How do you deliver medical supplies and devices to people in desperate need but so desperately poor that they can’t afford them? David Green set up Aurolab, a factory in India that makes low-cost sutures, eyeglasses, and lenses. Soon to follow: solar-powered hearing aids.
Executive director, Project Impact Inc.
FROM DAVID’S ORIGINAL ENTRY:
Tell us what you do (or what your team or organization does) and the specific challenge you faced.
David Green, has develop a different economic paradigm for making medical products and services affordable to the poor in developing countries. ‘Compassionate capitalism’ utilizes production capacity and surplus revenue to serve all economic strata, rich and poor alike. In this paradigm, profit is the MEANS to an END, not the other way around. In 1992, David directed the establishment of Aurolab (India), the first non profit manufacturing facility in a developing country to produce affordable intraocular lenses (IOLs), suture, pharmaceuticals and eye glasses. Aurolab has CE Mark Certification for suture and IOLs, fulfilling the same regulatory requirements medical companies must fulfill for selling products in Europe. The suture also has U.S. FDA approval. IOLs are artificial lenses which are implanted in the eye during a cataract operation, after the cloudy lens has been removed. Aurolab’s selling price is $4 per lens, compared to over $100 in the U.S. Aurolab is now one of the largest manufacturers of IOLs in the world, with 10% of the world market share. David also directed the establishment of suture (wound closure product) manufacturing at Aurolab. Aurolab has reduced the selling price from $200 per box of suture to $40. Previously, only 10 percent of suture products were sold to developing countries, where 70 percent of the world’s population lives. David is an Ashoka fellow and has also been recognized by Schwab Foundation as one of the leading social entrepreneurs in the world. With his team at the non profit organization Project Impact, David is now working on making an affordable hearing aid.
What was your moment of truth?
His present initiative is to design, produce and distribute a digitally programmable analog hearing aid. The hearing aids will be distributed in developing nations at a selling price commensurate with each client’s ability to pay, with free being the lowest price. Hearing aids currently sell for $1500 per unit. The AHAP hearing aid will be sold for prices ranging from $0 to $200. The target manufacturing cost is $40. The project will develop and implement financially self-sustaining models for the delivery of hearing aids to all economic strata, with an emphasis on serving the poor. Manufacturing and distribution will be self-sustaining from user fees. Aurolab will be the first manufacturing site. The project’s goal is to produce and sell half a million hearing aids within five years. $2.6 million dollars have been raised for this project, product development is complete and production and pilot distribution projects will be up and running in January 2003. The hearing aid batteries will be recharged with a unique and affordable (Under $5) solar re-charging unit. First prototypes have been produced and independently tested and have been found to compete favorably with other product on the market. Three clinical trials are being planned in Sweden, the U.S. and U.K. Planning and implementation are underway to establish pilot distribution programs embodying multi tiered pricing. The primary challenges have been ‘bootstrapping the project on a shoestring’ due to under capitalization (developing such products usually costs about $5 million and five years); risks inherent in developing electro acoustical chips; and managing a virtual team spread out over several continents. (The exact date? 10/27/2002)
What were the results?
Our hearing aid tested very favorably against the competition with excellent programmable sound quality covering a full range of hearing loss. We were also able to meet our goal of production costs between $40 and 50 dollars U.S.
What’s your parting tip?
Embrace the possibility of failure and continue to act in spite of fear.