The case for Big African Pharma

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In January 2020, before Africa – and indeed the world – had woken up to full horror of COVID-19, four partners at McKinsey’s consultancy made the case for Africa to manufacture pharmaceuticals on a large-scale.

Not that Michael Conway, Tania Holt, Adam Sabow and Irene Yuan Sun of McKinsey’s were prescient or prophetic about the coming Corona tide.

And no, not much of what the McKinsey’s quartet was totally new to African policymakers, businesspersons and pro-health activists, who for at least two decades have heard the argument for the establishment of our own industrial scale pharma industry.

But what they said in January bears revisiting by Africa’s policymakers, health experts and industrialists in light of two things.

The first is the most obvious: COVID-19 is killing people.

The second is related to the first but has a whole framework of its own predating the Corona virus, and it is rooted in the SADC Industrialisation Strategy and Roadmap (2015-2063).

SADC Executive Secretary Dr Stergomena Tax made reference to this at the recent virtual Council of Ministers Meeting.

Pointing to decisions made at the April 6 Council of Ministers Emergency Meeting, Dr Tax told the recent virtual indaba that creation of viable pharma value chains was something expected of SADC members as per the Industrialisation Strategy and Roadmap.

Dr Tax said the SADC Secretariat had already mapped regional manufacturers of essential medical supplies and equipment.

“The information gathered from the mapping assessment, and the needs assessment is being used in the ongoing efforts of mobilising resources and in prioritising procurement of medical supplies and medical equipment from regional manufacturers and suppliers.

“The information is also being used in enhancing capacities of regional manufacturers in the context of the SADC Industrialisation Strategy, which recognises pharmaceutical value chains as a priority. This initiative will go a long way in improving our region’s preparedness to deal with such pandemics and also drive our development agenda,” she told ministers.

Imported drugs account for anything between 70 and 90 percent of medicines used in Africa. That in itself is a case for creation of local pharmaceutical industries.

There are less than 400 drug manufacturers in Africa, and they are supposed to service a market of 1,3 billion people. Compare that to the tens of thousands of drug-makers in Europe, North America, India and the Far East – most of whom primarily rely on plants in Africa to make their medicines anyway!

Of course, not every African country possesses the economic fundamentals to manufacture drugs. Some can be pharma hubs and some will have to continue importing.

Which is where integration comes in.

Properly structured value chains – encompassing research, development, cultivation of medicinal plants (which has a subordinate value chain of its own), production, packaging, marketing, storage, distribution and retailing, to summarise – could be a big boon for African industry.

Annually, Africa’s pharmaceutical sector is worth around US$20 billion. Is this a pie that should be left largely to Western and Asian manufacturers? Are Africans going to continue to be producers of medicinal raw materials and consumers of imported medicines in perpetuity?

And the market of conventional medicine users has potential to grow on the back of an indigenous pharma industry because many Africans today simply cannot afford the imports from Germany, Switzerland, the United Kingdom, India, China and the United States.

We can go on and on about how an African pharmaceutical industry can make sense for African governments to facilitate – or even actively participate in.

More important than the business case for African Pharma is the human case.

Our reliance on foreign-developed and manufactured medicine comes at a great human cost.

McKinsey’s Conway, Holt, Sabow and Sun point out that: “Increased pharmaceutical manufacturing can affect a population’s health in various ways, such as its access to, awareness of, and availability of needed medicines. It can also impact the systems that regulate quality and safety.

“…our analysis for Ethiopia and Nigeria highlighted some effects that may be applicable for other countries as well. Access to medicines, for example, is often limited to outdated drugs because global drug originators, or patent holders, lack incentives to undertake the cumbersome process of registering and promoting all their products for each small African country market.

“As a result, many African countries still use drugs older than what is recommended by the World Health Organisation’s essential drug list. Local manufacturers often have the incentives and resources to introduce newer generation generics into smaller African markets.

“In Ethiopia, when one local player became the first in the country to produce a newer-generation antibiotic, the government added it for the first time to the list of products available to public health facilities.

“In Nigeria, regulations allow local drug manufacturers to also be drug importers. Many of the leading local drug manufacturers are also representatives of global drug originators, and hence have a strong incentive to invest in local drug registration and the introduction of lucrative new products.”

Africa remains overly reliant on the goodwill and – more often than not – the business decisions of Western and Asian drug makers.

Our lives are to a great extent at the mercy of benevolence and foreign capitalistic interests.

Surely, that alone should be sufficient reasons for Southern Africa’s leaders to take seriously Dr Tax’s calls for implementation of the SADC Industrialisation Strategy and Roadmap in as far as it pertains to pharmaceutical value chains.

We need to take a closer look at which drugs we can start manufacturing for our combined market as SADC, as a prelude to greater continent-wide synergies and value chains.

After identifying what we can start doing for ourselves in Africa as Africans, we must invest in the necessary regulatory frameworks and create an environment conducive for manufacturing of drugs for our people.

The reality we face today is that we are sitting like children waiting for Santa Claus, a fairy godmother or a genie to come from Europe, North America or Asia with a wonder drug for COVID-19.

Yes, even if we had already established a local pharma industry we – like the rest of the world – would be hard-pressed to quickly come up with a vaccine for the virus.

But we would at least be able to manufacture basics for PEP in the short-term while our scientists worked and competed with their counterparts from across the world to develop a vaccine in the medium to long-term.

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