HOW WE WORK

Ideally, all diagnostic devices and communications networks would be “plug and play.” But SystemOne had to raise millions of dollars to create a system that could work in any country and handle a wide range of telecommunications networks, device protocols, changing data requirements and program requirements. It also needed to function through power outages, equipment failures and human failures. We share this only to communicate the fact that setting up a digital infrastructure for diagnostics is difficult and expensive. SystemOne recovers fractions of these invested dollars with each project it implements, and the recipient countries each benefit from the large investment we made. We took this path because we believe it is prohibitively expensive and complicated to do this in each country separately, and such an approach would lead to numerous, heterogenous and unsustainable systems across many countries.

With per-test pricing, our annual fees are based upon the expected number of tests a country or program plans to procure and use. Beyond that, we do not enforce "license limits." Using a "per test" cost allocation method generally works out on both sides and avoids continually changing expectations on costs, which is hard for a program to sustain, and would be difficult and costly for our customers (and us) to manage.

Yes. We set a base level fee because there is a minimum level of effort to support each unique instance (country or program) of the software and to administer a contract. This is independent of the number of tests conducted or network usage. At this point, our minimum fee to set up and run connectivity in a country or for a health program is $50,000 .

In an ideal world, yes, and some device manufacturers include a digital offering with their devices. But they have no expertise in making information move in different countries and ensuring it gets to the right people at the right time. They are also not talented at making sure their instrument information is interoperable with other sources of data, which is incredibly important when dealing with multiple systems and multiple diseases. Most importantly, no country or program should be stuck with one device manufacturer’s digital platform. What if you want to change devices? Or what if you need to see information they might not willingly reveal, such as error rates and malfunctions? Or what if a health program needs to combine information from different manufacturers' diagnostic devices? For these reasons and many others, a multi-device, multi-disease platform is most useful.

Connectivity usually costs between 4% and 6% of the cost of diagnostics, and of course this can vary. But in general, this is a good percentage to keep in mind when budgeting. It is also a fraction of what a connectivity-enabled system will save in terms of inventory, re-testing, loss-to-follow-up, and optimizing numerous other parts of the diagnostic network.

This is a good question, and this concern is shared across many countries and programs. To state the concern differently: “what if I test 10 billion samples in a few years - will connectivity cost me $12 billion (assuming $1.20 per sample), and isn’t that unsustainable?" But it actually works the opposite way: Because we index our fees to the number of tests anticipated, as that number grows across the world, our fees will diminish proportionally. This is true whether we do per-test pricing or use a different method -- economies of scale will in time reduce the cost of the systems we sell. Currently, our service and support grow in proportion to the amount of testing that's performed, but we can already see that eventually they will level off and then diminish in proportion to the tests performed -- that's one of the advantages of working across numerous countries and encountering similar challenges.