India is Strengthening its Position in Africa’s Healthcare Sector
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India is Strengthening its Position in Africa’s Healthcare Sector
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By Naam Chakravorty, Gulf Lead, Botho Emerging Markets Group
October 28, 2022
India has played a significant role in the development of the pharmaceutical and healthcare industries in Africa. The country has a long history of cooperating with various African countries to combat and eradicate infectious diseases by offering generic medications at affordable prices. Additionally, it has launched development initiatives to enhance the skills of the local workforce and provide timely pharmaceutical aid.
The African continent remains a lucrative market for pharmaceutical companies with fewer than 400 local drug makers supplying 1 billion people. By comparison, China and India, each with roughly 1.4 billion in population, have as many as 5,000 and 10,500 drug manufacturers, respectively. With so few manufacturers, Africa relies heavily on imports to keep its population healthy. In most sub-Saharan African markets, imports account for as much as 70% to 90% of drugs consumed. This discrepancy was made worse by COVID-19, which prompted leaders to focus on the homegrown production of pharmaceuticals and capacity building to improve health systems across the continent. In light of the changing healthcare landscape in Africa, India is redefining its engagement with the continent to forge deeper economic and trade ties.
India's pharma trade in Africa is supported by the fact that it continues to be disruptive
India’s capability to produce inexpensive generic drugs has been the cornerstone of its trade partnership with Africa. The country achieved significant progress in providing life-saving antiretroviral (ARV) medications, which are essential for containing and stopping the spread of HIV/AIDS. For instance, in the early 2000s, when big pharma globally was selling ARV medications for $10,000 to $15,000, the Indian generic pharmaceutical firm Cipla Ltd offered a triple combination of ARV treatment for $350 per person per year. More recently, in 2017, Mylan and Aurobindo, two Indian generic pharmaceutical companies, disrupted the market by offering the generic ARV for $75 per patient per year. This product is being distributed in 92 nations, the majority of which are in Africa. Another example is the successful elimination of meningitis-A in Africa. MenAfriVac, a vaccine created especially for the African meningitis belt, was made accessible to the region in 2010 for just $0.50 per vaccination by the Serum Institute of India, the World Health Organization, and the Bill & Melinda Gates Foundation.
These headline initiatives have bolstered India's pharma exports to African nations, which account for about 20% of India's overall pharma exports totaling around US$ 17 billion. However, African leaders have realized the need for fundamental reforms since the pandemic. The COVID-19 outbreak revealed Africa's gaps in ensuring access to life-saving medications, vaccinations, and medical technology. African governments increasingly see the availability of safe, effective, and reasonably priced treatments and vaccines as a national security concern.
Since the pandemic, the African healthcare system has been pushing for reforms
Several initiatives are in motion to address the current issues with local manufacturing and the accessibility of high-quality healthcare. One example is the African Medical Agency, a project the African Union launched in 2009, which, as of 2020, has been ratified by 15 African nations. The project attempts to streamline regulatory procedures across Africa to enable faster medication development and access. Secondly, at the World Health Assembly of the WHO in 2021, a resolution on local production of pharmaceuticals, medical devices, and vaccines was presented with the support of 54 African nations. Lastly, regional organizations like COMESA, SADC, and ECOWAS are working to standardize pharmaceutical registration and regulations.
Africa is working toward becoming more self-reliant regarding the production and availability of pharmaceuticals. As such, trading partners like India are realizing the need to shift their stance of trade-focused and donor partnerships to one that supports Africa's goals.
India’s current strategy is to make itself Africa’s partner of choice in achieving its healthcare objectives
India has largely focused on building capacity in the last decade to support the growth of Africa's healthcare industry. Launched in 2018, the e-VidyaBharati and e-AarogyaBharati (e-VBAB) Network Project, a five-year flagship initiative of India, offers free online courses in healthcare-related disciplines to 4,000 students each year from 19 African countries. However, in the context of Africa's evolving healthcare sector, India's e-VBAB program and other comparable capacity-building-focused programs are falling short.
Recently, India has taken steps to embed itself in the continent’s healthcare ambitions rather than working as an outsider. For instance, the Indian pharmaceutical giant Cipla has established manufacturing plants in South Africa, Uganda, Kenya, and Morocco over the past few years. Additionally, in 2018, it opened a facility in South Africa dedicated to the production of biosimilars that will be used to treat cancer and other diseases. Cipla is also forming international alliances, such as its most recent one with the global biotech company mAbxience, to lower the cost of these medications.
More recently, in October 2020, India and South Africa presented an initial proposal to the World Trade Organization to temporarily waive intellectual property rights regarding vaccines, therapeutics, and diagnostics to prevent, contain, and treat COVID-19. The proposal, which has been gaining momentum, would open up the avenue for African countries to expand vaccine production on the continent. In fact, preparation has already begun: The Institut Pasteur in Dakar, Senegal, with support from a number of donors, is constructing a facility that aims to produce 25 million doses monthly by the end of 2022. Additionally, the Serum Institute of India, the world's biggest vaccine maker, announced in 2022 that it is considering setting up its first manufacturing plant in Africa as it looks to expand globally.
India realizes that Africa is ripe for further investments in the healthcare sector. The AfCFTA's establishment could further bolster India's growing influence in Africa because it has the potential to create an easily accessible continental market for Indian businesses, broadening the scope of the country’s engagement with Africa. By carefully coordinating its goals with those of the continent, the country is enhancing its pharmaceutical trade in the region and positioning itself as the preferred partner for African leaders, as well as any foreign entities establishing healthcare manufacturing or operations there.
Naam Chakravorty is the Gulf Lead at Botho Emerging Markets Group