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Read the case study before considering the questions at the end.
Reach52 is a social enterprise specialising in community health interventions, health-worker training, and the distribution of essential public health products in underserved regions — mainly in Asia and Africa.
The social enterprise was founded by Edward Booty in 2016, the “52” in its name reflecting the percentage of the world’s population unable to access essential healthcare products and services.
Reach52 uses a network of agents — often community health workers — and a community-level sales team, to sell health products to local clinics and pharmacies. It also uses its platform to provide data to target health promotion and screening campaigns run with, and funded by, governments, health agencies and private healthcare companies.
In 2023, Reach52 acquired part of another, larger social business in the sector, which allowed it to enter the Indian product distribution market. It operates using a distinctive model that offers social benefits but also raises strategic difficulties — such as the question of how to balance priorities as both a social and commercial business.
To meet their margin targets, mainstream pharmaceutical companies in India serve only large-scale, dense markets. Areas without large hospitals or clusters of clinics and pharmacies remain underserved, with limited visits from pharmaceutical sales reps and scant medical education or retraining.
The authors
Prashant Yadav is a senior fellow for global health at the Council on Foreign Relations
Amitava Chattopadhyay is professor of marketing and the GlaxoSmithKline chaired professor of corporate innovation at Insead
The range of medical products in these areas is also limited, often due to outdated prescribing habits that lead to the use of old generic medicines even when newer and better versions are available. This affects the local population’s health, despite India being a leading pharmaceutical manufacturing hub.
Rural people may also lack the literacy or health knowledge to recognise when they need medical attention. For example, women fainting is often seen as normal rather than a sign of malnutrition caused by eating last and least in patriarchal households with limited food. Educating people about health problems requires trust — something that comes from frequent interactions with the community.
Access to doctors is a further problem, with unqualified individuals posing as doctors and dispensing expired medicines. Visits to trained doctors, when available, are often costly and require travel, resulting in lost wages.
Reach52 aims to create a sustainable, high-volume, low-price model, purchasing products at a discount from high-quality generic manufacturers, including some on-contract suppliers. It ensures that mark-ups charged by intermediaries during distribution are as low as possible. Booty also recruited a commercial team with experience of managing rural markets for pharma companies in India.
When Reach52’s India operations were part of another, larger business, it benefited from economies of scale, with many overhead and corporate costs covered on behalf of the social enterprise. However, the structure constrained decision-making on the product portfolio and partnerships.
Some months after Reach52 took over this India social business, it had expanded its portfolio from 32 to 47 products, including extending existing product lines. It now sells to 26,000 pharmacies, clinics and hospitals in rural areas and organises thousands of health promotion events, engaging at least 500,000 people a month.
While this growth is promising, the social enterprise faces several strategic questions it needs to address to achieve its dual objectives of impact and business sustainability.
Questions to consider
1. Should Reach52 continue with the portfolio of medicines it inherited or expand by adding undersupplied products from other companies? Expansion means managing more suppliers, co-ordinating with sales teams, and possibly rebranding products. Sticking to the old portfolio risks missing market needs and misaligning with its mission. Reach52 has to balance ambition with pragmatism to avoid overextending resources.
2. Reach52 relies on sales reps and local health education agents to drive outreach, raise disease awareness, run screenings and rural clinics, and introduce needed products. How should Reach52 design incentives for sales reps and health agents that balance its social mission with sales targets? If sales lag, suppliers lose confidence, and margins will not sustain health programmes. But, if incentives lean too heavily on sales, the social mission may suffer. Reach52 must create focused social impact metrics for sales reps and health agents — usable locally, trackable corporately, and balanced to sustain finances.
