African pharmaceutical industry stands to benefit from business opportunity in drugs manufacture valued at $40.8 billion in 2019, on the back of growing incidence of non-communicable diseases (NCDs) across sub-Saharan Africa, such as cardiovascular disease, cancer, diabetes and respiratory disease, in addition to infectious and parasitic illness, according to a new study.
According to Frost & Sullivan (F&S), however, it is difficult for multinationals to compete in this space, owing to a heavy dependence on price, coupled with complexities associated with public sector tendering.
In the words of Saravanan Thangaraj, transformational health research analyst at F&S, “An increase in health spending will encourage the local manufacture of drugs. We expect this increase in local formulation and filling to be protected by regulatory and tariff barriers, so international players will be looking for local contract manufacturers and other strategic partnerships.”
Thangaraj notes that addressing loopholes in the supply chain and distribution channels is crucial for foreign companies to ensure product availability and prevent circulation of counterfeit drugs.
“Investing in technical training of distributors and pharmacists, and product-specific initiatives like barcodes and holograms to track counterfeits, can also help minimise drug trafficking and enhance the brand’s image,” Thangaraj says.
Pharmaceutical spending in Africa was also noted to be growing by 10.6 percent, with out-of-pocket spend on healthcare increasing, while the contribution of NCDs to the healthcare burden in Africa was set to rise by 21 percent through 2030.
The share of over-the-counter drugs in the region is also high, indicative of a culture of self-medication in Nigeria and Kenya.
The private market, on the other hand, faces challenges with regard to fragmented payer channels between donors, private insurance payers and employers, even as high out-of-pocket expenses restrict patient access to medicines.
Further, investment was further driven by trends such as the improving regulatory environment in East Africa, which is contributing to increasing regional harmonisation.
