TORONTO (Reuters) - Growing up in Ghana, Ashifi Gogo was amazed that he could surf the Internet on his mobile phone from anywhere, but couldn’t always get clean tap water to drink.
“The only state-of-the-art infrastructure we have is our cellphone network,” said Gogo, a 28-year-old Dartmouth College engineering graduate, who co-founded Sproxil Inc., a cell-phone based drug authentication service. Gogo said the decision by many African nations to privatize the mobile industry has inadvertently created tremendous opportunities to help solve widespread problems such as counterfeiting. Gogo hopes Sproxil will help end the “menace” of counterfeit drugs in Africa and other developing nations.
Gogo originally intended Sproxil’s mobile technology to be used in the organic food industry, but by the time he had completed it in 2005 he admitted he had “totally missed out on the organic farming boat.” At the time Nigeria was waging an intense public war on drug counterfeiters and Gogo thought his technology could be tweaked to help regulators and drug companies in that battle.
He quickly retooled his invention, employing the same kind of technology used in pay-as-you-go cellphone airtime cards to help consumers identify whether the over-the- counter drugs they were purchasing were real or fake.
“If you look at the cellphone industry and how well airtime vouchers have helped these companies generate significant revenue without worrying about counterfeit airtime vouchers, you could sort of readily see how this could be quite applicable to the pharmaceutical industry too,” Gogo said.
Gogo’s initiative found a champion in Former NAFDAC chief Dorothy Akunyili, whose diabetic sister died from an injection of fake insulin. She has been at the forefront in the battle against counterfeiters in Nigeria and for her efforts, has been the target of an assassination attempt and had her son kidnapped.
“She was the one who essentially gave us the green light to keep working on this,” said Gogo, who just last month announced a partnership with NAFDAC and Nigerian drug company Biofem Pharmaceuticals Ltd. that uses Sproxil’s anti-counterfeiting technology to cover about a million units. “There are other companies or people who tend to talk about the solution or advocate for it, but I can tell you that nobody else is working this close with a drug regulatory authority to implement this and nobody really has a product on the market yet. We’re the first to do this and we’re really excited about it.”
Gogo said when consumers purchase a drug protected by his trademarked Mobile Product Authentication technology, it comes with a scratch code that provides them with a number they can enter into their cellphone as a text and get an immediate text response back on whether the product they just bought was real or fake.
In addition to tackling drug counterfeiters at the point of purchase, Gogo is in the process of developing IP Check, which would allow customs officers to connect directly with brand owners to stop counterfeiting at any port of entry. He said often authorities don’t get the information about a fake shipment of drugs until after it has hit the shelves and this service helps big pharmaceutical companies tip off regulators as soon as they know.
“We are essentially able to plug a lot of the holes in this leaking barrel that we have in several cash-based societies,” said Gogo.
Gogo and business partner Alden Zecha, Sproxil’s chief financial officer, said if the technology is successful in protecting drug company products from being counterfeited it could then be rolled out to cover “any brand of high value,” such as cellphone batteries and golf clubs.
The World Health Organization estimated about a third of all the drugs sold to developing nations are fake and last year a report issued by the United Nations Office on Drugs and Crime predicted the global trade in fake pharmaceuticals would hit $75 billion by the end of this year - an increase of 90 percent since 2005.
“It’s growing at a rate that’s much faster than the rate at which genuine pharmaceuticals are growing,” said Gogo, who quoted a 2005 Interpol report that showed 80 percent of drugs sold in the Nigerian capital of Lagos were counterfeit. “So it shows you the kind of range that we’re dealing with. Best case you’re 1 out of 3; worst case you’re 4 out of 5.”
So far Sproxil sproxil.com has been bootstrapped by about $100,000 from Gogo, Zecha and other partners and some grants, including $10,000 from the Clinton Foundation. In January Sproxil won a $100,000 award from the Washington, DC- based African Diaspora Marketplace, a not-for-profit organization sponsored by U.S. AID and Western Union that provides grants to African American entrepreneurs creating jobs in Africa.
Zecha said Sproxil pulled in $100,000 in revenues last year and anticipated growing that to about $1 million by the end of 2010. He said the company’s main challenge this year is to raise capital to hire more sales and marketing staff in order for Sproxil to bring in more clients. Zecha said they are seeking to raise $3-4 million from primarily venture capital firms in the U.S. and Africa.
“Our technology can be moved into almost any market very rapidly, but we need a certain amount of capital to be able to do that,” said Zecha, who confided that it’s often difficult to convince foreign investors to fund Africa-focused companies. “Investors don’t seem to understand the African market and are a bit reluctant to look at deals that might involve targeting Africa as the marketplace.”
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