The key to the for-profit company’s successful partnership with governments, international agencies and humanitarian, nongovernmental organizations is how it handled its patent.
Nicolas Dahan, Professor of Management (Seton Hall University) Bernard Leca, Professeur en science de gestion (ESSEC)
About 19 million children under 5 around the world suffer from severe acute malnutrition every year. This life-threatening condition kills 400,000 of them – that’s one child every 10 seconds.
These numbers are staggering, especially because a lifesaving treatment has existed for nearly three decades: “ready-to-use therapeutic food.”
Nutriset, a French company, was founded by Michel Lescanne. He was one of two scientists who invented this product in 1996. A sticky peanut butter paste branded Plumpy'nut, it’s enriched with vitamins and minerals and comes in packets that require no refrigeration or preparation.
Health care professionals were quickly convinced of its promise. What was harder to figure out was how to manufacture as many packets as possible while cutting costs. In 2008, ready-to-use therapeutic food producers like Nutriset charged US$60 for one box of 150 packets – the number needed to treat one severely malnourished child for the 6-8 weeks needed for their recovery.
In a study we published in the Journal of Management Studies in October 2024, we explained how the international agencies, nongovernmental organizations, activists and for-profit companies involved in the product’s distribution managed to resolve a public controversy over the use of Nutriset’s patent and its for-profit business model.
Contrary to the expectations of activists and many humanitarian NGOs, this for-profit company managed to reduce its prices down to $39 per box of Plumpy'nut packets by 2019 and keep them consistently lower than any nonprofit or for-profit competitors could, all the while enforcing its patent rights.