The topic of enhanced local pharma manufacturing in Africa is one that has divided opinions, to say the least.

One faction remains adamant that the key to unlocking the full potential of the sector is by developing self-reliance through local manufacturing.

While the other questions the feasibility of the entire thinking, highlighting that Africa has neither the political goodwill nor the consolidated market size to reap the real benefits of local manufacturing.

Regardless of where you stand, one thing we can all agree on is that there’s huge potential and room for improvement in equal measure.

Africa’s vulnerability and over-reliance on foreign imports were ruthlessly exposed during the COVID-19 pandemic, where the continent struggled to match its medical product needs with the needed supplies.

The continent depends heavily on foreign players to meet its pharmaceutical needs, with imports accounting for 70% – 90% of its total consumption.

In comparison, countries like China and India, with similar population sizes (approximately 1.4 billion), import only 5% and 20%, respectively.1

Africa also imports an estimated 99% of its vaccine needs.

As of 2022, only 20 African countries have drug manufacturing capacities, most of which have limited or no scope for R&D and active pharmaceutical ingredient (API) production.

80% of total production on the continent is carried out in only 8 countries in Africa.2

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So, the question is, why bother to increase local production?

According to a report by the African Development Bank, there are three levels of impact that local production of pharmaceuticals could have: economic, health, and strategic.2

Economic impact

Those who support the idea of enhanced local production argue that it could have a significant impact on African countries’ economic positioning.

They point to an improved trade balance, GDP growth, and job creation.

In the last few years, it has become abundantly clear that there’s a gaping trade deficit due to the huge shortage of foreign exchange in some African countries. With low amounts, say of the dollar, it becomes extremely difficult to do business, especially when you rely on raw material importation.

Therefore, increased quality production of medical products could result in increased exports, translating to an influx of foreign exchange.

The argument for GDP growth is attributed to the increased levels of business and the creation of an “economically viable industrial base” that ultimately contributes to larger economic growth.

Opening new industries as well creates job opportunities for a diverse professional pool: regulatory affairs professionals, pharmacists, microbiologists, researchers, machine operators, managers, and many more.

However, not everyone subscribes to this way of thinking.3

A 2019 report by McKinsey & Company indicated that although increased local production in sub-Saharan Africa could have a significantly positive effect on the balance of trade, the report argues that the impact on GDP and job creation would be negligible at best.

The explanation is that the pharma sector is not big enough in the overall scheme of things to truly have an effect on GDP growth, and with the recent inclination towards automation, the number of jobs created would also not be considerable.1

Public health impact

The impact of local production of medicines on public health could be profound.

Historically, the region has struggled to gain access to newer, innovative health products.

This is largely because the larger foreign pharmaceutical companies, which are the main patent holders, have not found the highly fragmented African market to be attractive. It is a huge ask to register these products across the individual African countries whose regulatory processes are not harmonized, leaving public health at a huge disadvantage.

Local production could provide a solution to this.

Through the manufacture of quality generic products, Africa can realize the benefits of newer products.

The development of local manufacturing could have a ripple effect on the relevant country’s regulatory system.

The national medicines regulatory authority will need to step up its efforts to ensure the companies manufacturing locally are strictly sticking to the recommended procedures, guidelines, and standards.

The authority therefore, in itself, will have to build its own capacity, leading to safer, better-quality, and more efficacious medical products.

Supply security impact

Improving levels of local production ensures that the continent doesn’t over-rely on foreign imports to meet its pharmaceutical needs.

Pharmaceutical supply chains are not fool-proof.

Whether it’s the COVID-19 pandemic, the Suez Canal blockade, or Russia’s invasion of Ukraine, there are unexpected events that can abruptly halt the importation of pharmaceutical products.

Just relying on imports is therefore not a lasting solution.

Local production ensures that in times of such events that create uncertainty, it can still be able to sustain health service delivery to its citizens.

So how can local production of pharmaceuticals in Africa be made more feasible?

1. Improve the quality of manufactured products

Africa has had to contend with the influx of substandard medicines on its market, some of which have been locally produced.4

Consequently, patients have struggled with therapeutic inefficiencies, increased hospital stays, antimicrobial resistance, and others.

One way to combat this is by stepping up quality through cGMP compliance.

Ensuring that only international standards of quality are achieved ensures that these products are able to access a large enough market size both regionally and globally to be able to manufacture sustainably for the long haul.

There’s no longevity in producing poor-quality medicines.

Continentally, key players such as the African Union have recognized the urgent need for harmonizing medicine regulation in the market.

Hence, the emergence of the African Medicines Agency.

A harmonized regulatory framework allows the strengthening of NRAs across the region, allowing for good-quality, safe, and efficacious medicines in Africa.

2. Improve production volume and efficiency

One of the main aspects many look at when assessing the benefits of local production is its effect on affordability. Many argue that ultimately, medicines need to be more affordable to truly have a lasting positive impact on public health.

Affordability is realized through economies of scale.

Having a large enough production capacity that ensures efficiency and decreases the cost per unit of medical product produced is the first step.

The next objective will be to ensure that utilization rates are maximized.

Many African countries struggle with inconsistencies in the supply of water and electricity, two elements key in the manufacturing process. Additionally, they struggle with infrastructure and logistical challenges limiting the companies’ ability to achieve continuous manufacturing.

This has to change if local production is to be feasible.

Increased production capacity and utilization rates of manufacturing plants will lead to an improved production volume, allowing companies to produce at lower costs and eventually availing of medicines at competitive prices.

Otherwise, many will still lean towards cheaper imports if locally sourced products are expensive.

3. Create synergy through the creation of industry clusters

The smaller African countries may not be able to engage in local production of pharmaceuticals, especially if this is targeted just for their own markets.3

Not in a sustainable way anyway.

That’s why efforts have to be turned towards creating and taking advantage of regional hubs. The East African Community (EAC), for example, can bring together its eight members to create an industry cluster that supports the production and supply of medical products within the whole community.

The same can be done for the Economic Community of West African States (ECOWAS), which can pool resources to create another industry cluster, improving capacity and targeted market size.

Making substantial technology investments

Africa struggles to access key technologies needed in drug discovery and development, which is the main reason why many countries struggle to establish API manufacturing sites.

In their paper, Kaplan and Laing indicate that there’s no point in engaging in local production of medicines if countries will still end up buying APIs at higher costs than their foreign counterparts, making locally produced medicines more expensive.3

For local production to work, Africa needs to invest in the requisite technologies that will ensure API production capability, improved manufacturing efficiency, and better quality of final products.

4. Creating incentives to support local production

There’s little that can be achieved regionally without political goodwill.

African countries need to step up and show commitment and support for local production to be achieved. Laws, policies, and regulations have to be structured in a manner that supports this initiative.

Laws that prioritize public procurement of locally produced medical products, tax breaks, and eliminating unnecessary bureaucracy without compromising on quality could ensure the sustainability of local manufacturing.

Countries can also take advantage of the AfCFTA agreement, where member countries are committed to eliminating tariffs on most goods and services over a period of 5, 10, or 13 years, depending on the country’s level of development or the nature of the products.

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Just like many other regions in the world, Africa can reap the benefits of local production of pharmaceuticals.

However, this is contingent on intentional efforts by governments to express political goodwill and create a business environment that fosters and encourages investment.

The key lies in consistency in commitment, collaboration, and public-private partnerships within the continent to manufacture in a sustainable manner.

Will this happen within a year?

Probably not.

Can it happen eventually?

Many have proven it can.

Over to you, Africa!

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References

1.       Evaluating the sub-Saharan African pharmaceutical market | McKinsey. Accessed March 28, 2024. https://www.mckinsey.com/industries/public-sector/our-insights/should-sub-saharan-africa-make-its-own-drugs

2.       Bank AD. A New Frontier for African Pharmaceutical Manufacturing Industry. African Development Bank Group. Published April 15, 2022. Accessed March 28, 2024. https://www.afdb.org/en/documents/new-frontier-african-pharmaceutical-manufacturing-industry

3.       (PDF) Local Production of Pharmaceuticals: Industrial Policy and Access to Medicines An Overview of Key Concepts, Issues and Opportunities for Future Research. Accessed April 1, 2024. https://www.researchgate.net/publication/237266634_Local_Production_of_Pharmaceuticals_Industrial_Policy_and_Access_to_Medicines_An_Overview_of_Key_Concepts_Issues_and_Opportunities_for_Future_Research

4.       Fake medicines kill almost 500,000 sub-Saharan Africans a year: UNODC report. Africa Renewal. Published February 10, 2023. Accessed April 1, 2024. https://www.un.org/africarenewal/magazine/february-2023/fake-medicines-kill-almost-500000-sub-saharan-africans-year-unodc-report-0