Africa has for decades faced the challenge of too much reliance on imported pharmaceutical and medical products to meet the needs of the continent’s growing disease burden.

The trend, though inhibiting growth of the local pharmaceutical manufacturing capacity, can provide investment opportunities for Chinese pharmaceutical investors and other foreign financiers not only in expanding their foreign investment portfolio but also prop Africa’s local medical and surgical equipment production levels.

Africa imports more than 70% of the continent’s pharmaceutical products needs as countries in the region struggle with deficits in technical, financial and personnel capacity to support local pharmaceutical manufacturing. (1)

However, breaking the continent’s pharmaceutical products imports streak would require African governments to implement major reforms in their medical supply procurement procedures and expand the current inadequate storage facilities for pharmaceutical products in addition to partnering with the private sector and development allies such as China to ramp up local manufacturing.

The World Health Organization estimates Africa to one of the fastest growing pharmaceutical markets globally but which requires support to achieve “human capital development, innovation, foreign direct investment, quality assurance systems and strengthening national regulatory authorities”. (2)

Currently, China has an opportunity to offer Africa a few lessons on how to effectively reform the continent’s health care systems to reforms so as to catalyze pharmaceutical market growth.  

The Chinese central government driven reforms have expanded access to healthcare across China in addition to expansion and modernization of the hospital system and better integration of primary care services that are driving growth of the Chinese pharmaceutical market. (3)

Furthermore, China has in recent times been realigning the country’s State departments involved in regulating pharmaceutical product manufacture and distribution to ensure “consistency, speed and efficiency in implementation of policies” according to a report by the IQVIA Institute. (3)

Reforms in China’s hospital systems, for example, have not only shifted focus from increasing revenues for the institutions but ensuring quality healthcare, which in turn catalyzes growth in demand for pharmaceutical products according to the report by IQVIA.

In addition to learning lessons from the successful Chinese health care reforms, Africa also has existing strong drivers that promise to support growth of the pharmaceutical market such as the such as general surge in economic performance, increased urbanization, commitment to expand healthcare spending and investment and an emerging trend of more reported cases of chronic lifestyle diseases.

Furthermore, a growing middle class in Africa, estimated to have tripled over the last 30 years to 313 million people, equivalent of 34% of the continent's population, an increase in non-communicable diseases and likely budgetary increase by some governments, could be an indicator of increasing demand for pharmaceutical products that Chinese companies can support Africa to manufacture locally. (4)

According to Jiang Xuejun, Chief of Office for Asia and the Pacific at International Trade Centre, “the rapid growth of the continent’s industrialization process in recent years, the significant improvement in transport infrastructure, and the establishment of the African Continental Free Trade Area – which covers more than 50 African countries – have all presented significant historical opportunities for regional pharmaceutical production centres in Africa.” (5)

Moreover, Chinese pharmaceutical companies could explore investment in some segments of the industry with potential to reduce the continent’s pharmaceutical products’ import bill such as in manufacture of pharmaceutical and medical equipment, advance formulations for non-communicable diseases, veterinary pharmaceuticals and development of natural products and traditional medicines, which remain largely untapped. (5)

For example, in Eastern Africa, the region “l(fā)acks the capacity to manufacture advanced formulations with locally produced medicines covering only 66% of the regions’ disease conditions” according to a report by the East African Community, a six-member intergovernmental organisation in the African Great Lakes region in eastern Africa comprising of Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda. (6)

Currently, the EAC countries want to reduce pharmaceutical imports to less than 50%, increase to 50% local purchases by national medicines procurement agencies and woo more companies into the production of delayed release formulations, small volume injectables, doubled layered tablets among others.(6)

References:

1. https://www.un.org/africarenewal/magazine/december-2016-march-2017/dying-lack-medicines

2. https://www.who.int/bulletin/volumes/94/1/15-163782/en/

3. https://www.iqvia.com/institute/reports/the-global-use-of-medicine-in-2019-and-outlook-to-2023.

4. https://www.afdb.org/fr/news-and-events/africas-middle-class-triples-to-more-than-310m-over-past-30-years-due-to-economic-growth-and-rising-job-culture-reports-afdb-7986

5.  https://www.intracen.org/news/Enticing-Chinese-investment-into-Africas-pharmaceutical-and-medical-equipment-sector/

6. http://eacgermany.org/wp-content/uploads/2018/04/2nd-EAC-Regional-Pharmaceutical-Manufacturing-Plan-of-Action-2017%E2%80%932027.pdf.

About the Author:

With great honor and pleasure, PharmaSources.com has now invited Shem Oirere as one of the writers. He graduated from the University of South Africa with a bachelor’s degree in International Relations and Diplomacy and also holds a Diploma in Journalism from the London School of Journalism. He previously worked for the Kenya Times, Nation Media Group and The People Daily over a twenty-year span as a business writer and Sub-editor. He wishes to share a view of the scenes behind Africa's latest pharma market trends with the rest of the world.