New Research Director Joins WDI

Monday, July 25, 2011

Prashant Yadav, one of the world’s foremost experts on pharmaceutical supply chains in emerging markets, has joined WDI as a senior research fellow and director of the Institute’s Health Care Research initiative.

Yadav, who began his work at WDI in June, was previously professor of Supply Chain Management at the MIT-Zaragoza International Logistics Program in Zaragoza, Spain.

He is an advisor and consultant to the World Bank, the World Health Organization, the Bill and Melinda Gates Foundation, the UK’s Department for International Development, and the government of Zambia.

He is involved in field research and has been the principle or co-principle investigator for grant projects totaling $2 million. He currently has a project in Tanzania studying supplier incentives aimed at making artemisinin combination therapy (ACT) drugs available and affordable for the treatment of malaria. The Clinton Health Access Initiative is sponsoring this project with funding from the Gates Foundation

“I’m really happy to welcome Prashant to WDI,” said WDI Executive Director Robert Kennedy. “He has a global reputation in the field of supply chain research and is one of the leading authorities on the topic. Prashant joining WDI will allow us to make a big impact in the field, which is the goal of all our work here.”

Yadav said WDI’s tagline – Business Knowledge for Emerging Economies – fits well with what he does.

“All of my research, all of my field projects are about putting good supply practices and knowledge into improving public health in developing countries,” he said. “So the overall theme of using market mechanisms, or quasi-market mechanisms, to improve health care for underserved communities is, I think, a very good interface between what I do and what WDI’s bigger theme is.”

He also said the idea of a think tank or policy institute housed within a business school and with strong ties to a wider university community – including a very robust medical research community - is unique. Yadav also holds faculty appointments at the U-M Ross School of Business and U-M School of Public Health.

“It does not exist, to the best of my knowledge, anywhere else in the nation,” Yadav said. “So I think that was a unique proposition for me.”

WDI’s Health Care Research initiative was launched in December 2008 with David Canter as the first director. Canter, formerly a senior vice president at Pfizer Global Research and Development, studied how the delivery of health care in low-income countries could be improved by means of business rather than clinical approaches.

Canter left the position a year ago to become the inaugural executive director of the University of Michigan’s North Campus Research Complex.

Yadav will take the research initiative in a new direction.

He said two key problems that hamper good health outcomes in developing countries are a lack of manpower on the medical side of the business (being able to diagnose and treat a patient), and the shortage of medicines, vaccines, and bed nets.

The thinking in the 1980s, Yadav said, was that rich people sought medical care at private sector clinics and the poor went to government- or NGO-run clinics. Consequently, distribution of medicines, vaccines, and bed nets to low-income environments was through government or NGO channels.

But a large part of the poor population actually seeks health care in the private sector.

“The reason for this is, the time it takes for you to wait in line at a government-run clinic to get your medicine is very long,” he said. “And if you are working in a company or if you have some kind of paid job, then yes you can take a few hours off and come back and you won’t lose your wages.

“But if you are living off an hourly wage, and you take a half-day off you don’t have food to bring home at night. So they pay the money to a private clinic to get treated quickly.”

Yadav’s research aims to bring more transparency in how the supply chain operates in these private channels. In instances where there is price gouging and other things that people worry about with the private sector, he looks at what mechanisms can be put in place so that poor patients get access to health care in locations where they go and that there are medicines, vaccines, and other commodities available at a reasonable cost.

But because many people still go to publicly-run clinics, Yadav focuses part of his research on implementing better management practices in the government and NGO sector. This includes better management of inventory, better management of plans, improving forecasts for how much need there is for a product, and also how incentives impact the proper running of the government system.

“A typical problem of the government sector is that people don’t care if a clinic is under stocked of certain medicines,” Yadav said. “They don’t have the vaccines because it requires more effort. So we look at incentive mechanisms in the public sector that can improve the availability of inputs that are critical in improving the delivery of health care.”

The use of incentives is the focus of a current research project Yadav is conducting in Tanzania for the Clinton Health Access Initiative.

The project is based on the premise that poor people seek treatment in the private sector but good quality medicines – especially for malaria – don’t reach the remotest of the remote shops. These are the small drug shops in the marginalized regions of Tanzania near the Burundi and Zambia borders that are about 20 hours driving distance from the capital city of Dar es Salaam.

“These shops typically have very few medicines and typically they stock medicines that are very cheap because that way they don’t have to spend a lot of money in working capital,” Yadav said. “So what we’re trying to do is have a bonus that will be tied to the availability of good quality malaria medicines in remote shops. We measure national wholesalers and distributors in Tanzania on how many of their medicines are reaching the remotest shops in the region.”

Yadav’s team of researchers did a large-scale mapping exercise, visiting every drug shop in the study regions to determine things such as their suppliers and customer demand. 

“Then we kick in the incentive and observe its effect,” he said. “Is supply increasing? How quickly is it increasing? It’s randomized so we take a select set of regions where we do the incentive and another set of regions that are statistically similar where we don’t do incentive, and then we compare the two.”

The researchers visit the shops and measure the availability of products there. If it reaches a certain threshold, the distributors or wholesaler gets a bonus, a portion of which gets shared with the shops.

“What that achieves is it gives them an incentive to try this out and see that it is feasible,” Yadav said. “Once they try it out, we can taper down the incentive and slowly take it off. And hopefully they will continue to serve those regions because they realize that it’s not bad, that it’s sustainable, and they can do it even without the incentive.”

Yadav said this relatively new field of study is growing. He said he is seeing more interest from fellow academics from around the world, and getting inquiries on how to get involved in this research.

“I think historically the medical science community has focused on these health care problems, and to them the lens from which they view these problems is ‘Oh, these people don’t have the proper training.’ And clearly a health care worker from Tanzania is trained differently than one from the University of Michigan,” he said.

Therefore, the medical science community thinks closing that gap is the best option for improving health outcomes. But those looking at the health care problems from a more business management training view acknowledge the skill gap but realize it is not the easiest thing to fix.

“Even with current levels of health care workers, if we can’t get medicines and vaccines to people then we can’t achieve positive health outcomes,” he said.

Yadav said malaria drugs will continue to be the bigger focus of his work, though he is beginning to study drugs – such as zinc tablets - that combat some childhood diseases. Drugs to fight malaria are cheap, as opposed to those that are prescribed for HIV/AIDS, for instance, that run $1,000 for a treatment course.

“Fixing the supply problems for HIV drugs is not a sustainable solution because the cost for treatment is so high,” he said. “But for malaria it’s 80 cents, so the case is very strong that if you fix the supply problems you will see sustainable gains in health care over the long term. That is what I’m hoping for.”

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