Post on 09-Jan-2023
Dr Feng Zhao
Manager, Health Division
Human Development Department, African Development Bank
(title )
Opportunities and Challenges:
Africa Pharmaceutical
Sector
1
Challenges of the African
pharmaceutical sector
In SSA, on average only 38% of essential drugs are available in public facilities
• Current weaknesses of the pharmaceutical sector
- Limited local production
- Inadequate supply chain
- Weak procurement systems
- Counterfeited or sub-standard pharmaceutical products
2
Mapping of pharmaceutical manufacturing capacity in Africa
3
Libya
Tunisia
Algeria
Morocco
Western Sahara
Guinea
Bissau
Mauritania
Egypt
Chad
NigerEritrea
Sudan
Central African
RepublicNigeria
Mali
Senegal
Liberia
Togo
Cameroon
EthiopiaSomalia
DjiboutiGambia
Sierra Leone
Guinea
Ivory
Coast
Benin
Zaire
Uganda
GabonKenya
Burkina
GhanaEquatorial
Guinea
Congo
Rwanda
Tanzania
MozambiqueAngola
Zambia
Burundi
Malawi
MadagascarBotswana
ZimbabweNamibia
South Africa
Lesotho
Swaziland
▪ Total of 129 companies
identified
▪ Most companies locate
to Egypt, SA, Nigeria,
Morocco and Algeria
▪ Estimated average sales
for identified companies
of ~USD 90 million/year
▪ Total of 129 companies
identified
▪ Most companies locate
to Egypt, SA, Nigeria,
Morocco and Algeria
▪ Estimated average sales
for identified companies
of ~USD 90 million/year
Cape Verde
Pharmaceutical manufacturing
Industry size and participants
• Size of African pharmaceutical market
– SSA: 0.6 % of the global market or US$ 3.8 billion USD (IFC, 2007)
– Recent estimates for the continent’s market: US$ 8 to 10 Billion
• Nigeria market: US$ 2.5 Billion in 2011 (IMS Health)
• South Africa market US$ 4 Billion (IMS Health).
4
0
50000
100000
150000
200000
250000
300000
350000
Un
ited
Sta
tes
Jap
an
Fran
ce
Ger
man
y
Ital
y
Un
ited
Kin
gdo
m
Spai
n
Ch
ina
Can
ada
Bra
zil
$ (
Mill
)
Global Pharmaceutical Top Markets 2009
Range of products manufactured in Africa
• Limited range in most countries
– Simple analgesics and sedatives, antimalarials, older generation antibiotics, anti-helminthics, first generation anti-hypertensives, anti-diabetics and neuro-psychiatric drugs, nutraceuticals, cough and cold preparations,
– Significant latent potential market
5
Reliance on Import
• Products mostly imported
– HIV/AIDS: 80 % of ARV finished formulations in Africa are imported (mostly from India)
– Only 1 company in Africa is certified by WHO for an anti-malarial and therefore can access the donor funded markets
• Inputs mostly imported
– Design, construction, machinery and equipment, laboratory equipment and reagents, raw materials including API, aluminium foil for blister packaging, other labelling materials and excipients.
– 95% of the continent’s API needs are met by imports.
6
Efficiency of production
• Economics of pharmaceutical manufacturing are complex
– Efficiency of production is key to competitiveness
• Substantial efficiency gains are possible
– Estimated to about +30%
– Efficiency gains require expertise, buy in across the organization from senior management to production staff, and a culture of efficient production
7
Policy and legislative landscape
• National drug policy is in place in most African countries
– Promote access to safe, effective quality medicines at affordable prices
– Promote the rationale use of medicines and promotion of EML / EDL
– Develop the local industry via the promotion of the local production of essential medicines.
• Regulatory Oversight: Most African countries don’t meet basic minimum requirements.
8
Supporting industries and associated infrastructure
• Lack of clinical research organizations and bioequivalence centres
• Fragmented and inefficient distribution chains
• Unreliable and very expensive utilities
• Regular supply interruptions
• Unsupportive financial and legal infrastructure
• Lack of specialized skills
• Lack of a reliable supply of market intelligence services
9
Skilled Human Resources
• Pharmaceutical manufacturing system requires specialised skills in pharmacy, chemistry, biological sciences, engineering, life sciences, management, ICT
• Several ongoing initiatives to increase the human resources for the pharmaceutical manufacturing system (e.g. WHO’s Essential Medicines Group)
10
Access to Finance
• Access to affordable investment capital – Key challenge is the ability to make the requisite investments to upgrade
to international GMP standards
• Main funding options – Traditional bank debt financing
– Equity financing
– Finance from international sources
• Alternative sources of funds – Local private equity and venture capital investors
– Initial public offerings on certain national stock exchanges
– International private equity and venture capital investors
– IFIs
– Not-for-profit international organizations
– Pharmaceutical collaborative partners 11
Opportunities for pharmaceutical
industry’s growth in Africa
Pharmaindustry growth
1.3 billion population by
2020
A combined GDP of 2.9
trillion USD
Healthcare expenditure of
around 200 billion USD
A pharmaceutical market
valued at an estimated 23
billion USD,
50 percent of households
will have a disposable
income of more than 20 USD
per day;
Investments in healthcare
reforms
Economic factors Medical factors
The patent expiries of many
leading medicines
The growth of the
pandemics and increasing
numbers of people on
treatment
An improving health
insurance and coverage
environment, and a
consequent increase in the
number of people with
access to healthcare
An ageing population and a
consequent increase in
lifestyle diseases
13
The AfDB and the pharmaceutical sector
• The Bank is working with and governments and the private sector to build the pharmaceutical industry and associated services: – Ensure affordable medicines
– Make the sector an engine for economic growth and job creation.
• Examples of Bank’s activities in the sector: – Ongoing discussions on supporting ARV production line of the
continent
– Partnership with NEPAD to support sustainable access to medicines in Africa through the African Medicines Regulatory Harmonization (AMRH) program
– Partnership with the African Network for Drugs and Diagnostics Innovation (ANDI) to revitalize the pharmaceutical sector in Africa through a regional operation
– Pan-Africa region project to finance the revitalization of Africa’s pharmaceutical sector.