Medicines for Africa I Not all Doom and Gloom - Pharma Exiting African Markets

If there is a bright side to big pharma companies exiting the African market it is this. This could be an opportunity for Africa to accelerate its push towards self-reliance by filling in the gaps left by retreating big pharma companies with enterprises that are more committed to the African market and are willing to be in it for the long haul and benefit from Africa’s demographic dividend of 2 billion people by 2050. The continent needs to improve Africa's attractiveness for investment into the manufacturing sector.

Governments, starting with those hosting Africa’s manufacturing hubs of Nigeria, South Africa Egypt and others could pivot from these pharma exits towards a more sustainable and secure healthcare system across Africa. This could begin with consideration of the best steps that the continent could take to attract investment such as unequivocally rallying behind the African Medicines Agency (AMA) to accelerate the strengthening of regulatory frameworks and improving market conditions.

Collaborations, like the one in which Aspen entered an agreement with Johnson & Johnson to package, price, sell and distribute its vaccine, rebranded as Aspenovax in Africa, offer the kind of model that can be replicated and expanded. Such partnerships would be even more impactful if they go beyond fill and finish agreement to include the actual formulation on the African continent. However, what played out following Aspen-J&J agreement? - where Aspen did not receive any orders from African countries leading it to consider shutting down its newly established vaccine manufacturing operations is the kind of scenario that creates market uncertainty that discourages investment. That partnership was seen as a great solution towards reducing Africa’s reliance on imported Covid-19 vaccines which were often costly and not available. Aspen however received no orders for Aspenovax from African governments leading it to consider closing the 450 million dose production line it had invested in.

After initially considering switching the production line towards anesthetic production, Aspen Plater entered an agreement with the Serum Institute of India Pvt. Ltd. to manufacture and sell four branded vaccines for Africa. Under the Serum agreement, Aspen would produce hexavalent, pneumococcal, polyvalent meningococcal and rotavirus shots - vaccines that are commonly administered in the African context. Aspen’s challenges highlighted the need for policy reform to ensure market access to manufacturers operating on the African continent possibly by prioritizing African made products for African markets and addressing the USD10 billion market opportunity lost to counterfeited medical products each year. Interventions to make Africa’s pharmaceutical business environment favorable for those who chose to invest in the continent and significantly improve ease of doing business, facilitate market access and streamline the many agencies that function as gatekeepers of trade in pharmaceutical to make it more efficient could spur progress.

The National Agency for Food and Drug Administration and Control (NAFDAC) in Nigeria reports seeing an increase in applications for establishing medicines manufacturing operations in the country and have approved a record 105. Reports indicate that 35% of those approved have completed construction of manufacturing facilities and are at different stages of registering their facilities. These new businesses are planning to manufacture products that are critical to reduceing the cost of production in Africa such as active pharmaceutical ingredients (APIs) which are needed for the broader development of pharmaceutical businesses on the continent. ?

For instance, Emzor has begun commercial manufacturing of four active ingredient of four antimalarials in partnership and an additional 6 companies will also be manufacturing APIs in Nigeria. It could be that these companies offer Africa a fresh start to establish operations that are better aligned with its needs filling gaps that big pharma may not have been willing to fill before. In 2009, Sanofi signed a partnership agreement with May & Baker Nig.Plc, Lagos Nigeria to produce four of Sanofi’s brands including anti-infectives and an antimalarial. May & Baker management labelled the deal as an effort to increase the local production of drugs and boost Nigeria’s drug self-sufficiency.

Furthermore, Africa’s nascent manufacturing industry could in the future contract manufacture for pharma companies. The African regulatory environment has adequate capacity to regulate production of medicines even for Europe as recently demonstrated by Aspen which made Covid-19 vaccine in South Africa destined for the European market. In fact a number of local manufacturers are already contract manufacturing on behalf of GSK, Sanofi, Merck, Bayer and others. It is therefore not an unlikely scenario that pharma companies exiting the African market might in the future decode to operate in the African market through contract manufacturing which would be an equally positive contribution towards Africa's manufacturing ecosystem.

In fact, such collaborations could prove an effective driver of the development of Africa’s pharmaceutical sector. This scenario is feasible given Africa’s acceleration towards regulatory maturity driven by the countries aspirations as well as the coming into force of the African Medicines Agency. Such an outcome would be welcome that as it would have favourable outcomes towards security of access of medical products by Africans. These actions would enable the continent to be better prepared for future health emergencies and less dependent on importation to meet its healthcare needs.

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