Sector News

J&J makes renewed push into Africa

April 7, 2016
Life sciences

Johnson & Johnson is deepening its business in Africa, adding new research, development and distribution capabilities to boost sales of new medicines to fight HIV/AIDS and other major killer diseases.

The makeover formally kicks off Wednesday in Cape Town, South Africa, with the opening of the first office of a new global public health unit the company created last year.

The unit has two objectives. First, it will carry out its normal pharmaceutical activities, from supporting promising drug research in local universities to selling J&J products, the company says. The unit will also work with governments, nongovernmental organizations and others to build medical-testing capabilities, supply chains and other systems needed to get medicines distributed and into patients’ hands, J&J says.

“Part of it is the right thing to do. Part of it is building those kinds of relationships, those kinds of capabilities that over the long term are going to result in a very significant market opportunity for us,” J&J CEO Alex Gorsky said in an interview.

J&J’s portfolio of drugs for HIV, multidrug-resistant tuberculosis and other infectious diseases makes Africa an obvious commercial opportunity. In addition, the company is developing products like a long-acting injectable HIV drug, an HIV vaccine and an Ebola vaccine. The new unit will focus on three disease areas: HIV, tuberculosis, and maternal and child health.

During recent visits, Chief Scientific Officer Paul Stoffels said he realized J&J would lose out if it didn’t help extend distribution to clinics, ensure they have equipment to properly store and handle medicines, and train doctors and nurses on delivering good care. “When you see the drugs don’t get there where they need to be, you want to be involved,” Dr. Stoffels said.

J&J said it expects to launch similar offices in Ghana and Kenya in October, and eventually expand to developing nations in Asia and elsewhere.

Analysts consider Africa a promising emerging market, albeit one that will take years to reach its potential. Chinese and Indian drugmakers, along with certain multinationals like Sanofi SA, GlaxoSmithKline PLC, and Merck & Co. have sizable presences. Meanwhile, stable, wealthier African governments are investing billions of dollars in health care.

IMS Health estimates about $30 billion in pharmaceuticals will be sold in Africa this year, growing to $45 billion by 2020.

Jaak Peeters, head of J&J’s global public health unit, described a gradual, collaborative approach in Africa, such as working with NGOs to build out drug supply chains. Likewise, J&J would run demonstration projects in order to be sure the efforts would work, as well as to prove their worth to local governments. “It is the delivery of care in general that is our biggest obstacle,” he said.

The new business could help J&J get a new combination therapy it is developing for drug-resistant HIV to patients more quickly, he said. In the past, the company would develop and get approvals for a drug, and then introduce it in the market. But a shortage of diagnostic tests means it would be difficult to determine which patients could benefit from this new combination therapy. With its new unit, J&J is working to develop a point-of-care diagnostic test while the combination therapy itself is still in development, Mr. Peeters said.

By Jonathan D. Rockoff and Betsy McKay

Source: Wall Street Journal

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