Healthcare provision in most parts of Africa is very challenging.
The continent has about 15% of the world’s population but 24% of its disease burden. Life expectancy is rising, partly because of better healthcare, including vaccination programmes, but also because of greater food security.
This indicates that some progress is being made, while greater life expectancy and rapidly rising populations mean that even more people require healthcare with each year that goes by. According to the World Bank, there were about 500,000 doctors, 1,250,000 nurses and 1,000,000 hospital beds in Africa in 2012, the year of the most recent continent-wide estimate.
Many more trained healthcare professionals complete their education and training every year but far too many of them find work in other parts of the world, as African governments effectively subsidise North American and European healthcare systems.
HIV/AIDS, tuberculosis and malaria remain the biggest problems but the mortality rate from all three of them is falling. At the same time, the incidence of non-communicable diseases, such as cancer, diabetes and heart disease is increasing. The World Health Organisation has predicted that the death rate from cancer will double on the continent over the next 20–30 years, partly because smoking is becoming more popular.
Higher alcohol consumption will also probably result in a rise in an increased incidence of liver disease. African governments could act now to avoid many of the same problems that the rest of the world has experienced with non-communicable illnesses that are, to a large extent, avoidable. For example, taxation can play a big role in influencing tobacco and alcohol consumption patterns.
African pharmaceuticals are supplied by an increasingly diverse spread of companies, ranging from the international firms that have long dominated the industry, to Indian generics manufacturers, to homegrown producers, while Chinese suppliers are also targeting the continent. The debate over generics is well known: the developers of original medicines have sought to cover their research and development costs by maintaining high prices for their products.
This has put them beyond the financial reach of most African patients but Indian companies in particular have produced copies that can be sold at a fraction of the cost. Most HIV/AIDS antiretrovirals are now supplied in Africa on this basis but battles over patent production continue to be fought from medication to medication.
Generics have undoubtedly benefited African patients but the import of very low-cost Indian drugs is one of the reasons why African producers have just a 20% share of the continent’s pharmaceuticals market. Local manufacturing capacity varies from country to country but all are affected by the tendency of NGOs and inter-governmental donors to buy pharmaceuticals from Western firms or Indian generics producers. Despite this, African factories produce a very wide range of goods, from medicines and vaccinations, to diagnostic test kits, syringes and needles.
However, there have been some notable recent instances of foreign direct investment. In April, pharmaceutical firm Médis, which is owned by emerging markets investor Actis, bought Winthrop Pharma Senegal (WPS) from Sanofi. Hichem Omezzine, a director at Actis, commented at the time: “This acquisition is extremely exciting. Not only will Médis benefit from a world-class facility with significant production capacities and space available for fur ther expansion, but the business is also gaining an extremely strong platform from which to access the sub-Saharan African market.”
A growing market
Actis forecasts that the pharmaceutical market in Francophone Africa will grow at close to 10% a year in value over the next five years and other sources are optimistic about rising demand. Law firm Gowling WLG, which specialises in the African healthcare sector, estimates that healthcare sales will increase from $16bn in 2013 to $60bn in 2020, of which pharmaceutical spending will account for $43bn. The African Development Bank says that “Africa’s pharmaceutical industry is the fastest growing in the world”.
The Nigerian federal government currently spends just 4.5% of its budget on healthcare and less than 1% on pharmaceuticals, but has promised to boost these figures. Eyitayo Lambo, a former Nigerian minister of health, said in May: “Nigeria is still heavily dependent on importation of pharmaceutical products in spite of the existing local capacity. The prices of medicines are unaffordable to the majority of Nigerians who generally pay for them out-of-pocket.”
As in other sectors, it is difficult to know how much African governments should support and protect their own producers. The imposition of duties on imports can drive up prices but create security of supply by encouraging domestic factories. It is now eight years since the East African Community (EAC) removed all duties on finished pharmaceutical products in order to reduce prices; but it maintained import duties on raw materials, pushing up prices for local factories. The proportion of the market controlled by local producers has fallen, so the EAC has now introduced a range of incentives, including giving preferential treatment to locally produced pharmaceutical products in government procurement to boost demand
It is vital that African producers can sell their products in as wide a range of countries as possible. In a recent report, Gowling WLG stated: “Implementing international standards of manufacturing enables domestically manufactured pharmaceuticals to be traded in confidence between countries that have similar manufacturing standards. However, implementation of good manufacturing practices is not a straightforward process and requires the alignment of domestic policies across various government departments such as health, commerce, trade, and industry.”