27 Jan Pharmaceuticals as Drivers of Development in Africa
January 2021 The value of Africa’s pharmaceutical industry increased from USD 5.5 billion in 2007 to USD 28.56 billion in 2017. It is predicated to continue increasing in value and be worth up to USD 70 billion in 2030. (Goldstein Market Intelligence, 2020) Africa has the fastest growing pharmaceutical industry in the world, driven by leading producers such as South Africa, and Morocco who manage to produce 70% to 80% of their medicines. On the other hand, countries in central Africa import 99% of their medicinal requirements. There are five stages in the pharmaceutical value chain; Research and Development (R&D), licencing and patents, sourcing raw materials, Pharma manufacturing and distribution. Covid-19 has negatively impacted these stages and exposed Africa’s heavy resilience on imports, with Africa importing 94% of its pharmaceutical products. Covid-19 has resulted in reduced access to medical supplies due to the closure of manufacturing facilities in Africa’s two largest sources of import, India and China. It also resulted in inflated costs of pharmaceutical products. It is therefore critical that African countries utilise initiatives like the African Continental Free Trade Area (AfCFTA) to pursue local production and boost intra-regional trade. The AfCFTA initiative aims to facilitate access to safe medicines through regional value chains and pooled procurement and across the country ( Banga, et al., 2020).
There are numerous potential benefits of local production across the value chain. Local production will create employment opportunities upstream in the R&D sector, production and sales, media and advertising and downstream in public health services. It will also create numerous opportunities for highly skilled workers in the manufacturing sector (African Union , 2007). Increased investments in pharmaceutical R&D and training can also be beneficial across the health and industrial sectors. For the benefits to be maximised, a clear scope of all trained professionals required needs to be identified, such as biomedical scientists, pharmaceutical technicians, industrial laboratory workers etc. Thereafter pharmacy at tertiary level can be redeveloped to include these skills and training and produce workers who are equipped for local production. This will also improve employment opportunities for entry-level pharmacy assistants and technicians as they are needed in both sectors. It is evident that local production allows for mutual benefit in the health and industrial sectors. This is illustrated in Tanzania where the national industrial development policy focuses on pharmaceutical production and has resulted in increased domestic funding for local procurement of essential medicines. Local production will also save foreign exchange if raw materials, active ingredients and machinery are developed in Africa. In the long-term, maintaining domestic competition can lead to reduced costs and prices which will also allow for improved rural access to medicines. Ghana has a ‘Ghana Model’ in the pharmaceutical industry that aims to maintain and promote a competitive domestic industry through import bans of items that can be produced locally (Mackintosh, et al., 2017).
Sustainable access to medicines is an integral part of Africa’s health system. As a result of lifestyle choices and limited access, Africans are facing numerous health challenges from non-communicable diseases such as diabetes and cancer, as well as infectious diseases such as HIV, malaria and tuberculosis. HIV is treatable, while malaria and tuberculosis can be cured, however, an unacceptably high number of people in Africa do not have access or cannot afford the medicines and treatments they require. In 2015, approximately 1.6 million Africans died from malaria, tuberculosis and HIV/AIDS related illnesses (Pheage, 2017). This number can be expected to rise as a result of COVID-19-induced health service disruptions.
Therefore, efficient and technologically advanced local pharmaceutical production is a fundamental part of saving lives in Africa. Digital healthcare can also play a major role in accessibility. For example, medicines and treatment plans for patients can be stored in a multi-cloud computing system for hospital, pharmacy and insurance use. Also, with government funding assistance, the final cost of essential medicines can be disassociated from R&D costs to increase its affordability (ePharma, 2017). Africa can also gain pharmaceutical independence and sovereignty through the local production of generics. This can be done once the patent rights for essential medicines expire or through a process called scaffold hopping. Scaffold hopping is an alternative approach to waiting for patents to expire, it instead aims to find an active molecule scaffold that could replace the patented one (Ahen, 2018).
Other emerging pharmaceutical technologies may be used, such as continuous flow chemistry. Continuous flow technology is known for its scalability, safety and reproducibility and can be used to make advancements in Africa’s agenda 2063. This technology allows for essential medicines to be made cost effectively and can be adapted for research and industry (Sagandira, et al., 2020). Essential medicines can also be produced using Traditional African Medicine extracted from plants. Africa’s biodiversity contains 5000 species of plants with a potential for medicinal development. For example, a plant species in Cameroon was examined and showed strong anti-HIV activity while other African plants such as common chewing sticks are used for traditional dental care. The integration of traditional medicine in national health systems can be achieved through the formulation of the necessary policy, regulatory and legal frameworks (Elujoba, 2005).
While promoting economic development, the legal and regulatory framework needs to ensure that all medical products are produced sustainably and meet all safety and quality standards. For accelerated progress, effective integration and linkages across regional and local frameworks should be developed. For example, Nigeria successfully developed and locally produced Niprisan, a drug for the management of sickle cell disease. This was possible through the collaboration between local traditional healers and Nigerian researchers. Nigeria also developed policies that supported the emergence of indigenous Nigerian firms (Berger, et al., 2010).
Similar developments can be made across Africa with the assistance of regional cooperatives such as Common Market of East & South African (COMESA) and Economic Community of West African States (ECOWAS). These cooperatives aim to increase intra-African trade, improve accessibility to pharmaceutical products and increase production affordability. For example, the ECOWAS Regional Pharmaceutical Plan (ERPP) advocates for zero tariffs on raw materials, machinery and equipment for pharmaceutical production. Another necessity for successful production is government funding. Governments’ commitments to financing and investment in pharmaceutical innovation in African countries is low. Africa invests 0.3% of its GDP to pharmaceutical R&D, while South Africa remains an exception, with a 0.9% contribution of its GDP (Kaplan & Laing, 2005).
Government funding should also be allocated towards providing incentives for local pharmaceutical companies and for sectors across the local pharmaceutical value chain. Examples of incentives include loans, tax and VAT savings and non-fiscal facilitations such as capacity building, infrastructure development and holistic policy and regulatory frameworks (Berger, et al., 2010).
Capacity building is not only required as an incentive, but is essential to the successful implementation of manufacturing in Africa. The capacity of all financial holders should be strengthened to ensure that funds are allocated accordingly. The capacity of regulatory and distribution authorities should be developed for equitable, safe and efficacious access to medicines.
India is an example of a country that uses strong innovative capabilities for the low-cost production of high-quality pharmaceuticals. India’s pharmaceutical market was valued at USD 12.6 billion in 2009. With a 9.8% year-on-year growth rate from 2018 to 2019, the India pharmaceutical market was valued at USD 20.03 billion in 2019. The factors contributing to this growth are; the collaboration of traditional and scientific healing methods such as ayurvedic medicine and homeopathy, a strong interlink between manufacturers and government laboratories and the impact of patent and industrial policies. India made significant progress in its pharmaceutical sector after the implementation of a new law that did not recognise product patent protection in drugs. This allowed the indigenous sector to use technologically advanced and cost-efficient processes for manufacturing. There were 47 other countries with an absence of product patent protection, including Ghana and Malawi. However, these countries did not possess the entrepreneurial and technological skills required to take advantage of the Patent Act. India’s global success in the pharmaceutical industry is due to the Indian government integrating the sector as part of its industrial strategy. As a result, India is able to export pharmaceuticals worldwide at low-cost and at a high quality. However, the caution from this approach is that the pharmaceutical sector is not viewed as a health policy. Therefore, most Indian people in poorer regions do not have access to essential medicines due to price and quality control failures. It is therefore essential for Africa to adopt an integrated industrial and health policy (Chaudhuri, 2007).
South Africa is one of the few countries in Africa that meets World Health Organization (WHO) standards to manufacture pharmaceutical products. Its pharmaceutical market is expected to grow 7% a year and reach USD 3 billion in value by 2021. Manufacturing in South Africa is dominated by local companies like Aspen with a market share of 15.3% and Adcock Ingram with a share of 8.9% (Research and Markets, 2018). South Africa has identified the need for anti-retroviral drugs (ARVs) across Africa and therefore has six local companies that formulate, tablet and package ARVs locally. This initiative is supported by the Department of Trade, Industry and Competition (dti) in South Africa, as it is committed to supporting industry policies that promote local manufacture. The dti extends its support to R&D, infrastructure development and manufacturing competitiveness through grants and incentives. South Africa’s healthcare system is comprised of the private and public sector. The private healthcare sector supplies 16% of the population and accounts for 84% of total pharmaceutical spend while the public healthcare sector supplies 84% of the population but only accounts for 16% of the total pharmaceutical expenditure. As a result, the South African government developed National Health Insurance (NHI) to pool funds to provide equitable and accessible health services for all South Africans, irrespective of their socio-economic status (Organisation for Economic Co-operation and Development , 2018).
- Open innovation and technology transfer – Countries have the potential to benefit from encouraging the private sector to pursue an open innovation strategy which allows the sharing of intellectual property, resources and data. Using this approach, together with a technology transfer agreement, priority vaccines can be created globally and efficiently. The sharing of resources and technology will also promote medicine affordability.
- Mutually beneficial engagements – Africa has many private successful and competing pharmaceutical companies. African people and the public sector have the power to support and promote private companies that reinvest a percentage of their profits back into health infrastructure projects. This will promote the growth of the company, as well as development of the public health sector.
- Strong political leadership – Africa requires strong political leadership to integrate sectoral policies that specifically address the challenges that local producers face. This will also include the restructuring of import, export, tax and incentive policies to promote the success and competitiveness of local manufacturers.
- Optimum capacity utilization – Producers that operate at optimum capacity have lower production costs and higher production rates. The public and private sector have to invest in producers so that they are in a financial position to work at optimum rates. This includes investing in R&D, clinical trials, technology and skills development.
- Building and developing e-health – Increasing investment in the ICT health sector will result in more efficient and effective outcomes. E-health includes integrated health records, smart cards, RFID tags for patient tracking and medicine dispensary and management. Digitalisation can be applied across the healthcare system in a manner that is beneficiary to the patient, healthcare workers and the economy.
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