2021-02-17 14:27:10
The Covid-19 pandemic has reminded us: the production of medicines on site is essential as an axis of national and continental security. Hence the precise diagnosis, intended to inspire public policies, made in the latest Annual Report on the Economy of Africa by the Moroccan think tank Policy Center for the New South.
In 2020, the prohibition or limitation by 71 countries of certain essential medical supplies threatened the supply of Africa, which depends too heavily on its imports (95%). Beyond the pandemic, if nothing is done, the increase in African demand for medicines risks only benefiting multinationals, for lack of serious strategies to develop this vital industry.
Increase investment
What is the state of play? For now, Africa has no more than… 375 manufacturers in 37 countries, compared to 5,000 in China. The majority of these producers are small units repackaging products for local markets.
A few African pharmaceutical industries produce both molecules under license and their own generics. But few invest in the research, for lack of means – or strategic vision. South Africa and Egypt, the two leading producers, satisfy their domestic markets first and export only marginally. Morocco, the third largest producer, has 40 manufacturers, of which 10% of production is exported. Result: despite its one billion inhabitants, Africa represents only 0.7% of a global pharmaceutical market of 1,106 billion dollars in 2019.
A very promising market
All is not lost, however. Reinforcing the supply of quality products and betting on regional value chains is not a utopia. On the contrary, since the value of the African pharmaceutical industry has already multiplied by five between 2000 and 2018, the year when it weighed 53.2 billion dollars.
Health spending in Africa might reach $100 billion by 2030.
The market remains fragmented, of course, but has grown by 10% per year since 2010, higher than the world average (8%). According to research firm McKinsey, health spending in Africa might reach $100 billion by 2030.
This potential is increasingly encouraging big pharma and Asian generic manufacturers to invest alongside local producers. A few large units, such as the South African group Aspen or the Moroccan Cooper Pharma, might very well represent starting points for regional value chains. The leading countries, if they wanted to, might carry out restructuring efforts to increase production capacities and achieve economies of scale.
A panoply of measures at your fingertips
It remains to be seen in which camp the ball is. African Union, regional economic communities, States, private sector? Since 2005, the African Union has been concerned with the development of the pharmaceutical industries. Priorities have been defined and a roadmap drawn up in 2012 by Nepad, which is slow to produce results. The African Continental Free Trade Area (Zlecaf) holds out the hope of expanding intra-African trade through tariff dismantling. Simplification of procedures, with marketing authorizations (AMM) unique by sub-regions, is entirely possible.
Coordinated intervention by the States also seems necessary, so that medicines are affordable everywhere – and not twice as expensive as the production costs, as is often the case today, because of the margins taken by the intermediaries that are carriers, wholesalers and retailers. Public authorities can act, by covering all or part of the price of medicines, or by worrying regarding customs duties, taxes, import conditions and requests for the granting of licenses. Investments to support African laboratories and expand therapeutic ranges are within reach. Similarly, incentive measures seem feasible at the level of public market contracts, with a percentage of orders from local producers.
Provide and innovate
For the moment, supply chains are built on a “push” model: the distributor readjusts its stock or places an order with a wholesaler when the demand from the consumer (patients or healthcare centres) reaches it. This situation causes regular stock-outs, and offers an avenue for counterfeits.
The traditional pharmacopoeia is presented in its true light: a gold mine!
Another major weakness of the market, which is not inevitable here either: between 1975 and 2014, only 1.3% of the 1,556 new chemical entities registered in the world were intended for the treatment of tropical diseases and tuberculosis, even though these diseases account for 12% of the global disease burden. However, more than 80% of Africa’s natural raw materials have not yet undergone a standard scientific assessment. And more than half of the new drugs introduced to the world in the last three decades were derived from natural sources.
When we know that the Khoisan people in South Africa obtained royalties from the Pfizer group for their knowledge of an appetite suppressant cactus used in a treatment once morest obesity, the equation becomes clearer and the traditional pharmacopoeia comes under its real day: a gold mine! Suffice to say that Africa has the cards in main.
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