African Pharmaceutical Sector: A Global Opportunity


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Presentation by Dr. Feng Zhao, African Development Bank at the Euro-Africa Health Investment Conference, March 26 - 27, 2013, London, United Kingdom.

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  • -First look at the economic growth picture -Mention Angola-Growth has brought about better fiscal space, increased purchasing power, emerging middle class. -Increasingly Africa is seen as a market instead of target for aid-Continuous growth has been the key part of the “new Africa” concept
  • African Pharmaceutical Sector: A Global Opportunity

    1. 1. AFRICAN PHARMACEUTICAL SECTOR: A GLOBAL OPPORTUNITY Euro-Africa Health Investment Conference London, 27 March 2013 Dr. Feng Zhao, Manager, Health Division, African Development Bank
    2. 2. 2 Africa Rising: Rapid Economic Growth • Africa is growing rapidly at 5-8% per annum • Six out of 10 world’s fastest-growing economies are in Africa Annual Average GDP Growth: 2001-2011 8.9 8.4 8.2 7.9 7.9 7.7 7.6 Rwanda 10 Cambodia 10.3 Mozambiq ue 10.5 Chad 11.1 Kazakhsta n 12 6 4 2 Ethiopia Nigeria Myanmar Source: Economist & IMF China 0 Angola Percent 8
    3. 3. But Growth is not always Inclusive • Six out of 10 most unequal countries are in Sub-Saharan Africa • Inequitable growth negatively impacts human development prospects • Poor people in Africa have much less access to health care and essential medicines Contraceptive Prevalence Rate by Income Quintile 35 29.2 Percentage of women 15-49 years 30 25 20 20 15.3 15 12.7 10.1 10 5 0 Poorest Poor Middle Rich Richest
    4. 4. Pharmaceutical expenditure absorbs a large share of health expenditure in Africa • On average 25% of total health expenditure is spent on medicines in Sub-Saharan Africa • Represents more than 50% of THE in Ethiopia & Uganda • Despite country variation, pharmaceutical public spending can reach up to 45% of government health budget in some African countries
    5. 5. Still, pharmaceutical products are not available for African populations • High level of dependency on externally developed and procured drugs, vaccines, medical devices and diagnostics • Tanzania imports about 70% of its national drug requirements. • HIV/AIDS: 80 % of ARV finished formulations in Africa are imported • Poor access to essential medicines • In SSA only 38% of essential drugs are available in public facilities
    6. 6. A small but growing industry… • Global market: US$955bn in 2011 Pharmaceutical sales in selected African countries, 2011 4 North America: US$347.1bn Europe: US$265.4bn 3.5 Japan: US$111.2bn Asia/Africa/Australia: US$165.2bn 3 2.5 Latin America: US66.7bn o o o o o 2 • African market: US$23bn o o o o o o South Africa: > US$3.8bn Egypt: US$3bn Algeria: US$2.8bn Nigeria: US$1.8bn Morocco: US$1.2bn Kenya: US$0.66mn • Pharmaceuticals sales growth 1.5 1 0.5 0 Pharmaceutical sales US$bn rates are expected to be over Source: IMS Health 2012 10% in 2012-16 in care reports 2012. Egypt, Mozambique, Angola, Ug anda, Nigeria, Tanzania and Botswana and BMI, pharmaceutical and health
    7. 7. Factors Contributing to Pharmaceutical Industry Growth Growing 'Consumerism' African Demographic trends & Rising Medical Needs Stable Macroeconomic Growth Maturing Regulatory Environment Pharmaceutical Industry Growth
    8. 8. Pharmaceutical Manufacturing Plan for Africa • PMPA: Borne out of the recognition by African Heads of state of the tremendous challenges facing African healthcare systems • Objective: strengthen Africa’s ability to produce high quality, affordable pharmaceuticals across all essential medicines to contribute to improved health outcomes and the realization of direct and indirect economic benefits. • Clear Political Commitment: Initial Plan endorsed by Heads of State – Accra 2007 • Development and adoption of Business plan – 2012
    9. 9. 9 The AfDB at a glance • Africa’s premier development institution owned and trusted by member states • Clean records and good reputation (AAA rating) • Investment portfolio-$3 billion annually (6% of development aid) • Invested in health since the 1970s a total of UA 1.89 billion (about US$ 2.8 billion). • Instruments o Lending: Loans/grants o Non-lending: Analytical work; TA
    10. 10. The Duality of the Health Sector Public Health Health Industry • Health as fundamental • Contributes to Economic human right • Fundamental to peace and security • Governments responsible for the health of their people Growth • Source of employment
    11. 11. The AfDB: Supporting Africa’s pharmaceutical sector • Dialogue with Ministry of Finance • Harvard Leadership program for Ministers of Finance • Dialogue with Private sector • Business to Business platform • Access to finance • Partnerships with key stakeholders in Africa • African Regulators, manufacturers, African Network for Drugs and Diagnostics Innovation, Development partners • Development of knowledge sharing events and products • South-South learning event (Visit to India) • Economic and Sector Work • Support to regional member countries
    12. 12. Regional operation to vitalize the pharmaceutical sector in Africa • Objectives of the regional operation • Meet basic demand for essential health products to improve health status • Increase opportunities to invest in the sector in Africa, develop the private sector to create jobs and contribute to economic growth. • Multi-stakeholders involvement • Support Governments for public sector reform and incentives to create a supportive system in member countries • Create a conducive environment for industry development; • Reform regulatory frameworks and strengthening capacities; • Incentives to strengthen and/or develop SMEs, private sector, public-private partnerships, new incubators and innovation hubs; • Upgrading of facilities for GMP and quality assurance; • Business to business platform to facilitate technology transfer.
    13. 13. THANK YOU