Sector News

Want international growth? Africa’s set to double pharma sales in 5 years

June 17, 2015
Life sciences
Pharma growth in China may be slowing and Europe stalling, but there’s one area where drugmakers might actually achieve some big growth, according to McKinsey & Co. That’s Africa, a mere $4.7 billion market in 2003 and $20.8 billion a decade later.
 
And now? McKinsey numbers put the African drug market at $52 billion by 2020–and as high as $65 billion on the optimistic end of things. Even at the low end of their projections–$40 billion–that’s twice the level of 2013 sales.
 
The growth drivers are familiar–and similar to other emerging markets. Africa is growing increasingly urbanized, which means better infrastructure and greater household purchasing power. Healthcare capacity is also growing, with 70,000 new hospital beds and 76,000 new doctors and nurses added between 2005 and 2012. And healthcare systems are broadening their reach beyond typical healthcare facilities. Plus, governments are increasingly supportive of the pharma business, with new rules encouraging local drug manufacturing and anticounterfeiting measures.
 
In a sense, Africa is where other emerging markets were a few years ago–and that means bigger growth potential over the next decade. “In a world of slowing and stagnating markets, Africa represents perhaps the last geographic frontier where genuinely high growth is still achievable,” the McKinsey consultants conclude.
 
The challenges of emerging markets growth apply in Africa, of course, with on-the-ground knowledge and relationships key to success. One focus for Africa-ambitious pharmas should be recruiting local sales-and-marketing talent and developing strong local managers, the report states. Also important are business partners in manufacturing and distribution–not to mention partnerships with local governments.
 
Drugmakers might want to focus on expanding city by city rather than country by country in Africa, with 37% of African consumers concentrated in just 30 cities. And it’s smart to set up capital-intensive operations in countries where governments are most stable and business regulations best developed. Outsourcing supply chains can be a good move, too, McKinsey says. And with transportation a widespread barrier, local partners are the best sources for ID’ing the most efficient ways to get products to the right place.
 
“As ever, the key to success lies in understanding individual markets in granular detail,” the report states. “Early movers with the right approach should be able to capture competitive advantage. … Now is the time for drug companies to decide whether they want to be part of that growth and, more important, play an active role in improving public health.”
 
By Tracy Staton
 

comments closed

Related News

February 4, 2023

MedTrace receives U.S. patent for diagnosing the human heart

Life sciences

The U.S. Patent and Trademark Office issued a patent to MedTrace for their method of diagnosing the human heart via 15O-water PET. The patented method is the foundation of the company’s software aQuant, currently under development. Hendrik “Hans” Harms, PhD and Senior Scientist at MedTrace, and Jens Soerensen, Professor and Clinical Advisor to MedTrace, are the originators of the method.

February 4, 2023

Roche taps insider Teresa Graham for top pharma job as setbacks prompt M&A questions

Life sciences

Teresa Graham, currently head of global product strategy for Roche pharma, will become the division’s new CEO next month, Roche said Thursday. Simultaneously, Roche is elevating Levi Garraway, chief medical officer, to the executive committee.

February 4, 2023

J&J’s pharma group quietly works through global overhaul, with layoffs expected to reach multiple countries

Life sciences

Fierce Pharma has obtained internal documents and video of a town hall meeting conducted this week describing what J&J called a “comprehensive review” of its portfolio. Moving forward, J&J plans to operate its vaccines and infectious diseases outfits as one group, the executives explained.

How can we help you?

We're easy to reach