Huge opportunities are in the offing for local drug manufacturers including Fidson Healthcare plc GlaxoSmithKline, Pfizer Nigeria and East Africa region (NEAR), Evans Medicals, Swipha, and Neimeth Pharmaceuticals, to grow their revenues on the back of recent surge in non-communicable diseases (NCDs).
Lured by an emerging middle class, rising disease burden, especially NCDs such as cardiovascular and respiratory disorders, cancer and diabetes, major pharmaceutical companies are increasingly looking to harness Africa’s opportunity by producing drugs to address these medical conditions.
Although the total size of the African market may seem small compared to other global regions, analysts believe major cities within the continent including Lagos hold the key to unlocking pharmaceutical industry’s lucrative potential.
In these areas, increasing wealth, coupled with stronger health system infrastructure and rising demand for drugs treating chronic diseases are driving demand for pharmaceuticals products.
“Urban centres have the highest concentration of the segments of the population that are more likely to be relatively wealthy, more likely to be educated and also possibly more likely to suffer from the chronic diseases of affluence that are becoming increasingly important in Africa,” Sarah Rickwood, director of Thought Leadership at IMS Health told CNN.
Latest analysis from Frost and Sullivan Sub-Saharan Africa Pharmaceutical Yearbook, show that the market earned revenues of N359,623.8 billion ($2,276.1 million) in 2011 and estimates this to reach over N793,744 billion ($5,023.7million) in 2018, representing double digit growth in the East and West African pharmaceuticals markets.
The research shows that high growth in these therapeutic segments remains a function of the low base upon which growth will occur.
A recent IMS report titled “Africa: A Ripe Opportunity,” by 2020, the market could represent a $45 billion opportunity for drug makers, spurred in part by robust economic growth and demographic changes.
Though Africa is home to 11 percent of the world’s population, it accounts for 24 percent of global disease burden, according to the World Health Organisation. While infectious illnesses like HIV/AIDS, malaria, tuberculosis still remain a huge problem, the continent is also projected to experience a surge in demand for treatment of NCDs in the coming years. The WHO estimates that by 2020 the biggest increases in NCD deaths will occur in Africa.
As major market-leading multinationals like Sanofi and GlaxoSmithKline having a strong presence in Africa, diverse drug manufacturers have made significant inroads in recent years. Indian and Chinese companies have more than doubled their imports to Africa over the last decade.
With India being the world’s third largest producer of pharmaceutical products by volume with an annual turnover estimated at over $20 billion, latest findings by BusinessDay reveal that the value of Indian Pharma products exported to Nigeria stood at $307 million as at March 31, 2012.
As investment in more specialised diagnosis centres, relating to cardiovascular and oncological diseases has continued to improve the level of patient diagnosis, increasing levels of affordability have spurred demand for prescribed chronic medicines.
While overall projections are optimistic, regulatory delays and continued proliferation of parallel imports and counterfeit products remain a primary market restraint. These restraints are however forecast to have a diminished effect in the long-term, as a result of sustained regulatory reform and improved regulatory efficiency.
“Poor control at points-of-entry continues to contribute to the proliferation of illegal counterfeit products. Counterfeit and parallel products undercut the prices of reputable suppliers, enabling the former to secure government tenders. These products, consequently, compete with legitimate market participant’s products,” Ryan Lobban, Frost and Sullivan’s Healthcare industry analyst explained.
ALEXANDER CHIEJINA
