Addressing COVID-19 While Building Long-Term Capacity – Proshare Nigeria Limited

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Monday, June 28, 2021 / 08:46 PM /  By Nextbillion/ Header Image Credit: IMF

Proshare Nigeria Pvt. Ltd.

The African pharmaceutical market’s estimated worth is
between US $40 – $65 billion, but it remains largely untapped, with a heavy
reliance on imports. The market is expected to grow in response to the novel
coronavirus (COVID-19) pandemic, a changing disease burden, urbanization, new
technologies, health insurance expansion, anticipated continental market
integration and industry consolidation. But the ongoing pandemic shows the
urgent need to unlock new partnerships and investments to accelerate the local
production of medical supplies, medicines and vaccines, which could save lives
and create jobs across the healthcare and pharma value chains.

As Africa’s pharmaceutical sector continues to respond to COVID-19 with
international partnerships, policymakers, investors and other industry players
need to pay attention to the changes spurred by the crisis, along with other
major trends shaping the market. In this piece, I highlight some of those
trends, and how they have been impacted by the pandemic.

 

The Need For Greater R&D Spending

Historically, research and development (R&D) has been poorly funded
on the continent. Africa’s share of global
R&D spending was only 0.9% in 2020, compared to 2.2% in South America and
44.3% in Asia. Among African nations, only Egypt and South Africa are in the top
40 spenders on R&D globally. Evidence suggests
that higher R&D investments usually result in innovations, better
productivity and higher gross domestic product (GDP) – all of which the
continent sorely needs. Yet just 10 African countries are in the top 100 on the 2020 Global Innovation Index,
with Mauritius (52), South Africa (60) and Tunisia (65) leading the pack.

The African Union recommends national governments allocate at least 1%
of GDP to R&D, to spur innovations that drive economic development. But
unfortunately, only a handful of countries are close to achieving this target:
Average spending on R&D across sub-Saharan Africa was 0.4% of GDP in 2015. An analysis by the United
Nations Economic Commission for Africa shows that current research funding
comes mainly from government and external donors, which reveals significant
potential for an increase in business-related research expenditure. Within the
pharmaceutical sector, investment in 54Gene, an innovative
R&D enterprise, and the Drug Discovery and Development
Centre
 holds promise for higher public, private and
philanthropic support for pharmaceutical innovation in Africa.

The pandemic has also spurred growing interest in
pharmaceutical R&D in Africa. COVID-19 can be a driver of increased
spending on research, particularly for health research and pharmaceutical
innovation that targets prevalent diseases and uses local solutions.
Recent investments by the
Nigerian government to support research and pharmaceutical companies in
response to COVID-19 (and also to address other unmet health needs) is a
welcome development, and one that should be replicated across the region.
Governments are major investors in
basic science and drug discovery research in developed countries and emerging
economies like India: African countries can adapt useful investment lessons
from these countries in a way that maximizes the use of scarce public
resources. The Alliance for Accelerating
Excellence in Science in Africa
 can also contribute to a change
in the research funding landscape.

 

The Opportunity To Boost
Pharmaceutical Manufacturing Capacity

Africa offers ample opportunities to boost pharmaceutical manufacturing
capacity via international partnerships and knowledge transfers. The Pharmaceutical Manufacturing Plan
for Africa
 highlights the value of local production, which
requires detailed situational assessments, capacity strengthening, access to
finance and technology transfers. Although nearly 40 countries in the
WHO African Region, which excludes North Africa, undertake some pharmaceutical
production, there is heavy reliance on imports of active pharmaceutical
ingredients (API) – mainly from India and China. A new funding program by the European Investment Bank
aims to accelerate local manufacturing of API in Africa to improve the
continent’s COVID-19 response: This approach can be expanded in the post-COVID
era to other pharmaceutical products that address unmet needs.

A 2019 report by McKinsey
& Company shows that the region’s existing manufacturing capacity is
concentrated in North Africa – but this may be changing. Recent efforts to build an
industrial park in Ethiopia could expand this manufacturing capacity in East Africa.
2019 agreement between
the United Nations Industrial Development Organization and the West African
Health Organization could boost production in West Africa, especially in
Nigeria and Ghana. South Africa’s pharmaceutical manufacturing capacity is also
expanding, with new partnerships and
investments in the production of generic drugs and vaccines. It is also
possible for African manufacturers to use emerging technologies that
accelerate discovery and manufacturing. This momentum could pave the way for
more local manufacturers to meet international standards and obtain WHO
pre-qualification, in order to gain access to large markets and international
procurement systems.

 

The Need To Strengthen Africa’s Regulatory System

A strong regulatory system is important to guide the sourcing,
production, marketing and distribution of high-quality medical supplies and
health technologies. To that end, there is growing momentum for the full
operationalization of an African Medicines Agency (AMA), building on progress
made by the African Medicines Regulatory
Harmonisation
 and similar initiatives. Heads of states and
governments adopted an AMA treaty in February 2019. The AMA will go into force
once 15 African Union member states ratify the treaty: Eight countries have
ratified it so far. Sustained advocacy is crucial
to ensure the ratification process is completed.

Regulatory system strengthening at the national, regional and
continental levels could help to promote innovation and increase citizens’ access to high-quality health and pharmaceutical products. A new partnership between
the African Export-Import Bank, the International Islamic Trade Finance
Corporation and the African Organisation for Standardisation intends to promote
the harmonization of standards and regulatory policies across the region.
Timely efforts to strengthen regulatory institutions, cross-country guidelines
and implementation capacity could help to reduce the distribution of
poor-quality medical supplies and medicines on the continent.

 

Improving Supply Chains

However, investment in R&D, manufacturing and regulatory systems
will not necessarily translate to access to high-quality, locally produced
medicines without robust national, regional and continental supply chains.
Here, the African Union-backed Africa Medical Supplies Platform (AMSP)
represents an innovative tool for pooled procurement and supply – although it
was created to respond to the pandemic, its use should not be limited to the
COVID-19 response.

The platform could also help address the currently fragmented market,
which undermines market access and bargaining power. While each country can
independently negotiate with manufacturers and suppliers, the AMSP could help
reduce the price of medical products via pooled purchases from African and
international companies.

In addition, the emergence of technology-enabled logistic firms
(like Kobo360 and LifeBank),
the Africa Resource Centre, and African airlines
(like Ethiopian Airways) provide new opportunities for public health systems to
work with private sector players on health supply chain management, to ensure
that high-quality medical products get to citizens at the right time. This is
important for the delivery of personal protective equipment, medicines and
vaccines, both for the COVID-19 response and post-COVID systems strengthening.

 

Integrating The African
Pharmaceutical Market

The possibility of an integrated African market provides a significant
incentive for progress across the pharmaceutical value chain. To advance that
goal, and recognizing the importance of trade for economic development, African
Union member countries have 
agreed to establish
a continental market. The African Continental Free Trade Area, created through
an agreement backed by all African countries (except Eritrea), is a major
initiative with the potential to facilitate new investments in the growing
pharma sector. Leveraging useful examples from successful trade agreements from
other regions, this agreement can fast-track progress toward an integrated
market where Africans can trade more with each other and achieve better linkage
with global value chains.

In a related development, COVID-19 is accelerating African countries’ efforts
to diversify their economies with increased focus on industrialization. This
presents an opportunity to prioritize pharmaceutical manufacturing in specific
countries, which can become hubs for increased production for domestic and
continental markets. A cohesive continental market could also accelerate new
research collaborations, boost investments in manufacturing capacity, and
facilitate pooled procurement and
distribution.

 

Ensuring Access To Finance

Access to finance for pharmaceutical businesses is crucial for
sustainable investment in research, manufacturing and systems strengthening. To
position the private sector to attract domestic and foreign investments,
African countries need to improve their political and macroeconomic conditions,
conduct regulatory reforms, and increase their access to well-trained
pharmaceutical professionals.

For instance, recent funding by the
African Development Bank to research institutions involved in the local
production of health products could be scaled up to foster a sustainable
collaborative network between academia and industry. There is an opportunity
for the African Export-Import Bank’s trade finance facility to
continue to prioritize pharmaceutical innovation and health supply chain management.

Additionally, a new partnership between
major financial institutions to develop a large biopharmaceutical platform
could facilitate knowledge transfer and increase access to high-quality generic
drugs in Africa. More partnerships of these sorts are needed, both to respond
to COVID-19 and to address other prevalent unmet needs.

 

Advancing Toward The Sustainable
Production Of Pharmaceutical Products

This analysis shows there are several initiatives across the
pharmaceutical value chain that have the potential to expand the market and
create jobs. It does not cover all the initiatives happening within the sector,
but it does reflect progress. The opportunities in
Africa’s growing pharma markets call for political leaders to ensure that there
are conducive policy, regulatory and business environments for these
enterprises and initiatives. There is also a need for multi-sectoral
coordination by designated inter-governmental units which drive policy design
and coherent implementation, using a data-driven approach that harnesses
health, pharmaceutical and industrial policies to increase access to
affordable, high-quality products.

This coordination will require a new type of partnership between
policymakers, private sector coalitions, citizen groups and development
partners, to invest in skill development strategies that produce a more
talented workforce to drive pharmaceutical industrial development on the
continent. Despite the unique challenges of individual countries and regional
economic communities, there is a great opportunity for African nations to work
together on a rewarding pharmaceutical innovation journey. If they do, the
continent will advance toward the sustainable production of health and
pharmaceutical products.

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 Proshare Nigeria Pvt. Ltd.

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