Volume Guarantees and the High-Price, Low-Volume Trap with Hema Srinivasan

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• Escaping the high-price, low-volume trap

  09:48

  It's core to the way any manufacturing organization runs its business. If you reduce uncertainty around how much you're going to produce, if you maximize the scale at which you're producing, you will save costs, and you can pass those on to the customer. And in the case of global health, that often becomes self-fulfilling. So, reducing that high-price, low-volume trap can become quite catalytic, where we would often see this issue where the price is really high, the volumes are low. We know if the price came down, the volumes would be quite a bit higher, and everyone would win. But the supplier doesn't see enough in the market to say, ‘Let me reduce the price and hope for the best.’

• The credibility test every market shaper has to pass

  35:19

  You can't build a market-shaping success story just based on credibility with the public health community or credibility with the buy side of the market. You really need credibility with the suppliers and we tried to do a lot without that. That didn't work so well.

• How do you know a volume guarantee is the right tool?

  10:33

  If we see the enabling environment is there for uptake and there are just these few critical market-related barriers that we can solve for that unlock that equation, then, we can implement a volume guarantee, and it can have massive impact. But the trick is really spending the time to understand is the market-related barrier what's really holding back access, and not something like developing a whole new product that isn't available today or doing a ton of health worker training work for many, many years. I think those other barriers to access always exist, but if they are much more important than the price or the supply, a volume guarantee won't be successful.