Accra, Feb 16 (IANS) As India’s pharmaceutical companies continue to look for greener pastures for growth, the 70 participants in the two-day IPHEX Africa trade exhibition in the Nigerian commercial capital of Lagos will be aiming to increase their exports to western Africa where they see a significant growth potential.
The Pharmaceutical Export Promotion Council of India (Pharmexcil) told IANS in an email exchange that the February 18-19 exhibition aims to showcase “the advanced technologies that are being developed by Indian pharmaceutical companies and also to enable the Indian companies to renew their contacts with Nigerians and also with neighbouring countries.”
The exhibition comes at a time when international consulting firm McKinsey said in a report last year that “the value of Africa’s pharmaceutical industry jumped to $20.8 billion in 2013 from just $4.7 billion a decade earlier. That growth is continuing at a rapid pace”, and predicted that “the market will grow into a $40 billion to $65 billion by 2020”.
McKinsey said the projected growth was good news for pharmaceutical companies seeking new areas of growth as developed markets stagnate, adding that it was equally so for “patients who have gained access to medicines previously unavailable on the continent”.
Mckinsey’s projected that between 2013 and 2020, prescription drugs are expected to grow at a compound annual growth rate (CAGR) of six per cent, generics at nine percent, over-the-counter medicines at six percent and medical devices at 11 percent.
What is likely to work in favour of the Indian companies is Mckinsey’s projection that Africa’s population dispersal 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 infrastructure and healthcare capabilities and urban households have more purchasing power and are quicker to adopt modern medicines,” the report added.
It said that “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 anti-retroviral drug therapy. The introduction of innovative delivery models is increasing capacity still further”.
“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,” the report said.
What this means is that Indian companies will now have to find a way of building partnerships to penetrate this growing market.
Indian companies can take a leaf from Mckinsey’s recommendations that “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 non-governmental organizations to provide public-awareness campaigns, health screening, treatment, equipment, and training for hospitals and clinics,” the report added.
(Francis Kokutse can be contacted at [email protected])