Prospects and Challenges in West Africa’s Healthcare and Pharmaceutical Sector A Synopsis

1. Opportunities and Challenges in West
Africa’s Healthcare and
Pharmaceutical Sector
Dr Aneek Gupta
D
r.
A
neek
Gupta

2. Focus Points
Focus Points
Ghana & Nigeria – Macroeconomic Overview
Pharmaceutical Industry in Ghana & Nigeria Overview
Ghana & Nigeria Pharmaceutical Market Trends and Forecasts
Pharmaceutical Market Segmentation by Therapeutic Area
Therapeutic Area Growth Analysis
Key Drivers & Restraints
Pharmaceutical Procurement Process
Competitive Analysis by Company Type
Ghanaian Pharmaceutical Industry – Detailed Overview
Key Mergers, Acquisitions & Partnerships
Future Directions for Pharmaceutical Companies in Ghana & Nigeria
Nigerian Pharmaceutical Industry – Detailed Overview
D
r.
A
neek
Gupta

3. Pharmaceutical Industry in Ghana & Nigeria
Overview
Market Stage
Growth
Market Revenue
$1.63 B
(2013) (2013)
Market Size for
Last Year of Study
Period
$3.12 B
(2018)
Base Year Market
Growth Rate
14.0%
Compound
Annual Growth
Rate
13.9%
(CAGR, 2013–2018)
Customer Price
Sensitivity
9
(scale:1 [low] to 10 [High])
Degree of Technical
Change
6
(scale:1 [low] to 10 [High])
Total Pharmaceutical Industry: Market Engineering Measurements, Ghana & Nigeria, 2013
Market Overview
Note: All figures are rounded. The base year is 2013.
Stable IncreasingDecreasing
(2013)
Prescription
Pharmaceutical
Segment Revenue
65.9%
(2013)
OTC Pharmaceutical
Segment Revenue
34.1%
(2013)
Number of
Registered Market
Participants
185
(approximately)
(active market competitors in
2013)
D
r.
A
neek
Gupta

4. Ghana & Nigeria Pharmaceutical Market Trends and
Forecasts
Key TrendsKey TrendsKey TrendsKey Trends
Robust industry growth expected toRobust industry growth expected toRobust industry growth expected toRobust industry growth expected to
near 14% p.a. in the next 5 years,near 14% p.a. in the next 5 years,near 14% p.a. in the next 5 years,near 14% p.a. in the next 5 years,
underpinned by:underpinned by:underpinned by:underpinned by:
Continuous burden of infectiousContinuous burden of infectiousContinuous burden of infectiousContinuous burden of infectious
diseases including malaria, TB anddiseases including malaria, TB anddiseases including malaria, TB anddiseases including malaria, TB and
AIDS among others drives demandAIDS among others drives demandAIDS among others drives demandAIDS among others drives demand
for antifor antifor antifor anti----infectivesinfectivesinfectivesinfectives
Increased incidence of NCDsIncreased incidence of NCDsIncreased incidence of NCDsIncreased incidence of NCDs
including diabetes, hypertensionincluding diabetes, hypertensionincluding diabetes, hypertensionincluding diabetes, hypertension
and cancer drives demand forand cancer drives demand forand cancer drives demand forand cancer drives demand for
chronic prescription drugs.chronic prescription drugs.chronic prescription drugs.chronic prescription drugs.
OTC segment expected to witnessOTC segment expected to witnessOTC segment expected to witnessOTC segment expected to witness
growth mainly for antigrowth mainly for antigrowth mainly for antigrowth mainly for anti----infectivesinfectivesinfectivesinfectives,,,,
analgesics and vitaminsanalgesics and vitaminsanalgesics and vitaminsanalgesics and vitamins
Rapid increase in uptake ofRapid increase in uptake ofRapid increase in uptake ofRapid increase in uptake of
generics anticipated owing togenerics anticipated owing togenerics anticipated owing togenerics anticipated owing to
increased NHIS coverage.increased NHIS coverage.increased NHIS coverage.increased NHIS coverage.
100% NHIS coverage in Ghana100% NHIS coverage in Ghana100% NHIS coverage in Ghana100% NHIS coverage in Ghana
expected to boost prescriptionexpected to boost prescriptionexpected to boost prescriptionexpected to boost prescription
drugsdrugsdrugsdrugs
Pharmaceutical Industry in Ghana & Nigeria: Revenue ForecastPharmaceutical Industry in Ghana & Nigeria: Revenue ForecastPharmaceutical Industry in Ghana & Nigeria: Revenue ForecastPharmaceutical Industry in Ghana & Nigeria: Revenue Forecast
Key SegmentsKey SegmentsKey SegmentsKey Segments
75%
25%
44.3%
34.1%
21.6%
Sales BreakdownSales BreakdownSales BreakdownSales Breakdown bybybyby ExclusivityExclusivityExclusivityExclusivity
Status, 2013Status, 2013Status, 2013Status, 2013
RevenueRevenueRevenueRevenue Breakdown by GeographicBreakdown by GeographicBreakdown by GeographicBreakdown by Geographic
Region, 2013Region, 2013Region, 2013Region, 2013
2.4%
7
Governments to encourage local production of essential medicines to
improve capacity utilization and reduce imports
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
2010 2011 2012 2013 2014 2015 2016 2017 2018
Revenue 1.11 1.26 1.43 1.63 1.85 2.09 2.40 2.73 3.12
Growth Rate - 13.5 13.5 14.0 13.5 13.0 14.8 13.8 14.3
GrowthRate(%)
Revenue($Billion)
CAGR (2013 – 2018) = 13.9%
Branded
Nigeria
Ghana
OTC
Generic
CAGR (2013 – 2018) = 13.9%
D
r.
A
neek
Gupta

5. Per Cent Revenue Forecast by Region
Ghana is expected to witness higher growth than Nigeria because of increased NHIS
coverage and well-defined regulatory guidelines.
0.0
25.0
50.0
75.0
100.0
2010 2011 2012 2013 2014 2015 2016 2017 2018
Ghana 27.3 25.0 26.7 25.0 27.8 28.6 29.2 29.6 29.0
Nigeria 72.7 75.0 73.3 75.0 72.2 71.4 70.8 70.4 71.0
Revenue(%)
Year
Total Pharmaceutical Industry: Per Cent Revenue Forecast by Region, Ghana & Nigeria, 2010–
2018
Note: All figures are rounded. The base year is 2013.
D
r.
A
neek
Gupta

6. Pharmaceutical Market Segmentation by
Therapeutic Area
Anti-infectives
25.8%
Cardiovascular
11.9%
Diabetes
6.2%
Respiratory
5.6%
CNS
4.4%
Oncology
3.5%
Others
7.9%
OTC
34.7%
Total Pharmaceutical Industry: Per Cent Sales Breakdown by
Therapeutic Segment, Ghana & Nigeria, 2013
Although anti-infectives constitute the largest segment of the prescriptive pharmaceutical
market, a marked shift in the burden of illness towards lifestyle diseases is expected.
Note: Others include dermatology, gastrointestinal, and rheumatology.
Note: All figures are rounded. The base year is 2013.
D
r.
A
neek
Gupta

7. Therapeutic Area Growth Analysis
Total Pharmaceutical Industry: Therapeutic Segment Growth Analysis, Ghana
& Nigeria, 2014–2018
Anti-infectives
2%
4%
6%
8%
10%
12%
14%
Cardiovascular Diabetes Respiratory CNS
Declining
Fast
Growing
Growing
Source: Frost & Sullivan
Oncology
Note: Bubble size represents market value
Continuous burden of
anti-infectives is
expected to contribute
to significantly high
growth of this
segment throughout
the forecast period.
The relatively lesser
incidence of respiratory
diseases coupled with lack
of technological expertise
for the production of certain
drug types is expected to
restrict the growth of this
segment.
This is the fastest
growing segment.
Early diagnosis,
coupled with
increasing
awareness, is
expected to fuel
the growth of this
segment.
20%
Fast
Growing
CAGR
Fast
Growing
Fast
Growing
Increasing awareness
of mental conditions
and efforts to protect
mental health of
people are expected
to drive growth in the
long-term.
The increasing rate of urbanisation
and adoption of western life style are
expected to result in an increasing
incidence of NCDs, including
cardiovascular disease and
diabetes.
D
r.
A
neek
Gupta

8. Drivers
Continuous
burden of
infectious
diseases
Increasing
incidence
of NCDs
Increased
healthcare
spending
Weak
regulatory
policies
Weak
distribution
systems
Poor
diagnosis
and patient
awareness
Restraints
Pharmaceutical Industry in Ghana & Nigeria – Key
Drivers and Restraints
• Largest reservoir of
malaria, TB and
AIDS
• Recent outbreak of
Ebola virus
• Increased public
health coverage
(90%)
• Expanded program
on immunization
(EPI)
• Increasing
adoption of
western
lifestyle
• NCDs to
constitute 21%
by 2030
• Steep rise in
chronic drugs to
essential
medicines ratio
• Pharmaceutical
spending in Africa
to reach $35 billion
by 2018
• Implementation of
NHIS to improve
access and
availability of drugs
• FDI in Africa
expected to double
by 2016
• Inadequate
number of
pharmacies
and private
clinics
• Counterfeit
drugs and
illegitimate
drug trading
• Drug registration
process time consuming
and open to corruption
• Absence of structured
pricing system poses
challenge to public
sector
• Private sector
challenged by high out-
of –pocket spending
• Poor knowledge
of diagnostic
procedures
• Patients
skeptical about
use of modern
medicines
• Lack of trained
doctors and
nurses
Source: Frost & Sullivan
D
r.
A
neek
Gupta

9. Pharmaceutical Procurement Process
Local Manufacturers
Generic Companies
Distributors
Branded
Companies
Manufacturer
Representatives Direct Sales
Distributors Teaching hospitals,
private hospitals, clinics,
pharmacies, and chemical
sellers
Total Pharmaceutical Industry: Procurement Process, Ghana & Nigeria, 2013
Key Takeaway: Engaging in strategic partnerships with local distributors is crucial for effective product distribution
in Ghana and Nigeria.
End User
D
r.
A
neek
Gupta

10. • Efforts have been made to ensure quality
production
• The WHO and UNITAID have offered technical
assistance and capacity building to Nigerian drug
makers in achieving GMP standards and WHO
pre-qualification
Branded companies predominantly target the
private sector, especially for in-demand therapies
Increasing incidence of NCDs to fuel demand for
specialty pharmaceuticals driving growth of MNCs
Importers include Indian and Chinese generic
pharmaceutical companies.
Indian generic companies, which sell drugs
mostly through NGOs and government tenders,
fare much better than their Chinese counterparts.
Local manufacturers sell own brands besides
distributing brands of MNCs and importers
High cost of local APIs poses challenge to local
manufacturers
Only a handful of local companies have gained
WHO pre-qualification status
Competitive Analysis by Company Type
Importers
36.7%
Branded
companies
34.5%
Local
manufacturers
28.8%
Per Cent Sales Breakdown by Tiers of
Competition, Ghana & Nigeria, 2013
D
r.
A
neek
Gupta

11. Key Success
Factors
Key Success
Factors
Competitive
Pricing
Competitive
Pricing
Good product
quality
Good product
quality
Well-
established
distribution
network
Well-
established
distribution
network
Marketing
Strategies
Marketing
Strategies
Brand
Recognition/
Loyalty
Brand
Recognition/
Loyalty
Total Pharmaceutical Industry: Key Competitive
Factors, Ghana and Nigeria
D
r.
A
neek
Gupta

12. Ghanaian Pharmaceutical Industry Overview
OTC
28.8%
Generic
71.1%
Branded
28.9%Prescription
71.2%
Pharmaceutical Industry:Pharmaceutical Industry:Pharmaceutical Industry:Pharmaceutical Industry: Per Cent RevenuePer Cent RevenuePer Cent RevenuePer Cent Revenue bybybyby
Product Segment, Ghana, 2013Product Segment, Ghana, 2013Product Segment, Ghana, 2013Product Segment, Ghana, 2013
Pharmaceutical Industry:Pharmaceutical Industry:Pharmaceutical Industry:Pharmaceutical Industry: Per Cent RevenuePer Cent RevenuePer Cent RevenuePer Cent Revenue bybybyby Imported andImported andImported andImported and
LocallyLocallyLocallyLocally PPPProduced Pharmaceuticals, Ghana, 2013roduced Pharmaceuticals, Ghana, 2013roduced Pharmaceuticals, Ghana, 2013roduced Pharmaceuticals, Ghana, 2013
Locally
manufactured
34.0%
Imported
66.0%
The OTC product segment is considerable, attributing
to inaccessibility issues with prescription
pharmaceuticals in certain regions, increased focus of
the local participants on the OTC sector, and heavy
advertising of OTC drugs.
Ghana has approximately 55 registered
pharmaceutical manufacturers producing finished
dose formulations.
Few companies equipped with the capabilities to
produce APIs. La Gray Chemical Company is one such
example.
Well-developed NHIS and major donor funding for
the provision of essential drugs
10-15% of locally produced drugs exported to other
West African countries.
Unregistered products account for 4% of the market;
exact share of counterfeit drugs unknown
Acute respiratory infections, malnutrition, anemia,
diarrhea, and measles account for 50% of all
childhood hospitalisation and 30% of childhood
deaths.
Note: All figures are rounded. The base year is 2013.
D
r.
A
neek
Gupta

13. Ghana – Market Analysis by Product Segment
50.6%
20.6%
28.8%
Generic Branded OTC
• Local manufacturers primarily focus
on OTC.
• Key products include combination
analgesics, tonics, vitamins, cold and
flu preparations
• High cost of imports, APIs and
intermediates to drive growth of OTC
segment
• Increased NHIS coverage could result
in slightly lesser growth
• Increasing incidence of NCDs drive
growth in this segment
• Significant proportion of Ghanaian
population are brand loyal
• Growth of niche therapy areas such
as oncology and CNS expected to
increase uptake of branded drugs
• Increasing patient awareness to
contribute to growth
• Traditionally largest
segment comprising half
the market
• Key suppliers include
importers from India and
China
• Local manufacturers
produce drugs for PEDs
• Cent percent NHIS
coverage – major growth
driver
• Generic companies likely
to win tenders in public
sector, particularly in
diabetes and
cardiovascular segments
• Expected to witness
highest growth,
representing almost 60%
by 2018
Note: All figures are rounded. The base year is 2013
D
r.
A
neek
Gupta

14. Ghanaian Pharmaceutical Industry—
Procurement and Supply Management
Tertiary
level
(Central
authorities)
Secondary level
(District and regional)
Primary level
(Community and rural areas)
PublicPublicPublicPublicSectorSectorSectorSector PharmaceuticalPharmaceuticalPharmaceuticalPharmaceutical ProcurementProcurementProcurementProcurement
The Ministry of Health (MOH) Procurement
Department is responsible for the overall
steering and management of the public
sector drug procurement.
The Ghanaian health service (GHS), a
service delivery agency under the MOH, is
responsible for the allocation of resources
and liaison with the private sector.
Public sector procurement comprises 3
levels.
o Tertiary-level services are provided by central
authorities that include the major public
teaching hospitals (Korle Bu, Komfo Anokye and
Tamale) via tendering
o secondary-level services are offered by district
and regional institutions.
o Primary-level services are provided by
community and sub-district/rural institutions
Pharmaceutical Industry: Public Sector Drug
Procurement, Ghana, 2013
D
r.
A
neek
Gupta

15. Ghanaian Pharmaceutical Industry—Procurement and
Supply Management (continued)
• Drugs that address local PEDs and
financed through TGF are
procured via ICB.
• WHO pre-qualification and
registration with FDB is required
for a product to qualify for ICB.
• Drug needs assessment is done
by the following agencies:
o ARVs – Ghana Office of
UNAIDS and WHO
o Anti-malarials – Ghana
National Malarial Control
Program
o TB drugs – Ghana National TB
Program and WHO
o NTD drugs – Ghana MOH and
WHO
International Competitive Bidding
(ICB)
Pharmaceutical Industry: Public Sector Procurement Process, Ghana, 2013
• Conducted for essential
drugs not provided through
TGF
• Product qualifications
include FDB product
registration and GMP
registration.
• Nearly 1% of ARVs and anti-
malarial drugs are procured
through NCB.
National Competitive Bidding
(NCB)
• Large number of vaccines
and medical devices such
as disposables and
condoms are donated
through UNICEF and
USAID as well as ITNs
through NGOs.
• Additionally, the research
industry donates a
significant chunk of
medicines, although the
exact amount is
unknown.
Donations
• The MoH Central Medical
Stores maintains large
supplies of drugs targeting
PEDs.
• Whenever there is an
acute supply shortage or
lengthy delay in ICB- and
NCB-based procurements,
MoH fulfils drug
procurement orders
through shopping.
• A huge amount of
essential drugs are
procured through
shopping.
Shopping
D
r.
A
neek
Gupta

16. Ghanaian Pharmaceutical Industry - Distribution
DistributionDistribution
• Drugs procured publically via ICB/NCB are
distributed by the MoH’s Central Medical Stores.
• Transported to the district medical stores managed
by district health authorities
• Dispensed from public health centers
• Anti-retrovirals, medicines for HIV/AIDS, TB, and
NTDs are distributed by the public sector and
confirmed by the Ghana Standard Treatment
Guidelines.
• Few NTD drugs produced locally; vast majority
imported via ICB/ NCB and distributed through the
public sector
• Drugs procured publically via ICB/NCB are
distributed by the MoH’s Central Medical Stores.
• Transported to the district medical stores managed
by district health authorities
• Dispensed from public health centers
• Anti-retrovirals, medicines for HIV/AIDS, TB, and
NTDs are distributed by the public sector and
confirmed by the Ghana Standard Treatment
Guidelines.
• Few NTD drugs produced locally; vast majority
imported via ICB/ NCB and distributed through the
public sector
• Highly chaotic with thousands of
intermediaries involved
• Local companies forced to create own
distribution agencies to ensure product
supply at fair prices
• Anti-malarials, particularly Artemesinin-
based combination therapy (ACTs), are
distributed at subsidised rates
• Malaria largely treated outside the public
health system ; ACT anti-malarials dispensed
as OTC products.
• ITNs imported from donors represent an
integral part of malaria treatment
• Highly chaotic with thousands of
intermediaries involved
• Local companies forced to create own
distribution agencies to ensure product
supply at fair prices
• Anti-malarials, particularly Artemesinin-
based combination therapy (ACTs), are
distributed at subsidised rates
• Malaria largely treated outside the public
health system ; ACT anti-malarials dispensed
as OTC products.
• ITNs imported from donors represent an
integral part of malaria treatment
Public SectorPublic Sector Private SectorPrivate Sector
D
r.
A
neek
Gupta

17. Ghanaian Pharmaceutical Industry—Demand
Analysis
• Local manufacturers producing drugs for malaria, TB and HIV export to other parts of West Africa.
• Large-scale manufacturers compelled to produce under capacity as the local pharmaceutical market is primarily
focused on the OTC non-essential products.
• Local pharmaceutical industry strives to address PEDs and control population morbidity.
• Supply of medicines for PEDs through TGF funding and ICB procedure is as follows:
o ARVs heavily dependent on Indian suppliers
o Anti-malarial ACTs largely supplied from India and China
o TB drugs predominantly supplied through IDA
o Drugs for NTDs are principally imported.
• Besides traditional oral and topical formulations, Ghana also has local capacity for the production of parenteral
fluids (Intravenous Infusions Limited and San Bao Company Limited).
• Vaccines and injectables imported mostly through ICB/ NCB as well as drug donations
• Increasing investment by MNCs and Indian companies in local pharmaceutical production
Local Pharmaceutical Market: Industry Capacity Utilisation, Ghana, 2013
48.0% 100%0%
(Capacity
Utilization
Potential)
D
r.
A
neek
Gupta

18. Ghanaian Pharmaceutical Industry –
Competitive Landscape
Rank Branded Companies Generic Companies Local Manufacturers
1
2
3
4
5
Other
Noticeable
Participants
Novartis, Jansen-Cilag
Glenmark, Serum Institute of
India, Mepha
Danadams Pharmaceuticals
Ltd., La Gray Chemical
Company
Pharmaceutical Industry: Key Market Participants, Ghana, 2013
D
r.
A
neek
Gupta

19. Ghanaian Pharmaceutical Industry—
SWOT Analysis
Source: Frost & Sullivan
• Under-utilisation of local pharmaceutical
manufacturing capacity often by 50%
• Limited incentives for PED drug production; hence
heavy reliance on OTC drugs
• High cost of locally-manufactured products
• Unable to conduct bio-equivalence studies
required for WHO pre-qualification
• Large variation in local ex-manufacturing prices
for comparative products
• Lack of consensus regarding TRIPS
implementation and compulsory licensing.
• Imported raw material expense and supply
shortages
• VAT on imported manufacturing materials
• Influx of low-cost Asian generics
• Parallel pharmaceutical trade
• Continued proliferation of counterfeit
pharmaceuticals
• Price sensitivity of the total pharmaceutical industry.
• Unmet human resource development needs
• Lack of focus on pharmaceutical R&D issues
Strengths
Opportunities
Weaknesses
Threats
• Well-functioning pharmaceutical regulation
systems in place
• One of the strongest pharmaceutical industries in
the Economic Community of West African States
(ECOWAS)
• High degree of economic and political stability in
Africa
• Cent per cent public health coverage
• Established local manufacturing industry
• Existence of public budget for products that
address priority endemic diseases
• WHO pre-qualification enables better access of local
producers to international markets
• Utilisation of the ‘marginal preference scheme’
applied to tenders
• Access to external funding sources and technical
assistance
• Creation of local API, excipient, and packaging
material production
• Access to the President's Special Initiative
Programme
• Effective lobbying of PMAG and WAPMA on
important local industry issues
D
r.
A
neek
Gupta

20. Nigerian Pharmaceutical Industry Overview
Pharmaceutical Industry: Per Cent Revenue
by Product Segment, Nigeria, 2013
Pharmaceutical Industry: Per Cent Revenue by
Imported and Locally Produced Pharmaceuticals,
Nigeria, 2013
Locally
manufactured
30.0%
Imported
70.0%
The OTC product segment is quite large as a
significant proportion of population yet to be covered
under NHIS operational since 2005.
Nigeria has over 10,000 unregistered patent and
proprietary drug stores selling OTC products only
Vibrant pharmaceutical industry employing about
500,000 people in manufacturing and distribution
According to the Pharmacists Council of Nigeria,
there are 128 registered drug manufacturers, 724
drug distributors, 1,543 retail pharmacies, and 292
drug importers in Nigeria.
Only 50% of population covered under NHIS
Nigerian pharmaceutical industry is quite susceptible
to parallel trading.
It is estimated that nearly 17% of essential generic
medicines and as high as 30% of anti-malarials are
routinely faked in Nigeria.
ARVs, ACTs, and anti-TB drugs considered life-saving
drugs, the government strives to encourage local
production of these medicines
Note: All figures are rounded. The base year is 2013
OTC
39.4% Generic
62.9%
Branded
37.1%
Prescription
60.6%
D
r.
A
neek
Gupta

21. Nigeria – Market Analysis by Product Segment
38.1%
22.5%
39.4%
Generics Branded OTC
• OTC segment quite large as people
practice self-medication
• Anti-malarial ACTs, analgesics, and
multivitamins constitute a large
share
• Increasing demand for vitamins and
health supplements drive growth
• Over 10,000 unregistered stores
selling OTC drugs
• High out-of-pocket payment by
patients is likely to restrict use of
premium branded drugs
• Branded drugs more commonly used
in private sector by brand-loyal
customers
• Increasing incidence of life-style
diseases and absence of cheaper
generic equivalents to drive growth
of this segment
• Smaller as compared to
Ghana as consumers are
price-sensitive
• 70% of generics imported
while 30% produced
locally
• Anti-infectives,
cardiovascular and
diabetes are key
therapeutic segments
• Expected to witness high
growth – CAGR 14.6%
Note: All figures are rounded. The base year is 2013.
D
r.
A
neek
Gupta

22. Nigerian Pharmaceutical Industry—
Procurement and Supply Management
Tertiary
healthcare
under Federal
Government
Secondary healthcare
controlled by the
State MOH
Primary healthcare controlled by the
Local Government Areas
Pharmaceutical Industry: Public Sector Drug
Procurement, Nigeria, 2013
Public Sector Pharmaceutical Procurement
The federal government is responsible for
over all policy formulation and technical
guidance to all healthcare providers.
Public sector procurement comprises 3
levels
oThe tertiary healthcare centres (University
teaching hospitals) and federal medical
centres located in 36 states procure drugs
and supplies from the federal government.
oThe secondary level healthcare comprised
of state hospitals is supplied by the State
MoH, which also offers technical support
to the local government areas (LGAs).
oThe primary level healthcare services are
taken care of by the LGAs.
• The private sector, NGOs, and traditional
health practitioners provide service across
the healthcare delivery system.
D
r.
A
neek
Gupta

23. Nigeria Pharmaceutical Industry—Procurement and
Supply Management (continued)
• BPP established in 2007 by the Public
Procurement Act (PPA) is responsible for the
overall steering and management
• Aims to ensure accountability, integrity, and
transparency in the procurement process,
establishment of pricing standards and
benchmarks
• Frames policies and guidelines for the
approval of the National Council on Public
Procurement (NCPP)
• Right to debar any supplier, service provider
or, contractor in case of violation of the Act.
The Bureau of Public Procurement (BPP)
Pharmaceutical Industry: Public Sector Procurement Process, Nigeria, 2013
• Provision of PPA that grants a margin of
preference while evaluating tenders,
comparing bids from domestic and foreign
companies.
• Margins of preference applies only to
tenders procured under ICB.
• It is required that the bidding documents
clearly state the preference and furnish
information required to establish the
eligibility of a bid for such preference.
Domestic Preference Policy
D
r.
A
neek
Gupta

24. Nigerian Pharmaceutical Industry - Distribution
DistributionDistribution
• Traditionally 3 different warehouses – The Central
Central Medical Stores, the Federal Medical Stores
(FMS), and the State Medical Stores
• Currently, all integrated into one – the Central
Medical Stores with one branch in Oshodi and
another in Abhuja.
• A mega distribution consensus model was framed to
improve distribution
• Drugs collected from the FMS in Oshodi are
distributed directly to health institutions across the
country
• Drug distribution to pharmacists is prevented,
thereby promoting rational drug use.
• Traditionally 3 different warehouses – The Central
Central Medical Stores, the Federal Medical Stores
(FMS), and the State Medical Stores
• Currently, all integrated into one – the Central
Medical Stores with one branch in Oshodi and
another in Abhuja.
• A mega distribution consensus model was framed to
improve distribution
• Drugs collected from the FMS in Oshodi are
distributed directly to health institutions across the
country
• Drug distribution to pharmacists is prevented,
thereby promoting rational drug use.
• Local manufacturers and importers have their
own distribution channels to supply
medicines
• Drugs are traded in unregistered and
unlicensed premises, and sometimes by non-
pharmacists
• A predominant hub of counterfeit drugs -
17% of essential generic drugs and 30% of
anti-malarials are routinely faked
• NAFDAC strives to tackle this problem
through radio frequency identification (RFID)
technology for logistics and tagging to detect
fake medicines
• Local manufacturers and importers have their
own distribution channels to supply
medicines
• Drugs are traded in unregistered and
unlicensed premises, and sometimes by non-
pharmacists
• A predominant hub of counterfeit drugs -
17% of essential generic drugs and 30% of
anti-malarials are routinely faked
• NAFDAC strives to tackle this problem
through radio frequency identification (RFID)
technology for logistics and tagging to detect
fake medicines
Public SectorPublic Sector Private SectorPrivate Sector
Source: Frost & Sullivan
D
r.
A
neek
Gupta

25. Nigerian Pharmaceutical Industry—Distribution
(continued)
FACTORY/EXPORT
Mega Distribution
Wholesalers Wholesalers Wholesalers
Retailers Clinics
Hospitals
Retailers Clinics
Hospitals
Retailers Clinics
Hospitals
Regional Hub –
SW
Regional Hub –
SE
Regional Hub –
North
Regional Hubs
Pharmaceutical Industry: Public Sector Drug Procurement—Mega Distribution Company Consensus Model, Nigeria, 2013
D
r.
A
neek
Gupta

26. Nigerian Pharmaceutical Industry—Demand Analysis
• Local industry meets 30% of demand while 70% is imported from India and China
• Local manufacturers produce tablets, capsules, ointments, liquid preparations, creams, lotions, and ophthalmic
preparations
• Fluctuations in capacity demand are attributed to low purchasing power within the population and the irregular
government purchase of drugs and delayed payments
• Drugs locally produced in Nigeria represent as much as 60% of the pharmaceutical production in the ECOWAS
region.
• Judicious efforts to increase utilization rate of available capacity include:
o Upgrading of facilities of local drug manufacturers to obtain the WHO pre-qualification status
o In 2010, 6 Nigerian companies gained WHO pre-qualification for supply of ARVs, anti-malarials and anti-TB drugs
o Ban imposed by Nigerian FMoH on the import of certain essential medicines to attain self-sufficiency and
reduce parallel trade
o Revised ECOWAS tariff structure for import of drugs: essential medicines, industry machinery and equipment -
0% tariff; raw materials and other capital goods – 5% tariff; intermediates – 10%; finished goods – 20% tariff;
finished products with adequate local capacity – 50% tariff
Local Pharmaceutical Market: Industry Capacity Utilisation, Nigeria, 2013
42.0% 100%0%
(Capacity
Utilization
Potential)
D
r.
A
neek
Gupta

27. Nigerian Pharmaceutical Industry – Competitive
Landscape
Rank Branded Companies Generic Companies Local Manufacturers
1
2
3
4
5
Other
Noticeable
Participants
AstraZeneca, Jansen-Cilag,
Eli Lilly
Nigeria German Chemicals
Plc, Greenlife
Pharmaceuticals Ltd.
Juhel Nigeria Ltd., Swipha,
Neimeth International
Pharmaceuticals Plc.
Pharmaceutical Industry: Key Market Participants, Nigeria, 2013
Source: Frost & Sullivan
D
r.
A
neek
Gupta

28. • Current capacity utilisation rate in Nigeria is only 45%.
• Access to affordable funding for local manufacturers is
hampered by high bank interest rates.
• High cost of locally manufactured products than those
imported
• Unable to conduct bio-equivalence studies required
for WHO pre-qualification
• Large variation in local ex-manufacturing prices for
comparative products
• Weak purchasing power threatens scope for marketing
drugs.
• VAT on imported manufacturing materials
• Influx of low-cost Asian generics
• Parallel pharmaceutical trade
• Continued proliferation of counterfeit pharmaceuticals
• Price sensitivity of the total pharmaceutical industry
• Failure to address loopholes in the distribution system
• Lack of focus on pharmaceutical R&D issues
StrengthsStrengthsStrengthsStrengths
OpportunitiesOpportunitiesOpportunitiesOpportunities
WeaknessesWeaknessesWeaknessesWeaknesses
ThreatsThreatsThreatsThreats
• More than 60% of pharmaceutical production in
ECOWAS countries is domiciled in Nigeria.
• Attainment of WHO cGMP and pre-qualification status
by certain companies enables participation in
international tenders.
• High degree of economic and political stability
• Established local manufacturing industry – technical
skills, trained manpower, and basic manufacturing
infrastructure already exists.
• Large market size, strong demand and need for better
management of anti-infectives (malaria, AIDS, and TB)
• Positive economic growth and macroeconomic stability
in recent years
• Judicious efforts taken by NAFDAC to reduce counterfeit
trade
• Government ban of imports of certain essential
medicines for which there is adequate capacity and
technical skills
• Establishment of NHIS scheme to provide universal
health coverage by 2015
Nigerian Pharmaceutical Industry—
SWOT Analysis
D
r.
A
neek
Gupta

29. Key Mergers, Acquisitions & Partnerships
Value: Undisclosed
Year of Deal: February 2014
Key Reason:
• Imperial Health Sciences, the
Life Sciences division of Imperial
Logistics, a leading distribution
company in South Africa, bought
53% stake in WWCV.
• By this deal, Imperial Logistics is
expected to leverage the well-
established supply chain network
of WWCV in Nigeria, thereby
pioneering into the healthcare
space.
Value: $86.0 million
Year of Deal: July 2012
Key Reason:
• Bought the manufacturing
facility and sales and
distribution infrastructure of
Cosme Farma
• Adcock Ingram strives to expand
its presence in the Indian
pharmaceutical market by
leveraging Cosme Farma’s strong
sales forces and nearly 60 well-
established brands in
dermatology gynecology, among
others.
Value: Undisclosed
Year of Deal: May 2012
Key Reason:
• Sanofi Aventis acquired
Medreich’s portfolio of
branded generics in Sub-
Saharan Africa
• Med Reich being the leading
generic pharmaceutical
company, Sanofi has managed
to significantly increase its
market shares in the generic
pharmaceuticals segment by
this acquisition.
Adcock Ingram –
Cosme Farma
Imperial Logistics –
Worldwide
Commercial Ventures
Limited (WWCV)
Sanofi aventis –
Medreich
Pharmaceutical Industry: Key Mergers, Acquisitions & Partnerships, Ghana & Nigeria, 2012 - 2014
D
r.
A
neek
Gupta

30. Future Directions for Pharmaceutical Companies
in Ghana & Nigeria
22
Foreign traders in Africa are expected to bolster their distribution channels by
engaging in strategic partnerships with local trustworthy stakeholders.
33
Given the immense growth potential and business opportunities, it is expected
that companies would invest significantly in their marketing capabilities, patient
awareness programmes, and treatment support services to enhance brand
loyalty.
11
Branded companies are expected to adopt a differential pricing strategy specific
to patient segments and geographies in Africa to make treatment affordable to a
large group of patients, thereby significantly expanding their customer base.
D
r.
A
neek
Gupta

31. Foreign Companies to Bolster Distribution Channels
•Addressing
loopholes in supply
chain and distribution
channels
•Technical Training of
distributors and
retailers
•Pharmacists
influence choice of
customers and
brand image
Branded Companies to adopt Differential Pricing Strategy
•Revisiting cost of commodity
generics
•Close coordination with
NGOs to penetrate rural
areas
Game-changing Strategies for the success of market participants
•Patient support programs for
technically challenging
formulations
•Investing in R&D and engaging
local patient groups
•Bar codes and
holograms to track
counterfeits
Enhance Patient Awareness and Treatment Support Services
Future Directions for Pharmaceutical Companies
in Ghana & Nigeria (continued)
•Engage in strategic
partnerships with
trustworthy local
stakeholders
•Training of
physicians and
nurses
•Detailing by medical
representatives
•Continual medical
education (CME)
programs
•Advisory/Advocacy
Boards
•Corporate Social
Responsibility (CSR)
D
r.
A
neek
Gupta

32. Dr Aneek Gupta
ThanksThanks
D
r.
A
neek
Gupta