[Ip-health] BMJ: Can (and should) Africa make its own medicines?

Thiru Balasubramaniam thiru at keionline.org
Wed May 27 03:19:45 PDT 2015


Feature Generic Drugs

Can (and should) Africa make its own medicines?

BMJ 2015; 350 doi: http://dx.doi.org/10.1136/bmj.h2178 (Published 28 April
2015)Cite this as: BMJ 2015;350:h2178

Mara Kardas-Nelson, freelance journalist, USA

marajenn at gmail.com

Africa has a huge burden of disease but makes few of its own drugs. Mara
Kardas-Nelsonreports on the region’s nascent pharmaceutical industry and
its chances of success

Support for Africa producing medicines is in vogue these days. The World
Health Organization executive director, Margaret Chan, supports it.1 So
does Michel Sidibé, head of UNAIDS. “The goal is to address health
inequities and build capacity to meet supply shortages for essential health
commodities that cannot be sourced reliably and sustainably from outside
the continent,” they wrote last year.1 Major international organisations
and donors, from the UN Industrial Development Organization (Unido)2 to the
German Federal Enterprise for International Cooperation,3 are providing
technical assistance to make local production happen, and the African Union
has put together a business plan to spur its implementation.4

The rationale for local production is simple: it is assumed that big donors
bankrolling many of Africa’s programmes for HIV, tuberculosis, and malaria,
three of the continent’s biggest killers, won’t stick around forever.
Africa imports 70% of its drugs,5 and if African countries have to pick up
more of the tab, some drugs could instead be produced at home, bolstering
local economies. Local production might also provide a more steady supply
of medicines, ensuring that drugs are immediately available during local
health emergencies and even in the face of international shocks, such as
when the Chinese government closed down its chemical companies during the
Beijing Olympics, leading to shortages of active pharmaceutical ingredients
used by some African countries.6

Local production could also give greater control to overstretched African
regulators, which are battling against low quality drugs, sometimes made in
far-off factories that are difficult to monitor. African companies,
governments, and international organisations that support local production
say the aspiration is for Africa to be able to produce generic drugs, not
patented products, spurring an industry like that of India’s, which has one
of the largest generic industries in the world.7

But making enough medicine for the continent is a long way off. According
to WHO, 37 sub-Saharan African countries have some pharmaceutical
production capacity, but only South Africa makes active ingredients, the
key component of a medicine.8 And even where pharmaceutical companies are
up and running, output is limited—for example, WHO estimates that Ghana’s
pharmaceutical sector, one of the healthier in the continent, is operating
at only 50% capacity.8


African companies face substantial hurdles. Supplies of electricity and
water are often unreliable, and poor roads make transporting goods cheaply,
and efficiently, difficult. Several people—from African drug manufacturers
to representatives of international institutions—told me that it is cheaper
and faster to transport goods from India to Kenya than from Mombasa to
Nairobi (within Kenya).

Finding enough appropriately skilled staff is another problem. Many African
countries produce only handfuls of pharmacists, technicians, and business
managers each year, many of whom leave for greener pastures. And accessing
affordable finance in some countries can be difficult. Take the case of
Zimbabwe, where a once thriving pharmaceutical sector, already gutted by a
series of economic and political embarrassments, was dealt a final death
knell by the 2008 hyperinflation crisis. Alois Muchabaiwa, managing
director of Zimbabwe’s Varichem Pharmaceuticals—in its heydays one of the
region’s most successful companies—says that now the firm can’t get a loan
for longer than 12 months.

Even if companies are successful in starting production, they face steep
competition from Indian generics, which famously supply antiretrovirals at
99% below originator prices. Affordable generics from the country has
helped to fuel a massive international response,9 and Indian generic
producers continue to act as the key supplier of medicines to big donors
like the Global Fund to Fight AIDS, Tuberculosis and Malaria and the US
President’s Emergency Plan for AIDS Relief, whose multibillion dollar
annual budgets fund the overwhelming majority of programmes for these three
diseases in many African countries.10 Indeed, 80% of antiretrovirals
purchased with donor funding in low and middle income countries are made by
Indian manufacturers.11

Fledgling African producers, in need of large and predictable markets in
order to reach economies of scale, want a slice of that pie. But most
international funders require the medicines they buy to be either WHO
prequalified or approved by a stringent regulatory authority like the US
Food and Drug Administration or the European Medicines Agency. (No African
regulatory authorities are considered stringent, and most African companies
prefer to use the prequalified route.)

Tough market

Today, only a handful of African produced drugs are WHO prequalified. And
prequalification doesn’t guarantee procurement from a big donor. “There’s
an expectation that you get prequalified and then suddenly you’re the goose
that gets the golden egg,” says Alastair West, senior technical adviser at
Unido’s local production project. “But all the donors are supplying
medicines for the same diseases, so the market is saturated. It’s very
difficult to compete. There are very low margins.” Uganda’s Quality
Chemicals, one of Africa’s flagship drug companies, has yet to supply
antiretrovirals to any big donors despite getting WHO approval, largely
because its prices are almost double that of the cheapest Indian generics.12

Some local production proponents accuse donors of choking the continent’s
pharmaceutical industry. Wilberforce Wanyanga, a former Unido consultant
and former general manager for Cosmos, a Kenyan drug company, says that
when the Global Fund started supplying antimalarials in the country, it
sourced primarily from companies outside the continent, pushing a healthy
local industry out of the market. He says that before the Global Fund
supported malaria programme was introduced 16 Kenyan companies were making
artemisin based combination therapies. “Now there are only two, because the
Global Fund is supplying everything.”

“You’re actually strangling a country. You need to have generic producers
who can jump in when you have a shortfall of supply,” he says.

Sudip Chadhuri, professor of economics at the Indian Institute of
Management in Kolkata, says the attitude of donors is, “We want to buy from
the cheapest source. We don’t care about industrial policy.” The Global
Fund’s head of communications, Seth Faison, agrees. “We see [local
production] as a practical issue not a political issue. Wherever a company
can produce high quality health products at reasonable prices, we are
interested, no matter where the company is located … We strive to serve
people, not companies, and not governments. We cannot compromise on quality
and price.”

Local production has some important sceptics. For example, South Africa’s
Treatment Action Campaign, which campaigns for better access to care for
people with HIV, says that more expensive, locally produced medicines
should not necessarily be favoured over affordable imports that have been
key to fuelling the international response to the epidemic, especially
given limited health budgets.13 Zafar Mirza, coordinator of the health
systems and innovation cluster at WHO, says that whether African local
production is a good thing “depends on your definition of success. Are you
looking at this from a health perspective or an industrial policy
perspective? You need to ask: which medicine is being produced? Is it
aligned to local needs? Is it affordable? Is it of high quality? A company
may be doing very good business producing only vitamins, or only cough and
cold remedies, which are not good commodities from a public health point of

Although local production champions say that homegrown efforts could
provide “African solutions to African problems,” there’s little indication
that private, profit driven companies in Africa are any more willing than
companies elsewhere to make drugs for neglected tropical diseases such as
sleeping sickness and guinea worm, which disproportionately affect the
continent. “What my shareholders will look at is return on investment,”
says Palu Dhanani, managing director of Universal Corporation, a Kenyan
generics company. “What is the benefit for us developing a product for
neglected diseases when there’s no market for it?”

Christophe Perrin, pharmaceutical coordinator of Médecins Sans Frontières’
access campaign, suggests that companies focus on non-communicable diseases
rather than the oversaturated market for HIV, tuberculosis, and malaria
drugs, in which they can’t compete. “African countries are struck by
cancer, asthma, diabetes. There we see a huge opportunity for African
manufacturers to be ready for the needs of African people. We know the
volumes that are needed in Africa, and the gap in access is enormous.” As a
result of the focus on communicable diseases and an unexpected rise in
conditions such as diabetes and heart disease, researchers say the
continent as facing a “neglected epidemic” of non-communicable disease.14

African governments could do more to nurture budding industries. Countries
could set up regional medicine regulatory authorities, allowing companies
to sell in multiple countries with only one registration, saving time and
money and, importantly, offering expanded markets. Until that happens,
individual regulatory agencies could be strengthened to stamp out low
quality drugs and boost confidence in African regulators—not necessarily
known for their stringent oversight—and by proxy African manufacturers.

Other policies could also be enacted: interest rates could be lowered.
Import barriers, such as tariffs on imported medicines, could be levied.
Countries could decide to buy selected medicines only from local producers,
as has been done in Ghana and Nigeria. Mostly, though, Chadhuri says what’s
needed is political will. “What is the main constraint of the development
of local production in Africa?” he asks. “It’s not the size of the market.
It’s the attitude of the government. Industries do not just develop. They
need to be supported.”


Cite this as: BMJ 2014;349:h2178


Competing interests: I have read and understood BMJ policy on declaration
of interests and have no relevant interests to declare.

Provenance and peer review: Commissioned; not externally peer reviewed.


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