Africa – 24% of the world’s disease burden, only 1% of its healthcare expenditure
While sub-Saharan Africa might be home to 11% of the world’s population, it holds up to 24% of the world’s “disease burden”, according to Joubert Krugel, KPMG’s Africa head of life sciences.
The continent is plagued with communicable diseases such as HIV/Aids, Malaria, TB, with an increase in non-communicable diseases such as diabetes and cardiovascular diseases.
“But yet we only attract about 1% of global healthcare expenditure,” said Krugel
The recent Ebola outbreak, which took tragic numbers of lives across Guinea, Liberia and Sierra Leone, showed how unprepared African healthcare systems are for national crises. And that many governments and institutions take a reactive, rather than preventative approach to healthcare.
If the continent is to address its healthcare problems, noted Krugel, all stakeholders will need to play a role – from governments to the private sector.
Manufacturing locally a challenge
“Now the way the life sciences industry can help is by providing consistent supply of medicines of high quality and low cost. And I think that’s where the challenge comes.”
Krugel explained the African healthcare industry is generally heavily reliant on donor-funded agencies and foreign companies to provide medicines, the vast majority of which is imported.
One key solution would be to produce quality pharmaceuticals at a lower cost locally, but this is easier said than done. For starters, developing an ecosystem around manufacturing pharmaceuticals on the continent is limited by a number of challenges. These include a lack of funds and investment in infrastructure.
“If you just look at the availability of active pharmaceutical ingredients and raw materials, we don’t really have the manufacturing capacities. We are very reliant on importing just the basic raw materials and active pharmaceutical ingredients.”
Lack of adequate skills in the sector also poses a problem. “We’ve got major shortages in skills because we see a ‘brain drain’ of our skilled professionals, especially in the life sciences space, going elsewhere to Europe, US and Far East.”
Furthermore, Krugel noted local pharmaceutical companies have to compete with “cheaper medicine” coming in from India and China, with counterfeit pharmaceutics being a massive phenomenon in Africa as well.
“And to top all of that, the regulatory environment is also very fragmented across the continent. You don’t have harmonised technical and quality requirements. And you don’t have the necessary capacity to effectively implement and regulate these regulations where they are in place.
“So it’s quite a complex environment with many challenges one needs to address.”
Long waiting periods
According to Krugel, companies also have to face delays with registering new drugs or vaccines locally.
“For example, in South Africa if you want to register a new drug, it can take you anything between three and five years through the local medicines control council to get a drug registered. This is a massive delay to ensure access to medicine within our market.”
He added that KPMG has three clients actively researching and developing potential vaccines for Ebola, but even if they did develop a cure, it would be a long time before approval and distribution in the country.
“It’s a big problem,” Krugel said, adding there needs to be a more streamlined framework in place between industry players and government healthcare systems to get quality medicines and vaccines to market as quickly as possible.
Local partnerships can help
But, according to Krugel, it’s not all “doom and gloom” and there is movement by governments and stakeholders to streamlining regulatory frameworks and improving healthcare infrastructure. The African Union has also taken some significant steps to actively involve the life sciences industry to better improve the continent’s pharmaceutical manufacturing landscape.
He noted the private sector could also better operate within these countries by understanding its specific healthcare environments, and building their business model specifically to that environment.
“What [successful multinationals] also do is they tend to partner with local players who also understand the market better, and they tend to have an existing distribution channel.”
Other multinationals have also been successful in licensing out some of their key product portfolios to local companies who can manufacture in African countries on their behalf.
“So we’ve seen that type of model seems to work well,” Krugel concluded.