Hema Srinivasan, formerly the Chief Access Officer of MedAccess, a leader of CHAI’s market shaping work, and a former country director for a major pharma company, joins host Inder Singh to discuss how market shaping in global health has evolved to use more formal tools like volume guarantees. They discuss when and how volume guarantees should and should not be used, how they can help address the high-price, low-volume trap to dramatically lower prices and expand access to critical health products, and other use cases including ensuring supply security or incentivizing supply expansion. The Market Shapers Podcast is a production of Inder Singh and is produced by University FM. This interview was recorded in July 2026.
Hema Srinivasan, formerly the Chief Access Officer of MedAccess, a leader of CHAI’s market shaping work, and a former country director for a major pharma company, joins host Inder Singh to discuss how market shaping in global health has evolved to use more formal tools like volume guarantees. They discuss when and how volume guarantees should and should not be used, how they can help address the high-price, low-volume trap to dramatically lower prices and expand access to critical health products, and other use cases including ensuring supply security or incentivizing supply expansion.
The Market Shapers Podcast is a production of Inder Singh and is produced by University FM.
This interview was recorded in July 2026.
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.
(Transcripts may contain a few typographical errors due to audio quality during the podcast recording.)
[00:00:00] Inder Singh: Welcome to Market Shapers, a podcast about harnessing capitalism for good. I'm Inder Singh. Over the years, I've had the privilege of working with incredible people, building products, forging deals, and shaping markets that have impacted millions of lives.
On this show, I sit down with the leaders, innovators, and behind-the-scenes deal makers who've changed the way markets work, often in ways most people never see. We'll unpack how they did it, what they learned, and how those lessons can help tackle the big challenges ahead.
I'm incredibly excited to be speaking with my former colleague, Hema Srinivasan. Hema and I worked together early in her career at the Clinton Health Access Initiative, and then Hema went on to take this work on market shaping to a completely new level. She worked closely with the leadership at CHAI to advance new tools like volume guarantees, which we'll talk about.
She also went on to help Michael Anderson set up MedAccess, an organization that is dedicated to certain aspects of market shaping. She's worked on Wall Street before all of this, and she was a country director for a major pharma company.
From my perspective, there are very few people in the world that have seen the movie of market shaping and global health like Hema has. Let's dive in. Hema, welcome to the show.
[00:01:21] Hema Srinivasan: Thanks, Inder.
[00:01:22] Inder Singh: Take me back to when you first started at CHAI. So, I was there 2007 to 2012. We overlapped for about a year, year and a half, I think.
Back then, tell me what your perception of the toolkit or approaches were, the how, and how that changed with the first volume guarantee.
[00:01:42] Hema Srinivasan: So, at the time, in HIV, where CHAI was doing a lot of really important negotiation and brokering work to really maximize impact, we had built a procurement consortium to improve treatment coverage as quickly as possible.
You know, we had all seen on TV images of people suffering from AIDS. We had seen pharmaceutical companies mobilize to develop highly effective treatments, and yet most of the disease burden was in Africa, and those treatments in the early days were not getting to Africa at all.
So, there's a really stark access gap. So, CHAI was working with incredible urgency, trying to do more with less. At the time I started, Gilead had already issued voluntary licenses for its innovative therapies, so we were operating in the context of generic supply. So, we had a real opportunity here to really reduce prices, really expand production capacity, make a massive difference. And so, when we started looking product by product at what's really holding these back, in many cases, we found that price was a really big issue.
We had fixed budgets. We wanted to reach as many people as we could. We weren't going to be able to do that at high prices. Many cases, we had newer products coming to market that were more effective but much more expensive than the standard of care, so there was a trade-off, right? Do you want to introduce the more effective product but reach fewer people? Obviously not.
As we looked at the numbers and the potential for the market to grow, we said, "Well, you definitely can unlock scale economics. When we get to that point the prices will come down. We just need them to come down sooner so that we can get there."
And we took those arguments and those analyses to the Indian generic companies. My job was to run the HIV analytics work, so to do all the forecasts, gather all the information from individual countries and say, "Okay, we're going to tell you, company A, here's what the demand could be if you can just get to this lower price."
We promise once you get there, we'll go from a high-price, low-volume market to a low-price, high-volume market, and ultimately you'll be making more profit. So, it's win-win. More patients benefit, and also, you're making more money at the end of the day. We just need you to, kind of, slightly change your business model,"
So, those were the kinds of negotiations and they were really effective, and the generic companies understood it. A lot of them really stepped up. We had this, kind of, annual ceiling price list that we published, and we really brought down prices significantly, and I think had a great impact.
So, that's, kind of, where we started. And then things became more formalized. The big difference was Natalie Revelle at the Gates Foundation, Ira Magaziner, for years, had looked at these types of issues. So, they said, "What if you had this, kind of, third-party guarantee fund that you could apply in markets like those for HIV treatment or contraceptives and you actually put financial backing behind your forecast, you could potentially have huge impact because you can leverage those economies of scale that we see the massive, fixed costs and overheads associated with making and selling for most pharmaceutical and diagnostic products.
So, if I make 10 million units this month instead of one million, I'm spreading out those costs over a much larger base, and my unit costs go down. Basic math. So, we knew that if we gave you a volume guarantee, we could guarantee that you reach those economies of scale. There's a lot of uncertainty around forecasts. With a guarantee, you remove that risk premium. So, by putting real financial backing into it so you're actually taking out some of the risk, it's easier to negotiate those lower prices up front.
So, very similar to what we were doing at CHAI, but just a more powerful tool because you put some financial backing behind it.
[00:05:33] Inder Singh: And this became the tool that CHAI, Gates, and MedAccess would use much more frequently to overcome the high-price, low-volume trap. Volume guarantees have been used in the private sector for decades and decades, right? This idea that I can go ahead and guarantee a supplier a certain volume. They know exactly how much of their factory is going to be utilized, so there's lower risk.
I remember back when I was doing deals in 2007, 2008, that was one of the critical factors is, can I get my factory at a minimum utilization? Because that's the only time that I'm ever going to recoup the investment and be able to make a profit. So, there was this, unobvious to outsiders, incentive.
It wasn't about profit maximization. It was about factory utilization first and then profit maximization, just because of the dynamics of the way the unit economics of production work. And this is true of any manufacturing industry, not just pharma.
So, they've been using it for years. Now you're talking about in global health finding a multi-party approach to taking this concept in the private sector, getting a philanthropist, like Gates or governments, to backstop a volume guarantee for maybe two or three suppliers of a medicine so you could cause the same downstream effects.
And in return, we're going to contractually obligate you to price at a lower price. Did I capture that? And add some color onto that.
[00:07:05] Hema Srinivasan: Yeah, no, that's exactly right. And funnily enough, a lot of counterparties to volume guarantees tell us that they then offer a volume guarantee in turn to their raw material suppliers to rationalize those cost reductions.
Yeah, I mean, fundamentally, the volume guarantee is a binding legal agreement. There are typically two parties. One is the guarantor, so the Gates Foundation, or SIF, or SIDA, or MedAccess. and they're primary obligation is if the volumes don't meet what we've guaranteed, they pay out at some predefined price. And the second counterparty is the supplier, and their primary obligation is either you're reducing price to certain eligible purchasers in certain eligible countries.
It could also be you're expanding production capacity. It could also be you're agreeing to register the product in certain countries within a certain timeframe. You're going to agree to go out and get WHO prequalification or U.S. FDA approval. So, there are usually many obligations on the supplier.
So, the legal agreement itself is much more complicated than the headline. But yeah, in general terms, 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."
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.
[00:09:43] Inder Singh: You used a term that we've used on the podcast, but we've never really well-defined, which is the high-price, low-volume trap. Can you talk a little bit more about how to really identify that the market is in that trap and not the other things that you just described?
[00:09:59] Hema Srinivasan: Yeah. So, I think the basic definition of a high-price, low-volume trap is a market where, on the demand side, they say the price is really high, there's no way we can increase how much we're buying. There's no way we can improve access from a procurement perspective-
[00:10:18] Inder Singh: The buyers.
[00:10:18] Hema Srinivasan: ... unless the price comes down. The buyers, right. So, the people actually procuring products are saying demand's not going to increase essentially unless the price comes down. We can't afford it at this level. Oftentimes, buyers in the global health world have a sense of what the price would need to be in order for them to increase their buying.
There's a lot of deep thinking around, how do you stretch the impact of every dollar in this space. And so, all the purchasers think quite carefully about, what is the cost-effective price of any new intervention or innovation?
On the supply side, you talk to the suppliers and say, "Well, we heard the purchasers said the price was too high. If it came down, we could really increase uptake." And they say, "But the volumes are too low. I've not yet rationalized my production. If they don't increase by five, 10, 20X, there's no way I can reduce price to the levels you asked for." So, you're just, kind of, caught in this trap.
And for contraceptive implants, for example, that's exactly the situation we were in in 2012. There are many other products that are the same. I've done, some volume guarantees more recently on rapid diagnostic tests, so dual HIV, syphilis, RDT, for example. When we talk to folks on the demand side of the market, you talk to governments, you talk to NGOs, you talk to purchasers, like PEPFAR and Global Fund, they said, "Absolutely, we get the value. If instead of testing a pregnant woman for HIV, we test her for HIV and syphilis in the same visit, you can avert stillbirths. You can avert a lot of adverse birth outcomes. Treating syphilis in pregnancy is really important, and we already have 90% uptake of HIV tests."
So, it seems so simple from a public health perspective to swap out an HIV RDT for one that tests for HIV and syphilis. So, the public health system is there. We're already testing women for HIV. We would love to replace that test with one that tests for HIV and syphilis. It's not more complicated to run, but the price is way too high. It's $1.50 a test, and it's only 80 cents for an HIV test. So, get it to a dollar and then come back and talk to me.
We went to the suppliers, and they essentially said the reverse, “Right now, we're producing fewer than a million HIV syphilis tests. That's way below what we would need to get to a $1 price point. Come back to us when you see a market of 10 million tests or more every year.”
[00:12:41] Inder Singh: So, the volume guarantee tool is really used to address the high-price, low-volume trap. Is that correct?
[00:12:49] Hema Srinivasan: I think that's the primary use case. There are others. For example, there are companies like BASF. They had started to make the IG2 bed net, so the next generation dual active insecticide bed net for malaria prevention. We were seeing a lot of resistance emerging to pyrethroids, so the standard pyrethroid nets just weren't seen as effective in certain regions.
And so, BASF developed a bed net that has two insecticides on it instead of one. And so, theoretically a lot more effective, but there were a lot of real-world studies ongoing to test that, and the price was just higher. It was higher because there were two insecticides on it instead of one. There was no way the price was ever going to come down to the same level as pyrethroid nets, which were also sold at very high volumes.
So, price was definitely an issue there, but also the management team would have had to build a whole new plant and a whole new manufacturing setup to make the kind of volumes that we thought we were going to need in the next few years. And that was a tough decision to make as a management team when you have no orders in hand.
So, of course, you see the problem of malaria. You see the potential impact this bed net could have. You hear about the interest in this from all the global health partners, but that's a big difference from making a big, fixed investment in making something, you don't know if the orders are going to come.
So, sometimes volume guarantees can be really helpful in incentivizing increased production capacity as well, or even in saying we're going to prioritize registration in a number of markets, like we talked about before. If you take out some of that risk and you say the business is going to come, there are a number of folks now incentivized to making that happen, and we've put money behind it as well, then you can give a senior management team just a lot more comfort around increasing production capacity or maybe offering better lead times or supply terms.
So, at its core, the high-price low-volume trap is where we started. And that's really the first major use case for volume guarantees. But over time, I think we've, kind of, expanded our thinking on where they can be useful.
[00:15:06] Inder Singh: And in that second use case, just to boil it down, it's, "Hey, we can also provide a volume guarantee for you to build or expand a factory so that you have more production capacity."
[00:15:17] Hema Srinivasan: Exactly. And/or invest in automation. There are a number of ways to improve your business, whether it's reducing price or improving the, kind of, lead times you have or expanding your manufacturing capacity, so price or supply.
[00:15:34] Inder Singh: Hema, you have thought a lot about and even produced a nice document that essentially talked about the conditions that need to exist before a volume guarantee can be used.
Can you walk us through those? Because again, this podcast is about the how. The goal here is to encourage the use of these market-shaping approaches in new sectors. So, with that in mind, what are the conditions you'd want to see before a volume guarantee is implemented?
[00:16:05] Hema Srinivasan: Yeah, sure. I mean, I'm considering the case of a volume guarantee being deployed for the greater good. So, theoretically, something with the goal being you're solving a market failure in order to expand a public good or access to something that can essentially improve people's lives, right?
So, obviously, we also want commercial sustainability for anything in the market, but there's a public good aim here. Some kind of impact framework that needs to be satisfied. So, even if you were to implement a volume guarantee in, say, climate, you would have to have some way of considering if it's product X and I deploy it at large, does that, kind of, meet my bar for impact?
And then I think the second question is really about the market-related barriers to access. So, in our case, is pricing really one of the major barriers to access, or is supply security one of the major barriers to access? Like we, kind of, alluded to before, sometimes they're not, right? Some medicines, the price is really, really low. It's affordable but there are other things that need to happen. Maybe clinical guidelines haven't been updated. That's going to take a lot of time. Maybe there is fundamentally just no funding to support a particular area. We need a lot of advocacy to get people excited about treating disease X or Y. So, yeah, that's number two is, does this, sort of, tick the box of the kinds of problems a volume guarantee can solve?
Number three is whether there's agreement around the role of a product. You want to believe that when you solve those market-related barriers to access, you will unlock uptake, not you solve those and then you spend four years updating normative guidance, training health workers, doing demand generation campaigns.
Those things might be complementary investments that you make, but if they're truly inhibiting uptake, then the volume guarantee is not the right tool. You probably need to invest in some of those pieces before you negotiate a volume guarantee to solve the, let's say, high-price, low-volume trap.
And then the fourth piece, which is really important, sometimes really hard to characterize, is the extent to which the demand side is consolidated or could be consolidated. So, a lot of the, kind of, basis for volume guarantees was what Gavi and UNICEF had done in a monopsony market, and we knew we'd be taking on more risk when you move into contraceptives, where you have two major purchasers, UNFPA and USAID. Of course, now we're trying to do volume guarantees in markets with 10, 15, 20 purchasers, domestic governments. If you move into NCDs, non-communicable diseases, which we've been talking about for many years, you're talking about a highly fragmented demand side. There aren't centralized purchasers, like PEPFAR, or Global Fund, or PMI.
And so, this, kind of, fourth criteria around consolidation on the purchaser side wouldn't be satisfied. So, either you need to find a way of clubbing purchasers together or find a sort of pooled procurement platform that you could build this on top of. So, it's not to say that volume guarantees can't be applied in markets where you see that fragmentation, but there has to be some pathway to consolidating the buy side.
So, I would say those are the four main criteria. There may be others that come up as you start to look at the market dynamics. If you have a really fragmented supply-side environment, too, where it's really hard to figure out which suppliers are going to gain market share and what, kind of, drives market share, it becomes harder to offer a volume guarantee because you can't really forecast the sales of one manufacturer or another.
And then you want to see what the market dynamics look like. If we came and introduced a volume guarantee, what might happen? But those are things that you discover along the way.
[00:20:01] Inder Singh: Can you describe one or two volume guarantee deals that were done? Maybe we can start with the implantable deal that you, Natalie, Ira, Alan did in 2012. That was the first big use of volume guarantees in global health to massively reduce the price of a product and enable access, if I recall.
[00:20:22] Hema Srinivasan: Sure, yeah. So, contraceptive implant volume guarantees were the first guarantees in global health done by third-party guarantors. So, Gates Foundation, NORAD, SIDA, SIF were not purchasers. Some of them were in part funding some purchase through other channels, but they were third parties. They were neither purchasers nor suppliers of contraceptives.
When CHAI first looked at this market, I think it was around 2011, and we had done a lot of great work in HIV and malaria. And so, the UK's aid agency had come to us and said, "We do a lot of work in family planning."
At the time, CHAI didn't do any work in family planning, and they said, "There's this great product, contraceptive implants. They're long-acting, so in the real world, they're a lot more effective than taking a pill every day to prevent pregnancy. And they're really safe, they've been around for a while in low- and middle-income countries, and they're just not taking off, and we don't know why. And our programs would be far more impactful if we made sure that these were more accessible."
And there was also a lot of really interesting, kind of, anecdotal information coming our way. There were NGOs that were funded by the donors to go out and make implants available in communities in Africa, and they'd have women lined up for miles and miles waiting to get implants.
They did these kinds of outreach campaigns. They'd drive up a van with a trained provider and a bunch of implants. They'd run out every time. So, anecdotally, we thought, "Okay, a lot of women want this." There were survey data suggesting if women had access to long-acting contraceptives, many more of them, 15% to 20%, would choose implants over shorter-acting methods, and we knew they were more effective.
So, if 15% to 20% of women want implants, but in practice, only 1% of them are getting implants, there's a real gap there. And when the UK's aid agency DFID approached us, they said, "We see this gap. There's an impact that we're missing. And when we talk to purchasers and when we talk to suppliers, we think it's this high-price, low-volume trap. What can you do?"
Around the same time, Natalie Revelle was setting up this health commodities guarantee initiative at the Gates Foundation and was thinking about what's the first use case. So, everything came together serendipitously. And we started to have a lot of deep conversations with governments to really figure out is high price really the primary barrier to access here?
That's what we're hearing at the central level, but is that true? So, I took a trip. I went to 10 different countries across Africa, a few in South Asia, and just really tried to understand on the ground exactly what's happening here.
And it really genuinely seemed like there was quite a bit of absorptive capacity in the market for implants, that wasn't the issue. The health workers were trained. There were people out there who could at least insert implants. We discovered later there wasn't enough capacity to remove implants, so we had to, kind of, work that into our implementation funding.
But certainly, there was demand. Women wanted this product. That wasn't the issue. It was really, if you can make more implants available tomorrow, we can use them. We want them. So, that really clarified some of those early questions around whether or not a volume guarantee is the right tool.
Then we spent a lot of time figuring out who's the right supplier. There was a "generic supplier" that Gates had invested a lot of time and effort into. They had funded a lot of their R&D work, and we really wanted to back them. We knew they could get to pretty low costs, but then we found out they weren't going to be able to get U.S. FDA approval. They didn't have the right evidence generated, so they were actually going to be quite late to market.
So, then we regathered, we changed our strategy a little bit, and we went to Bayer and Merck, the only two other suppliers that existed in the market that had the relevant quality assurances. And we started to have just a lot of discussions with them. What do your, kind of, production economics look like?
We had McKinsey run an analysis. CHAI did a kind of teardown analysis of the implant. We really tried to get down to what does it costs to make this, and how would economies of scale change that picture? We wanted to take that into the negotiation, so we were really sure what we were presenting was commercially sustainable in addition to unlocking tremendous access.
So, that really buoyed us because we realized it actually doesn't cost much at all to make these. We could do it for a few dollars, and so we negotiated a 50% reduction on the basis of a six-year volume guarantee, first with Bayer. And then with Merck. And since the volume guarantees ended in 2018, both companies have maintained the prices.
Dahua, that third manufacturer that we had been talking to early on, has entered the market, did get WHO prequalification. They sell at an even lower price. So, our negotiated price was $8.50 versus the $18 price point that these had been selling at previously. And Dahua came in at $7.50. So, we've seen, kind of, those low prices maintained, the market expanded massively, and there have been studies showing that in many countries in sub-Saharan Africa, implants were the driving force behind the increase in contraceptive prevalence over the last decade. So, really compelling evidence that we've had massive impact both when it comes to women, when it comes to family planning, and also when it comes to commercial sustainability.
[00:25:59] Inder Singh: This is a wonderful case study on the use of volume guarantees to massively drop the price of an important health product. For our listeners out there, if you want to hear more about the negotiations with Bayer and Merck, the ups and downs and the war stories, I'd encourage you to listen to an earlier episode, episode 3 with Alan Staple.
So, you're talking about a market-shaping intervention that was implemented from 2012 to 2018, and the market impact sustained after the intervention was over. And that's the goal of any market-shaping intervention. You intervene and correct the market and put it into a new equilibrium situation, and the market sustains and gets better.
I mean, the way that I used to describe back in the day is we're catalyzing effects that accelerate the development of markets. Maybe the markets would've gotten there eventually over a 20-, 30-, 40-year period, but we're trying to do it in two, and the impact is huge.
You mentioned that there was a complementary intervention. We had to help train health workers to remove the implants. So, ultimately, the Gates Foundation funded not just the volume guarantee, but some complementary interventions. Despite that, the primary barrier to access was this high price. So, if I recall correctly, this was a $300 million guarantee, and it was never called. In other words, they backstopped it with $300 million from the Gates Foundation and others. Had it been called, it would've depleted all of Gates' innovative financing funds, as is my understanding. But it was never called up because the market realized its value. Gates never had to pay a dime of that guarantee. Can you talk about that?
[00:27:41] Hema Srinivasan: So, the Gates Foundation provided six-year volume guarantees to both suppliers, Bayer and Merck. And the guarantees, as most guarantees are, kind of, structured with annual volumes in them. So, there's what I would call an annual true-up. At the end of every year, if we fall short of the volume guaranteed in that previous year, there will be a payout.
That payout could be at the ceiling price that you've negotiated, or it could be at a lower number. Some of the more recent volume guarantees I've negotiated the payout is at the, sort of, cost of production plus lost profit. So, we don't compensate you at the full ceiling price. We might compensate you at another number, but in any case, there is some compensation.
[00:28:26] Inder Singh: So, Gates will cover the costs of what the supplier produced, maybe even cover the profits associated with that production if that supplier can't actually sell it to any buyer.
[00:28:40] Hema Srinivasan: Yes. So, in the case of contraceptive implants, had we not met the volumes we had guaranteed in the first year or in year two or in year three, Gates would have had to make some compensation on the basis of the shortfall.
So, what is the difference between the volumes Gates had guaranteed and the volumes that were actually purchased in the market? Multiply that number by whatever that shortfall price is — could be the ceiling price could be something else. And yes, that's typically what the payout would be. So, yeah, Gates is putting real money on the line, but it's not money paid out upfront. It's money that would only be paid out in the event of a shortfall, in the event that the volumes we had guaranteed were wrong.
And yes, in the case of contraceptive implants, there wasn't a call. The guarantees have ended. And so, yeah, we got the calculus right. The volumes we had guaranteed were sufficient for us to get to a price that was low enough to unlock the uptake and not so high that they caused us to pay out on the agreement.
[00:29:46] Inder Singh: Now, if I recall correctly, I don't believe that there's ever been any major volume guarantee ever called in global health. Is that correct?
[00:29:54] Hema Srinivasan: There's been one call, but it's not one that I can talk about publicly.
[00:29:59] Inder Singh: Okay. Does that mean that the global health funders are not taking enough risk?
[00:30:05] Hema Srinivasan: Yeah. I think there are a lot of different views on this point. I think some folks would say if there's only been one call on a guarantee, and there have probably been dozens of guarantees deployed, over 30 certainly, that may mean you're not taking enough risk. And if you're not taking enough risk, what are the consequences of that?
So, could you have unlocked more impact had you been willing to guarantee higher volumes for certain products? There are some people who would say, "Well, the job of being a guarantor is to take on the minimum amount of risk to achieve the impact that you want. So, it would be good if, as long as we're getting to the prices that we intended to unlock the impact, it's a good thing that there have been no calls. We did our jobs effectively."
And then I think there are some people that would say, "Yeah, categorically, you're not taking enough risk. The way that you build your models is too conservative, and we need to do better."
Yeah, I mean, I think the truth is somewhere in the middle, and it probably differs deal to deal. There are probably some deals where our models were far too conservative, and there was probably more we could have unlocked in terms of actual impact had we taken on more risk. We probably could have gotten to a lower price, and that actually could have made a difference in terms of patient impact.
And there are others where we had to get to the cost-effective price point. We didn't need to get any lower than that and so taking on more risk wouldn't have made much of a difference.
[00:31:35] Inder Singh: Let’s shift to the future of access in global health. What trends are you seeing in pharmaceutical companies' commitments to serving low- and middle-income countries? Is it increasing? Is it decreasing? Are there policy wins that are affecting their incentives?
[00:31:52] Hema Srinivasan: To be honest, I'm quite concerned about what I'm seeing in terms of the way innovators are looking at LMICs and the way that their, kind of, access programs and initiatives are oriented. I see a lot of big companies that have made large commitments to LMICs, have big affiliates and offices there starting to pull back.
Some heavy hitters in pharma have recently exited Nigeria, have exited India after being there for decades, citing unfavorable operating environments, citing increasing business risks. And then I think, just zooming out a little bit, when you look at the numbers, the research shows that, since 1982, we've not seen the lag in introduction of new pharmaceutical products between high-income countries and low- and middle-income countries come down at all. It's been, kind of, eight-year median time to a product reaching a high-income country and reaching a low-income country.
So, when I think, well, what have we really achieved in 40 years of donor funding? We've done a lot in infectious diseases, in family planning, in some of the highest-impact areas. But is that going to carry forward when we go back to commercial and political incentives as they are outside of this donor bubble?
And by the way, it's not just funding for procurement, it's also the parallel supply chains and infrastructure that donors built that disappears in part as well. And I see a lot of the risk from the side of pharma companies. I remember what it was like running a business in South Asia and being concerned about IP-related risks, what happens if compulsory licenses are issued in one country or another? How does that impact the global business? How do we think about price referencing?
I feel the heightened concerns around most-favored-nation clauses, around some of these business risks, and I, sort of, see companies scratching their heads and saying, as donor funding decreases, how are we going to achieve commercial sustainability? Which in my mind is a precondition for access.
[00:34:01] Inder Singh: You mentioned the most-favored-nation clauses. Can you define very briefly what that is and why that is actually having a negative impact on developing countries?
[00:34:10] Hema Srinivasan: Yeah, absolutely. And I think there's been a lot of media attention around the US application of most-favored-nation mechanisms, which is basically to say, within a certain list of countries, and I think most of the US administration's MFN clauses relate to OECD countries, so wealthier countries that are, kind of, within the same core as the US, basically, if a pharma company offers a lower price elsewhere, they have to match it in the US. And MFN clauses have been around for a long time in many industries, including pharma.
So, these can be a really effective tool for a purchaser, for the US government. So, offering a low price in Nigeria is not going to trigger your most-favored-nation clause in the US. But I think there's a lot of fear about making broad-based, you know, tiered pricing commitments and announcing really low prices in low- and middle-income countries because the US and other markets are thinking along these lines. If they, sort of, see that you're offering a much, much lower price elsewhere, that may trigger a new round of price negotiations in the US because they realize you can actually make the product for a lot less.
So, I think there's a lot of fear around knock-on effects. If I offer a really low price in LMICs, what is that going to mean to my commercial business elsewhere?
[00:35:32] Inder Singh: Yeah. And for the audience, I mean, let's be clear, Hema used the term "innovators," right? These are the pharmaceutical companies that make brand-new drugs — the Bristol-Myers Squibbs, the Mercks, the Gileads. Most innovators make their money on the US market, like these developed nations. That is where they get the money to invest in new drug development, because new drugs are really expensive, on the order of billions of dollars, to actually get to market if you consider all the failed drugs as well.
And so, the challenge is: how do I make enough money from the developed countries, which are my primary markets, to invest in new drug development and keep going, even while offering an access price, a tiered price, to other markets that covers my costs and enables these other populations to get it, but doesn't necessarily pay for my new drug development?
And what we're hearing from Hema is even the idea of offering tiered pricing is concerning to them because it may trigger a negotiation with one of those major countries that reduces their ability to invest in new drugs.
[00:36:40] Hema Srinivasan: Yeah, I think that's right. And I think companies are still… they want to do the right thing, they want to make sure that patient populations can benefit from these products.
So, I think, when I look at what it takes for a company to launch a new product in LMICs, I'm concerned that the case is becoming weaker, and we need to, kind of, do a better job of distilling the success stories and the strategies that you can employ to expand access massively in LMICs without it causing you to lose money and affecting your business elsewhere.
I think there's more work we can do to, kind of, show that there is a way to have an access-forward but commercially sustainable model in these markets. And I think there is a way to isolate any risks and mitigate them.
[00:37:32] Inder Singh: So, with the US massively reducing its funding for global health priorities, how significant is this shift? Are you worried that a lot of the market-shaping interventions are going to be rolled back, like the pricing is going to go up? And what is the role also of market shaping going forward given lower donor funds available?
[00:37:52] Hema Srinivasan: Well, I think it is a very significant shift. We saw a 21% decrease in donor assistance for global health in one year between 2024 and 2025. And I think IHME forecasts further reductions in the coming several years, so it will be a sustained donor retrenchment.
I am concerned, in general, will markets be able to sustain the gains that we made through volume guarantees? I think the short answer is we don't know. I remember, when we were negotiating the concept of implant volume guarantees, there was a partner who'd worked in family planning for many, many years who told me, "Don't get too distracted by the headline impact. Look deeply at the incentives built into the market."
She told me a story about working in family planning in Indonesia at USAID. And throughout the '90s, USAID had been really, kind of, pushing long-acting reversible contraceptives quite successfully. They had seen massive uptake in implants and IUDs, which, as we talked about before, are much more effective than shorter-acting methods.
But as donor aid graduated and private midwives took up family planning and the, kind of, capitation-based national insurance scheme went into place, the incentives completely inverted the market. So, basically, midwives were paid by visit, so they were incentivized to push short-acting methods, not long-acting methods.
So, suddenly, you saw all the gains that USAID had made over many, many years completely erased. And if you looked in 2015 at the DHS surveys, injectables, pills, or short-acting methods made up, I think, 75% of the method mix.
So, that's my big concern when donor funding goes away. We've achieved these great things. We talked about implants. We talked about the gains being sustained. But all of that has been done within a donor-backed landscape where USAID and UNFPA are still the primary purchasers.
What happens when that goes away? Will we see the same thing that happened in Indonesia in the '90s and early 2000s repeat itself elsewhere or not? So, have we done enough to make sure that the underlying incentives in the market can uphold the gains we've made? I think a lot of what you were alluding to about the way market shaping might look in other fields, we may have to go back to what market shaping looked like 15 years ago in global health, right?
So, instead of starting with volume guarantees, building the market intelligence, finding new ways to originate these deals within the current incentive structures that exist to get to expanded access and maybe, kind of, start with the buyers' club and you figure out what's actually possible on the demand side and then you, kind of, think about pulling in the private sector and having negotiations.
[00:40:51] Inder Singh: Suppose you were creating a new market shaping organization for an entirely new sector, not global health, what capabilities would be essential? And what would differentiate the organizations that have real impact from those that don't?
[00:41:05] Hema Srinivasan: Okay. So, I think if you're getting an organization off the ground, governance is quite important. So, make or break, when I look across market-shaping organizations, you have to be very clear on who's funding it, what are the KPIs, are there any kind of hidden incentives or indicators that might derail you or distract the team? So, governance is number one.
Number two is talent. I think one thing many of us learn the hard way is you can't build a market-shaping success story just based on credibility with the buy side of the market. You really need credibility with the suppliers.
I think the other piece is deep instincts on market intelligence. You really can't do these deals without solving information deficits and information asymmetries. That is the core of market shaping. Whether you put a big volume guarantee on it or not, you have to have good information. And so, if you're expanding into a new area, you want to make sure you know how you're generating market intelligence to actually design market-shaping interventions well.
I think political power and influence is another one. It's something we don't talk a lot about. It's quite nebulous, and there are a lot of different paths to achieving it. But market-shaping agreements that have huge impact require senior-level stakeholders to sign off, whether that be at governments, at donor agencies, at industry.
So, being able to say Bill Clinton or Bill Gates backed this, that's been really important for certain deals. You can, kind of, borrow it. So, at a place like MedAccess, you know, working closely with CHAI or working closely with the Gates Foundation was really helpful.
And then the last piece is being able to sell people on ideas because…
[00:42:48] Inder Singh: Persuasion and negotiation.
[00:42:50] Hema Srinivasan: Absolutely, persuasion and negotiation. Go read a Harvard negotiation project book or two just to, kind of, brush up on some of those skills. Learn how to tell stories that people get excited by. Learn how to really understand what moves people so that they want to work with you, because at the end of the day, when you're doing market shaping, you're convincing a lot of people to work a little bit harder.
It's not business as usual. You want to disrupt the market. You want them to change the way they're buying and/or the way that they're supplying products. So, when you're asking someone to change what they're doing, that's more work, so you better make them understand why they're doing it, understand how to motivate them. And that really comes down to selling.
It comes down to basic negotiation skills, right?
[00:43:39] Inder Singh: I love that you said that. I mean, you have to elicit their interests and incentives. You have to test which incentives will actually move them. Then you have to deploy those incentives effectively. It's, like, really about understanding their underlying incentives. That's really what it is, their interests and incentives, and mapping those across all the actors on the supply side and the demand side.
I used to call this incentive mapping, right? It's like figuring out what's the shortest possible path to a deal that has impact, right? But getting that information and using it, that's the hard part. Without that, you’re never going to cut a deal.
Today, nearly every major global health organization has a market-shaping team. That was not true when I was with CHAI. Are they doing real market-shaping work? What are they getting right, and where do you think the field has room to improve?
[00:44:27] Hema Srinivasan: Well, I think one is there's no single definition of what market shaping is, something you and I have contended with before. So, it’s very hard to know how many of those teams are actually doing what you define as market shaping.
We've been able to achieve a lot within donor-subsidized markets. Can we really carry that forward to other markets? I don't know. I think it's still to be tested. I think the part of me that worked in industry at Gilead saw how well voluntary licensing and volume guarantees worked for HIV and how they completely collapsed when applied to hepatitis C, right? The same framework, the same toolkit. And yet, years later, we never saw the uptake.
And so, I think what we often miss is, commercial sustainability is the precondition for durable access. The one area where market shaping needs to evolve the most is to really think carefully about, what are the commercial models that work and where can you influence those to expand access? And don't see commercial pharma or diagnostics as the enemy. These are your partners. You need to understand very clearly what the business and access case is for them to operate in LMICs.
Some tend to think industry has no place in market shaping. But if industry is incentivized to do so, they spend a lot of money on market building. And I think a lot of folks in the global health world, they've never worked in industry, they don't see that, and so they don't see that there's another way to fund some of that access work that every product needs.
And so, I think, if you really understand the commercial model and the incentives, you can build more durable market-shaping agreements.
Figuring out what it takes to build what we had built as CHAI 15 years ago, I don't think anyone's quite been able to replicate it, although I'm biased. But you need to be able to originate. And I think, even within global health, figuring out who is going to originate deals outside of the areas CHAI works in, that's a real challenge.
[00:46:40] Inder Singh: Hema, it's been a real pleasure having you on the podcast. And I hope that you have the platform to lead some major new initiatives in global health because you're the right person to do it, and I'm so excited for you.
[00:46:52] Hema Srinivasan: Thanks so much, Inder. Pleasure talking to you as always.
[00:46:56] Inder Singh: Thanks for listening to the Market Shapers Podcast. I'm Inder Singh. If you enjoyed the show, please like it, or leave us a review, and subscribe in your favorite app so you don't miss the next episode. Market Shapers is produced by me with help from University FM.
Special thanks to Renaissance Philanthropy, Griffin Catalyst, and the Digital Harbor Foundation for their support.