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Irish firm ION sets up Sh500m e-drugs store

Irish private equity firm ION Equity has set up a Sh500 million ($5 million) online medicine distribution platform in Kenya.

The fund says its new platform, dubbed Mydawa, will go live in Nairobi next month, partnering with pharmacies to deliver medicine to buyers who place orders for drugs through a web portal.

Delivery will be to the nearest pharmacy to a customer’s home or office for convenience.

“Drugs cannot be delivered home because they must be issued at a controlled environment, that is pharmacy or hospital,” said ION Equity chief executive Neil O’Leary during an interview with the Business Daily.

Consumers will be required to place their orders based on their prescriptions from the doctor for prescription drugs.

“Prescriptions will be from doctors whereas the pick-up point for the dispensed medicine will be from a pharmacy of their choice that is enlisted with MyDawa,” said Mr O’Leary.

However, non-pharma products that are non-prescription can be ordered directly from the portal.

For those inquiring for drugs that require prescription, they will be directed to consult a doctor first.

Mr O’Leary said that the bulk of the initial Sh500 million has been invested in setting up the IT infrastructure and conducting market research ahead of the launch.

“We have been in the country for the last three years, spending most of time on regulatory matters and creating an IT system that will be reliable and enable us control the product from the manufacturer to the consumer,” said Mr O’Leary.



Mr Neil O’Leary, Chairman and Chief Executive Officer of ION Equity and founder of Mydawa. PHOTO | SALATON NJAU
Mr Neil O’Leary, Chairman and Chief Executive Officer of ION Equity and founder of Mydawa. PHOTO | SALATON NJAU

“It will also track logistics, warehousing, delivery mechanisms, authentication process, and allow for interaction between the patient, doctors and pharmacists.”

PE firms looking to invest in Kenya have been riding on a growing middle class, and deal activities are considered to be high besides entrepreneurs being considered more approachable.

The World Health Organisation estimates that about 10 per cent of global pharmaceutical supplies are counterfeit and substandard.

Last year, the Health ministry introduced the country’s first code of practice that governs the pharmaceutical sector, making Kenya the second country in the continent after South Africa to adopt such guidelines.

The healthcare sector in Kenya — in particular pharmacies —has attracted rising interest from private equity firms and development finance institutions.

In November, PE fund LeapFrog Investments paid Sh2.2 billion to buy out the entire stake held by fellow fund Catalyst Principal Partners in Goodlife Pharmacy. The pharmacy chain had in 2015 received Sh405 million from the International Finance Corporation (IFC) to expand its branch footprint from the initial six to the current 19 stores in Kenya and Uganda.

In October 2016, the IFC also gave pharmacy chain Haltons Sh300 million to finance its expansion plans.

Editor's note: This story has been edited to clarify that the firm does not deliver medicines to homes.

jngunjiri@ke.nationmedia.com

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