More Related Content
Similar to Explore Pharmaceuticals Industry 2020 - Goldstein Market Intelligence (20)
More from Goldstein Market Intelligence (6)
Explore Pharmaceuticals Industry 2020 - Goldstein Market Intelligence
- 2. Goldstein
Market Intelligence
©GOLDSTEIN MARKET INTELLIGENCE PAGE 02
ACCELERATE THE GROWTH
TM
Africa’s pharmaceutical markets are growing in every
sector. Between 2013 and 2020, prescription drugs are
forecast to grow at a compound annual growth rate of 6
percent, generics at 9 percent, over-the-counter
medicines at 6 percent, and medical devices at 11
percent. Three factors are driving this growth:
Urbanization: Africa’s population is undergoing a massive
shift. By 2025, two-fifths of economic growth will come
from 30 cities of two million people or more; 22 of these
cities will have GDP in excess of $20 billion. Cities enjoy
better logistics infrastructures and healthcare capabilities,
and urban households have more purchasing power and
are quicker to adopt modern medicines.
Healthcare capacity: Between 2005 and 2012, Africa
added 70,000 new hospital beds, 16,000 doctors, and
60,000 nurses. Healthcare provision is becoming more
efficient through initiatives such as Mozambique’s switch
to specialist nurse anesthetists and South Africa’s use of
nurses to initiate antiretroviral drug therapy. The
introduction of innovative delivery models is increasing
capacity still further.
- 3. ©GOLDSTEIN MARKET INTELLIGENCE PAGE 03
Goldstein
Market Intelligence
The business environment: To create a more supportive
environment for business, governments have introduced
price controls and import restrictions to encourage
domestic drug manufacture; required country-specific
labeling to reduce counterfeiting and parallel imports; and
tightened laws on import, wholesale, and retail margins. In
the pharma industry, meanwhile, pharmacy chains are
consolidating, horizontal and vertical integration is on the
rise, and manufacturing is expanding. A flurry of mergers
and acquisitions, joint ventures, strategic alliances,
partnerships, and private-equity deals are further
extending Africa’s markets.
Growing and Ageing Population
Increasing Access of
Pharmaceuticals to Poor and
Middle Class Families Due to
Their Rising Disposable Income
Increasing Focus on Rare &
Speciality Diseases
Innovations in advanced
biologics, nucleic acid
therapeutics, cell therapies and
bioelectronics & implantables
field.
Increasing Cost Controls In Key
Pharma Markets
Decreasing Return on
Investments in Generics Pharma
Market Due to Price Erosion
Tightening of Government
Policies
Decreasing R&D Expenditure due
to Slowdown in Global Pharma
Industry
Inhibitors
Drivers
What are the growth drivers and inhibitors for global
pharmaceuticals industry?
- 4. ©GOLDSTEIN MARKET INTELLIGENCE PAGE 04
Providing Africans with affordable health care could be
realized if pharmaceutical products were produced on the
African continent. The continent faces many challenges
before it will be able produce its own medicines.
.
Goldstein
Market Intelligence
CHALLENGES TO CONFRONT
African and Chinese delegations came together this week
at the Roundtable on China-Africa Health Cooperation to
discuss how Africa can start producing health care
products on the continent. This could help African
countries provide their citizens with a stable supply of
quality medicines.
Feng Zhao of the African Development Bank said that
producing locally could bring many benefits for the
continent. "If you look at the pharmaceutical sector now,
the size is very small compared to the global overall size.
Africa is now less than 1 percent of the global share.” It
has a great potential to grow, the average growth rate is
expected to be more than 10 percent.
The sector would also create high quality jobs and bring
more technology to the continent.
Africa suffers frequent bouts of many preventable
diseases, such as malaria and tuberculosis. But the
medicines to treat these diseases are imported from
outside the continent. And the cost of those imports
weighs heavily on the health care budgets of many
African countries.
- 5. ©GOLDSTEIN MARKET INTELLIGENCE PAGE 05
Lack of Market Understanding Among the Potential
Customers
Goldstein
Market Intelligence
Desire to improve quality is driven by the regulatory
regime
Disparate regulatory requirements
Uneven playing field
1. Poor Regulatory environment
Fragmented markets creates no economy of scale
Left out of major procurement opportunities by
development partners
2. Fragmented market and poor Patronage
All the initiatives risk failing when there is lack of
capital for the manufacturers to implement
Without infusion of capital by Government, companies
are not positioned to improve standards
3. Lack of capital
Expertise for pharmaceutical manufacturing in a GMP
compliant facility still being developed
4. Lack of Technical Capacity
Lack of sound financial and business management
principles
Poor data on market size, demand and competition
5. Inadequate Application of Business Principles
High tariffs on API but low on finished products
Poor vetting of initiatives- example AMFm
6. Lack of Government support and poor vetting of
initiatives
- 6. ©GOLDSTEIN MARKET INTELLIGENCE PAGE 06
Although China has much experience in producing its own
pharmaceutical products, the country still faces a lot of
negative perception towards their medicines, as the World
Health Organization hasn't approved most of them yet.
It will probably take 20 to 30 years before Africa produces
high quality health products, as the industry is in its initial
stages.
But producing health care products in Africa comes with
many challenges. The health systems are not adequate
enough to address some of the challenges that the
continent is facing. That includes human resources for
health, that includes the facilities in terms of hospitals,
clinics, laboratories and all of those things. Then Africa
also have issues around low funding because the health
sector is considered more of a social sector. It does not
get enough funding, both from the government or even the
donors.
Goldstein
Market Intelligence
Many countries, in early days, they are going for low cost
and their quality doesn’t always meet the global
standard. Then gradually they move up the value chain.
And they start producing better products.
For Africa to become a major player in the pharmaceutical
sector, it has to start partnerships with companies outside
the continent that have the technology, the people and
the intellectual property.
The African Union has started with the development of a
Pharmaceutical Manufacturing Plan for Africa to promote
private-public partnerships to push the pharmaceutical
sector.
- 7. ©GOLDSTEIN MARKET INTELLIGENCE PAGE 07
.
Goldstein
Market Intelligence
OPPORTUNITIES TO
CONSIDER
The pharmaceutical market opportunity in Africa is
significant and growing, but manufacturers need to be
aware of the challenges involved in developing viable
market strategies in this fast-evolving region, says a
new report.
Success in these markets will be driven by a
company's ability to address the challenges of both
market and patient access, and overcoming these
hurdles is contingent on rapport-building, local
stakeholder buy-in and trust, says the study.
Opportunities and trends in the African Pharma
In a world of slowing and stagnating markets, Africa
represents perhaps the last geographic frontier where
genuinely high growth is still achievable. Early movers
can take these four steps to pursue competitive
advantage:
Focus on pockets of growth. Africa is not one unified
market, but 54 distinct ones, with wide gaps between
countries in terms of their market size, growth trajectory,
macroeconomic landscape, legal structure, and political
complexities. Over the past decade, ten countries have
delivered more than two-thirds of Africa’s GDP and
cumulative growth. However, much of the opportunity lies
not at country level, but in cities.
- 8. ©GOLDSTEIN MARKET INTELLIGENCE PAGE 08
Goldstein
Market Intelligence
Build strong local teams. Real talent is key and requires
investment in big, effective local marketing and sales
teams. That means hiring more pharmacy
representatives, building teams’ technical skills, and
selecting and developing strong local managers to lead
them. Sales teams also should be set up in a flexible way
that enables them to be responsive to the needs of local
markets. Forge partnerships. Global pharmaceutical
companies need local business partners—manufacturers,
packaging companies, and distributors—to help them
navigate the continent’s many markets, with their widely
varying consumer preferences, price points,
manufacturing, and distribution infrastructures. In the
absence of a pan-African pharma regulatory body, they
also need to invest in local partnerships to understand
varying regulatory environments. Partnerships with
governments are equally important, whether they involve
working with medical opinion leaders to guide research
priorities and secure funding, or collaborating with health
ministries and nongovernmental organizations to provide
public-awareness campaigns, health screening,
treatment, equipment, and training for hospitals and
clinics. Johnson & Johnson, for example, has partnered
with the South African government to introduce an
education program for maternal, newborn, and child
health that operates via mobile-phone messaging.
In fact, our analysis shows that 37 percent of African
consumers are concentrated in 30 cities, which will have
more consuming households than Australia and the
Netherlands combined by 2025.
- 9. ©GOLDSTEIN MARKET INTELLIGENCE PAGE 09
Goldstein
Market Intelligence
Address supply and distribution challenges. In parts of
Africa, supply and distribution mechanisms still pose
challenges: regulations are evolving, transport and
logistics infrastructures are patchy, and lead times can be
long. The ability to innovate the distribution channel and
set up effective operations against this challenging
backdrop is critical to capturing growth opportunities.
Helpful strategies include locating fixed assets in
countries with well-established political and business
structures, outsourcing supply chains to third-party
operators, and partnering with local logistics providers to
identify efficient transport routes. In the key area of
customs and border control, companies should work with
the most reliable agents to minimize shipping delays, use
only bonded distribution centers, and ensure all customs
paperwork is airtight.
- 10. Goldstein
Market Intelligence
©GOLDSTEIN MARKET INTELLIGENCE PAGE 10
About Goldstein Market Intelligence
About the author
bit.ly/3acISRt
Scan the QR code or click the link below
for our study on future of Africa
Pharmaceutical industry.
bit.ly/3kpjE77
Dennis Abraham Ph.D, senior vice president at Goldstein
Market Intelligence, leads GMI's syndicated health and
wellness research. Before joining Goldstein Market
Intelligence, Dennis held a variety of senior leadership
positions in global and regional consulting roles covering
consumer and retail insights across a broad range of
healthcare categories. Dennis has been providing cross-
category strategic insights to healthcare brands for over 12
years on topics including digital disruption, ecommerce, and
healthcare technology. Dennis holds a Ph.d from Havard
University.
Goldstein Market Intelligence helping businesses to be
successful at strategy and take informed decisions to
grow the business in future. Goldstein Market
Intelligence is one of the leading professional services
firms, providing Intelligence Services, Consulting &
Advisory and research related services to clients. We,
at Goldstein Market Intelligence practice works side by
side with chief executives and their teams to create
effective strategies and secure alignment across the
organisation.