Emerging healthcare challenges in South Asia and Africa have put generics drugs in great demand. With a large number of drugs going off the patent, leading companies in South Asia, particularly from India, Bangladesh and Sri Lanka and a few companies from African countries are gearing up to cash in on the upcoming opportunities.

“Majority countries in Africa and South Asia are middle income countries and the healthcare challenges that they are facing today are tremendous. This scenario has put great pressure on the pharma industry to produce quality medicines at lower and affordable costs. Grabbing this opportunity, Indian pharma industry has been in the forefront in the manufacture and export of generic drugs to the world. Among all, African countries are the greatest beneficiaries from the Indian manufacturers,” says Sudarshan Reddy, Chairman of DSR Labs Pvt Ltd.

Globally, the pharma companies are also under tremendous pressure to discover new drugs and vaccines for the newly emerging diseases like swine flu and Ebola in the recent days. If the swine flu had impacted South Asia a few years ago, the recently emerged Ebola virus is spreading like a wild fire killing thousands in West Africa and elsewhere across the globe. With these emerging unknown diseases along with existing communicable and non-communicable diseases, countries across South Asia and Africa are bearing huge disease burden on the earth. To counter this, pharma sector across the world is striving relentlessly to produce better drugs and affordable drugs to save the poor patients in Asia and Africa.

“Among all the continents, Africa is bearing the worst disease burden in the world. The main reason for this is majority of the African countries have unstable governments due to which there is no proper healthcare policy to rescue their diseased population. The local industry in Africa is still at a nascent stage and depends on huge imports from India and elsewhere” said the chairman.

In Africa there are about 55 countries recognized by United Nations and African Union. Except a few, majority of these countries have no stable governments and are reeling under continuous internal conflicts because of which there is no proper development and the populations of these nations are under acute poverty and dying due to unavailability of primary healthcare and basic medicines.

According to World Health Organization (WHO), low-income countries particularly in Africa and South Asia are currently having a relatively higher share of deaths from Human Immuno Virus (HIV) infection, TB, malaria and other infectious diseases. The maternal, perinatal and nutritional causes are also very high in the low income countries when compared with high and middle-income countries.

It is also projected that these diseases will remain important causes of mortality in the next 25 years in low-income countries. In 2004, all countries in south Asian region except for Indonesia, Maldives, Sri Lanka and Thailand were classified as low-income by the World Bank.

Having learned the growing demand for high quality and low cost drugs, the pharma companies in India have been in the forefront and are exporting large number of medicines and pharmaceutical products to the western world and to some of the leading African countries. Major countries from Africa that import large consignments of Indian medicines include South Africa, Nigeria, Kenya and Ghana.

In South Asia, India is the leading manufacturer of generic drugs followed by Bangladesh and Sri Lanka. Pakistan, Nepal, Bhutan and Afghanistan are other South Asian countries which are having considerable demand for generic drugs. Though the domestic companies in these countries are meeting the demand, India’s role in supplying medicines to its neighbours along with other African and western world is highly significant.


African pharma profile
With growing healthcare demand, the African pharma sector offers great opportunities both for its domestic and international companies. As growth opportunities continue to move away from the traditional pharmaceutical markets, most multinationals have Africa in the sight of their expanding global footprint. It is a continent ripe with potential, but the challenges for developing a viable market strategy are formidable.

Understanding the dynamics and underlying demographics will be the key for ensuring a sustainable business model for the future. IMS Health has conducted a study combining IMS intelligence with secondary research and primary interviews with the pharmaceutical industry, international and African organizations.

By 2016, pharmaceutical spending in Africa is expected to reach US$30 billion. This value is driven by a 10.6 per cent compound annual growth rate (CAGR) through 2016, second only to Asia Pacific (12.5 per cent) and in line with Latin America (10.5 per cent) during this period. Spurred by a convergence of demographic changes, increased wealth and healthcare investment, and rising demand for drugs to treat chronic diseases, this market potentially represents a US$45 billion opportunity by 2020.

The pharmaceutical growth is a reflection of economic strength accompanied by increasing healthcare spending. Sub-Saharan Africa (SSA), excluding South Africa, is notable in this regard. According to the Economist Intelligence Unit, its economies are growing faster than anywhere else in the world and this trend is expected to continue.

The appeal of Africa lies not in its size – the continent accounts for just three per cent of the global economy – but in the dynamics that drive sustainable growth at a time when the major established pharmaceutical markets face an uncertain future. Underpinning these prospects are a series of positive economic trends: greater political and fiscal stability and improvements in pro-business legislation have led the United Nations (UN) to forecast that Foreign Direct Investment (FDI) in Africa could more than double by 2014, despite speculative money leaving the continent following the collapse of Lehman Brothers, and the Arab Spring restricting investments in North Africa.

Healthcare economics of Africa
The changing economic profile of Africa is also linked to an increased demand for chronic care drugs, reflecting a marked shift in the burden of illness towards non-communicable diseases (NCDs) and the continued impact of human immunodeficiency virus and acquired immune deficiency syndrome (HIV/AIDS) on the continent. The NCD proportional contribution to the healthcare burden is forecast to rise by 21 per cent through 2030. While continuing to struggle with infectious and parasitic illnesses, Africa is expected to experience the largest increase in death rates from cardiovascular (CV) disease, cancer, respiratory disease and diabetes over the next ten years, resulting in greater demand for healthcare services and appropriate medicines.

The combination of economic strength and an expanding middle class is already driving a demand for medicines across Africa. For example, in Algeria, Morocco and Tunisia, a rise in wealth has triggered demand for chronic medicine consumption. In Algeria, the chronic medicine to essential medicine ratio increased by 72 per cent from 2002 to 2011, accompanied by a total Gross National Income (GNI) increase of 70 per cent. A similar trend is likely to emerge in other countries, such as Kenya and Botswana, where NCDs have been declared a national priority at the ministerial level.

Notwithstanding its growth potential, Africa presents a complex, multifaceted set of markets, which are highly heterogeneous in terms of pharmaceutical growth, language and trading blocs. Consequently, the opportunities they offer are also quite variable. Understanding the nuances and navigating the challenges is the key to establishing successful and sustainable operations.

To date, three types of pharmaceutical industry players have a track record of success, defined as sustainable revenue-generating business operation: innovative multinational companies (MNCs), Indian and Chinese pharmaceutical companies, and local manufacturers in Northern and South Africa.

Most of the major pharmaceutical MNCs have had a presence in Africa for a number of years. Among the first companies (or precursors of today’s companies) to enter the continent were Abbott (South Africa, 1930s), Sanofi-Aventis (Morocco, 1953), Novartis (Egypt, 1962), Pfizer (Morocco, 1963) and GSK (Nigeria, 1971). MNCs have predominantly focused on, and succeeded in marketing, branded innovative and generics drugs to the private sector in urban areas.

Products have typically targeted in-demand therapy areas, such as vaccines, anti-infectives and anti-diabetics, with sales mainly concentrated in Northern and South Africa. Few opportunities have been realized in the public sector although MNCs have had some success through tendering, particularly in the more established markets such as South Africa.

South Asian pharma profile
Among all the south Asian Nations, India has emerged as the leading producer of pharmaceutical products. The demand for generic drugs is high as the countries in the region are highly burdened with various diseases which include HIV, AIDS, tuberculosis (TB) and malaria. Thousands of patients are dying in Pakistan, Nepal, Bhutan, Sri Lanka and Afghanistan with epidemics, such as influenza, cholera, diarrhoeal diseases and TB.

In South Asia, India is the leader and other countries like Sri Lanka, Bangladesh, Pakistan and Afghanistan are slowly picking up. Bangladesh is leading after India in the south. Though at a nascent stage, Bangladesh holds huge potential for the Indian pharma companies to tap. Since a huge potential exists for developing trade and economic relations between the two countries, both the nations should move ahead to tap the emerging opportunities, viewed industry experts. While on the one hand, India being a well established country in pharma segment can assist Bangladesh to grow, on the other Indian companies can gain from exports, they point out.

Indian pharma industry
The pharmaceutical industry in India has grown from mere US$ 0.3 billion turnover in 1980 to about US$ 21.73 billion in 2009-10. The country now ranks third in terms of volume of production (10 per cent of global share) and 14th largest by value (1.5 per cent of global share). One reason for lower value share is the low cost of drugs in India ranging from five per cent to 50 per cent less as compared to developed nations. Indian pharmaceutical industry growth has been fuelled by exports and its products are exported to a large number of countries with a sizeable share in the advanced regulated markets of the US and Western Europe.

India's pharmaceutical sector is expected to touch US$ 45 billion by 2020, according to a major study by global management and consulting firm, McKinsey & Company. The report further states that the Indian pharmaceutical market will be the sixth largest in the world by 2020.

The rise of pharmaceutical outsourcing and investments by multinational companies (MNCs), allied with the country's growing economy, committed health insurance segment and improved healthcare facilities, is expected to drive the market's growth.

India is today one of the top emerging markets in the global pharmaceutical scene. The sector is highly knowledge-based and its steady growth is positively affecting the Indian economy. The organized nature of the Indian pharmaceutical industry is attracting several companies that are finding it viable to increase their operations in the country.

India currently exports drug intermediates, Active Pharmaceutical Ingredients (APIs), Finished Dosage Formulations (FDFs), bio-pharmaceuticals, and clinical services across the globe. The exports of pharmaceuticals from India grew to US$ 14.6 billion in 2012-13 from US$ 6.23 billion in 2006-07, registering a compound annual growth rate (CAGR) of around 15.2 per cent.

Bangladesh pharma industry
After India, Bangladesh is fast emerging as the next leading exporter of Active pharmaceutical ingredients (APIs) in South Asia. At present, industry experts reveal that the Bangladeshi pharma industry is growing at a pace of around 15 per cent per annum. It is estimated that the industry which is at $1.82 billion today is expected to grow to $5.59 billion by the year 2022.

Having India in its neighbourhood with a strong base in the pharma sector, Bangladesh is a big importer of pharma and infrastructure raw materials from India for its domestic consumption and commercial purposes. Bangladesh is importing huge quantities of APIs from India for its domestic pharma industry needs. As the country is aiming to develop its own API manufacturing base, it could well utilize the services of India and can enter into joint ventures with Indian companies for technology transfer and sharing other related aspects of the industry.

With a view to improving trade relations among the two nations, two years back, the Pharmaceutical Export Promotion Council of India (Pharmexcil) had lead a delegation of 26 members to Dhaka and even participated at an international pharmaceutical trade expo in Dhaka to showcase India’s capabilities.“In the recent years, we have improved our API exports to Bangladesh. Though some companies in Bangladesh are strong in manufacturing in certain generics, they are weak in molecule segment. Their APIs industry has not yet grown and totally import oriented. Most of their companies are importing APIs from India and China,” said Dr. P.V. Appaji, Director General, Pharmexcil.

Pakistan pharma industry
The India-Pakistan business relations are     slowly improving despite numerous hiccups. Compared to India, Pakistan’s global trade in pharma is minuscule. Expressing his opinion on Pakistan pharma industry, Krishna Prasad, MD & CEO of Cito healthcare Pvt Ltd, said that many Pakistani authorities are willing to build relations with Indian pharma particularly in the clinical trials. “Both High Commissioner Salman Bashir and Ubaid-Ur-Rehman Naizamani, Counceller/Head of Chancery have shown lot of interest in clinical trials and wanted to align their manufacturers and universities in line with Indian outfits,” he said.

According Prasad, Pakistan holds potential for manufacturing bulk actives, pharmaceutical formulations as the disease burden increases as the population gets older.

The Pakistani pharma industry is looking up to grow. As per the 2011 statistics, there is an increasing trend visible in 2012 and 2013. Almost all the drugs in the country are under prize control. Overall market size of pharma industry of Pakistan is US$1.64 billion.

Sri Lankan pharma industry
Though the pharma sector in Sri Lanka is at a nascent stage, the country has a promising future as the markets are estimated to be around $400 million. At present the country’s domestic sector is meeting 15-20 per cent of its local demand. The remaining 75-80 per cent demand is being met by imports from India.

The recent Indian export statistics to Sri Lanka, on a year-on-year basis reveals that, Indian pharma exports to Sri Lanka have increased by 15.95 per cent in 2011 to $126.9 million of which 93 per cent are formulations followed by bulk (seven per cent) and herbals (0.15 per cent).

Apart from implementing medicine pricing policy, the Sri Lankan government also needs to enforce a policy that acknowledges the operating environment for multinational drug companies selling their products in the country, particularly as it is heavily reliant on foreign produced medicines. It needs to retain a business environment that is attractive to multinational drug makers.

This will help ensure that patients can access innovative medicines. During 2011 to 2012 the Sri Lankan pharmaceutical markets have grown from $444 million to $460 million which had seen a growth rate of more than 3.6 per cent. While the healthcare sector has grown at 4.9 per cent, the medical devises sector had grown at 0.9 per cent during the same period.