The Covid-19 pandemic has exposed Africa’s inadequacies in manufacturing and supplying its own vaccines, essential drugs and personal protective equipment (PPE) required to curb the disease that is ravaging the world.
Africa currently imports more than 80 per cent of its pharmaceutical and medical consumables. The continent can only manufacture one percent of its vaccine needs.
A comprehensive analysis of the pharmaceutical industry in sub-Saharan Africa by Michael Conway, Tania Holt, Adam Sabow, and Irene Yuan Sun from the global consultancy firm McKinsey and Company shows that the medicines production in sub region lags behind comparable regions.
Some African countries have a handful of local companies who produce for the domestic market. Most do not—and are currently uncompetitive for local drug production. The continent overall has roughly 375 drug makers, most in North Africa, to serve a population of around 1.3 billion people, according to the study titled “Should sub-Saharan Africa make its own drugs?”
Those in sub-Saharan Africa are largely clustered in just nine of 46 countries, and they are mostly small, with operations that do not meet international standards.
By comparison, China and India, each with roughly 1.4 billion in population, have as many as 5,000 and 10,500 drug manufacturers, respectively. And the sub-Saharan market’s value is still relatively small, at roughly $14 billion compared with roughly $120 billion overall in China and $19 billion in India, Conway, Holt, Sabow, and Sun add in their study.
According to Conway, Holt, Sabow, and Sun, “In sub-Saharan Africa, only Kenya, Nigeria, and South Africa have a relatively sizable industry, with dozens of companies that produce for their local markets and, in some cases, for export to neighbouring countries.
Local producers also play in a limited range of the value chain. Almost all of them are drug-product manufacturers—that is, they purchase active pharmaceutical ingredients (APIs) from other manufacturers and formulate them into finished pills, syrups, creams, capsules, and other finished drugs.”
“Up to a 100 manufacturers in sub-Saharan Africa are limited to packaging: purchasing pills and other finished drugs in bulk and repackaging them into consumer-facing packs. Only three—two in South Africa, and one in Ghana—are producing APIs, and none have significant Research and Development (R&D) activity,” they add.
Latest figures show that Africa accounts for 17 percent of the world’s population, 30 per cent of the world’s disease burden, and only three percent of the world’s total health expenditure.
In their article titled “Africa needs vaccines. What would it take to make them here?” Andrea Gennari, Tania Holt, Emma Jordi, and Leah Kaplow from McKinsey and Company estimate that the public market for vaccines in Africa could rise from $1.3 billion today to between $2.3 billion and $5.4 billion by 2030, depending on the scenario.
While Africa’s population is growing faster than that of most other regions, significant immunisation coverage gaps remain, and new products, such as vaccines for Lassa fever or malaria, could be introduced and used widely on the continent.
Asked to describe the state of the African pharmaceutical manufacturing industry, the chief executive officer of the Ugandan based drug maker Cipla Quality Chemicals (CQCIL), Nevin Bradford replied: “Too small given the healthcare challenges facing the continent. Small in size and small in the number of quality manufacturers. Africa has more than 80 per cent of the world’s malaria cases and more than 60 percent of HIV positive individuals but less than five percent of the medicines (outside South Africa) are manufactured on the continent and most of those by CQCIL.”
“There is an urgent need for more African manufacture of quality, affordable medicines to guarantee security of supply, import substitution, provide skilled jobs and a scientific manufacturing base and generally foster economic development. It is estimated that more than 15,000 Ugandans have an economic livelihood through CQCIL, whether through direct employment, families or indirect employment through suppliers,” Bradford added.
According to the business plan for the “Pharmaceutical Manufacturing Plan for Africa (PMPA)” developed by the African Union Commission (AUC), the industry does face serious challenges that include limited access to finance, limited availability of skilled human resources, inability to access the detailed know-how necessary to implement an upgrading programme or design a new plant, significant costs involved in the proper development of new products, the aforementioned policy incoherence, and underdeveloped supporting industries.
The president of the Pharmaceutical Society of Uganda (PSU), Ms Pamela Achii, said the Ugandan pharmaceutical industry is very small and concentrated around simple molecules but with huge potential. And more than 90 percent of the needed medicines are imported.
Achii singles out cheap and highly subsidised imports, especially from India; inadequate national budget allocations to support local manufacturers; high utility costs that drive the cost of production higher; high currency fluctuations of currency exchange which affects cost of imported raw materials yet finished product is renegotiated in local currency; and high interest rates to secure funding; as the major challenges facing the Ugandan pharmaceutical industry.
According to Bradford, the Ugandan pharmaceutical manufacturing industry is growing, with the definite potential to become the pharmaceutical manufacturing hub for East Africa. In CQCIL, Uganda has one of the few WHO GMP approved manufacturing facilities in sub-Saharan Africa together with robust manufacturers such as Kampala Pharmaceutical Industries (KPI), Rene Industries and Abacus.
“There is still however a significant portion of Uganda’s pharmaceutical requirements which are still imported and which represent an opportunity for local manufacturers to substitute with local production. Indeed there are entire therapeutic categories where there is no local production at all, the most prominent of which are oncology treatments for cancer,” Bradford adds.
As to how the limited access to finance is hindering investment in the African industry, Bradford, said: “It is not so much the limited amount of financing as the cost of financing that are challenging to investment in the African pharma industry.
It can take 18 months to two years from a greenfield manufacturing site to start production from ground breaking through to validation, regulatory approvals and first commercial batches. This is a significant financing and cash flow challenge exacerbated by the relatively high cost of capital.”
On how the limited availability of skilled human resources is constraining the development of the African pharma industry, Bradford, said: “In Uganda, there is now a pool of human resource with experience of pharmaceutical manufacturing either in CQCIL or the other local manufacturing companies. CQCIL itself (pre-Covid) has provided internship training in quality pharmaceutical manufacturing to 120 science and pharmacy students every year, more than 1,000 graduates have been through this scheme. The challenge is more acute in those countries establishing a pharmaceutical manufacturing sector from scratch, especially those countries that also have a small industrialised base generally.”
The “East African Community (EAC): Regional Manufacturing Plan 2017-2027” sets four targets for the development of the pharmaceutical manufacturing sector in the sub-region. These include reducing imports from 70 per cent to less than 50 percent, support expansion of product portfolio to cater for 90 percent of disease burden; governments to procure at least 50 percent from local manufacturers, and at least five companies to produce more advanced formulations such as delayed release formulations, small volume injectables, vaccines, among others. The PMPA business plan addresses a complex industry and covers a diverse range of contexts across our 54 member states.
It aims at strengthening Africa’s ability to produce high quality; affordable pharmaceuticals across all essential medicines will contribute to improved health outcomes and the realisation of direct and indirect economic benefits.
According to Dr. Margaret Agama-Anyetei, the head of division for Health, Nutrition and Population, Social Affairs Department at the AUC, the AU’s PMPA was established to develop the African pharmaceutical industry (Assembly/AU/Dec.55(IV), a sector with considerable potential for reducing the burden of disease in Africa.
With a projected value of more than $40 billion by the next decade, the sector will also contribute significantly to economic growth.
A business plan for implementing the plan was developed and considerable progress has been recorded including the establishment of initiatives to harmonise medicine regulation on the continent [Assembly/AU/DEC-413(XVIII)], addressing human capacity and skills shortages, and promoting cooperation and advocacy in the industry.
“The optimism in the sector has also galvanised countries and regions with manufacturing capacity to harness support for the development of the sector despite the funding challenges,” Dr Agama-Anyetei said.
In this regard, in 2018, the African Union Specialised Technical Committee on Health, Population and Drug Control established the fund for African Pharmaceutical Development (FAP-D), as a specific financing facility for the sector (EX.CL/Dec.970 (XXXI).
“The value of a strengthened pharmaceutical industry for and across Africa will contribute significantly, to improved access to quality assured, affordable, safe and efficacious essential medicines and new medicines for African citizens.
Enhancing standards of production is central to improved access to quality assured medicines,” said Dr Agama-Anyetei.
“Furthermore, the African Continental Free Trade Agreement (AfCFTA) of the Africa Union allows access without tariffs to a market of more than 1.2 billion potential consumers. Through this mechanism Africa has created a single continental market for goods and services across the continent as well as accelerated the establishment of a customs union which now leads to the creation of an African Economic Community by 2028,” Dr Agama-Anyetei added.
“Through the coming into a force of the AfCFTA, Africa becomes the largest integrated trading area in the world. This has huge implications for the pharmaceutical industry and in particular for the movement of goods and services associated with medicines, medical products and technologies. Regulation shall be critical to guaranteeing the protection of the 1.2 billion African market from fake, substandard, and counterfeit products and services,” Dr Agama-Anyetei further added.
Asked whether Africa has the capacity and know how to produce its own vaccines, Dr Agama-Anyetei replied: “According to the Pharmaceutical Manufacturing Plan for Africa, an area that will require further work is establishing a model for enhancing the production of human vaccines. Vaccines are a cornerstone of any primary healthcare programme and are an essential tool in preventing disease. The significance of vaccines in public health in general, coupled with the requirement to be able to respond rapidly to pandemics (note the limited availability of vaccines in the ongoing Covid-19 pandemic and during the 2009 influenza crisis) mean that developing our own capability to provide for our vaccine needs will be explored.”
Dr. Agama-Anyetei adds: “The African Vaccine Manufacturers’ Initiative is currently being formulated. Historically, much emphasis has been placed by international agencies and donors on the supply of vaccines and in doing so many lives have been saved. However, we should build production capacity on the continent so that, in the medium to long term, we will be able to rapidly respond to our needs and will have a sustainable source of high-quality products to address vaccine preventable diseases.”
As to the opportunities available for investors in African pharmaceutical industry, Dr. Agama-Anyetei, says: “Investors can make an impact through establishing a source of supply of high-quality pharmaceuticals across the Essential Medicines List that highly resource constrained National Regulatory Authorities can effectively oversee. In addition, local manufacturing will contribute to producing critical medicines available during health emergencies thus contributing to health security and safety at all times.”
“The purpose of a fund for the pharmaceutical industry would be to provide affordable financing to the industry in the form of low interest rate loans. For efficient implementation of the PMPA, long-term support for the development of indigenous African medicines as well as complementing the financing with technical advisory services is imperative,” Dr. Agama-Anyetei adds.
“Equally important, the establishment of the Fund for African Pharmaceutical Development (FAP-D) requires bilateral and multilateral support from financial institutions coupled with access to innovative financing, technology and innovation from the private sector.”
“Very significant opportunities are open and available for investors in the African pharmaceutical manufacturing industry. Covid has focused the attention of healthcare providers on the importance of security of supply as well as price. Africa based manufacturers are excellently placed to take advantage of this opportunity to manufacture in Africa for African patients. Such investment must however be focused, carefully assessed and balance quality, affordability and scale,” Bradford says.
Vaccine scaling up
According to Dr. Agama-Anyetei, this year the AU and Africa CDC launched the Partnerships for African Vaccine Manufacturing (PAVM), framework which aims to leverage pan-African and global partnerships to scale-up vaccine manufacturing in Africa.
“The framework notes the existing capabilities on the continent today, the African diaspora, and commitments from our private sector partners to strengthen capacity which provide a relevant starting position for African manufacturing.”
“Manufacturing operations and quality systems are extremely dynamic. There’s constant learning and so Africans can learn as fast as others or even better. The issue of capacity can be addressed by better government support in access to affordable financing and support local manufacturers to make partnerships with established manufacturers in Europe and America.”
“Governments should also agree to make pooled procurements to raise volumes and make the business attractive to investment. Governments also need to increase budget in healthcare and support local or regional manufacturers,” Achii adds.