A biotech executive explains her innovative business model for funding diagnostic tests in poor countries.
As the head of Diagnostics for All, a nonprofit founded in 2007, Una Ryan has one goal: to change the way health care is delivered in poor countries. The organization is developing paper diagnostics—cheap, portable, easy-to-manufacture tests that can be used in environments with few resources and little infrastructure (see “TR10: Paper Diagnostics,” March/April 2009).
The key to the nonprofit’s success is an innovative business model. Diagnostics for All has won grants and philanthropic funding to support early development of its technology. But Ryan knows that these types of funds are inadequate for deploying new medical tests over the long term. So Diagnostics for All has created a for-profit subsidiary, Paper Diagnostics, which will partner with companies to develop tests for use in wealthy nations. After taxes, the proceeds will be invested back into the nonprofit.
The organization’s most advanced test, for liver function, is designed to help people who take HIV and tuberculosis medications that can cause liver damage. A doctor can use the test to quickly determine when a patient’s drug or dosage should be changed. Emily Singer, TR’s senior editor for biomedicine, asked Ryan how she expects to deploy this technology in poor countries.
TR: What makes Diagnostics for All’s business model unique?
Ryan: We have created a nonprofit and a wholly owned for-profit. That will allow us to take the technology and work with partners who want to make money. But we will get royalties and put them back into a fund to allow Diagnostics for All to do more tests and develop more products. I am trying to build sustainability in terms of delivery to people in the developing world, but also for DFA. I want it to be here long after I am gone.
How will you work with companies? Will you license the technology or work with them to develop products?
We can envisage different models being suitable for different relationships, including straight licensing deals, joint ventures, and shared development. We have several ongoing corporate relationships but have not announced anything publicly.
What kinds of diagnostic tests are you developing?
In addition to the liver function test, we already have a pregnancy test and a glucose test [for diabetes monitoring]. But one of the biggest advantages of the technology is that the applications are broad. We can test food products. We can put the technology into thread to look for infections in wounds, we can put it in diapers. The cost of the test is not limiting—it’s all about what you do with the test. This is a very good way of accurate intelligence gathering on health and disease.
You previously headed a public company. Why did you decide to take on the job at Diagnostics for All?
DFA represents an opportunity to fundamentally change the way we look at health care worldwide. If one can make a device that meets the qualifications for success in the developing world—one that can be produced at low prices on a massive scale, that is easy to use, portable, and disposable—it will likely be a dynamite product for the developed world as well.
Many attempts to bring technology to poor countries have failed. Health clinics are littered with broken centrifuges and other instruments. How do you plan to avoid these problems?
You have to have the right technology, one that is intrinsically low cost. The second thing you have to have is the right business model. You can get a lot of stuff worked on or researched—students will work on a project for one summer, or people will make donations during the holiday season—but to get to the end user, we need something scalable and sustainable. I have done many experiments with dual markets [which sell one product to poor countries and a related product to wealthy ones] and tiered pricing [with different prices for different markets], but I think this is a winner.
What have been the biggest hurdles in achieving your vision for Diagnostics for All?
Initially, it’s getting unrestricted funding. A lot of grant funding often excludes legal expenses, consultants, or overhead for paying employees. The other hurdle is always the regulatory one. Satisfying regulatory bodies all over the world is expensive. We have made something that is almost zero cost to make—a 300th of a cent to print them. But by the time it goes through the regulatory process, we have to add a few cents.
How will you deliver the technology?
Initially, we will work with hospitals and clinics where there is already some infrastructure, because we don’t have feet on the ground all over the world. One thing we can do is deliver them at scale. And they are portable enough to be delivered by someone on a bicycle. We also want to go more nontraditional routes, such as small NGOs and e-health clinics. I would like to see these paper diagnostics available at a convenience store, just like chewing gum. In South America, we might work with generic pharmacies, which tend to be next to doctors’ offices.