1. Emerging market
28 PharmaTimes Magazine June 2013
Africa:
open for business
W
ith the pharmaceutical
industry’s large
traditional markets
in North America and
Europe stalling, and the first signs that
early-growth emerging markets may
be slowing down, the fast-changing
African continent presents enormous
opportunities for new growth,
experts believe.
Drug spending by African nations
is expected to hit $30 billion by 2016,
up from $8 billion in 2010, according to
IMS Health. Boosted by a 10.6% annual
economic growth rate – only beaten by
the Asia Pacific region, which is rising
12.5% a year – Africa’s pharma market
could be worth as much as $45 billion
by 2020, the research firm projects. As
well as soaring economies, many African
nations are experiencing unprecedented
demographic change, with a fast-
increasing urban middle class, declining
child mortality rates, a rising elderly
population and growing demands for
drugs to treat chronic Western diseases
– as well as the region’s traditional
need for medicines to prevent and treat
communicable diseases such as HIV/
AIDS, tuberculosis and malaria.
All this is underpinned by greater
political stability throughout the region
and a range of pro-industry initiatives
being put in place by governments
at both national and regional levels,
aimed at boosting Africa’s position as
a majority supplier of medicines to its
own people and to enable it to become
more competitive globally. Policymakers
are also taking steps to tackle the
hurdles – particularly in the regulatory
arena – which have in the past proved so
daunting for multinational drugmakers
seeking to gain a foothold on this
continent.
Many Western drug majors have
a long-established presence in Africa,
including AstraZeneca, Bristol-Myers
Squibb, Sanofi, Pfizer, GlaxoSmithKline
and Novartis, whose chief executive,
Joe Jiminez, recently commented to
Reuters: “We’re thinking hard about
what happens when these emerging
markets start to slow… and a place where
we’re putting a lot of our attention
is Africa.”
Africa accounts for just 3% of the
global economy but 11% of the world’s
people. And its population is set to
grow from 1.03 billion in 2010 to
1.3 billion in 2020, by which time its
Gross Domestic Product will have
soared from $1.7 trillion to $2.9 trillion,
according to Dorman Followwill,
partner and director for Europe,
Israel and Africa at Frost & Sullivan.
This means 220 million Africans who
currently meet only their basic needs
Africa is being primped and preened ready for business,
and there are enormous opportunities for new growth
Healthcare Writer Lynne Taylor | Edited by Claire Bowie/Jenny Hone
will become consumers by 2015, he told
the first Euro-Africa Health Investment
Conference, held in London recently.
The region also accounts for a
staggering 24% of the global disease
burden, but the pattern here is changing
in previously unimaginable ways. The
picture for communicable diseases we
know – with 63% of people with HIV
worldwide (25 million people) living in
sub-Saharan Africa, nine million new
cases of tuberculosis and half a million
cases of multi drug-resistant TB each
year, and one million deaths caused
by malaria per annum, costing about
$12 billion in lost GDP annually, notes
Followwill.
But, by 2020, Africa will also account
for a million new cancer cases and
60 million cases of hypertension a year
while, by 2030, 18.6 million Africans
will be diabetic, he believes. The region
is also set to see fast growth in other
age-related diseases, such as Alzheimer’s,
Parkinson’s and dementia.
In Algeria, for example, the ratio of
chronic medicines to essential drugs
increased 72% during 2002-11, and
similar trends are expected in other
nations including Botswana and Kenya,
IMS reports.
Dr Feng Zhao, manager of the health
division at the African Development
Bank, gave EAHIC another snapshot of
how fast things are changing. According
to The Economist and the International
Monetary Fund, the world’s 10 fastest-
growing economies during 2001-2011
were: Angola – 11.1%; China – 10.5%;
Myanmar – 10.3%; Nigeria – 8.9%;
Ethiopia – 8.4%; Kazakhstan – 8.2%;
Chad – 7.9%; Mozambique – 7.9%;
Cambodia 7.7%; Rwanda 7.6%. Six of
these are in Africa.
But growth is not always inclusive.
Six out of 10 of the world’s most unequal
countries are also in sub-Saharan Africa,
with much less access to healthcare and
essential medicines. In sub-Saharan
Africa only 38% of essential drugs are
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2. 
PharmaTimes Magazine June 2013 29
available in public facilities, says
Dr Zhao. A major problem is its
dependence on externally-developed
and procured drugs. For example,
Tanzania imports about 70% of its
national drug requirements, while 80%
of antiretrovirals used to treat HIV/AIDS
in Africa are imported.
Although the pharmaceutical
market is small, representing just
$23 billion of the $955 billion global
market in 2011, growth rates of more
than 10% are expected between 2012
and 2016 in nations including Egypt,
Mozambique, Angola, Uganda, Nigeria,
Tanzania and Botswana.
Becoming more competitive
A range of issues must be tackled,
however, if local industry is to take
advantage of growth opportunities at
home and become more competitive
globally, Dr Paul Lartey, chairman of
the newly-established Federation of
African Pharmaceutical Manufacturers
Associations, told EAHIC. These include
facilities not being compliant with
international Good Manufacturing
Practice standards; a weak regulatory
framework; a lack or absence of
technology and market data; and a
lack of partnerships/linkages with
universities, each other, multinationals
and research institutions, he said.
FAPMA, which was launched in
January, represents 231 manufacturers
in 13 countries, and includes three
regional associations – the Federation
of East African Pharmaceutical
Manufacturers, the Southern African
Generic Medicines Association and
the West African Pharmaceutical
Manufacturers Association. The
group’s objectives are strongly aligned
with another major new initiative
– the launch of the Pharmaceutical
Manufacturing Plan for Africa, notes
Dr Lartey, chief executive of LaGray
Chemical Company. This sets out the
political will to pursue local production
of generic medicines, making full use of
the flexibilities contained in the Doha
Declaration on Trade-related Aspects of
Intellectual Property Rights.
Its proposals include providing
incentives and other government
support to local firms, facilitating access
to affordable financing, establishing
business linkage platforms and the
development of a Good Manufacturing
Process roadmap.
One possible area for growth is in the
manufacture of active pharmaceutical
ingredients. APIs are produced mainly
in China and India but not in the EU
because they are polluting, Adil Zanfari,
president of Moroccan generics specialist
Genpharma points out. For example,
although pharmaceuticals is one of eight
industrial sectors included in Morocco’s
Emergence Plan – an industrial strategy
launched by the government in 2007
to magnify the nation’s competitive
advantages over other developing
nations – because Morocco is included
in the European Pharmaceutical Zone, it
doesn’t produce APIs, he says.
Yet this is one area where the policies
of the Global Fund to Fight AIDS,
Tuberculosis and Malaria and other
bilateral donors are, unintentionally,
harming the industries of those
countries they are trying to help.
“The issue for donors is how to get
quality, value-for-money medicines
– they are neutral as to where the
API comes from,” says Ian Boulton,
managing director of TropMed Pharma
Consulting. “Theirs is a short-term focus
– people need treatment now,” he added.
A major conflict?
But, he forecast, this situation will
create “a major conflict” within the next
few years. HIV/AIDS, TB and malaria
drugs are mostly still sourced with donor
funding, and there is a huge push for
lower prices. And as donors are not keen
on paying a premium to support local
manufacturers, the time will shortly
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3. Emerging market
30 PharmaTimes Magazine June 2013
come when these two imperatives come
into conflict, he warned.
Nevertheless Grey Perry, executive
director of the Medicines Patent Pool,
emphasises there is a commitment to
help local production as well as increase
access to medicines. But, he added:
“We need quicker access to the
regulatory systems in developing
countries – we need either immediate
or accelerated approval, and we need
mutual recognition.”
And this is the biggest problem –
the continent’s fragmented regulatory
system. “Numerous companies have
discontinued supply in Africa for
regulatory reasons, with approximately
80% of companies experiencing
interrupted supply because of regulatory
issues,” according to the Innovative
Pharmaceutical Industry Association
South Africa. The first stage of a massive
and ambitious new project, the African
Medicines Regulatory Harmonisation
Initiative, is set to commence this year.
The aim is for European Union-style
harmonisation of drug registration
throughout Africa, and will begin with
a regional harmonisation project in the
East Africa Community.
Today, there are 54 national
medicines regulatory agencies across
Africa with “variable” capacities
and policies, differing requirements
and formats, no clear guidance or
timelines, and minimal transparency,
reveals Margareth Ndomondo-
Sigonda, pharmaceutical coordinator
at the AU New Partnership for Africa’s
Development agency, which is leading
the AMRHI.
Harmonising drug approvals
The ambition is to have no more than
five to seven economic communities
covering the entire continent to reduce
the time it takes to register priority
medicines. There will be resource-
pooling and information-sharing,
she told EAHIC, adding that a draft
model law for harmonisation has
been developed with stakeholder
consultations planned this year.
Under the auspices of the AMRHI,
regional integration will drive the
development of a single African
Drug Agency aligned with the
WHO Prequalification of Medicines
Programme, reducing the burden on
individual countries and also cutting the
 time needed for the registration of life-
saving drugs, she adds.
The importance of partnership
working in this new environment was
also emphasised. “Learn lessons from
the experiences of Brazil, India, China
and Mexico – that to grow a product will
require local firms and multinationals to
work together for a while, understanding
that in time they will be competing,”
advised Dr Jorge Santos da Silva, an
associate principal in the Zurich office at
management consultants McKinsey.
Multinational compaines have to
realise they can’t get into these markets
alone, while to local firms, he said:
“Don’t be afraid of MNCs – think how
you can get technology transfer and
knowledge from them.”
The private sector has to form a
lobby for policy dialogue and healthcare
planning, and the industry has to be
talking to departments of finance and
industry to help get investments into
the sector – but not to the departments
of health, because “all they want is free
drugs”, experts warned.
“We need to be telling the finance
ministries how boosting the industry
will increase employment and raise
taxes, but we haven’t done this. We
don’t talk about issues such as revenues
and capacity – we see this as private
information – but we need to collect data
to back up our arguments,” Lartey urges.
And the time to act is now – Africa
is booming. The AU governments have
emphasised the importance of building
up the industry and “we will hold their
feet to the fire to deliver on their pledges”,
he declared, adding: “There is a lot of
synergy which will help the industry
grow. Everything is set now for massive
growth – we are open for business.” PT
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