If you are doing a setup.py with specific directories

python setup.py install --prefix=/home/user1

If you are getting a PythonPath Error something like this.

TEST FAILED: /home/user1/lib/python3.7/site-packages/ does NOT support .pth files error: bad install directory or PYTHONPATH

You are attempting to install a package to a directory that is not on PYTHONPATH and which Python does not read ".pth" files from. 
The installation directory you specified (via --install-dir, --prefix, or the distutils default setting) was: /home/user1/lib/python3.7/site-packages/

and your PYTHONPATH environment variable currently contains:

You can solve like by putting in your .bashrc.

export PYTHONPATH="${PYTHONPATH}:/home/user1/lib/python3.7/site-packages/"

source ~/.bashrc