innovations quickly. If patient access to innovation is as simple as health care professionals picking up best-in-class products and sharing with their networks, you will definitely see a higher demand. Compare this to the process of getting your product regulated, potentially speaking individually to c. 200 local healthcare economies and getting your head around lots of different types of procurement contracts. You might even have to disrupt years-old systems and convince lots of different stakeholders of the value.
It turns out that the product that cost so little to design and manufacture starts to become expensive to implement. It doesn’t seem so much of a silver bullet any more.
The system we use is designed to ensure safety and consistency, and we have the excellent record to prove it. But getting innovative products (frugal or not) to market quickly is the best way for them to start having an impact on patients. Today, the Government released the Accelerated Access Review, a report which outlines how new and innovative pharmaceutical, med tech and digital products can reach patients more quickly without compromising safety or effectiveness. It’s an excellent first step, and hopefully one that opens up opportunities for free-thinkers and innovators to have the impact we need on our healthcare system.
[i] The full Mitticool story can be read here: http://www.thebetterindia.com/14711/mitticool-rural-innovation-nif-mansukhbhai/
[ii] If you are interested in the topic, I recommend reading either ‘Frugal Innovation’ or ‘Jugaad Innovation’ by Jaideep Prabhu and Navi Radjou
[iii] This process is called reverse innovation. According to this article, the difference between the two is that frugal innovation involves designing solutions specifically for low-income market segments, whereas reverse innovation involves new products developed in emerging markets, which are then modified for sale in developed countries
[iv] Source: Deloitte report on Connected Health http://www2.deloitte.com/content/dam/Deloitte/uk/Documents/life-sciences-health-care/deloitte-uk-connected-health.pdf
