Increasing Private Sector Engagement in the Supply of Family Planning Commodities in Kenya

From September 17 to 18, 2024, FHM Engage with Maisha Meds hosted a workshop in Nairobi, Kenya to explore opportunities for the private sector to expand access to modern contraception in Kenya. Maisha Meds is a digital health organization that builds business software used by over 1,500 private pharmacies and clinics across Kenya. 

During the event, participants (including from the Ministry of Health, Population Services (PS) Kenya Social Marketing, Revital Healthcare, and Sai Pharmaceuticals) highlighted the already substantial and growing role of private actors in the family planning (FP) market as the country increases domestic sources of health financing. While the private sector is significant, it currently, predominantly provides short-term contraceptives, with emergency contraception (EC) leading sales. Methods like depot medroxyprogesterone acetate (DMPA; a self-injected contraception), condoms, and combined oral contraceptives (COCs) are largely supported by social marketing organizations (SMOs), while donations of long-acting contraceptives from the public sector challenge the commercial viability of these products.

During the workshop, Maisha Meds presented wholesale facility level pricing data that revealed the presence of products in the private sector sold at below ex-manufacturer pricing levels, likely present through either policy allowances, donor subsidies, or informal channels. Maisha Meds' data revealed intense competition in the Kenyan EC market. A separate Maisha Meds presentation went in detail into the possibility of local manufacturing of FP commodities, which presents both opportunities and challenges.

An SMO called DKT International Kenya posed key questions highlighting important dynamics in the FP market: is the market shaped by women’s preferences or by market structures shaping behaviors? How challenging will it be to shift the current dynamic, where long-term methods are dominated by the public sector and short-term methods by the private sector? Does this dynamic matter for public health goals? What does the government aim to achieve by supporting greater private sector involvement?  These are important questions because they get at the “why” which then informs the “how.”

Then, PS Kenya – a market leader in socially marketed commodities – highlighted that both demand creation and brand building are compulsory for the success of a new product. Initial investment is high as supplies build brand awareness and list their products in trade. Monopoly of the supply chain does not favor the consumer. On the path to commercial viability, one does not always have to increase the price; they noted that one should relook at other cost saving elements such as packaging, 

The workshop discussions also highlighted several challenges facing the FP market, namely advertising restrictions on contraceptives; the presence of public sector products in the private sector through both policy allowances and informal "suitcase sales"; and intense competition in the EC market.

Several additional factors were identified as hindering the commercial market, including consumer ability to pay. This is a significant constraint particularly for mid-tier brands and higher-priced commodities like DMPA-SC. SMO market leaders possess strong brand equity, making it difficult for newer, low to mid-priced brands to gain traction. Delays in product registration by the Pharmacy and Poisons Board (PPB) – reported to take over two years – further complicates market entry.

Philips - Kenya emphasized the importance of new partnerships in introducing family planning products, such as DMPA-SC. These include integrating family planning services into pharmacy chains, accrediting pharmacies as FP providers, offering Ministry of Health (MoH)-approved training for healthcare providers, and providing direct digital training for consumers to enhance access and awareness. These partnerships aim to strengthen the role of pharmacies in the FP landscape while ensuring quality service delivery.

During the workshop, discussions also touched on potential growth scenarios for the private FP market, focusing on the financial impact of increased private sector participation. For oral contraceptive pills (OCPs), the current private sector value stands at $5.796 million. Under a low-growth scenario, where the share of private sector clients rises from 42.3 percent to 50.7 percent, the value would increase by $764,000 annually. In a high-growth scenario, where nearly 65 percent of clients shift to the private sector, the dollar value for OCPs could increase by $2.3 million. Overall, the current total private market value is $33 million. If the client base grows within the private sector without a change in the method mix, the total market value could increase by $2.6 to $8 million annually, depending on the growth trajectory.

Local manufacturing of FP commodities presents both opportunities and challenges. While some products like EC are relatively easier to produce, others, such as DMPA intramuscular (IM), require advanced capabilities like a sterile fill-finish line and prequalification by the World Health Organization. DMPA subcutaneous (SC), soon going off-patent, may see increased demand, creating a potential market for local manufacturers. However, more complex products like COCs, implants, and intrauterine devices (IUDs) require sophisticated manufacturing processes, making them harder to produce locally. Additionally, global competition, particularly for condoms and implants, and a market dominated by donor and government procurement, present challenges for the commercial viability of local production. Developing local capacity would require substantial investment in technology, quality assurance, and regulatory approvals to meet global standards.

In conclusion, after robust discussions on whose role it is to grow the private sector’s contribution for FP, the consensus was that all workshop participants – from government, private sector, partners in development – all have a role to play. Participants proposed a number of solutions including platforms to address incentives for businesses in Kenya through subsidies for local manufacturing, removal of taxes on health products and technologies, innovative partnerships, and financing for FP to increase access. But one poignant question remains: How can the business environment be more conducive and what licenses need to be consolidated to improve the ease of doing business?

Banner image: A client passes by a PS Kenya desk during the World Contraceptives Day to enquire more on family planning products. Photo accessed on USAID flickr.