R&D less innovative but increasingly costly  Manufacturing is less sustainable in the West - shift to developing markets  Health care costs rising globally – pressure on prices/profits  Emergence of non-communicable diseases (NCD’s)  Demand for medicines is growing more rapidly in the emerging economies than the industrialized economies  Push towards generics over patented medicines  Focus on access to quality healthcare in Africa  Improving manufacturing/quality standards in developing countries  Increasing political support for local manufacturing in Africa  Greater focus on Africa as a “Market Opportunity

1. EAST AFRICA PHARMACEUTICALSECTOR
OPPORTUNITIES & CHALLENGES
Prepared By Vincent Oluoch Odhiambo, SCA-Partners March
2021
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 R&D less innovative but increasingly costly
 Manufacturing is less sustainable in the West - shift to developing
markets
 Health care costs rising globally – pressure on prices/profits
 Emergence of non-communicable diseases (NCD’s)
 Demand for medicines is growing more rapidly in the emerging
economies than the industrialized economies
 Push towards generics over patented medicines
 Focus on access to quality healthcare in Africa
 Improving manufacturing/quality standards in developing countries
 Increasing political support for local manufacturing in Africa
 Greater focus on Africa as a “Market Opportunity
PHARMACEUTICALS
GLOBAL TRENDS
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 17% of the world’s population
 30% of the world’s disease burden
 3% of the world’s total health expenditure
EAC: Composed of 6 countries: Burundi, Kenya,
Rwanda, South Sudan, Tanzania, and Uganda
AFRICA
THE HEALTHCARE
DILEMMA
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 East Africa has a large and growing population and
a high GDP growth.
 Significant unmet medical needs.
 Emerging middle class with increasing government
support. PHARMACEUTICAL
MARKETDRIVERS
SIGNIFICANT AND SUSTAINABLE
OPPORTUNITY IN AFRICA
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EAC: Political support for pharma
 African Union - local pharmaceutical manufacturing 3rd
highest priority!
 All Partner States have medicines policies, legislations and
regulations in place
 Regionalisation is ongoing
 Programme to support strengthening of regulatory institutions
and harmonize regulation (EAC-MRH)
EAC aggregated pharmaceutical
imports vs. exports
 EAC countries heavily rely on pharmaceutical imports,
especially for branded and innovator products
 Pharmaceutical imports into the EAC have been rising
at a much higher pace than the pharmaceutical exports
by local firms (2019-2020)
EAC Pharma - Opportunities
 Large unmet need for essential medicines
 Significant population growth anticipated
 Double disease burden (growth of chronic diseases):
 NCDs are predicted to account for 40% of illnesses & for
42% of deaths (5.1 million) by 2030 (WHO Global
Health Estimates, 2013)
 Growing middle class willing to pay for better treatment
 New models of care being designed (e.g. PPP, medical
insurance, etc.)
 Existing pharmaceutical production base & enabling
regulatory environment
 African traditional and herbal medicines as a market
niche
 Political will and action!
EAC Pharma - Challenges
 Negative perceptions of locally manufactured products
 Lack of capacity to manufacture advanced formulations due to
a skills gap on product development and formulation expertise
 High cost of borrowing (20-30%)
 High cost of operations e.g. finance, utilities, infrastructure
 Lack of market data
 Poor and unreliable infrastructure (roads, utilities, etc)
 Under resourced and weak institutions (Civil society,
Regulatory agencies, etc)
NOTE: The above challenges CREAT an EXPORT opportunity for
foreign manufacturer in EAC.
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EAC: Investment Opportunities
 Manufacturing - medicines, vaccines, diagnostics,
herbals, etc.
 Healthcare delivery systems
 Procurement and distribution systems
 Financing systems e.g. health insurance
 Use of mobile technology to increase access!
Tips for Investing in Sub-Saharan
Africa
 Understand the market structure (informal and formal)
 Take a longer term view
 Operational challenges
 Learning curve
 Work with a local partner
 Need to be close to the action
 Invest in local talent
 Understand the needs of the Government
 Develop relationships!
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1. Who are the major market players in the Pharmaceutical Market?
2. What are the growth trends and the largest revenue-generating
region for pharmaceutical industry?
3. How are Pharmaceutical products sold to customers?
4. What are the major technologies and applications in
Pharmaceutical?
5. What are the Market Entry strategies?
6. What are the Alternative market penetration strategies?
7. What are the Potential market entry barriers and risks?
SEVENQUESTIONS
TO BE ADDRESSED BY
SCA-PARTNERS
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CLIENT CHALLENGE
PHARMACEUTICAL MANUFACTURERS/EXPORTERS
1. Expression of Interest for Export to African countries (Kenya,
Uganda and Ethiopia). Pharmaceutical products.
2. Finding an importers and distributor of pharmaceuticals, Surgical
and Medical Equipment in Africa.
3. Language Barrier-Very often what makes it difficult for a
company to export to other countries is the different language
and culture that the other country holds.
4. Business Terms-How to write a good Distribution Agreement,
what terms should we include? Deciding the payment methods,
shipping methods and a lot of other issues is especially important
at the very beginning of a new business relationship.
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OURAPPROACH
To devise an Export plan for
Pharmaceutical opportunities for the
Pharmaceutical Manufacturers or
Exporters, SCA-Partners shall adopt the
following approach:
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First Approach
 Contacting companies in African countries is not an easy task. We can do it for you!
 We can represent your company in the way you feel comfortable with.
 After selecting the most suitable Distributor candidates we can contact them, tell them about your company, about your products. We can
discuss with them possible common projects, describing the cooperation that you are looking for.
Second Approach
• Identify the menu of tests and outline the pricing strategies
• Explored the potential entry options –
1. Define the addressable market,
2. Evaluate the competitive intensity
3. Examine the key drivers and business risks
Recommendations
Recommendation on the entry strategy will involve a series of
initiatives such as tying-up with private and government healthcare
bodies, NGO’s, Research institutions, Educational Institutions,
Medium and small laboratories, public and private hospitals and
exploring distributor, agents or importers partners for pharmaceutical
products to cut cost and time of market entry.
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OURIMP
ACT
SCA-Partners shall also suggest the pricing for
pharmaceutical products and recommend key initiatives to be
taken by Manufacturers or Exporters. A timeline will be drawn
outlining the entry for the Manufacturers along with the
suggestions on possible operating model.
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 Over 50 active manufacturers (members of FEAPM); facilities
with WHO cGMP approval and pre-qualified products
 Primarily compounding and formulation of most dosage forms
including infusions
 Almost all raw materials imported
 High dependency on imported finished pharmaceutical products
 Focus on WHO list of essential medicines
 No API manufacturing Increasingly well regulated (NDA, PPB,
TFDA)
 Trade is mostly intra-East Africa
EAC: PHARMA MANUFACTURING
OVERVIEW
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ThankYou
Vincent Oluoch Odhiambo
+254728268568
vodhiambo1987@gmail.com
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