Roche: Cutting tests prices not solution to healthcare funding

Bringing down costs of medical tests is not one of the tactics Roche seeks to employ as it unveiled its 10-year strategy to expand its footprints in the continent.

As part of the strategy, the global diagnostics firm in April acquired legal presence in the country to trade as Roche Diagnostics.

Roche already had legal presence in Kenya but as a pharmaceutical firm.

Kenya becomes the 12th country in the continent for the diagnostic company where it has presence.

The firm says its strategy is to reach 500 million people through diagnostic tests in the next 10 years, which will be a tenfold growth in its business.

Bernard Colombo, Roche Diagnostics' president for Europe, Middle East, Africa and Latin America, says their plan entails partnerships with other firms, who might also be competitors, even as he insisted that the solution to healthcare is not necessarily cutting costs.

"Historically, when we talk with authorities, in our domain which is diagnostics, the typical question we get is 'what is the price of the test', and the discussion is: can you reduce the price?" he said in an interview with Financial Standard last week.

Mr Colombo said the question to be asked should be: what is the cost of treating the patient for a certain disease?

The response to this will enable authorities to determine where there is wastage and fix it.

"Supplying one test at a low cost is not efficient for the global health system," he said.

"What is efficient is to look at everything that is needed from screening to treatment of a patient and ask yourself how much money is spent in different steps.

"The diagnostic tests will only be one element of the cost, and if we do a better reallocation of how money is spent, we are going to see more patients benefiting."

This perspective will inform how the Swiss multinational healthcare company will be engaging with the government and ministries of health in the continent as it seeks to expand its business.

The firm also wants to ride on health agenda in the continent such as Kenya's Universal Health Coverage to increase its footprints and cements its position.

Colombo argued that if governments take the same healthcare budget and allocate the money differently, they would be able to put many more patients in the equation at the same cost.

"This is absolutely instrumental in achieving what we need to achieve and our vision of Africa many more patients," he said.

"This is why I am usually fighting against this push for costs reduction; spending the same amount of money differently will by itself allow us to serve many more patients."

He said the notion has always been that in order to get more patients into the equation then it requires either to have more money allocated in the sector or that companies would have to reduce their prices.

"We need to have an adequate pricing but we should never talk about pricing for a test but pricing for a solution."

These solutions can come in form patient education or training for medical professions.

Roche has not disclosed how much this strategy will cost but instead insists on its commitment to grow the African market by leveraging on the successes in developed markets such as Europe.

Colombo said he is aware that to grow the African market will take time - years, possibly decades - and it is prudent to work with other firms, like imaging and pharmaceutical companies, to sell healthcare solutions to the continent.

"We live in a continent that has opportunities and challenges in equal measure. Some of the health challenges the continent has to live through come alive with the statistics.

"For example, Africa has to solve a quarter of the global health burden with just one per cent of the (global) health budget and three per cent of the global health workforce," said Dr Allan Pamba, Executive Vice President, Roche Diagnostics Africa.

While there is progress in infectious diseases, Dr Pamba said, more investment is needed in areas of non-communicable diseases where ailments like chronic heart disease, diabetes and cancer fall.

"For NCDs, we have little to no infrastructure," he said.

Dr Pamba said diagnostics form the foundation of a robust public health system, but in countries across Africa; such as Kenya, barriers to accessing these continue to stand in the way.

"The allocation of healthcare budgets to diagnostics is disproportionately lower than the allocation to treatment interventions. Unfortunately, this results in overall higher costs to the health system," he said.

In its 2022 financial report, Roche Group documents sales of diagnostics in Europe, Middle East and Africa(EMEA) having dropped as a result of the Covid-19 pandemic.

"Sales in the EMEA region decreased by 16 per cent due to the significant reduction of Covid-19-related sales compared to the previous year, partly offset by growth in the immunoassay business," the report reads.

"In North America, the 13 per cent sales growth was driven by the sales of the SARS-CoV-2 Rapid Antigen test. Asia-Pacific sales were 23 per cent higher as a result of increased sales of the SARS-CoV-2 Rapid Antigen test and due to growth in the immunoassay business."