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International generic drug manufacturers are showing
an unusual interest in helping the ailing and
thriving drug industry in Africa, a continent
otherwise deemed irrelevant in the 600 billion
dollar-global pharmaceutical industry. The question
now remains, if those of us on the receiving side
are prepared not only in our ability to absorb added
resources in the form of technology transfers, but
also in our capacity to mobilise local resources to
manage what we are being offered.
I could not help but think about these challenges
ahead while seated in a conference room inside the
United Nations Conference on Trade and Development (UNCTAD)
in Geneva, Switzerland, on November 15, 2007. I was
one of the two African delegates, representing
Bethlehem Pharmaceuticals - the other being from
Tanzania - who were invited to attend a consultative
meeting on how to enhance local resources and
harmonise them with knowledge that could be acquired
from industries in developing nations so that we,
the local operators in Africa, can boost our
capacity to manufacture essential drugs. To be
frank, this is an opportunity too good to be true
for sub-Saharan Africa , a region with 800 million
people, of whom 90pc live below poverty line; a
population of 81 million belongs to Ethiopia.
Africa is in the forefront of regions that are
challenged by the wide gap between the needs of its
population to get drugs and its ability to afford
importing them from drug manufacturers found in
developed nations. Drugs to combat epidemics such as
HIV/Aids, malaria and tuberculosis cost African
economies 18 billion dollars a year. Although
insignificant to the 250 billion dollars a year drug
users spend in the United States (US), this amount
is certainly a huge burden on many African
economies, hence their reliance on locally
manufactured affordable generic medicines.
High prices are only part of the picture. Not many
of the drug manufacturers in the developed world are
keen to invest in research and development on drugs
that may cure tropical diseases: Between the year
2004 and 2006, there were over 1,400 newly generated
drugs but only 16 were for the treatment of tropical
diseases.
It is this grim reality of Africa that I believe
prompted the consultative meeting held in Geneva
recently, organised by UNCTAD in cooperation with
the Ministry for Economic Cooperation and
Development (BMZ) and Capacity Building
International (inWEnt), both of Germany.
The meeting was exploring ways on how to strengthen
pharmaceutical productive capacities as key to
developing countries and least-developed countries (LDCs),
in order to ensure better access to medicines. A
number of issues played an important role, ranging
from economic and pharmaceutical to legal aspects.
Both investment and intellectual property rights (IPRS)
provide essential tools to promote local
pharmaceutical production and supply capacities.
To ensure that these systems generate beneficial
effects, cooperation is needed not only among the
respective governments and their agencies such as
ministries of health and trade, patent offices,
investment and drug regulatory authorities, but also
among other parties such as local and foreign
companies - both generic and research and
development (R&D) based - academics, and civil
society.
Regional markets could potentially attract foreign
investors and serve as a basis for joint ventures or
other forms of collaboration between local and
foreign producers to promote technology transfers.
Collaborative approaches to the promotion of local
pharmaceutical production and the use of
flexibilities provided under the World Trade
Organisation (WTO) agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS)
could generate win-win situations by taking
advantage of economies of scale, with benefits for
both the host country and foreign producers.
The objective of the meeting was to discuss options
for strengthening local capacities of the
pharmaceutical sector in developing and LDCs,
including through investment, IPRs, and trade.
Pharmaceutical production normally occurs at three
levels: primary, secondary and tertiary. The primary
ones deal, among other processes, with the
production of Active Pharmaceutical Ingredients
(APIs), while the secondary ones produce finished
dosage forms by importing APIs from non-African
countries. Tertiary levels do only packaging and
labelling.
Out of the 46 sub-Saharan African countries, 37 have
pharmaceutical companies. In the continent as a
whole, only South Africa barely reaches primary; 34
others are categorised as secondary, while 25 are
tertiary. The Ethiopian pharmaceutical industry is
included in the secondary level.
If research and development centres are to be
established on a national or regional level, it will
be possible to address poor-man-diseases problems
through local API manufacturing. Multinational
pharmaceutical companies have so far reached but a
fraction of this huge population. They always have
targeted the upper classes.
European international pharmaceutical manufacturers
should not shy away from supporting local
manufacturers in LDCs, because for it offers high
returns in the long-run, and they will be
discharging their corporate responsibility by
providing the poor and needy with viable and more
affordable generic drugs through working with local
manufacturers by supplying the most needed working
capital and technology transfers.
Ethiopia, unlike its past miserable history, is now
going through a renaissance. The country has
registered consecutive 9.5pc-plus gross domestic
product (GDP) growth for the last four years. It has
seen 14 new privately owned pharmaceutical companies
during the last 16 years. Recently, the government
has redrawn its long-term pharmaceutical strategic
plan and has added the sector to its core industries
that will make local pharmaceutical manufacturing
the most rewarding investment of all time.
This reminds me of a phrase from Stephan Jennings,
founder and chief executive officer (CEO) of
Renaissance Capital:"If Russia was a
once-in-a-lifetime opportunity, sub-Saharan Africa
is a second once-in-a-lifetime opportunity. Africa
is going through an enormous renaissance and unlike
Russia in the 1990s. It is not a matter of imagining
that it might happen; it is happening."
Industry operators in the developed world have began
to subscribe to such views; what I feel is remaining
is our ability to do business with them. Are we
ready?
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