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(Adhy Savala, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Dr Nina Rawal, Founder and Managing Director, Emerging Health Ventures


  • Venture capital can turn scientific discoveries into consumer products for patients in LMIC.
  • It has transformed the market for rare disease medicines, bringing huge benefit to patients worldwide.
  • Healthcare innovation in low-income countries driven by a venture capital model could also benefit high-income countries, which share the same disease challenges.

Important gains have been made in global health in the past few decades: the rate of deaths caused by malaria has halved, HIV/AIDS is no longer a death sentence and the same might soon be true for Ebola judging by the success of recent clinical trials. Human lives have been saved and this has translated into economic prosperity; healthy people make for healthy workers and family providers.

Despite this progress, there is still much to be done in order to reach SDG 3 (good health and well-being for all). One of the main challenges is the large financing gap – up to an estimated $70 billion a year.

In addition to infectious diseases, non-communicable diseases (NCDs), such as diabetes and cardiovascular disease, also weigh heavily on low and middle-income countries (LMIC). Historically associated with elderly populations in high-income countries, today, four out of every five NCD patients live in LMIC. The mismatch between large unmet medical needs and the number of available treatment options is nothing short of a textbook definition of market failure. Innovative pharmaceutical and medical device companies have built their businesses around premium-priced therapies, mainly targeting high-income countries. At present, just $6 billion per year, or less than 5% of total private R&D spending, is directed towards the global health segment. But LMIC are catching up and will soon represent half the global economy, so there is much reason to challenge that model.

I’ve spent the recent years investing in start-up companies within areas such as cancer and rare diseases and I’ve seen the power of the venture capital and active ownership model to translate and transform promising scientific discoveries into commercial products that improve people’s lives. Rare disease was considered an unattractive market segment as well but with the help of regulatory incentives and premium pricing it has been transformed; 31 out of the 59 new drugs approved by the US FDA in 2018 were for rare diseases. Venture capital has played an instrumental role in that transformation by funding unproven, high-risk technologies and demonstrating their clinical benefits in patients.

How could venture capital transform global health?

In addition to saving lives by bringing new treatment options to patients, it can also contribute to economic development in LMIC. Innovative products can be scaled across populations and geographies, achieving sizable gains in health in countries that have a limited ability to individually fund innovation.

The notion that low and high-income countries face different disease challenges is increasingly outdated, so innovations for LMIC, such as cost-effective diabetes drugs, could have a significant impact in high-income countries too. Impact investing is gaining a lot of traction and global health is a great example of how financial and social returns can co-exist. Last but not least, venture capital can help attract the attention of big corporations to this largely overlooked market segment which is waiting to be tapped.

The venture capital toolbox to improve global health
Image: Emerging Health Ventures

Critics could argue that the venture capital model is based on premium pricing and that product development risks cannot be compensated for in a low-cost setting. I would argue that with some important adjustments to the traditional venture capital toolbox, it can be done. Tiered pricing models, regulatory incentives and innovative approaches to sales and marketing can all be used. Recent examples from the technology sector have shown that Silicon Valley-backed companies can reach unicorn valuations based on products that are largely deployed in low-income countries.

The venture capital model is far from perfect and is not proposed as a one-size-fits-all solution for the entire global health challenge, but the last decade in life science, as well as in consumer technology, has shown us how it can support the transformation of entire industries. So far, the concept of global health venture capital is in its infancy, spearheaded by the Bill & Melinda Gates Foundation. In order to extract the full power of the venture capital minority ownership model, additional funds must enter the game. As the capital allocated to impact investing rapidly increases, this could be a great time to transform global health.