Bayer Pharmaceuticals
ecent pandemics have triggered calls for deglobalization in the production of medical products to ensure that these products are manufactured closer to those who need them.
A good point to ponder is just why these calls have taken so long to realize the tangible results of making Africa self-sufficient, or at least contribute significantly towards fulfilling the demand for medical products without having to import more than 70% of health products, mostly from India and China (among other source nations).
To fully realize this goal, we need to look at various enabling factors that must be addressed to establish a sustainable journey towards local manufacturing of medical products in Africa.
First, mutual, beneficial partnerships including but not limited to overseas companies and organizations are crucial. The co-existence of global, regional, and local manufacturers provides the necessary synergies to trigger development of the pharmaceutical industry in general. Anecdotal evidence shows that markets which have a good mix and coexistence of local, R&D-based manufacturers and overseas manufacturers tend to have better developed local manufacturing ecosystems overall. Often, local manufacturers and by extension the patient population tend to benefit from the early introduction of the latest medical technologies, expansion of medical education opportunities, and (most likely) passive technology transfer if not specific bilateral initiatives. It is important to cultivate partnerships across these different types of manufacturers and to identify areas of mutual benefit, including but not limited to technology transfer and voluntary licensing. One important player in this co-existence is the government, through policies that encourage these partnerships. It is worth noting that unilateral calls for immediate 100% localization of pharmaceutical manufacturing at the expense of the above mix of local/overseas manufacturers with little regard to other factors such as available local capacity could harm the pharmaceutical industry in the respective country if this results in the mass exit of R&D-based and overseas manufacturers.
The last decade of harmonization and convergence of regulatory requirements and events and efforts culminating in the founding of the African Medicines Agency through the African Medicines Regulatory Harmonization (AMRH) initiative presents a unique opportunity for local pharmaceutical production. One outcome has been the progressive strengthening of the health products and technologies regulatory systems. The introduction and sustained presence of well-developed alternative regulatory pathways presents an opportunity for local producers to get to market faster, even in the absence of special treatment from their native countries. Reliance practices, especially between countries in the regional economic communities (RECs) and later within AMA framework, will continue to support these efforts. It is exciting to note efforts aimed at establishing a continental framework for reliance thanks to AUDA-NEPAD and partners. The WHO Global Benchmarking Tool (GBT) assessments and the race to Maturity Level 3 (ML 3) by countries in Africa (with Tanzania, South Africa, Egypt, Zimbabwe, Nigeria, and Ghana having already attained ML 3 status, and a few others expected in the near future) will certainly play an important role, as it will allow countries to have regional or even bilateral agreements for mutual recognition, seen as the apex of reliance and a great enabler for regional manufacturers to bring products to market. For this to work, however, other enablers such as fast-tracking the free movement of goods as expected via the African Continental Free Trade Area (AfCFTA) will be crucial.
The excessive fragmentation of the local production industry and “me too” type of products have also held the region back from innovative growth. Introducing harmonized regulatory standards via Regional Economic Communities (RECs) and ultimately via AMA will help countries consolidate available markets also occasioned by the free movement of products. However, multiple administrative requirements and national requirements (such as pre-registration testing, trade barriers between countries, etc.) keep us from accelerating realization of this goal. It is crucial for countries to identify administrative pain points through their national regulatory agencies and progressively address them. By extension, consolidation of manufacturing should advance work towards strategic pool procurement, another important market development tactic that will support growth of the medical products market in Africa and make it attractive to more investment.
Local manufacturing is not only for companies currently located in/on the continent; overseas companies aspire to relocate at least some of their production activities to the African continent. However, they are often constrained by the limited predictability of the operating and regulatory environments in Africa, obscure signals of market need, and other circumstances. A recent case in point is the recent exodus of major companies from sub-Saharan Africa.
In such cases, conducting a proof-of-concept assessment is critical before full-scale production relocation, even for the most determined manufacturers. Unfortunately, the current environment doesn’t seem to easily accommodate this “in-between” of local and overseas production. Herein lies an important opportunity: Put together a clear framework for manufacturers that wish to transition from global to local/regional production hubs in Africa, because the lack of clarity in this process can hinder the smooth transfer of production activities. It is therefore important for the regional/national authorities to consultatively develop practical guidances and frameworks for industry to successfully implement these transfers. These should recognize, for example, the phased introduction of localization initiatives and offer similar benefits such as fast-tracked registration timelines.
Manufacturing of medical products must in the end make economic sense. To join the race for local manufacturing, Africa needs to exercise caution not to join the bandwagon without assessing where it really has a competitive advantage/edge. Production costs for most essential products are more favorable, for example, in India and China, perhaps because these countries have made systematic investments in local production for decades. Policy makers in Africa should recognize and realize that producing pharmaceutical products locally is not a complete solution. Identifying what makes economic sense and key enablers which support the manufacturing ecosystem such as power supply, road infrastructure, health systems capacity, tax incentives, and sustainable supply of raw materials and other inputs are equally important. Africa should start from where the continent has a competitive edge.
Finally, market-shaping factors need to be accelerated. A clearly defined market, including tax policies and differential pricing, must be nurtured to make the market more attractive. It is important to create a manufacturing ecosystem that favors and supports “would-be” manufacturers. This includes introduction of common and shared services like clinical research organizations (CROs), packaging materials suppliers, pharmaceutical manufacturing waste management, and others. It is also important to take advantage of government initiatives such as special economic zones, innovation campuses, and regional centers of excellence, all meant to support mainstream manufacturers with the auxiliary services they require, closer to home (and hopefully at competitive prices).
In conclusion, local and regional manufacturing of medical products in Africa is long overdue. However, careful consideration is required to address the elements highlighted above. We would do well to remember that this is a marathon, not a sprint. But with the right investments, intentions, and sustained support from all stakeholders, this is certainly a reachable target.