Global Marketing Issues for HIV Testing Products and Services
1Stefan Weiss, marketing manager at Ross IVD, just read an e-mail from Dr.
Carola Chabari, a prominent scientist he had recently met in Kenya. What he read made him sit back and think cautiously about what she offered to the company. Dr Chabari, a researcher at the Kenya Medical Research Institute, had proposed a new, less costly HIV testing method. She wrote that she had not sent this information to anyone else in the in vitro diagnostic industry, although her fi ndings were to be published in a medical journal soon.
Chabari had written in her message: “I was impressed by your CEO’s speech at the WHO (World Health Organization) meeting. He seemed truly interested in a solution to develop a more affordable HIV test. It seemed to be a personal commitment of his.” An innovative researcher, Chabari had discovered a way to simplify the CD4 T cell count—a means of monitoring HIV patients. She had named the procedure Simplex, and believed that it had the potential of making testing more widely available because it cost less than other methods and was slightly less complicated to use.
The chief executive offi cer of Ross IVD, Dr. Harry Knowles, had publicly stated his readiness to support global efforts to offer affordable HIV monitoring tests for developing countries. His statement to the media came after a conten- tious meeting at World Health Organization (WHO) headquarters in Geneva on the topic of HIV/AIDS tests pricing. “Find a way to make these lower-cost tests happen, Stef. I know if anyone can, you can,” had said Knowles, slapping Weiss confi dently on the shoulder before fl ying out to a President’s Emergency Plan for AIDS Relief (PEPFAR)2 meeting in Washington, DC.
Weiss reread a passage from the e-mail Charabi had written: “As a Kenyan, I know the situation ‘on the ground’. I can vouch that from a human resources perspective Simplex makes sense because it renders HIV monitoring tests a bit easier. It is so diffi cult to recruit, train, and retain good people to run clinical laboratories. In the case of Simplex, the logis- tics, too, are simplifi ed. I also know that until tests are more affordable and easy to carry out, governments in my part of the world won’t be buying enough of them.” Charabi’s method used fewer of the reagents (monoclonal antibodies used to detect HIV antigens in biological samples) commonly used in European and North American tests, thereby reducing the costs.
Her method also had the benefi t of being accurate even when blood samples had been collected as much as ten days earlier and treated with a fi xative.
For more details about tests please see Appendix B.
As Marketing Director at Ross IVD, Weiss had met with enough non- governmental organization (NGO) people from organizations like the International HIV/AIDS Alliance to know that time and money were seri- ous clinical testing issues in the developing world. In the fi rst place, it was hard enough to get people to agree to testing, especially in remote locations and small villages. For the few who agreed to be tested, testing staff had to rush down mountain tracks or perilous roads, often in searing heat, to get the blood sample as quickly as possible to the big city hospital. There were all kinds of anecdotes he had heard, about HIV testing program cars breaking down on the way back from a remote village in the African savan- nah, or sinking in mud on deserted mountain tracks in Latin America or East Asia . . . and the blood samples being carried in the driver’s own bag as he walked and hitchhiked great distances to the hospital laboratory. As these kinds of stories illustrated, there was a human commitment to testing and monitoring which the country’s infrastructure did not support in many regions. Then, after all that, someone would have to get the results back to the remote villager who agreed to be tested and often another confi rmatory test3 would be needed before treatment could begin. And that was a differ- ent kettle of fi sh. “Sometimes it must be like paddling upstream, working on location with an HIV/AIDS voluntary testing and counseling program,”
mused Weiss as he sat back in his orthopedic chair and ate a few pretzels.
Ross IVD is a leading supplier of HIV detection and monitoring systems located in Portland, Oregon, USA. The company’s portfolio of products had the potential to service global HIV testing and monitoring needs. Ross IVD’s line of HIV testing products represented 40 percent of the company’s total business worth US$1 million worldwide. Ross IVD testing products for HIV included the following:
Testing kits: a well-packaged all-in-one kit targeted at laboratories in
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primarily affl uent settings.
Reagents in bulk packaging: simple bottles containing multiple doses,
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targeted at governments, NGOs, and the WHO Bulk Procurement Scheme.
Diagnostic instruments: sophisticated and sensitive soft- and hard-
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ware equipment that does cell counts (fl ow cytometers) and displays the results per test.
After-sales service: training provided in testing technology, interpre-
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tation of results, the use of and troubleshooting for diagnostic instru- ments, and quality control and quality assurance programs.
Reagents used in tests were typically purchased from manufacturers in the United States, then assembled and packaged by Ross IVD. Components
of the diagnostic instruments were manufactured in low-cost sites across Southeast Asia, but the fi nal assembly, packaging, and distribution were done at the Ross IVD plant outside Portland, Oregon, USA.
Concerned about the high cost of manufacturing in the United States, Ross IVD had explored licensing possibilities and offers in several develop- ing countries for the reagents. However, the company had decided based on the precautionary principle not to proceed with licensing. “There are just too many unknowns . . . and who trusts them not to cut us out and start making their own? With their history on intellectual property I know I sure as hell don’t!” had snorted the research and development director, when Weiss presented all the marketing opportunities that would arise from lower-cost licensing in key markets. Upon hearing that comment, Weiss thought it was typical of the divergence of opinion between marketing and R&D people. And that was not only true for Ross IVD! Long term, he was convinced that the benefi ts of licensing outweighed the risks—especially if Ross IVD was one of the fi rst fi rms to do it. The market for testing was growing for the following reasons:
1. HIV is still spreading, and more people are contracting it than ever before.
2. People with HIV and AIDS are now living longer (those who receive the treatments), and so need HIV monitoring tests for a longer time.
3. The calls for widespread provision of antiretrovirals were being heard by organizations with a global impact like the Bill and Melinda Gates Foundation4 and the William J. Clinton Foundation,5 with the WHO doing its part with the “3 by 5”6 initiative, which implied that the testing market was opening up. Where treatment becomes available, more people are willing to come forward for testing (“oth- erwise, who would want to hear their death sentence?” thought Weiss).
4. Global organizations, events, and personalities like the G8 Sum- mit, the World Economic Forum, the World Social Forum, the Bush administration’s PEPFAR, the World Bank, Bono, and Angelina Jolie, to name a few, are talking more often and more openly about HIV and AIDS, leading to increased awareness and increased funding for testing and treatment.
5. Private companies big and small as well as public sector employers and trade unions are committing themselves to action on HIV, and testing programs like “Know your Status” are spreading.
Plus, he reasoned, it was a lost opportunity to portray the company as having a sense of social responsibility.
As Weiss refl ected on the problem, he loosened his tie. How on earth can he sell “affordable” HIV tests to developing countries and make a rea- sonable profi t from it? After all, Ross IVD is not in the charity business:
our strongest responsibility is to our shareholders! Unlike country-tailored strategies for businesses, HIV has no borders: the marketing manager feared waking the sleeping bear of its wealthier western and northern customers.
When they fi nd out we give lower rates to so-called developing countries, they will have legitimate complaints . . . and I will likely have a crisis com- munications problem on my hands, puffed Weiss.
Weiss was well aware also that, like a spreading virus, international sci- entists have no borders: they regularly attend international conventions on HIV where they talk about the tests they use, and pricing inevitably comes into the discussion. Northern scientists will not fail to notice pricing differ- ences. “Worse,” thought Weiss, “there’s a handful of HIV/AIDS activists who would jump on the occasion to publicize differential pricing to their fellow activists here in the US. HIV positive New Yorkers without medical insurance are going to whine about paying higher prices than people in Zim- babwe.” Weiss could just imagine how that would pan out in the media.
As an experienced marketer, Weiss knew that he could divert attention by fi ne-tuning the product defi nition and its positioning. Even the packag- ing made a lot of difference, whether it was a “kit” or a “bulk” package.
However, HIV is a sensitive business area. If HIV/AIDS patient activists came to know that a “more affordable” testing product existed, they would ask their clinical lab to switch to it and Ross IVD’s profi ts on its HIV line would likely plummet. Weiss could feel the gray hairs coming through his scalp as he considered these different angles of the “affordable” testing idea.
However, he took out a pen, a calculator, and a sheet of paper and began to write an offer for the WHO, to be presented to them in a meeting next month. The offer for CD4 count kits contained the following elements:
1. Simplex kit: set of two reagents, instead of the four usually used in affl uent settings.
2. Quality control product for daily use.
3. Quantix instrument systems, new or used. (Quantix is a rather sophis- ticated instrument but a new simple and cost-effective instrument will be possibly developed for the resource-poor settings at a later stage, when Simplex takes off.).
4. Training, installation, and after-sales service.
5. Volume discount.
6. Simplifi ed purchasing process.
7. Calculations of difference between the WHO offer and current market prices.
Weiss was concerned about the role that the WHO would play: they would become a sort of distributor if the details could be worked out. Weiss smiled at the irony of that. His smile faded as he considered the details to be worked out with the WHO. What would be the extent of competi- tors offering test kits under the bulk procurement scheme? To what degree
could governments have freedom to choose one brand over another in the scheme? Is delivery at airport like in the current procurement scheme to help us keep our costs down? How would the WHO promote Simplex and its peripheral products to WHO partners, affi liates, and organizations on the ground? How long would we be locked into this program?
BACKGROUND FOR THE CASE: THE MARKETING OF HIV TESTS AND THE CONTEXT OF TESTING
On the occasion of World AIDS Day 2005, Richard Holbrooke,7 president of the Global Business Coalition on HIV/AIDS, boldly stated that the world’s HIV/AIDS-fi ghting strategy was wrong. He delivered a stinging critique of the status quo in HIV/AIDS programs. According to Holbrooke, “The num- ber of people infected is still growing sharply.”8 Treatment is a “bottomless pit” and prevention programs “have failed most seriously.”9 He offered a range of arguments for increasing testing in addition to treatment and pre- vention because “the spread of the disease cannot be stopped, and we cannot offer drugs to those who need them, unless people know their status.”10
Holbrooke had stated his belief that people who have been tested and know their status are more careful in their sexual behavior, and wider test- ing programs result in increased awareness, less stigma, and more people being treated. In his call for widespread testing, Holbrooke was sharply criticized by human rights and HIV/AIDS activists. His assumption that infected people would be more careful in their behavior to restrict pass- ing on the virus to others may be fl awed. Some have argued that altruis- tic motives do tend to sway people diagnosed with HIV, if they have been provided with effective counseling (Mechoulan, 2004).11 However, there is uncertainty about human behavioral consequences of taking an HIV test. According to Philipson and Posner (1993) in Mechoulan (2004), some people who discover they are HIV positive are assumed to operate in self- ish ways, for instance, by increasing their sexual encounters and thereby increasing the spread of HIV because they feel they have “nothing to lose.”
Meanwhile, a proportion of those who tested positive increase their protec- tive measures and may balance out the effect of those with risky behaviors.12 Analyses of MSM testing patterns showed that those who test negative may in fact increase their risky behavior, in which case HIV testing may in fact contribute to high-risk behavior in this high-risk population.13,14 There is a possibility that improved behavior—when it occurs—may be a response to the counseling received at the testing site; however, the true behavioral out- comes of voluntary HIV counseling and testing are as yet little understood.
Technology for HIV tests is fast improving, and the market is grow- ing.15 There are more than seventy tests available,16 and new tests are being developed—particularly tests that provide rapid results and those that use saliva instead of blood or serum. Some newer so-called rapid tests require
only ten to twenty minutes to deliver results, as compared to older tests that required more than two hours.17 This is a signifi cant development because there are specifi c situations that require a rapid medical response, as in the case of a pregnant woman of undetermined HIV status who is giving birth and may be in need of antiretroviral drugs to prevent trans- mission to her baby. Time is also an important factor in the case of health workers exposed to blood of a patient who may have HIV, as in the case of a “needlestick” when the syringe needle used on a patient accidentally pierces the health worker’s skin. The health worker may then be promptly offered postexposure prophylaxis to diminish the risk of contracting HIV by more than 80 percent.18 The antiretroviral drug zidovudine (Retrovir) is commonly used for this purpose. Similarly, a person who has been sexually assaulted may receive protective doses of zidovudine if the HIV status of the rapist is known. Another issue is related to post-test counsel- ing: when older tests were conducted in resource-poor settings, people who had been tested were often asked to return the next day or even several days or weeks later19 for their results, which in effect meant that many would never return due to fear of public disclosure (acquaintances might see the HIV test candidate entering the testing site) or simply lack of accessibility where people must travel far on foot or through danger- ous territory to the testing site. In the United States, an estimated 30 to 40 percent of those tested do not return for their results,20 a fi gure which is likely to be higher in resource-poor regions. Other settings where rapid tests may be useful include combat settings and workplaces where there are particular risks of exposure.
Online, Home, and Self-Tests
Today tests are available for purchase over the Internet, by mail order, or at pharmacies for testing at home. A small minority of the tests are approved by a government medical regulatory agency, such as the U.S. Food and Drug Administration (FDA). There are many fraudulent offers of home HIV tests.21 In a developed market like North America, an approved HIV testing procedure commonly includes the following steps:
1. Order is placed for testing kit and payment is made.
2. Testing kit is received by customer via an express mailing service.
3. A customer personal identifi cation number (PIN) is activated to main- tain anonymity when customer calls the testing service, and pretest counseling and further instructions may be provided.
4. Customer uses the contents of the test kit to prick fi nger to obtain a blood sample and apply sample to the sample test card that is marked with the customer PIN.
5. Sample test card is sent to the testing service via express mailing service.
6. Testing service conducts HIV test in a certifi ed medical laboratory.
7. Two or three days later, the customer calls the testing service and, using the PIN, retrieves the HIV test result. If the test is positive, post- test counseling may be provided, as well as a list of medical facilities in the customer’s region.22
Issues related to home testing and self-testing include regulatory aspects which may be little understood by many consumers. For exam- ple, testing kit literature may boast of “approval” or “accreditation”
by a number of offi cial-sounding (but potentially nonexistent) entities.
The quality of pre- and post-test counseling may be a serious issue, in particular for people who discover that they are HIV positive and may need more than a telephone call to understand the signifi cance of the news. As stated in the WHO document on the topic of post-test counsel- ing, “counseling is a relationship,” and counselors need to be sensitive to the client’s context, culture, and emotions. A number of complex features should be included in post-test counseling, including an assess- ment of who else will be affected by the result, a medical overview of HIV and AIDS, and prevention of transmission to others, which may include the client’s baby and permanent or casual sex partners.23 For many consumers, the main issue is their anonymity and the confi den- tiality of their results. This concern has legal implications, particularly
Box 4.1 A View from the Field:
What can be Done to Encourage More People to be Tested and Who Could be More Active in this Area?
New ground has been established by governments such as Botswana, where people have to opt out of being tested, rather than waiting for voluntary testing to be sought. Since 2003, the government has initi- ated “routine HIV testing and counseling,” which means all citizens of Botswana can expect to be offered an HIV test whenever they have contact with their health care system and offered counseling if they are found to be positive. This has dramatically increased the number of peo- ple receiving ARV treatment. Similar initiatives are under way in Zam- bia, Malawi, and Lesotho.
A concerted effort by all stakeholders to reduce the stigma which sur- rounds HIV/AIDS in many countries is essential to increase uptake of test- ing. Information and education by national governments are of primary importance. But also employers have an important role to remove barriers and encourage testing by ensuring effective nondiscriminatory workplace policies are in place.
Source: Information provided by Dr. Franz B. Humer, former chairman of the board of directors at Roche; former chairman of European Federation of Phar- maceutical Industries and Associations (EFPIA), Basel, Switzerland