Investing in Pharmaceuticals in Central West Africa

Investment ra+onale The African generic drugs market is totally reliant on foreign sources. almost 90% of available medicines come from abroad but do not cover the needs of the popula=on. The popula=on con=nued access to quality fairly priced, safe and effec=ve essen=al medicines accessible is a major challenge of na=onal drug procurement agency.

Key issues in pharmaceu+cal drugs The development of the industry the pharmaceu=cal in Central West Africa requires concerted ac=on across manufacturers, na=onal regulators, government, wholesalers and others stakeholders to create an environment favorable for industry to realize its full poten=al

Counterfeit and sub-‐standard drugs are a significant problem in the Central West African region. Pharmaceu=cal products of dubious origin are traded through informal channels There are oIen poorly documented processes in the quality control system that can lead to the manufacture of sub-‐standard drugs. However, Nigeria is the second largest producer of counterfeit medicines, accoun=ng for about 23% of counterfeit medicines distributed worldwide aIer India which is thought to account for about 35%; and Pakistan, 13.3% . In Africa as a whole, 25 to 50 percent of the pharmaceu=cal market is counterfeit, with Nigeria being the most affected, accoun=ng for 50 percent of the total sales of fake drugs (Chioma Joy Onwuka. 2010. The School of Pharmacy, University of London. The SituaBon of Medicines counterfeiBng in Africa). Another serious issue in the pharmaceu=cal sector is corrup=on. In the processes in the selec=on and delivery of generic drugs in general, procurement is par=cularly suscep=ble to corrup=on. Countries should promote a documented open bidding process that prevents personal discre=on in the selec=on of suppliers. Sub-‐op=mal policies, inefficient and incompetent management, and conscious viola=on of rules for personal gain are other observed problems in the sector that

Generic Drugs in Central West Africa Execu+ve Summary

Key findings

–  Public pharmaceu=cal ins=tu=ons and NGOs are principal generic buyers –  Nigeria, Democra=c Republic of Congo and Cameroon are the only countries in the region to have pharmaceu=cal

industries. –  Eurapharma-‐CFAO, OA VISION SANTE; UBIPHARM and Phillips Pharmaceu=cals Ltd with their distribu=on

network in the region are well posi=oned to benefit from the regional market –  The absence of transparency in tenders and awards process associated with the lack of code of conduct

governing the behavior of public procurement agencies in their interac=ons with sales representa=ves and wholesalers.

–  The marke=ng prac=ces of the pharmaceu=cal industry (rela=on between doctors and drugs representa=ves): doctor’s decision as to which drugs to prescribe may be influenced by pressure from pharmaceu=cal companies

–  Failure of states to control the pharmaceu=cal sector and enforce regula=on illustrated by taxability of the informal pharmaceu=cal sector through ci=es taxes makes informal trade legal, leading to the indirect promo=on of illicit and counterfeit drug market

–  Easy access of good-‐quality, cost-‐effec=ve, safe and efficacious medicines, medical personnel good prac=ce and the general popula=on educa=on on generics efficacy will determine the growth of generics market.

–  companies have forged strategic alliances with branded pharma for the marke=ng rights and exclusivity to certain generic blockbusters

–  The introduc=on of na=onals health insurance in the region would boost the region’s generics market

Generic Drugs in Central West Africa Execu+ve Summary

§  What is the research about?

This research report focuses on the situa=on of pharmaceu=cal generics (procurement and distribu=on) in Central West Africa, and address the present and future investment opportuni=es. We will also take a look at why some African countries produc=on of generic drugs failed or succeeded and which companies or ins=tu=ons are best posi=oned to benefit from future growth in this part of the con=nent

§  Why are we doing this research?

In developing countries ensuring the popula=on’s access to quality essen=al medicines at affordable prices is among the prime challenges facing many governments Africa’s healthcare industry is characterized by a huge gape between the private and public sectors in terms of healthcare delivery. In Africa Public facili=es provide more than two-‐third of healthcare services. The high burden of diseases con=nue to place considerable strain on the public health system in many African countries including Angola, Cameroun, Central African Republic (CAR), Chad, Congo, Democra=c Republic of Congo (DRC), Equatorial Guinea, Gabon and Nigeria.

Because healthcare is cri=cal in any effort to emerge and develop this sector is con=nuously subsidized by public, private and NGOs Funds. All efforts (government and non governmental) are directed on making healthcare more accessible and affordable for the general popula=on. As a result there is a great opportunity the supply of a wide range of medical drugs, diagnos=c tools, hospital equipment and allied medical products. However due to budgetary restrain, the African market is price-‐sensi=ve. Buyers are looking for high quality and compe==vely priced products.

Generic Drugs in Central West Africa Research Introduc+on

Generic Drugs in Central West Africa

§  Who should be interested in that research report?

o  Investment companies that have already invested in the pharmaceu=cal sector of this region

o  Investment companies looking to invest in the region o  Local companies looking to growth their market share or to enter new markets within

the region o  Pharmaceu=cal companies either involved in the region or planning to get involved in

the region o  Financial ins=tu=ons that commit funds to government programmes o  Na=onal states and na=onal ins=tu=ons of the countries studied

Research Introduc+on

§  Invest’in market assessment integrates: an assessment of healthcare systems and na=onal states

priori=es, quan=fica=on of need, market characteris=cs and compe==ve landscapes

§  Informa=on is gathered through extensive secondary research, primary research (telephone and

face-‐to-‐face interviews with countries specialists and stakeholders), beneficiaries, service users, the general public experiences and percep=ons

Generic Drugs in Central West Africa Research Methodology

§  For the purpose of its research programme, Invest’in divides Africa into five regions: Central West Africa, East Africa, North Africa, Southern Africa and West Africa

§  The Central West Africa region includes nine countries: Angola, Cameroon, Central African Republic, Chad, Congo, Democra=c Republic of Congo, Equatorial Guinea, Gabon and Nigeria o  Central West Africa has a total popula=on of is 284.5 million, which represents a third of Africa’s total

popula=on

Generic Drugs in Central West Africa Market Segmenta+on: Geographic Scope

284.5 (26%)

821.77 (74%)

Popula+on (in million)

Central West Africa

Rest of Africa

o  Its cumulated GDP accounts for 23% of Africa’s total GDP over the past five years (2006-‐2010)

Generic drugs in Central West Africa

Market Segmenta+on: GDPs and Economies Growth


o  Two of 20 world’s fastest growing economies for the past five years (average growth 2006-‐2010) can be found in the region

2006-‐2010 average growth

ü  Angola is the world’s 4th fastest growing economy of the past five years (11.95%). Africa 1st ü  Equatorial Guinea is the 16th fastest growing economy of the past five years (7.93%). Africa 4th ü  Nigeria is the world 31st fastest growing economy of the past five years (6.69%). Africa 12th ü  Democra=c Republic of Congo is the world 49th fastest growing economy of the past five years

(5.52%). Africa 16th ü  Congo Brazzaville is the world 56th fastest growing economy of the past five years (5.24%). Africa

20th ü  Central African Republic is the world 121st growing economy of the past five years (2.9%). Africa

41tst ü  Cameroon is the world 123rd growing economy of the past five years (2.84%) Africa 42nd ü  Gabon is the world 128th growing economy of the past five years (2.66%). Africa 43rd ü  Chad is the world 171st growing economy of the past five years (0.54%). Africa 49th

Market Segmenta+on: GDPs and Economies Growth


GDP Real Growth 2006-2015

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

Countries

GD

P g

row

th

2006

2007

2008

2009

2010

2011 (P)

2012 (P)

2013 (P)

2014 (P)

2015 (P)

2006 18.6 3.2 3.8 0.2 5.1 1.3 1.2 6.2 6.1

2007 22.7 3.5 3.7 0.2 6.3 21.4 5.6 6.4 -1.6

2008 13.8 2.9 2.0 -0.4 6.2 10.7 2.3 6.0 5.6

2009 2.4 2.0 1.7 -1.6 2.8 5.3 -1.4 7.0 7.5

2010 2.3 2.6 3.3 4.3 7.2 0.9 5.7 7.9 8.8

2011 (P) 7.5 3.8 4.3 5.7 6.7 5.0 4.2 6.9 8.4

2012 (P) 8.5 4.2 5.3 5.3 8.4 3.5 6.4 8.0 10.2

2013 (P) 7.7 5.9 6.4 6.9 8.2 2.9 4.8 7.6 4.6

2014 (P) 7.6 6.2 7.1 5.7 9.7 4.3 5.4 7.9 3.2

2015 (P) 7.3 6.5 7.3 4.3 8.2 2.5 4.7 7.7 4.2

Angola CameroonCentral African

RepublicChad

Democratic

Republic of the

Congo

Equatorial

GuineaGabon Nigeria

Republic of the

Congo

Market S

egmen

ta+o

n: GDP

s and

Econo

mies G

rowth

Gen

eric Drugs in Cen

tral W

est A

frica

P = prévisions

§  The cumulated number of people living in Central West Africa is 284.5 millions. This represents about a

third (34%) of Africa’s total popula=on §  The most populous country of the region Nigeria (154.3 million), followed by the Democra=c Republic of

Congo (71.0 million), Cameroon (20.8 million), Angola (17.0 million), Chad (10.6 million), Central African Republic (4.5 million), Congo (4.0 million), Gabon (1.6 million) and Equatorial Guinea (0.6 million)

Regional Snapshot: Demographic: Key fact


17 20,8 4,5

10,62

4

71

0,651 1.587

154.3

Popula+on (in million)

Angola

Cameroun

Central African Republic

Chad

Congo (Brazzaville)

Democra=c Republic of Congo

Equatorial Guinea

Gabon

Nigeria

Africa’s healthcare industry is characterized by a huge gape between the private and public sectors in terms of healthcare delivery. In Africa Public facili=es provide more than two-‐third of healthcare services. The high burden of diseases such as HIV/AIDS, Malaria and Tuberculosis con=nue to place considerable strain on the public health system in many African countries including Angola, Cameroun, Central African Republic, Chad, Congo, Democra=c Republic of Congo, Equatorial Guinea, Gabon and Nigeria. Health services delivery in most of these countries is characterized by shorkalls in health coverage of and limited access to health care marks of rather neglected healthcare systems Because healthcare is cri=cal in any effort to emerge and develop this sector is con=nuously subsidized by public and NGOs Funds. All efforts (government and non governmental) are directed on making healthcare more accessible and affordable for the general popula=on. As a result there is a great opportunity the supply of a wide range of medical drugs, diagnos=c tools, hospital equipment and allied medical products. However due to budgetary restrain, the African market is price-‐sensi=ve. Buyers are looking for high quality and compe==vely priced products.

Generic Drugs in Central West Africa Regional Snapshot: Healthcare Landscape

0 20 40 60 80 100 120

Angola

Cameroo

n

Central

Afric

an

Chad

Congo

DR Con

go

Equa

toria

l Guine

a

Gab

on

Nigeria

South Afric

a

Europe

Life expectancy

Basic healthcare access / primary health care access as % of the popula+on

•  Healthcare coverage and life expectancy


Healthcare capaci+es

0

10

20

30

40

50

60

70

80

Angola

Cameroo

n

Central A

frican

Re

public

Chad

Congo

DR Con

go

Equa

toria

l Guine

a

Gab

on

Nigeria

South Afric

a

Europe

Physicians per 10,000 people

Nursing and midwifery personnel per 10,000 people

Number of beds per 10,000 inhabitants

Regional Snapshot: Healthcare Landscape

Expenditure on health

0 10 20 30 40 50 60 70 80 90

Angola

Cameroo

n

Central A

frican

Re

public

Chad

Congo

DR Con

go

Equa

toria

l Guine

a

Gab

on

Nigeria

South Afric

a

Europe

General government expenditure on health as % of total expenditure on health

Private expenditure on health as % of total expenditure on health

Generic Drugs in Central West Africa Regional Snapshot: Healthcare Landscape

§  It has been said that the “cri=cal aspect of strengthening health systems lies with improved governance, based on principles of decentralisa=on; inclusive representa=on; defined cons=tuency and mandate; and democra=c mechanisms of selec=on and accountability” (Dan Kaseje 2006 Healthcare in Africa: challenges, opportunity, and an emerging model for improvement).

§  Invest’in argues that poli=cal stability should be added to the list of prerequisites to guarantee a good healthcare system.

§  Although all countries in this study claim to be democracies and despite the regain of poli=cal stability in Angola, Central African Republic, Chad, Congo, the Democra=c Republic of Congo and even Nigeria, transparency and accountability are not yet current prac=ces (Habibat A Garuba et al. 2009 Transparency in Nigeria's public pharmaceu=cal sector: percep=ons from policy makers; UNAID Angola Health System Assessment 2010; Africa Economic Outlook 2011)

§  Nevertheless, looking at these countries Na=onal Health Development Plan they have understood

that true effec=ve economic development cannot be achieved without a strong health system, which guarantees basic healthcare access to the grand majority of the popula=on

§  Thus strengthening health system access to quality care is on the priority list of these countries

Regional Snapshot: Poli+cal landscape


§  The latest analysis done by Africa Magazine (2011) on the state of African economy, which integrates mul=ple parameters including: business environment, infrastructure, economic and finance policies as well as economic well-‐being and quality of life places several Central West African countries in the lower quar=le

§  Gabon is the highest ranked at 19th place, followed by Nigeria (26th), Equatorial Guinea (29th),

Cameroon (30th), Congo (34th), Angola (44th), Chad (44th), Central African Republic (50th) and the Democra=c Republic of Congo (51st)

Generic Drugs in Central West Africa Regional Snapshot: Economic Health

Gabon Rank 19

Nigeria Rank 26

Equatorial Guinea Rank 28 Cameroon

rank 30 Congo (Brazzaville) Rank 30 Angola

Rank 44 Chad Rank 49

Central African Republic Rank 50

Democra=c Republic of Congo Rank 51

•  Several African countries are already trying to produce their own medicines. Kenya, DR Congo, Nigeria, South Africa and Tanzania, for example, have adopted policies to canalize investment into development, produc=on and procurement of drugs for their popula=ons.

•  With this awareness, countries like Congo Brazzaville and Gabon have tried to develop

their own produc=on of generic drugs without success.

•  Cameroon has just embarked itself on the produc=on of generic. Launched by the company Cinpharm, the Cameroonian plant is described as one of the most modern pharmaceu=cal company in West and Central Africa with a produc=on capacity is of 1.5 billion tablets, 150 million capsules and 25 million boples.

Generic Drugs in Central West Africa Regional Snapshot: Pharmaceu+cal Industry

Generic Drugs in Central West Africa Principal in flows of pharmaceu+cals to Central West Africa

China ± $100.63 Mn

North America ± $8 Mn

India ± $282.76 Mn

Brazil

± $1 Mn

Africa ± $30 Mn

EU27 ± $767.07 Mn


Drugs imports trend by countries 2006-‐2010

•  x

0 $

50 000 000 $

100 000 000 $

150 000 000 $

200 000 000 $

250 000 000 $

300 000 000 $

350 000 000 $

2006 2007 2008 2009 2010

Angola

Cameroon

CAR

Chad

Congo (Brazzaville)

DRC

Equatorial Guinea

Gabon

Nigeria


•  Apotex •  Aspen •  AstraZeneca •  Baxter •  Cipla •  Dr. Reddy’s •  Greenstone •  Hospira •  Lupin

Leading Generics Companies with Representa+on in the Region

•  Mallinckrodt •  Mylan •  Orchid Chemicals & Pharmaceu=cals •  Par Pharma •  Ranbaxy (Daiichi Sankyo) •  Sandoz (Novar=s) •  Sun Pharmaceu=cal •  Teva Pharmaceu=cal


Global Interest in Generics Market

Major pharmaceu=cals company such as Sanofi-‐Aven=s, GlaxoSmithKline, Pfizer, Merck and Abbop are venturing or venturing back into generics through acquisi=on or partnerships. Example:

•  Pfizer signed an agreement with Aurobindo Pharmaceu=cals (India) and Strides Arcolab (India)

•  Ranbaxy was acquired by Daiichi Sankyo •  GlaxoSmithKline have signed agreements with South Africa’s Aspen Pharmacare,

Dr. Reddy’s •  Sanofi-‐Aven=s acquired Actavis, Zen=va, Helvepharm, Kendrick and other •  Abbop signed a collabora=on agreement with Zydus Cadila

With more and more blockbuster drugs losing patent protection, the global interest in generics will keep on growing.


Strategy to Tape into Africa Generic Drugs Market

Pharmaceu)cal generics companies invest in African generic drug industry or partner with African companies

•  Cipla invested in Cinpharma Cameroon and is working with the Gabonese Phamaceu=cal Office

•  GlaxoSmithKline have signed

agreements with South Africa’s Aspen

•  Adcock, which markets Merck products in South Africa is using its holding in Ghana’s Ayrton Drug as a hub from which to expand in western African markets such as Nigeria

Increased Market Share

Affordable generics

Acquisitions/ Collaborations

Value Added Generics

Chain distribution /

Chain pharmacies

Generic Drugs in Central West Africa Procurement and distribu+on system

Private sector

Multinationals

Local manufacturer

Local wholesalers

Local distributors

Local pharmacies

Public sector

International agencies / NGOs

Government National procurement services

Government Regional and district storage and

distribution services

Public health services

Generic Drugs in Central West Africa Distributors with an Interes+ng Regional Network

•  Eurapharma-‐CFAO (Algeria, Benin, Burkina Faso, Cameroon, Chad, Congo, Côte D'ivoire, Gabon, Guinea, Kenya, Madagascar, Mali)

•  OA VISION SANTE (OA VISION SANTE has an extended network of pharmaceu=cal sales

representa=ves in Angola, Central African Republic, Chad, Congo, Democra+c Republic of Congo, Gabon and Nigeria. In Benin, Cameroon, Côte D'ivoire, Senegal and Togo OA VISION SANTE is collabora=ng through partnerships with local networks. OA VISION SANTE is nego=a=ng with local partners in Burkina Faso, Equatorial Guinea, Guinea and Niger.

•  Phillips Pharmaceu+cals Ltd (Nigeria, Kenya Rwanda, Tanzania, Uganda and Zambia) •  UBIPHARM (network of partners: Burkina Faso, Cameroon, Congo, Côte D'ivoire, Gabon,

Madagascar, Mali, Niger, Senegal and Togo)


Working insurance scheme in the region Mandatory health Insurance (cover 2% to 6% of the popula)on) In all Central West Africa countries all government or public servant and their family (wives and children) are covered by a health insurance. Workers from private sector (+ Family) are also covered. Voluntary Health Insurance There are also volunteer healthcare insurance scheme

–  Privates Healthcare Insurance –  Mutual health organiza=ons

In addi)on to all above Only Gabon has a Public Healthcare Insurance in place. Nigeria has also a Na)onal Health Insurance Scheme but its current coverage do not exceed 4%

Health Insurance

Generic Drugs in Central West Africa Na+onal and Universal Health Insurance Scheme

Countries Year of / for Na+onal Health Insurance or Universal Health Insurance introduc+on

Types of Insurance Na+onal Health Insurance Coverage

Angola 2009 (Na=onal Insurance Company of Angola (ENSA))

Private (affordable) ND

Cameroon •  2005 (Mutual health organiza=ons (MHOs)), •  In study: Universal Health Insurance (CNAM) Launch date planned for 2012

•  MHOs: voluntary community health Insurance • CNAM: Public (Universal)

Less than 2% (MHOs); objec=ve reach 40% MH coverage by 2015

Central African Republic 20 In study: Universal Health Insurance (CNAM) Launch date planned for 2012

NA

Chad 2010 (Mutual health organiza=ons (MHOs), MHOs: voluntary community health Insurance

<1%

Congo In study: Universal Health Insurance. Launch date planned for 2012

Public (Universal)

Working towards making the Universal Health Insurance scheme a reality by 2013

Democra=c Republic of Congo 200 (Mutual health organiza=ons (MHOs)) MHOs: voluntary community health Insurance

<1%

Equatorial Guinea ND ND ND

Gabon 2009 Universal Health Insurance (CNAMGS) Public (Universal) 20-‐30% (CNAMGS) popula=on enrollment con=nue

Nigeria 2005 Na=onal Health Insurance Scheme (NHIS) Public 4% coverage Working towards making the scheme universal NHIS intend to cover 40% of the popula=on by 2013


Countries from Central West Africa region including Cameroun, Central African Republic, Chad; Congo (Brazzaville), Democra=c Republic of Congo, Equatorial Guinea, and Gabon, in the context of the French-‐speaking countries associa=on of procurement centrals and of the economic and monetary community of central Africa have decided to standardize their pharmaceu=cal regula=ons and their tender policies (mechanisms for evalua=on and selec=on of interna=onal sources of generic drug and marke=ng authoriza=ons).

Toward Standardiza+on of Policies and Tender Applica+on Condi+ons in the Public Pharmaceu+cal Sector


•  2011: Levaquin (ID an=-‐infec=ve); Liptor, Clexane (CVD)

•  2012: Crestor, Seroquel, Plavix and Diovan (CVD); Actos, Singulair, Enbrel (AID)

•  2013: OxyCon=n, AcipHex and Sere=de (PIC)

•  2014: Celebrex, (AID) •  2015: Spiriva (AID)

Pain and Inflammatory condi+ons (PIC) Infec+ous disease (ID) An)-‐infec)ves (bacterial,viral and fungal) •  Malaria •  Intes=nal parasites •  Bacterial infec=ons •  HIV/AIDS •  TB Cardiovascular Diseases (CVD) and Auto

Immune Diseases (AID) •  High blood pressure/hypertension •  Hypercholesterolemia/hyperlipidemia •  Diabetes

Leading therapeu+c areas Expiring drug patents by therapeu+c area

The major part of African consumers are “price-sensitive” rather than “price-insensitive” which an advantage for the generics industry


Country Analysis: Angola

Angola or the Republic of Angola is a country in south-central Africa bordered by Namibia on the south, the Democratic Republic of the Congo on the north, and Zambia on the east; its west coast is on the Atlantic Ocean. Angola is member of the Economic Community of Central African States (ECCAS); and one of the Africa’s largest resource-rich countries in the region


Angola has experienced increasing poli=cal stability since the end of their civil war in 2002 and rapid economic growth with an average of 10.22% per year from 2003 to 2011 (5.9% in 2011) and a projected growth of 11.1 % in 2012. Improvement of health services is one of Angola greatest challenges. The government is the largest source of health financing; its contribu=on represents 81% percent of total health expenditures. Private expenditure on health represents less than 20 % of total expenditure on health. Only 5% of Angola total expenditure is dedicated to health (less than the African median value of 9.1%). Health service delivery is organized into three levels of care (primary, secondary, and ter=ary) corresponding to the three levels of government (district, provincial, and na=onal). Angola coverage of basic health services is es=mated at 42%. The chronic shortage of essen=al medicines and supplies at the district level is a problem that needs to be addressed urgently.

Angola: Introduc+on

A Young Popula+on

§  Angola has a popula=on of nearly 17.0 million §  The urban popula=on represents 56.0% of the total popula=on §  The popula=on is predominately young, with 43.7% below the age of 14, 53.5%

between the age of 15 and 64 years old and 2.8% 65 years old and older

With almost half of the popula)on below the age of 14, paediatric disease and the availability of paediatric drugs should be a healthcare priority.

Angola Popula+on

Peace and high economic growth rate since 2002

§  Angola has experienced increasing poli=cal stability since the end of the civil war in 2002 and rapid economic growth with an average of 10.2% per year from 2003 to 2011 (5.9% in 2011) and a projected growth of 11.1% in 2012

§  The gross na=onal income per capita (US$ 5,200) is 20.0% higher than the

average for the region §  Angola GDP per capita is es=mated at US$ 8,700 §  Angola’s economic figures show that the country has to poten=al to face its

current difficul=es, on the condi=on that good governance principles are respected

Angola Economic growth

Poor health socio-‐economic development

§  Despite its abundant natural resources (oil, diamond, iron), Angola con=nues to score badly on most global measures of health socio-‐economic development

§  The literacy rate in Angola is es=mated at 67.4% only

Angola Health socio-‐economic development

§  Health services delivery is organised into three levels (primary, secondary and ter=ary) corresponding to the three

levels of government (district, provincial and na=onal) §  With 2,409 facili=es (9 central hospitals, 45 general hospitals, 155 district hospitals, 359 health centres and 1,841

health posts), Angola coverage of basic health services is es=mated at 42.0% §  Angola has a ra=o of hospital beds es=mated at 8 beds per 10,000 inhabitants §  The Na=onal Directorate of Medicines and Medical Supplies (Direcção Nacional de Medicamentos e Equipamentos –

DNME) is responsible for developing the strategic planning and implementa=on of norms regarding the produc=on, importa=on, procurement, use and maintenance of all appropriate technologies, including medicines, diagnos=cs, surgical supplies, and other medical commodi=es. This includes ac=vi=es that impact on both the public and private sectors, and the rela=onship between them

§  Chronic shortage of essen=al medicines and supplies at the district level

§  In Angola, life expectancy at birth is 52 years §  Major causes of death for children under five years of age include preventable or easily treatable condi=ons such as

pneumonia, diarrhoea, malaria and malnutri=on

Angola Healthcare service delivery

Pharmaceu+cal Generics

Market assessment

Angola

One-‐way pharmaceu+cal trade flow •  Angola pharmaceu=cals products are for the big part imported

–  value of imports: 130.24 Million US$ (2009/2010) •  The country exports very liple

–  Value of exports: 0.73 million US$ (2009/2010) •  Generic market in Angola is es=mated around US$.

The public sectors

•  According to the DNME, the budget from the 2010 General State Budget (OGE) for the procurement of medical products was 121.4 million US$

•  We es=mate NGOs and other donor financed drug expenditure around 10 million US$ •  Public sector spending on generics drugs: around 20 million US$ (2005)

•  Angola, Despesa Pública no Setor da Saúde, 2000-‐2007. The private sector

•  Generics represents % the private wholesalers turnover •  EvaluaBon du Secteur PharmaceuBque de L'Angola. Accès, Qualité et Usage RaBonel des

Medicaments. Luanda -‐ Angola, 2007i

Angola Market size

Manufacturers –  No private pharmaceu=cal companies producing medicines locally (2008) –  Only two principals domes=c manufacturers of generics: Angomédica and the

small produc=on unit of GALÉNICA DA TRAPA (produc=on capaci=es judged insufficient to cover the country need in generics)

With only few domesBc manufacturers of generics, Angolese pharmaceuBcal generic market is open to outside manufactures products. There is a real opportunity for manufactures from the region (Southern African Development Community (SADC) or the Economic Community of Central African States (ECCAS)). PharmaceuBcals manufacturers from outside Africa such as the Cuban company "Labiofam" and the European company “Inpharma” project to install a branchs in Angola and make use of the opportunity.

Angola Compe++ve analysis: manufacturers distributors and distribu+on

Wholesalers/Distributors The public sector •  DNME -‐Direção Nacional de Medicamentos e Equipamentos through his Procurement

branch is the provider of essen=al drugs and na=onal medical consumables for the public sector.

•  The central acquires 83% of its products through interna=onal bidding and distributes them to the provincial supply centers, the procurement office of secular and religious clinics, to central and general hospitals.

•  The medicines are mostly acquired through the State Budget (90%) The private sector •  There are : 908 licensed pharmacies and 350 licensed wholesalers in the Angolese

pharmaceu=cal market. We find among the wholesaler wholesaler LABOREX, Ranbaxy, UPD/UPEX, Jaba, Mecopharma and OA VISION SANTE.

Angola Compe++ve analysis: manufacturers distributors and distribu+on

Angola Compe++ve analysis: procurement and distribu+on flow

Europe India/China/ Brazil Others

MINSA The Procurement Agency (Central de Medicamentos)

Public Health structures Private Health structures

Mecopharma Ranbaxy

LABOREX

NGOs

Public Private

(buys:% generics; % branded drugs

UPD/UPEX SHALINA

OA VISION SANTE

Angola

Public sector tender •  Public sector tenders and awards are not publicly available (2008) •  No wripen code of conduct governing the behaviour of public procurement agencies in their interac=ons with sales representa=ves and wholesalers exists (2008)

Price Control for the private sector Maximum wholesale mark-‐up, maximum retail mark-‐up and price is regulated in Angola

Legal and regulatory provision –  The country has guidelines on Good Manufacturing Prac=ces –  Legal provisions exist to ensure quality control of imported medicines –  Legal provisions exist for licensing importers –  No legal and regulatory provision for medicines adver=sing and promo=on –  No Legal provisions existed for licensing mul=na=onal manufacturers that produce

medicines locally (2008)

Compe++ve analysis: determinants

Angola

The absence of transparency in tenders and awards process associated with the lack of code of conduct governing the behaviour of public procurement agencies in their interac)ons with sales representa)ves and wholesalers could favour corrup)on. With no regulatory provision for medicines adver)sing and promo)on the popula)on can be directly exposed to any kind of drugs increasing the risk of self medica)on and drug misuse For manufacturer or distributors the absence of regulatory provision for medicines adver)sing and promo)on give them a marke)ng freedom that allow them to reach directly the public.



Country Analysis: Cameroon

Located in the Gulf of Guinea, Cameroon is member of both; the Economic and Monetary Community of Central Africa (EMACC) and the Economic Community of Central African States (ECCAS). The country is limited to the west by Nigeria, the North West by Chad, east by Central African Republic, and south by Congo, Gabon and Equatorial Guinea. Its total area is 475,442 square kilometers.


Increase geographical access to, and affordability of care for neglected tropical diseases, combat HIV/AIDS, malaria, tuberculosis and other diseases, Improvement of the na=onal health policy and alignment are among Cameroon health priori=es. The pharmaceu=cal drugs supply is done through government structures, private and informal structures. These drugs are mostly imported. Local produc=on exists, but remains negligible and limited to few products. The supply of medicines for the public sector remains precarious, funded in part by coopera=ng agencies. It provides the medica=on in public care facili=es. For the private sector, there are several wholesalers importers that supply pharmacies and private health care ins=tu=ons. The pharmacies are largely concentrated in big ci=es. Pharmacists margin on drug prices are fixed by the state. The informal market the drug represents about 25% of the medicines consumed in Cameroon. It is supplied mainly by imports of illegal and uncontrolled drugs from neighboring Nigeria and some Asian countries. About 58% of prescribed drug in the Cameroon are generics. Branded drugs represent 42% of prescribed drugs. 92,5% of prescribed drugs are listed in essen=al medicine list. An=bio=cs are used at a rate of 51%

Cameroon: Introduc+on

A young, rural popula+on

The latest figures show a popula=on of about 20,8 millions inhabitants with 55 to 65% es=mated of the popula=on living in rural areas. Cameroon has 50.6% of women and 49.4 % of men. 72% of the popula=on is under 30 years. People aged over 60 accounts for only 5.5% of the total popula=on. In Cameroon life expectancy at birth is 51 years.

Cameroon Popula+on

•  A dynamic economy Cameroon is one of the leading forces in the economy of the sub-‐region. Cameroon economy relies on agricultural, forestry, mining and petroleum industries. Its GDP is 2,300 U.S. dollars per capita (2012 projec=on: 2,293). . The growth rate of GDP in 2010 was 3% and the projec=ons for 2011 and 2012 are 3.8% and 5.3% respec=vely. The country has a number of assets: a self-‐sufficient food produc=on to 95%, a =mber and oil industry as well as on large reserves of bauxite etc.

•  Major challenges for investors

Cameroun is ranked 168 out of 183 countries by the World Bank’s 2011 Doing Business report on "Ease of star=ng a business". The literacy rate of Cameroon was es=mated to be 67.9%.

Cameroon Economic growth

•  There are currently 178 health districts in Cameroon with about 190 district

hospitals. Health coverage reaches 70 to 80%. However Physical accessibility to healthcare remains inadequate, despite great efforts towards the se�ng up, construc=on and equipment of health facili=es.

•  Of all the func=onal public and private health centers, about 79% are public, 21% are private non-‐profit. As for hospitals in all categories, about 65% are public and 35% are private non-‐profit. It should be noted that these do not take into account the health facili=es of related ministries that dispense healthcare. The private for-‐profit sub-‐sector has since 2002 experienced a significant increase (provide figures) in the number of private facili=es. Today the country has a ra=o of hospital beds es=mated at 43 beds per 10 000 inhabitants (Cameroun 2001-‐2015 Health Sector Strategy).

Cameroon Healthcare service delivery


Market assessment

Cameroon

Two-‐way pharmaceu+cal trade flow •  Cameroon imports of pharmaceu=cals (bulk drugs excluded): 135.17 million US$ in 2010 •  Cameroon exports of pharmaceu=cals (bulk drugs excluded): 147 299 US$ in 2010

Manufacturer CINPHARM the new generic manufacturer has a turnover around 16 million of US dollars and a produc=on capacity of 1.5 billion tablets, 150 million capsules and 25 million boples.

GENEMARK: generic manufacturer specialized in the formula=on of pediatric drugs Wholesalers/Distributors The public sectors

•  The state spending for pharmaceu=cals was 3.04 billion F CFA in 2010 (6.08 million US$). The government spending prevision are 3.4 billion F CFA (6.8 million US$) for 2011, 4.3 billion F CFA (8.6 million US$) in 2012 and 5.74 F CFA billion (11. 5 million US$) in 2013.

•  The public sector wholesalers generics turnover was 8.6 billion F CFA (16.78 million US$) in 2009

NGOs and other donor •  NGOs and other donor financed generics expenditure: 3.6 billion F CFA (7.2 million US$)

The private sector •  Generics represents 2% the private wholesalers turn over: 2.4 million US$

Cameroon Market size

The public sector •  The na=onal central for procurement and supply of essen=al medicines and medical supplies (CENAME) is supposed to be the sole provider of essen=al drugs and na=onal medical consumables for the public sector.

The private sector

•  Ten wholesale distribu=on facili=es are opera=onal, including five for the bulk import and distribu=on of pharmaceu=cal products (UCPHARM, LABOREX, CAMPHARM, and PHARMACAM CCP)

•  CINPHARM: generic manufacturer makes a wide range of an=bio=cs, painkillers, an=-‐malaria, an=-‐TB and an=-‐retroviral drugs.

•  GENEMARK: generic manufacturer specialized in the formula=on of pediatric drugs (an=-‐infec=ves, an=-‐parasi=cs, an=-‐inflammatories and food supplements)

Cameroon Compe++ve analysis: manufacturers distributors and distribu+on

Cameroon Compe++ve analysis: procurement and distribu+on flow

Europe India/China Others

Na=onal Central for Essen=al Medicines

procurement (CENAME) (Buys :90% generics; 10%

branded drugs)


LABOREX CAMPHARM

PHARMACAM

CCP (Generics wholesaler)

Public Private

UCPHARMA

CINPHARMA and GENEMARK Generics

manufacturer Cameroon

(buys:2% generics; 98% branded drugs

Cameroon

Public sector tender •  The central acquires 63% of its products through interna=onal bidding, 25%

through selected providers, 12% over-‐the-‐counter and distributes them to the provincial supply centers, the procurement office of secular and religious clinics, to central and general hospitals.

•  98% of contracts are awarded to interna=onal suppliers •  The organiza=on and award of contracts which are based on the best price / quality

ra=o is done by the CENAME contracts award Commipee. •  The provincial pharmaceu=cal supply center may purchase from other local and

foreign suppliers, they distribute drugs especially in public health facili=es.

•  Close to 80% of partners in Cameroon use the CENAME for procurement.

Price Control Maximum wholesale mark-‐up, maximum retail mark-‐up and price is regulated in Cameroon. However, 80% of regional procurement centers, 100% of central hospitals, 43% district hospitals, 35% of medical centers in Cameroon apply margins higher than those set by the Ministry of Public Health


Cameroon

Legal and regulatory provision •  The DPM ensures compliance with regula=ons including that the drugs are registered in Cameroon

•  Insufficient capacity to perform fundamental regulatory tasks

Public Services The terms of stock-‐outs are important, especially in the structures at peripheral level (average: 25 days). If the availability of ART is 100%, that of essen=al drugs is less than 50% in the structures of the peripheral level


Medical prac==oners favor special=es rather than generics when prescribing drugs. Furthermore, the lack of Social security and popula=on lows income seem to favor the informal sector which represents close to 50% of pharmaceu=cals general market. The easy access to illicit drug vendor is another challenge faced by the generics legal industry. The quality and security of medicines sold in the formal sector is the principal argument given for buying in this sector. Generics are oIen seen as subop=mal drugs and recent controversy around Indian and Chinese counterfeit drugs the did not arrange medical prac==oners and popula=on percep=on of generics.

(1) Easy access of good-‐quality, cost-‐effec)ve, safe and efficacious medicines. (2) The medical personnel good prac)ce and the general popula)on educa)on on generics efficacy will determine the growth of generics market in the Cameroonian se_ng. In the Cameroonian context the failure of the state to control the pharmaceu)cal sector and enforce regula)on is illustrated by taxability of the informal pharmaceu)cal sector through ci)es taxes makes it legal, leading to the indirect promo)on of illicit and counterfeit drug market

Cameroon Compe++ve analysis: determinants

Cameroon

(2) Educa)on of consumers about the importance of quality in medicines (which will s)mulate consumer demand for quality medicines) (3) The marke)ng prac)ces of the pharmaceu)cal industry (rela)on between doctors and drugs representa)ves): doctor’s decision as to which drugs to prescribe may be influenced by pressure from pharmaceu)cal companies. Ashley Wazana (Physicians and the PharmaceuBcal Industry: Is a Gie Ever Just a Gie?’, Journal of the American Medical AssociaBon 283(3), 19 January 2000.) has shown that physician interac)on with the pharmaceu)cal industry was associated with increased requests for addi)onal drugs on hospital formularies and changes in prescribing prac)ce.

Competitive analysis: determinants :


Country Analysis: Central African Republic

The Central African Republic (EMACC and ECCAS member) has a Surface area of 622984 square kilometers.


Central African Republic is a landlocked country, located in the heart of Africa. It extends 623.000Km ² and is bounded by Chad to the north, Sudan to the east, Cameroon to the west and south, the Democra=c Republic of Congo and the Republic of Congo. The health system of the Central African Republic is based on the health district or health region. The geographical accessibility to health services within 5 km from is 65.2% (98% for urban areas and 47% for rural areas). It should be noted that at least 25% of the popula=on in the backcountry travel over 10 km on foot or using whatever means to reach a health facility. About 70% of prescribed drug in the Central African Republic are generics. About 70% of prescribed drug in the Central African Republic are generics. Branded drugs represent 30% of prescribed drugs. 82% of prescribed drugs are listed in essen=al medicine list.

Central African Republic: Introduc+on

A challenging economic situa+on

The Central African Republic has with a popula=on over 4.5 millions and a popula=on growth rate of 1.49. 38% of the popula=on lives in urban area. The country gross na=onal income per capita is 1,110 U.S. dollars. The country occupies 165th place among the 174 countries listed in terms of their sustainable human development ra=ng. Per capita GDP for 2009 was es=mated at 760 U.S dollars (2012 projec=on: 794 ). There is a return to peace and beper security condi=ons; people’s daily lives have resumed a more tranquil course. The literacy rate of the Central African Republic is es=mated at 48.6%.

Central African Republic Popula+on, socio-‐economic development

•  The health system in Central African Republic (CAR) can be described as dysfunc=onal. The destruc=on of public services over the years of poli=cal crises has severely reduced the ability of government to ensure and coordinate the delivery of health care. There are shorkalls at all levels of the health sector: doctors, nurses, facili=es, equipment, drugs and financial resources that could help improve the situa=on. The sta=s=cs reveal a much neglected health system.

•  The Central African Republic total expenditure on health represents 4 % of gross domes=c product. General

government expenditure on health is 12.4 % of total government expenditure. The private expenditure on health represents 61% of total expenditure on health.

•  The Central African Republic has 440 health facili=es, a ra=o of 6,579 persons per health facility. Hospital

capacity is es=mated at 4,030 beds. The ra=o of hospital beds is es=mated at 12 beds per 10 000 inhabitants. For the big part these facili=es are in the state of disrepair. UNDP United Na=ons Development Program reported that only 37% of people live within 10km of a health center.-‐ Similar stat for other countries

•  The maternal mortality rate is a staggering 1,102 per 100,000 births. Life expectancy at birth is 49 years for

males and 48 years for women1. Healthy life expectancy is 46 years

Central African Republic Healthcare service delivery


Market assessment

Central Africa Republic

One-‐way pharmaceu+cal trade flow •  The Central African Republic imports virtually all pharmaceu=cals and does not produce •  The Central African Republic imports of pharmaceu=cals was 73.7 million US$ in 2010

–  The government allocates 300 millions de francs CFA for procurement of generics drugs every year.

–  Partner organiza=on ( The Global Fund, GFATM, UNICEF, AFD, Coopéra=on chinoise) spending on pharmaceu=cal drugs (essen=ally generics) turn between 6 to 15 million US$ per years.

Central African Republic Market size

The public sector

•  The supply system of the Central African Republic is a centralized system with three levels. At the central level, the supply of public facili=es and private health nonprofit has been entrusted to the central purchasing of essen=al drugs and medical consumables called in french « Unité de cession des médicaments (UCM) » (unit for drugs sale).

•  The UCM mission is to ensure the con=nuous availability of essen=al drugs generic quality, affordable health facili=es to the public and private non-‐profit. The UCM supplies public structures, but also private organiza=ons, denomina=onal structures and NGOs.

•  Only drugs belonging to the Na=onal List of Essen=al Medicines can be distributed by the UCM. Next to the UCM, other structures involved in the supply of essen=al drugs and are the Ministry of Health of the central religious and partners (UNDP, USAID, MSF, the Global Fund, WHO, UNICEF). At the prefectural level, the prefectural drug depots ensure the drug supply.

•  The na=onal drug policy does not limit the supply of public facili=es to the na=onal list of essen=al drugs.

•  Less than 20% of partners (ONGs) procurement go through the Purchasing office.

Central African Republic Compe++ve analysis: manufacturers distributors and distribu+on


•  In Central African Republic , there is no regulatory text requiring health faciliBes in

the public sector to purchase exclusively from naBonal supply systems. •  Thus in case of rupture in the naBonal system, these structures are buying from

private wholesalers, manufacturers and distributors from abroad.

Compe++ve analysis: manufacturers distributors and distribu+on


Private for-‐profit •  Three principal wholesalers, all based in Bangui lead the private sector: the Centre

African of Pharmacies (CENTRAPHARM), ROFFE PHARMA and SHALINA. •  CENTRAPHARM is the most effec=ve drug supplier. •  The ROFFE PHARMA: a drugs repository; •  SHALINA: represen=ng an Indian laboratory SHALINA market its own products. •  Private wholesalers supply private pharmacies, private and religious health

facili=es and NGOs. Shalina and ROFFE PHARMA also supply hospitals, health centers and retailer units

Compe++ve analysis: manufacturers distributors and distribu+on

Central African Republic Compe++ve analysis: procurement and distribu+on flow


Unité de cession des médicaments (UCM) » (unit for drugs sale) :90% generics; 10% branded drugs)


CENTRAPHARM

ROFFE PHARMA SHALINA

NGOs

Public Private

•  In Central African Republic, there is virtually no regulatory text requiring public

health facili=es to purchase exclusively from the public procurement structure. Thus, in case of rupture in the public system, public health facili=es buy from private wholesalers and even manufacturers and distributors abroad.

•  For drugs procurement, the UCM carries out restricted. Procurement through restricted tenders accounted for 75% to 95% of the Central purchases.

•  The average length of the publica=on to sign the contract with the vendor is 21 days. •  The procurement contracts are award based on clearly specified criteria. These

criteria are in order of priority: product quality, the price, and the delivery )me. •  Purchase prices obtained are compared to the reference price of the WHO and the

results are published. •  The drug procurement office (UCM) demands full payment from their clients. No

deferred payment is granted.

Central African Republic Compe++ve analysis: determinants


NGOs partners have their own procurement policy. Their purchases are based on needs and do not always s=ck to the na=onal list of essen=al drugs. For their procurement NGOs focus on the following criteria:

–  WHO Prequalifica=on; –  Registra=on in RCA; –  Registra=on in a country with rigorous regulatory authority;

Purchases are made from manufacturers and interna=onal distributors, but some=mes from local distributors .



•  Although price structure in the public sector are regulated by laws, we observe a extreme vola=lity of essen=als medicines prices.

•  Margins on pharmaceu=cal drugs are defined as part of the domes=c price policy. These margins are 12% for procurement and distribu=on structures and 25% to 35% for retail unit and local distribu=on services.

•  In the private sector, margins vary according to health facili=es. They range between 32 and 40%.



•  The non-‐limi=ng supplies in the public sector to the na=onal list of essen=al drugs; •  The lower extension of the na=onal list of essen=al drugs and treatment regimens; •  The lack of quan=fica=on of na=onal needs medica=on; •  The absence of drug funding by the State; •  The non respect the name of the pricing structure set by the Government; •  Low storage capacity at all levels; •  Inadequate storage condi=ons of drugs at the UVD, the DPCM and public health

facili=es and private; •  Failure to comply with quality guarantees by partners and ver=cal programs; •  Weak logis=cs for distribu=on of drugs, the absence of pharmaceu=cal inspec=on

ac=vi=es;



Country Analysis: Chad

The Republic of Chad (EMACC and ECCAS member) is landlocked in central Africa with a Surface area of 1.284 million km square kilometers and a population of 10.62 millions and a population growth rate of 3%.


Chad is one of the poorest countries of the world and its living standards are among the lowest in Africa. The health sector is also heavily dependent on extra-‐budgetary support, which finances 60% of health spending. Data from Chad Department of Pharmacy, Medicines and Laboratories have shown that in Chad, where more than 90% of the popula=on lives on less than $ 1 per day, drug prices are high, making essen=al medicines inaccessible for many people. With reasonable procurement prices achieved by public structures, prices paid by pa=ents in the public sector are lower than those of the private sector. The private sector prices are much higher and prescribers in this sector make greater use of special=es brand medicines, resul=ng in treatment unaffordable for most people. The median availability of generic drugs in public health facili=es is 31.3% in denomina=onal health facili=es of 6.3%. In the private sector median availability of generic drugs was only 13.6%. About 54% of prescribed drug in Chad are generics. Branded drugs represent 46% of prescribed drugs. About 91% of prescribed drugs are listed in essen=al medicine list.

Chad: Introduc+on

The Republic of Chad has a popula=on of 10.62 millions and a popula=on growth rate of 3%. Challenging economic condi+ons The country gross na=onal income per capita is 784 U.S. dollars (1,828 U.S. dollars es=mated for 2012). In 2010 the economy, grew at an es=mated 5.9% (up from 1.7% in 2009). 2012 projec=on predict a 6.9 growth. The overall growth is expected to be 5.7% in 2011 and 6.9% in 2012, according to? . However the World Bank’s 2011 Doing Business report on “Ease of star=ng a business” ranks Chad 182nd out of 183 countries. Chad literacy rate of the Central African is es=mated at 32%. Oil Dependency Chad’s economy is dependent on oil, which was 65.4% of government revenue in 2010 and 90% of export earnings.

Chad Popula+on, economic growth and socio-economic development

The health system in Chad is facing difficulty in the quan=ta=ve and qualita=ve inadequacy of health infrastructure but also and especially by the scarcity of human resources. 4 beds per 10 000 inhabitants is the es=mated ra=o of hospital beds. Access to medicines remains a major problem, especially at the periphery, thus limi=ng the func=onality of health facili=es. Frequent shortages are observed for essen=al medicines, vaccines, reagents and other medical consumables. However, the government took the measure of the problem and began to cope with this problem. They organized an industry roundtable process involving development partners to adopt a common strategy for development of the health sector. People's access to quality basic services is the overall objec=ve of health policy, which was assigned by Chad's adop=on of its Na=onal Development Plan (PNDS).

Chad Healthcare service delivery


Market assessment

Chad

One-‐way pharmaceu+cal trade flow (last up date) •  Chad imports virtually all pharmaceu=cals and does not produce •  Chad imports of pharmaceu=cals was around 25,799,706 million US$ in 2010 The public sectors

•  The government allocates millions de francs CFA for procurement of generics drugs every year.

•  Partner organiza=on ( The Global Fund, GFATM, UNICEF, AFD, Coopéra=on chinoise) spending on pharmaceu=cal drugs (essen=ally generics) turn between to million US$ per years.

The private sector

Chad Market size

The public sector •  The supplies for the public and private non-‐profit health structures is provided by the

Central for Pharmaceu=cal Procurement (CPP), which provides the popula=on of the products listed on the essen=al drug list established by the Country.

•  There are fourteen prefecture pharmacies in charge of drug distribu=on to health facili=es through out the country.

•  Throughout the country medical facili=es experience recurrent shortage of medicines; even the pharmacy General Hospital, which is the na=onal reference, experiences ruptures =me to =me.

The private sector •  The private sector is principally supplied by Central Pharmaceu=cal Purchasing Office

of Chad (PHARMAT) and LABOREX-‐CHAD a private partnership between Chadian pharmacist and the French group Eurapharma.

•  Uneven geographical distribu=on of pharmacies and depots

Chad Compe++ve analysis: distributors and distribu+on structures

Chad Compe++ve analysis: procurement and distribu+on flow


Central for Pharmaceu=cal

Procurement (deliver:80% generics to public health structures)

Laborex-‐Chad)

Public Health structures

Private Health structures

Private Public

NGOs PHARMAT

Limited control and regula)ons •  The Ministry of Health through the service registra=on and visa must first approve any

medica=on that comes in Chad. •  The approval is an authoriza=on for placing on the market (AMM) granted by the Ministry

of Health issuing a visa to the applicant against the payment of a fee. •  The inspec=on of pharmacies checks deposits and retail pharmacies quality of the drug

sold. But this is only visual inspec=on due to the lack of control laboratory. Quality control should be done in the laboratory. For it is in the laboratory that can analyze whether a drug is good or not.

•  The lack of control laboratory that can import any kind of medica=on •  Se�ng prices is part of market authoriza=on/registra=on •  Margins in the public sector are 16% for central medical stores, 25% for regional store,

and 30% for public medicine outlet •  In the private sectors margins are 20% for wholesalers and 30% for retailers.

Chad Compe++ve analysis: determinants

Chad

•  Price structure is not respected in any sector –  In the private sector in Chad, officially cost, insurance and freight represents

59% of the pa=ent price. Margins of wholesalers and retailers represent 13% and 23% respec=vely. Audit on imports tax and the sta=s=cal tax together account for 5% of the final price to the pa=ent.

–  The cumula=ve margin on the purchase price of medicines in the public sector is more important than in the private sector as the public sector sector is exempt from both audit on imports tax and customs du=es. The margin shared by the importer, distributors and retailers represent 47% of the final price.

–  Prices paid by pa=ents in the public sector were three =mes the purchase price.

–  Prices paid by pa=ents in the private sector were 4.3 =mes higher than prices paid by pa=ents in the public sector.


Principal Threat to the formal pharmaceu)cal sector

•  The pharmaceu=cal industry is now threatened by the illegal sale of drugs. Traders set themselves up as wholesale distributors of drugs of all kinds come in containers in Chad in the full knowledge of government without effec=ve control

•  The private sector is fueled by the parallel markets and illegal imports. •  The non respected of price structure on the Chadian generics market leads to high

priced generics and popula=on limited access to medica=on, which favor the informal drug market.

Pharmaceu)cal companies with a distribu)on chain including wholesalers and chain pharmacies that respect the price structure would offer compe))ve generic pricing that would increase popula)on access to medicines and boost sales.

Chad Compe++ve analysis: determinants


Country Analysis: Congo (Brazzaville)

A State of the Economic and Monetary Community of Central Africa (EMACC) as well of the Economic Community of Central African States (ECCAS), the Republic of Congo (also known as Congo -Brazzaville) covers an area of 342 000 km2.


Congo is a country with rich poten=al of natural resources. The different conflicts in the country made challenging the provision of care and quality services to the popula=on. Congo total expenditure on health represents 2.7% of gross domes=c product and 5.3 % of total government expenditure (World Health Sta=s=cs 2011). The availability of essen=al drugs is 60% in public health facili=es, 53.3% in power supply 78.8% in public and private pharmacies. 62.7% of drug prescrip=ons include essen=al drugs, 46.8% of prescrip=ons include an=bio=cs and 37.7% include injec=ons. Like a number of country in the region the republic of Congo tried to produced generics by crea=ng its own pharmaceu=cal laboratory (first known as LAPCO) unfortunately like some of its regional counterpart the project failed and the laboratory priva=zed (and now called LAPHARCO)

Congo (Brazzaville): Introduc+on

An urban popula)on With a popula=on over 4 million and a growth rate of 2.75 %, Congo is one of the most urbanized countries in Africa, with 70% of its total popula=on living in Brazzaville, Pointe-‐Noire, or along the 332-‐mile railway that connects them. A country with a country with rich poten)al Congo is a country with rich poten=al of oil resources and important forest. He also has a hydroelectric poten=al and fish stocks. The country wealth provide in theory an annual income per capita es=mated at 3,732 USD. The country GDP per capita is 4,000 U.S.D and should rose to 4,835 in 2012. Congo's economy is based primarily on its petroleum sector, which is by far the country's greatest revenue earner.

Fragile economic growth Congo recorded a strong 10.2% growth rate in 2010, with 8.4% for 2011. However the country growth remains fragile due to its oil dependency. Congo expected growth for 2012 is set at 3.1%

Congo (Brazzaville) Popula+on, economic growth and socio-economic development

The health infrastructure is organized into two networks: public and private sectors the public system of care consists of 5 general hospitals including University Hospital and Central Hospital of the Army, 42 base hospitals including 3 military hospitals 127 health centres, 481 dispensaries, 46 health posts, leper health centres, 2 out pa=ents clinics for pa=ents infected with HIV, 11 opera=onal unit for endemic diseases a Na=onal Blood Transfusion Centre with two relays, a Na=onal Laboratory of Public Heath. Despite the construc=on of a new modern hospital in Pointe Noire and the effort to rehabilitate exis=ng hospitals access to care remains a major challenge for the Congolese popula=on . In term of hospital accommoda=on the country has a total of 5,241 beds and a ra=o of 16 beds per 10,000 inhabitants . The different conflicts in the country have leI hospital facili=es in such a state that they cannot provide care and quality services to the popula=on. The private network of care is growing and is characterized by a high concentra=on in the ci=es of Brazzaville and Pointe – Noire. There are currently around 12 clinics, 50 medical offices, 4 dental clinics, 110 nursing care prac=ces and about 220 pharmacies.

Congo (Brazzaville) Healthcare service delivery


Market assessment

Congo (Brazzaville)

One-‐way pharmaceu+cal trade flow •  Congo imports virtually all pharmaceu=cals and does not export •  Congo imports of pharmaceu=cals was around 96 million US$ in 2010 Generic market in Congo is es+mated around 4 billion F CFA (8 million US$US). Generics represents 2% the private wholesalers turnover

Congo (Brazzaville) Market size

Pharmaceu=cals distribu=on network includes between 12 and 16 wholesale distributors, 218 pharmacies and 418 pharmaceu=cal depots. Two networks of drug importa=on serve the Congolese market: a public and private sectors network. The public sector

The public network consists of the Congolese of Generics Drugs, general hospitals, Health Services of Congolese army and Interna=onal Non-‐governmental ins=tu=ons. The Na=onal Central for Essen=al Drugs Procurement was created to support the strengthening of health districts and allow people access to essen=al generic drugs at peripheral level.

The private sector The private network is composed of seven importers: LABOREX, SEP,

COOPHARCO, SAÏPHARMA, BETA-‐PHARMA, ZENUPHA, EMS. It also includes supply structures managed by NGOs, religious orders (CARITAS, RED CROSS and SALVATION ARMY), and various companies (AGIP, Elf-‐Congo, Brasseries du Congo).

Congo (Brazzaville)

Compe++ve analysis: Manufacturers, distributors and distribution

Congo (Brazzaville) Compe++ve analysis: procurement and distribu+on flow


Congolese of Generics Drugs :

90% generics; 10% branded drugs)


LABOREX COOPHARCO SAÏPHARMA

BETA-‐PHARMA ZENUPHA SEP

EMS

NGOs

Public Private (buys:% generics; % branded drugs

The Republic of Congo pharmaceu=cal regula=on is out dated and the situa=on of the pharmaceu=cal distribu=on is hardly sa=sfactory. The structure of drug prices is fixed under the provisions of Law on the regula=on of prices, trading standards, recogni=on and preven=on of fraud. The margins of wholesalers and pharmacists are set as follows:

•  The margins of wholesalers and pharmacists:

–  Essen=al generic drugs: 15% wholesaler margin and 43% for pharmacist margin –  Special=es drugs: 12% wholesaler margin and 30% pharmacist margin.

The major drawback of the current margins provided is that of an ad valorem system that promotes the sale of products at wholesale prices exclusive of VAT rates. Thus, private pharmaceu=cal operators are more interested in providing branded drugs than generic.

Congo (Brazzaville) Compe++ve analysis: determinants

Congo (Brazzaville)

•  Customs duty rate for imported drugs: –  Duty rate for the private network is 5% of their acquisi=on costs, in addi=on

to the costs of transit companies. –  The public network, although exempt from customs du=es, are subject to

compulsory taxes. These are the computer fees at the rate of 1% of the invoice amount.

–  Given the current situa=on, there is a failure of price controls on pharmaceu=cals and exis=ng laws are not enough to control them. The imposi=on of mandatory fees increases the cost of drugs to users and the current provisions are liple incen=ves to promote generics.

•  Failure of price controls There is a failure of price controls on pharmaceu=cals and exis=ng laws are not enough to control them. The imposi=on of mandatory fees increases the cost of drugs to users and the current provisions are liple incen=ves to promote generics.



Country Analysis: Democra+c Republic of Congo

Democratic Republic of Congo (DRC) is located in Central Africa. With an area of 2,345,000 square kilometers DRC is the second largest country in Africa after Algeria. The DRC shares border with nine neighboring Angola and the Congo to the west, the Central African Republic and Sudan (or South Sudan) in the north, Burundi, Uganda, Rwanda, and Tanzania, east, and Zambia in the south


DRC is a poor country in a home to vast natural resources. The country is in a transi=on phase between emergency and development, because the many crises and wars, which the country has faced in the recent past, and changes, observed in the world today. DRC has a health system based primarily on the use of fixed health facili=es. The provision of health services in the DRC is a reflec=on of the socio-‐poli=cal situa=on of post-‐conflict countries. Although the DRC has a pharmaceu=cal industry, A large por=on of DRC’s pharmaceu=cal imports are sourced from India, some for re export to neighboring countries like Republic of Congo, Republic of Gabon and the Central African Republic. In RDC drug procurement is based at 86% on na=onal list of essen=al drugs.

Democratic Republic of Congo: Introduction

A young and fer+le popula+on •  The popula=on of the DRC is es=mated at 71 million, with annual growth of

about 2 million people, because of high fer=lity (es=mated between 2005 and 2010 to 6.7 children on average, by woman).

•  Youth under the age of 20 years account for about 57% of the total against 38.8% for the adult popula=on (between 20 and 59) and 4.2% for the popula=on of the third age.

Democra+c Republic of Congo (DRC) Popula+on

A poor country in a home to vast natural resources

The DRC is currently ranked among the poorest countries in the world, despite its vast natural resources (diamonds, gold, copper, cobalt, coltan, zinc, =n, diamonds oil and =mber). The decade of conflict, compounded by the culture of bad management supported, had a devasta=ng impact on the na=onal economy. The DRC GDP per capita is es=mated at 300 and should be around 356 in 2012

A recovering economy

DRC economy is expected to grow at around 6.5% over the next two years. The country gained four place from the last World Bank’s Doing Business report and is now ranked 175th.

Democra+c Republic of Congo (DRC) Health socio-‐economic development

•  The provision of health services in the DRC is a reflec=on of the socio-‐poli=cal

situa=on of post-‐conflict countries •  The country was covered by about 400 hospitals and about 8300 health centers that

provided to the popula=on, with the support of mobile teams, the bulk of health care. •  The country total expenditure on health represents 7.3% of gross domes=c product

and 17.5 % of total government expenditure (World Health Sta=s=cs 2011). •  Over 60% of hospitals belong to the private sector.. •  30% of sick people use public health center, 40% prac=ced self-‐medica=on, 21%

received no treatment and 9% consulted a tradi=onal healer. •  The country has a ra=on of 8 beds per 10 000 inhabitants. •  Endemic diseases, such as malaria, plague, cholera, ebola (marburg), monkey pox,

sleeping sickness, remain major threats. •  In the DRC life expectancy at birth is 49 years

Democra+c Republic of Congo (DRC) Healthcare service delivery


Market assessment

Democratic Republic of Congo (DRC)

Two-‐way pharmaceu+cal trade flow •  DRC imports of pharmaceu=cals (2010): 129 million US$ (bulk drug included) and 103 million US$ (bulk drugs excluded)

•  DRC exports of pharmaceu=cals: million US$ in 2010 The public sectors

•  The state spending for pharmaceu=cals was in 2010. The government spending prevision are

•  NGOs •  The public sector wholesalers generics turnover was million US$) in 2009

The private sector •  Generics represents % the private wholesalers turn over •  the only generic manufacturer has a turnover around 16 million of US dollars

Democra+c Republic of Congo (DRC) Market size

The public sector

The DRC has a Na=onal System of supply of essen=al drugs (SNAME) is coordinated of by the na=onal program of drug procurement (PNAM) and based on a centralized purchasing through two procurement agencies, the purchase coordina=ng bureau (BCAF) in Kinshasa and the regional associa=on for procurement in essen=al medicines (ASRAMES) in Goma.

The distribu=on of drugs and other health products at the provincial level is done through a network of 15 regional distribu=on centers (CDR). 85% of the funding partners use their own procurement agencies (17 out of 19) for the purchase / import of drugs and other health products in the DRC,

The choice of partners to use alterna=ve structures is contrary to the concept of bulk purchasing adopted by the Ministry of Public Health in the DRC.

Democra+c Republic of Congo (DRC) Compe++ve analysis: manufacturers distributors and distribu+on

The private sector

The DRC is the one of the few in the region to have a pharmaceu=cal industry. This industry feed the local market and exports to Angola and Congo – Brazzaville. With about about a dozen companies, mostly from abroad. The few Congolese enterprise to intervene in the sector are Phatkin and Pharmagrosone. Zenufa, New Cesamex and Biopharco are other major producers of generics. Most of these companies import raw materials needed to manufacture generics from Europe (including Germany), and especially India, China and South Korea.

Only a handful of companies, including Phatkin and Zenufa are authorized to meet, along with large interna=onal firms, calls for tender launched by donors to fund the purchasing and hence hospitals.

Importers and wholesalers are Shalina, Prince Pharmas, Getraco, Sofaco, Euraf, Enaph, Unique Pharma, Green House and Wagenia. Most are of Asian origin and furnish by India and China. Some, like Pharmans, are linked to European firms. The majority of importers are also wholesalers

Democra+c Republic of Congo (DRC) Compe++ve analysis: manufacturers distributors and distribu+on

Democra+c Republic of Congo (DRC) Compe++ve analysis: procurement and distribu+on flow

NGOs

The purchase coordina=ng bureau (BCAF) in Kinshasa

Europe India/China Local manufacturer & Others


Euraf Sofaco Getraco

Prince Pharmas Shalina, Unique

Pharma

Enaph

Public

Private

Regional distribu=on center CDR

The regional associa=on for procurement in essen=al medicines (ASRAMES)

FEDECAME

Zenufa


Country Analysis: Gabon

Located in Central Africa, member of the Economic and Monetary Community of Central Africa (CEMAC), Gabon is 267,667 square kilometers big, with 800 kilometers of coastline and 85% forest cover.


Gabon is one of the largest drug markets per capita in Africa. Condi=ons authoriza=ons for impor=ng drugs are covered by the Office of the drug, and these are generally admiped free of du=es and taxes for social reasons. The introduc=on of new pharmaceu=cal products on the Gabonese market requires registra=on and the right to operate issued by the Ministry for Health, upon recommenda=on of the World Health Organiza=on, and aIer reviewing the administra=ve and technical issues. The right of exploita=on is valid for five years. It seems however that the level of penetra=on of counterfeit pharmaceu=cals in the domes=c market is quite low. Counterfeit products are imported mainly through informal channels In apempt to produce in own generic Gabon in public private partnership opened a manufacturing structure. This venture proved unproduc=ve. We are yet to see on the market the first generic drugs from this structure. 80% of prescribed drug in Gabon are branded drugs. Generics account for only 20% of prescribed drugs. Around 60% of prescribed drugs are listed in essen=al medicine list.

Gabon: Introduc+on

An urban and literate popula+on. The total popula=on turns around 1.5 millions inhabitants with a popula=on density of 5.9 inhabitants / km ² and an annual growth rate of 2.5%. The sex ra=o was 0.9 with 48% of men against 52% women. 41% of the popula=on is under 15 years, 46% between 15 and 49 years and 11.5% for the age of 50 years and older. Nearly 85% of the popula=on lives in urban areas with 50% in Libreville and Port -‐ Gen=l. The rest is dispersed within the country, especially along roads and waterways and major conurba=ons; the country is laic with 87% of literate people. The net enrollment rate of children aged 6 to 14 years is es=mated at 96.5%.

Gabon Popula+on

Great economical poten+al

GDP per capita rose from 4,000 U.S. dollars in 2000 to more than 14,000 U.S. dollars in 2010 and is expected to be 16,306.51 in 2012. The stock of debt rela=ve to GDP is es=mated around 13%. The main resources of Gabon’s economy remain oil, manganese and =mber

Gabon Economic

Gabon Healthcare service delivery

Today, Gabon is on its way to universal healthcare access through Na=onal Health Insurance and Social Guarantee bureau created in 2007. Basic health services coverage is es=mated around 90%. However, the condi=on of primary health infrastructures and equipments especially in rural areas hinders access to quality treatment. Regarding infrastructure and equipment, the poli=cal orienta=on was focused on developing the structures of cura=ve care. The country has about 959 health facili=es since the boxes of health to na=onal hospitals, all health sectors combined. There are nearly 700 structures of first contact between the popula=on and the health care sys-‐tem (clinics, infirmaries, care prac=ces) and 5 na=onal hospitals. The number of beds is es=mated at around 4000 for the en=re health system, a ra=o of 25 beds per 10 000 inhabitants. These figures hide the failures of most structures of the first level of the health pyramid. Many clinics are closed and /or do not meet any standard. It is es=mated that nearly 400 million U.S. dollars total expenditure on health, including 276 million U.S. dollars for the public sector in 2009. These expenditures represent 5% of GDP. The total health expenditure per capita has doubled between 2000 and 2007, from 185 dollars to 373 U.S. dollars. Reduc=on of maternal and infant mortality, the fight against malaria, HIV, and tuberculosis, as well as the adequate breakdown of essen=al drugs and medical devices are registered among country priori=es. Life expectancy at birth in Gabon is 62 years (male: 60 female: 64).


Market assessment

Gabon

One-‐way pharmaceu+cal trade flow •  Gabon imports virtually all pharmaceu=cals and does not produce •  Gabon imports of pharmaceu=cals was 73.7 million US$ in 2010 •  Generic market is es=mated around billion F CFA (5 million US$).

The public sectors •  The Na=onal Pharmaceu=cal Office spend around 3 million US$ per years for the procurement

of generics drugs (the office 2012 budget for drug procurement: 1.8 billion F CFA (3.6 million US$))

•  2012 HIV clinics independent drug procurement (no involvement of Na=onal Pharmaceu=cal Office) budget: 86.6 million F CFA (173 200 US$)

•  2012 Public Hospitals independent drug procurement budget: 1. 5 billion F CFA (3 million US$) generics accoun=ng for about 12.5% (187. 5 million (375 000 US$))

•  ONG (Red Cross, UNICEF, The Global Fund) The private sector

•  2009 private sector pharmaceu=cals turnover was 17. 55 billion F CFA (34.2 million US$) Generics represen=ng 1% ( 175 500 000 F CFA (342 000 US$)) the private wholesalers turnover

Gabon Market size

In Gabon all pharmaceu=cal drugs including generic drugs are imported. Three majors players assure importa=on and distribu=on of pharmaceu=cals in the country:

•  The Na=onal Pharmaceu=cals Office (OPN), which is the public ins=tu=on in charge of pharmaceu=cals procurement.

•  PharmaGabon and Copaharga, which are private wholesalers.

Gabon Compe++ve analysis: manufacturers, distributors and distribution

Gabon Compe++ve analysis: procurement and distribu+on flow

Public Private


Na=onal Pharmaceu=cal Office (90% generics; 10% branded drugs)

Pharma-‐Gabon) Copharga

Public Health structures

Private Health structures

NGOs

1% generics; 99% branded drugs

Quality, easy access, affordability, the reimbursement by the social security of prescribed generics, wining the trust of the medical personnel and the general popula)on on generics efficacy are determinants for generics market growth. The Gabonese Insurance scheme should ensure generics market growth. Afer the introduc)on and the effec)ve startup of the Public Na)onal Health Insurance scheme in 2009-‐2010 in Gabon (20% to 30% coverage (Invest’in)), the frequenta)on of healthcare facili)es has increased by 37% since (Invest’in).

Product approval by the WHO the prequalifica)on program is a prerequisite when funding for generics procurement is provided by NGOs such as the Global Fund.

Gabon Compe++ve analysis: determinants


Country Analysis: Nigeria

Nigeria is a Western Africa country bordering the Gulf of Guinea, between Benin and Cameroon. The country also and shares borders with Niger and Chad and has a total area of 923,768 square kilometers


Nigeria pharmaceu=cal market as the 17th most aprac=ve market in the Middle East and Africa (MEA) region. However, the country scored weakly in term of country and industry risks (20 and 40 respec=vely). A situa=on that could be improved by, reducing the country exposure to counterfeit drugs and corrup=on. There are 120 local pharmaceu=cal drug manufacturing companies in Nigeria, which together produce less than 30 per cent of the country’s drug requirements. the rest is imported. Most counterfeit drugs are imported from Asia, more than 98 per cent from China and India. Mul=na=onal pharmaceu=cal companies, both from developed states and emerging markets, compete with local drug makers in Nigeria's pharmaceu=cal market. Around 96% of prescribed drugs are listed in essen=al medicine list. An=bio=cs use rate is 48% in Nigeria.

Nigeria: Introduc+on

Nigeria has a popula=on of 154.3 millions distributed as 51.7% rural and 48.3% urban. 68% of the popula=on is literate.

Nigeria

Popula+on

The country is the world’s 11th largest producer of oil, with a GDP per capita of 2,500 (2012 projec=on: 2,677 ). The industry (crude oil, coal, =n, columbite; rubber products, wood; hides and skins, tex=les, cement and other construc=on materials, food products, chemicals, fer=lizer, prin=ng, ceramics, steel etc.) accounts for 33% its GDP. Agriculture accounts for around 31% of GDP, the services sector for just over 35% of GDP. About 60% of pharmaceu=cal produc=on in Economic Community of West African States countries is located in Nigeria Nigeria has the poten=al to establish itself as the leading manufacturer and distributor of essen=al medicines in sub-‐Saharan Africa. However, Nigeria’s private manufacturing sector is rela=vely small represen=ng 4% the country GDP. To promote local manufacturing, the Federal Government of Nigeria put in place protec=ve measures, including a restric=on on certain products imports.

Nigeria

Economic

Nigeria is one of the few countries in the developing world that has systema=cally decentralized the delivery of basic services in health to locally elected governments and community-‐based organiza=ons. Nigerian cons=tu=on implies that it is the state governments that have principal responsibility for basic services such as primary health, with the extent of par=cipa=on of local government authori=es in the execu=on of these responsibili=es. Nigeria’s total expenditure on healthcare as a percentage of GDP is es=mated around 5.2 %, (of which about 70% is spent in the private sector) while the percentage of federal government’s total expenditure on healthcare is es=mated at 6.4% (World Health Sta=s=cs 2011). The latest data available showed that Nigeria's health care delivery system consists of a network of 17,068 primary, secondary, and ter=ary facili=es. The primary care is provided through approximately 8,360 health clinics and 5,249 health care dispensaries scapered throughout the country. As for secondary care, there are about 1,106 general hospitals, and 2,273 maternity hospitals; ter=ary care is handled through 48 university teaching hospitals. The ra=o of hospital bed per inhabitant is es=mated 5 beds per 10 000 inhabitants. Life expectancy at birth in Nigeria is 54 years. In a move, to address the country’s healthcare problems the government introduced in 2005 the Na=onal Health Insurance System (NHIS) with a direc=ve that there should be universal coverage by 2015.

Nigeria Healthcare service delivery


Market assessment

Nigeria

Nigeria's pharmaceu+cal market trade values were in 2010: •  4.6 million US$ for exports (bulk drug included) and 356311 US$ for imports (bulk drugs

excluded) •  407 million US$ for imports (bulk drug included) and 323 million US$ for imports (bulk drugs

excluded) In 2009, the Pharmaceu=cal Manufacturing Group of the Manufacturers’ Associa=on of Nigeria

(PMGMAN) es=mated the size of the total pharmaceu=cals and healthcare products market to be in excess of 2 billion US$ annually. The pharmaceu=cal market was es=mated to be worth 600 million US$ in 2009. With a predicted sustain growth around 12% year-‐on-‐year, the market worth for 2011 was es=mated to reach US$ 717 million.

Depending of the source generics represents between 36% and 70% of Nigeria's pharmaceu+cal market size.

74.7% of expenditure on health is made by the private sector, Out-‐of-‐pocket expenditure represented more than 90% of all private expenditure on health. However, these sta=s=cs are expected to change over =me as the Na=onal Health Insurance Scheme is now opera=onal.

Nigeria Market size

Nigeria

•  The local pharmaceu=cal manufacturing industry is currently able to meet 25% of local demand. Nigerian manufacturers produce liquid prepara=ons, tablets, capsules, ointments, lo=ons, creams and ophthalmic prepara=ons. The local pharmaceu=cal industries are able to meet domes=c demand for some classes of medicines in the propor=ons listed The remaining 75% of the market is increasingly dominated by imports from Asian companies.

•  The ownership structure was predominantly indigenous (i.e. eight out of the 15 companies were 100% owned by Nigerians). Four of the companies had foreign majority shareholders while the remaining three were jointly owned by Nigerians and foreigners. The annual turnover of the profiled companies ranges between 380 million Naira (US$ 2.53 million) and 5.4 billion Naira (US$ 360 million).

•  Industry’s key players include GlaxoSmithKline Plc (GSK), May & Baker Nigeria Plc, Neimeth Interna=onal Plc and Evans Medical Plc.

Compe++ve analysis: manufacturers, distributors and distribu+on

Local Industry

Nigeria

•  GlaxoSmithKline Nigeria •  May & Baker Nigeria Plc •  Fidson Healthcare Plc •  Emzor Pharmaceu=cal Industries Ltd •  Juhel Nigeria Ltd •  Evans Medical Plc •  Swiss Pharma Nigeria Limited (SWIPHA) •  Nigerian-‐German Chemicals Plc (NGC Plc) •  Ranbaxy Nigeria Limited

20 Leading Nigerian Pharmaceu+cal Manufacturers

•  Vitabio=cs (Nig) Ltd •  Neimeth Interna=onal Pharmaceu=cals Plc •  Afrab-‐Chem Limited •  Tuyil Pharmaceu=cal •  Pharma-‐Deko Plc •  Bentos Pharmaceu=cal Products Ltd •  Mopson Pharmaceu=cal Industries Ltd •  Morison Industries Plc

The Pharmaceutical Manufacturing Group of Manufacturers’ Association of Nigeria estimated at US$ 505 million the annual (2008) revenue of the top 20 Nigerian pharmaceutical manufacturers


Nigeria

–  GlaxoSmithKline Nigeria –  May & Baker Nigeria Plc –  Fidson Healthcare Plc –  Nigerian-‐German Chemicals Plc –  Evans Medical Plc –  Neimeth Interna=onal Pharmaceu=cals Plc –  Pharma-‐Deko Plc –  Morison Industries Plc –  PZ Cussons Nigeria Plc –  Boots Company (Nig.) Plc (BCN Plc)

10 Pharmaceu+cal Companies are listed on the Lagos Stock Exchange


Distribu=on of medicines in Nigeria involves too many different players. Major manufacturers contract private logis=cs organiza=ons to distribute medicines and a number of interna=onal development partners some =mes use courier companies for delivery of pharmaceu=cal drugs

Nigeria Compe++ve analysis: manufacturers, distributors and distribu+on

Distributors and distribu+on

The public sector –  In the public sector, there is a na=onal procurement policy and a dedicated

procurement department has been created to cater for health related items. –  The Bureau of Public Procurement (BPP) oversee all procurement processes in all

public and government agencies. –  The Bureau formulates the general policies and guidelines rela=ng to public sector

procurement for the approval of the Na=onal Council on Public Procurement (NCPP), publicizes and explains the provisions of the Public Procurement Act and supervises the implementa=on of established procurement policies.

–  In the public sector, medicine supplies are currently stocked and distributed through three different warehouses, the Central Medical Stores, the Federal Medical Stores and the State Medical Stores.

–  In 2010, a Na=onal Health Logis=cs Commipee was established to harmonize all logis=cs related to medicines supplied by the various development partners and Government.

–  There is project to merge the exis=ng three layers of warehousing of health commodi=es into one Central Medical Stores, with a branch in Oshodi and Abuja.


The private sector Retail pharmacies and private health clinics typically procure drugs from wholesalers or directly from the manufacturer/importer through a sales representa=ve or detailer. Very large private health facili=es may procure through a tendering process. The informal market is believed to play a significant role in the supply chain for generics in Nigeria (18% and 48% of the general drug market).


Nigeria Compe++ve analysis: procurement and distribu+on flow

Regional Hub South East

Regional Hub South West

Regional Hub North

Factory / Export

Mega Distribu=on

Wholesalers

Wholesalers Wholesalers

Retailers Hospitals

Retailers Hospitals

Retailers Hospitals

Regional Hubs

Adapted from the UNIDO 2011 report on the Pharmaceutical Sector Profile of Nigeria

•  The Nigerian government is set to promote domes=c manufacturing. The Public Procurement Act 2007 made provision for a domes=c preference policy.

•  Pharmaceu=cals are required by law to be registered before marke=ng in Nigeria. This applies to both locally manufactured and imported products

•  Foreign manufacturers must be represented by duly registered local agents. •  Inefficient system of drug administra=on and control leaving the door open to counterfeit

drugs. •  of inadequate funding of drug supplies and drug control ac=vi=es and •  Nigeria is highly dependent on imports of finished drug products, pharmaceu=cal raw

materials, reagents and equipment. •  Drug prices in Nigeria are set mostly by market forces, with government tariffs, taxes and

distribu=on mark-‐ups accoun=ng for a significant propor=on of the final price.

Nigeria Compe++ve analysis: determinants

Nigeria

With a popula=on over 150 millions Nigeria drug consump=on is s=ll rela=vely low (drug access below 50%). The ever increasing demand for drugs and medical care will con=nue to remain an advantage to domes=c producers as well as an opportunity for growth and development. The government has indicated its inten=on to revamp the health care sector by ini=a=ng several reforms. Some of the said ini=a=ves include the following: 1. Liberaliza=on of laws on Private Sector par=cipa=on in health care delivery. 2. Introduc=on of various incen=ves for expansion of exis=ng pharmaceu=cal companies. 3. Revising regulatory structure to protect consumers and ensure minimum quality standards. 5. Empowerment of various regulatory agencies such as NAFDAC and NDLEA.

if successfully implemented these ini=a=ves will boost investment in the health care sector


Overall Opportuni+es and Scenario Analysis



The region has long-‐term growth poten=al since It includes some rela=vely wealthy, fast growing emerging markets but not yet saturated.

Economic growth driving significantly government healthcare spending, increased health insurance coverage and a very young and fast growing popula=on are all factors that would lead to the development and growth of the pharmaceu=cal sector in the Central West Africa Region.

Regional Market opportunity

Generic Market Drivers and Inhibitors

Drivers Inhibitors

The patent cliff: several blockbuster-‐branded drug patents are set to expire soon, opening up the market to generic versions.

Growing regulatory pressure: focus on drug safety and restric=ons of drug marke=ng con=nue

Economic growth Counterfeit drug and the informal drug market:

Disease burden & Drug access: The African popula=on has the world’s highest burden of infec=ous and neglected diseases, and faces a rapidly-‐rising burden of non-‐communicable diseases.

Safety: With many manufacturing facili=es for generics located in less-‐developed na=ons, safety is a major issue for any generic drugs.


Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs) on access to essen=al medicines in the developing world expressly authorized developing countries with inadequate or no manufacturing capacity to import generics produced from other countries. Thus giving the opportunity to Nigeria, DRC and even Cameroon the only countries in the region to have pharmaceu=cal industries to export generics to other sub Saharan countries.

Regional Market opportunity


Invest’in Scenario 1 Invest’in scenario1 is based on 2006-‐2010 drugs imports and exports trends analysis.

Invest’in Scenario 2 It is well established that health insurance coverage is an important determinant of health expenditure growth (Newhouse 1993, The New England Journal Medicine; Gemmill M. 2006, The Geneva Papers on Risk and Insurance; Danzon MP. 2002, Journal of Law and Economics). Focusing on Insurance and drugs prescrip=on and spending reports also showed that health insurance coverage posi=vely affects drugs expenditure growth (Long S. 1994, Health Affairs; Lillard L. 1999 Medical Care).

Scenario Analysis

Invest’in Scenario 1


Generic Drugs in Central West Africa Invest’in Analysis Scenario 1: Imports Trends Analysis

Based on 2006-‐2010 drugs (Medicaments, therapeu=c, prophylac=c use, in dosage Excluding bulk) imports trend Invest’in an=cipates for 2012-‐2015 a drug imports growth average of:

–  6.8% per year for Angola; –  7.28% per year for Cameroon; –  10.3% per year for the Central African Republic (CAR); –  6.4% per year for Chad, 2.6% per year for Congo (Brazzaville); –  16.7% per year for the Democra=c Republic of Congo (DRC); –  12% per year for Equatorial Guinea; –  3% per year for Gabon; –  8.9% per year for Nigeria.


Invest’in Analysis Scenario 1: Imports Trends Analysis (2)

2006 2007 2008 2009 2010 2011(P) 2012(P) 2013(P) 2014(P) 2015(P) Angola $62 798 221 $81 352 312 $98 005 735 $99 641 375 $93 809 642 $111 215 029 $113 463 621 $115 973 908 $122 516 428 $130 047 460

Cameroon $86 117 003 $110 232 509 $116 626 091 $130 789 179 $135 178 372 $151 392 453 $159 105 372 $170 286 844 $180 227 143 $191 935 617

CAR $9 062 329 $16 568 746 $16 118 104 $20 672 426 $24 200 314 $26 252 154 $30 293 258 $33 083 122 $36 129 594 $39 545 079

Chad $8 586 677 $23 904 428 $12 691 388 $19 366 138 $20 373 919 $22 695 368 $21 385 572 $25 517 756 $25 862 217 $27 306 662

Congo (Brazzaville) $66 592 655 $74 584 803 $88 716 249 $78 050 588 $80 040 008 $86 705 008 $86 288 582 $85 099 813 $89 340 907 $90 593 844

DRC $49 946 668 $81 335 457 $57 504 925 $120 327 147 $120 241 937 $139 747 906 $157 702 060 $185 051 316 $194 688 626 $217 747 420

Equatorial Guinea $2 639 609 $3 043 049 $4 528 502 $5 183 284 $4 725 509 $5 917 601 $6 463 422 $6 744 911 $7 265 296 $7 995 413

Gabon $48 887 607 $63 330 583 $174 238 204 $68 329 653 $73 700 000 $102 084 366 $89 427 370 $60 795 832 $79 065 363 $71 847 244

Nigeria $177 374 725 $207 987 583 $152 967 691 $230 122 807 $323 096 885 $312 383 801 $358 988 243 $423 802 515 $456 654 082 $488 545 038

$0

$100 000 000

$200 000 000

$300 000 000

$400 000 000

$500 000 000

$600 000 000

Impo

rts trade

value

(USD

)

Generic Drugs in Central West Africa Invest’in Analysis Scenario 1: Exports Trends Analysis

Based on 2006-‐2010 drugs exports trend of countries with pharmaceu=cal industries, Invest’in scenario 1 an=cipates for 2012-‐2015 : –  a drug exports growth average of 1.43% per year for Cameroon and 12.4% per

year for the Democra=c Republic of Congo (DRC). –  In Nigeria the scenario foreseen a serrated growth -‐82% (between 2011 and

2012), 180% (between 2012 and 2013) -‐23.5% (between 2013 and 2014), -‐31% (between 2014 and 2015) .

Generic Drugs in Central West Africa Invest’in Analysis Scenario 1: Exports Trends Analysis (2)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Cameroon 35719 196533 60280 106183 147299 149045,8 129481,54 172837,632 175616,9356 178984,4925

Nigeria 5565 1710239 1258931 787776 356311 757473,1 131700,48 368321,46 281544,84 194768,22

DRC 310 272 329 247 297 597 634 746 670 042 755892,5 858396,4 960900,3 1063404,2 1165908,1

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

Cameroon

Nigeria

DRC

Invest’in Scenario 2



Introduc+on of Health Insurance in Central West African countries:

Invest’in argues that introduc)on of public health insurance scheme in the region will promote and increase generics drug consump)on driving to the growth of generics market in the region. Studies conducted on the effect of public health insurance on drug access realised in the poor communi)es of developing countries showed that public health insurance led to 6.8% -‐ 10% increase in drug access in covered popula)on. Invest’in an)cipates that introduc)on of public health insurance in Central West Africa will lead to a similar scenario.

Scenario Analysis: Invest’in Scenario 2


Generics market growth based on health insurance coverage Invest’in es=mates generics market growth using the formula: Market Growth = Increase in drug access in covered popula)on X Insurance Coverage

Scenario Analysis: Invest’in Scenario 2 (2)

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5% 10% 20% 30% 40% 50% 60%

Gen

erics m

arket g

rowth (%

)

Public health insurance coverage

Drug access increase at 10% Drug access increase at 6,8%


•  Government and health Insurance providers should through policies promotes generics use to minimize their spending. They should also prompt public health facili=es to address the consistency of physicians prescrip=on paperns that played an important role in the market: “price-‐sensi=ve” rather than “price-‐insensi=ve” prescrip=on paperns should be promoted.

•  Generics industry should support public health ins=tu=ons in their drugs access

to program and fund generic promo=on campaigns. The industry should also support countries effort to control and provide quality generics to popula=ons (this would bring or boost the trust in generic drugs)

General Recommanda+ons

Documents

Investing in Pharmaceuticals in Central West Africa