The 21st century has witnessed a paradigm shift among the South Asian and African nations especially in the growth of pharmaceutical and biotechnology sectors. Having broken the shackles of colonial rule and with flourishing democracies, these nations have been treading a remarkable growth path.
From being totally dependant a decade ago, countries like India, Bangladesh, Sri Lanka, Pakistan, Nepal, Bhutan and Afghanistan from South Asia and African nations like South Africa, Nigeria, Egypt, Tobago etc have remarkably developed their pharmaceutical and biotechnology capabilities.
Today both Asia and Africa, the two biggest continents of the world comprise almost more than 75 per cent of global population. Of this, India and China, two of the world’s densely populated countries itself account to more than 60 per cent of the seven billion people. It is imperative for the governments of Asian and African countries to push forward pharmaceutical and biotechnology sectors to meet the growing healthcare demands of the people.
The South Asian and African countries have suffered an avalanche of diseases in the past few decades. To combat the prevailing mass of diseases and develop innovative methods to prevent deadly diseases, these nations are building deep foundations of their pharma and biotechnology segments.
Taking cognizance of this, many countries in Asia have already established most advanced infrastructure to manufacture low cost pharmaceuticals especially APIs and generics. Among them India, China, Japan, Malaysia, Indonesia, Singapore and South Korea are leading. In south Asia, apart from India, Bangladesh, Pakistan and Sri Lanka are moving forward to become the pharma hubs.
The countries in Africa are still lagging behind due to uncertain political scenarios and drastic economic downfalls in many countries. But in spite of all these problems, the African manufactures are strengthening their pharma base with the help of Asian pharma industry especially India and China.
“In south Asia, India is the leader in pharma and biotechnology segments. Today India stands as the third leading bulk drug manufacture in the world and second leading exporter of Aysuh and herbal medicines in the world. We are competing with China neck to neck in every segment and if we take forward the same pace of growth, India will beat china and emerge as the world's numero uno pharmaceutical producer in the next few years,” opined Dr.P.V. Appaji, DG, Pharmexcil.
Today South Asia is regarded as one of the fastest growing pharma economy of the world. The rapid growth rate is mainly attributed to growing health care demand in the Asian countries. To meet the demand & supply gap of India, Bangladesh, Nepal, Pakistan, Bhutan, Myanmar, Thailand, and Indonesia, many foreign companies have set up their manufacturing bases in these countries and performing remarkably well. Today the whole world is looking at the low cost destinations like India and South Africa to establish their R&D centers.
Over-all growth rate of the South Asian pharma industry's growth is about 14 per cent annually. There are about 24000 formulations companies across South Asia exporting to various countries across the globe.
Some of the important countries in South Asia which are performing remarkably well include India, Bangladesh, Sri Lanka, Pakistan and Afghanistan.
South Asian pharma markets
India, which is the largest pharma market in South Asia, has built a robust pharmaceutical and biotechnology infrastructure. The country enjoys a huge pool of talented and skilled professionals. India has emerged as the third largest producer of pharmaceuticals and related medical products across the world. The country has surpassed an export target of $13.2 billion and has set a new target of reaching $25 billions by the end of next two years i.e. 2014. At present the industry is growing at a rate of 12-13 per cent.
Over 60 per cent of India’s bulk drug production is exported. India’s pharmaceutical exports are to the tune of Rs 87 billion, of which formulations contribute nearly 55 per cent and the rest 45 per cent comes from bulk drugs.
The growth in drug exports, despite the pressing generic competition in the global markets, is attributed to increased Abbreviated New Drug Applications (ANDAs) approvals in the US market and contribution from unconventional markets in Latin America, Australia and the emerging markets in the Middle East and African Region.
The export revenue now contributes almost half of the total revenue for the top three Pharmaceutical majors: Dr Reddy’s, Ranbaxy and Cipla. The other major exporters are Wockhardt Ltd, Sun Pharmaceutical Industries Ltd and Lupin Laboratories. The formulations and exports are largely to developing nations in CIS, South East Asia, Africa and Latin America.
By honouring the international patent laws in 2005, the market potential in India has increased by creating huge demand for pharma products. India’s domestic pharma companies have experienced a significant increase in R&D spending to be competitive in the world market. India has well-educated scientists, a well-established computer industry and technological know-how for the manufacture of bulk drugs and formulations.
Of late Bangladesh is emerging as promising country in the pharmaceutical segment. The country is offering various advantages for setting up manufacturing hubs. Though the country is dependant on India for its generic production, it has devised a long-term strategy to build a robust pharma and biotechnology infrastructure of its own in the coming years. With about 97 per cent of the total pharma production being exported to over 62 countries, the country is a leading exporter after India in South Asia. As per the Doha declaration, Bangladesh still has an opportunity to produce patented products till 2015 as it comes under the LCD (least developed country) nations list.
Sri Lanka, the island nation, located on the southern side of India too is emerging as a strong pharma hub. Though the country had conventionally dependent on India for pharmaceutical and medical products, it is slowly moving forward to collaborate with Indian companies and the government to develop its own pharma hub.
Pakistan which is the western neighbour of India has a huge demand for healthcare and medicinal products. Though the country has a good pharmaceutical base, it has not attained the quality standards comparable to India. But there is a huge potential for the country to build a robust pharma and biotech hub if the government attracts foreign investments.
African pharma markets
Majority of African nations depend on imports for the pharma and healthcare needs. The continent of Africa has 54 different African countries including the 47 nations of the mainland and the six surrounding island nations. The West African region consists of 250 million people, comprise countries of Nigeria, Ghana, Cote D Voire, Togo, Niger among others. The sub-region is almost a third of the whole of Africa.
Though of late some countries like Nigeria and South Africa are slowly building their manufacturing hubs, it may take some more time for these countries to look towards global exports. At present they are more keen on meeting their domestic needs. Local production mainly focuses on generics. Also, most of the African nations are identified as under-developed. Hence, a quantum of health care funding is being channeled through organisations such as UNO, WHO and the World Bank. Apart from this, HIV has been identified as a major threat to the continent and some of the leading Indian manufacturers are supplying Anti-Retroviral (ARV) formulations at lowest possible price as a part of humanitarian service
In its research report, the Hyderabad-based Cygnus Research institute said that Nigeria is the most lucrative market within the African continent followed by South Africa. According to the report, Nigeria is the major export destination for formulation products exported from India and almost one-fifth (20.48 per cent of the total exports to Africa) of the exports to Africa can be attributed to this country.
The next major countries as export destinations for the Indian products are South Africa, Kenya and Congo People’s Republic with a share of 10.37 per cent, 6.50 per cent and 4.08 per cent respectively.
But many Indian companies are concerned over the fact that Nigeria has not implemented the patent law existing in that country. Also the sales that happen there are not systematic. Kenya is another big market as it imports more than 115 odd products which are already registered.
The West Africa pharma industry consists of manufacturers and importers of pharmaceutical finished products accounting for over 60 per cent of the industry. With a strong presence of pharma manufacturers in the sub-region, there are currently over 200 active manufacturers of pharmaceuticals in West Africa.
According to an IMS forecast, Nigeria’s pharma business is worth about $2.5 billion serving 150 million Nigerians. The pharma market in West Africa has been growing at between five to seven per cent annually.
The market is expected to rise steadily in the next few years.
The pharma industry in Africa is keen on forging alliances and M&As with Indian and other Asian low cost nations for imports and custom manufacture of pharma products. Especially for the HIV and AIDS related drugs the African countries mainly depend on Indian companies like Ranbaxy, Dr.Reddy’s, Cipla and other major MNCs from Asia. The pharma industry in West Africa is also looking forward to develop the basic infrastructure and logistics needed for its pharma industry.
The North Africa and Middle East (MENA) region constitutes just two per cent of global pharma sales. A rapid increase in population has stoked drug demand especially for higher-yield pharma products attracting the attention of multinational companies. The region now competes with Asia and Latin American countries in terms of the projected growth in its local pharma industries. Of the 22 odd countries in the region, Turkey, Israel, Saudi Arabia, Egypt and Iran stand out as the largest markets in terms of growth potential and value representing a host of opportunities.
With the average annual projected population growth by 2015 in the region set at 1.7 per cent (World Development Indicators 2004) - a figure that is much higher than the global average of one per cent- it is no surprise that the governments in the region have favoured healthcare policies focusing reforms on curbing expenditure and encouraging private sector participation in healthcare delivery. Huge demand for not only medicines but also medical equipment is foreseen as governments are increasingly expanding healthcare delivery systems to match the growing population.
The most vibrant domestic pharma market can be found in Egypt, Israel and Turkey. This group of countries represents a burgeoning local pharma production industry owing to a protectionist regime as yet. But despite the flourishing local production, the rising consumer demand has led to increasing multinational pharma firms’ interest. Here, the regulatory environment is typified by tough entry barriers largely to protect local industry, price controls, parallel imports and the constant impact of fluctuations in economic conditions.