Africa Pharmaceuticals Market

Africa Pharmaceuticals Market Outlook (2023 to 2033)

The Africa pharmaceuticals market generated US$ 46.8 billion in revenue in 2022. The market is predicted to expand at a CAGR of 8.3% and reach a valuation of US$ 110.9 billion by 2033-end, according to the latest study by Persistence Market Research.

Africa is undergoing rapid urbanization, with a significant portion of the population relocating from rural settings to urban centers. This urbanization trend is driven by factors such as employment opportunities, improved infrastructure, and better access to services. As more people move to urban areas, there is an increased concentration of population in cities. This demographic shift brings about changes in healthcare needs and demands.

Urbanization is often accompanied by lifestyle changes. As people transition to urban areas, they adopt new behaviors and habits influenced by urban lifestyles. These changes include dietary shifts towards processed foods, reduced physical activity levels, and increased tobacco and alcohol consumption. These lifestyle factors are associated with various health risks and contribute to the growing burden of non-communicable diseases in Africa.

The pharmaceutical market in Africa is responding to these trends by providing a wide range of medications to address the healthcare needs of urban populations.

• Africa accounted for 3.2% of global pharmaceutical sales in 2022.
• Oral formulations constituted 47.3% of overall pharmaceutical sales in 2022.

AfCFTA presents an opportunity to address the challenge of small fragmented markets, which have hindered the competitiveness of African countries against Asian manufacturers. By establishing a continental market, the AfCFTA enables economies of scale, allowing businesses to achieve higher production volumes and cost savings. Furthermore, regional markets facilitate specialization, fostering the development of regional procurement markets that are attractive to investors.

Recent Market Developments

• The African Development Bank (AfDB) launched the African Pharmaceutical Technology Foundation, an innovative effort designed to revolutionize Africa's homegrown pharmaceutical sector. This foundation is dedicated to improving Africa's availability of technologies that facilitate the production of medicines, vaccines, and various pharmaceutical goods, simultaneously diminishing the region's reliance on imports.
• The African Pharmaceutical Technology Foundation, once fully established, is expected to serve as an intermediary organization, facilitating deals and promoting the interests of the African pharmaceutical sector with global pharmaceutical companies.
• Growth of the pharmaceutical industry in Africa is being facilitated by the African Continental Free Trade Area (AfCFTA), which is addressing longstanding regulatory challenges. Also, the Africa Medicine Regulatory Harmonization (AMRH) initiative, aims to overcome the issues arising from misaligned regulatory frameworks, leading to limited access to medicines and high prices.
• Progress has already been made through the AMRH initiative, with appropriate standards achieved for four out of seven East African National Medicine Regulatory Authorities (NMRAs) and five West African NMRAs. Additionally, the time required for marketing approvals has been significantly reduced from over a year to 7 to 8 months in the East African Community and the Southern African Development Community regions.

How is the Market for Pharmaceuticals Evolving in Africa?

“Increasing Prevalence of Non-communicable Diseases and Government Initiatives Supporting Pharmaceutical Production”

Government initiatives play a crucial role in driving the African pharmaceutical market, and the AfCFTA-Anchored Pharmaceutical Initiative is a notable example.

• The United Nations Economic Commission for Africa (UNECA) was launched in 2019, and this initiative aims to improve access to essential medicines and create fiscal space for African governments and is supported by the African Business Coalition for Health (ABCHealth). The initiative focuses on 10 pilot countries, including Seychelles, Madagascar, Comoros, Mauritius, Djibouti, Eritrea, Rwanda, Sudan, Kenya, and Ethiopia.
• The successful launch of the initiative's Centralised Pooled Procurement Mechanism (CPPM) in July 2021 highlighted the potential for private sector investment, job creation, and productivity gains. The Pharmaceuticals Manufacturing Plan for Africa (PMPA) AfCFTA and the Africa Medicines Agency (AMA), are key components leveraged to enhance the initiative's impact.

By implementing the AfCFTA-Anchored Pharmaceutical Initiative, Africa aims to address short-to-medium-term challenges by harmonizing national standards and pooling procurement efforts.

As chronic diseases such as cardiovascular diseases, diabetes, cancer, and respiratory illnesses become more prevalent in Africa, there is a growing demand for medications to manage these conditions. The increasing burden of chronic illnesses necessitates the availability and accessibility of a wide range of pharmaceutical products to meet the healthcare needs of the population.

Increasing prevalence of chronic diseases and government initiatives seek to attract increased investment in pharmaceutical production and exports, promoting self-sufficiency and economic growth, thereby driving market growth in Africa.

What Hurdles Does the Pharmaceuticals Market Face in Africa?

“Lack of Sustainable Health Financing Mechanisms and Limited Access to Essential Medicines”

A significant challenge in the African pharmaceuticals market is the absence of proper health financing frameworks, which hinders access to affordable medicines. Despite the commitment made in the 2001 Abuja Declaration, where African leaders committed to dedicating a minimum of 15% of the overall government budget to healthcare, only a handful of nations have managed to fulfill this objective.

• According to the World Health Organization (WHO) 2020, among the 22 African nations that were evaluated, merely five (Botswana, Togo, Madagascar, Rwanda, and Zambia) have successfully honored this obligation. Furthermore, several countries fall short of meeting the stipulated minimum health expenditure of US$ 44 per person, as defined by the High-Level Task Force on Innovative International Financing for Health Systems.

Inadequate health financing poses challenges to accessing medicines in Africa, leading to high out-of-pocket payments and financial risks. In fact, over 40% of total health expenditure in at least 20 African countries is financed through out-of-pocket payments, which often result in catastrophic health expenditure and can push families below the poverty line (WHO, 2020).

Low health insurance coverage further exacerbates the problem. In countries like Nigeria, where only a small percentage of the population is covered by the National Health Insurance Scheme (NHIS), many individuals cannot afford essential medicines due to the lack of financial protection. This is especially true for those in the private sector, self-employed individuals, and the unemployed, who constitute a large portion of the population.

The lack of sustainable health financing poses a substantial hurdle to maximizing healthcare treatment results across Africa. The overpriced medicines render it nearly unfeasible for individuals with low incomes to obtain essential care, resulting in unfavorable health consequences and the continuation of the poverty cycle.

Country-wise Insights

Why is Nigeria a Lucrative Market for Pharmaceutical Manufacturers?

“Increasing Investments in Healthcare Research and Development”

In terms of revenue share contribution, Nigeria accounted for 9.3% share of the pharmaceuticals market in Africa in 2022. Sales of pharmaceuticals in the country are expected to increase at a CAGR of 7% between 2023 and 2033.

The Nigerian government has been implementing various initiatives to improve healthcare access and affordability. This includes programs to increase the availability of essential medicines, establish healthcare centers in rural areas, and promote local manufacturing of pharmaceutical products. The National Drug Distribution Guidelines, the Nigerian Drug Policy, and the establishment of the National Agency for Food and Drug Administration and Control (NAFDAC) to regulate and ensure the quality of pharmaceutical products are some examples.

What is the Demand Outlook for Pharmaceuticals in the Democratic Republic of Congo?

“Growing Emphasis on Enhancing Local Manufacturing Capacity and Improving Distribution Systems”

The Democratic Republic of Congo accounted for 3.9% share of the African market in 2022.

The country is increasingly focusing on local production and manufacturing of pharmaceutical products. This involves setting up manufacturing facilities within the country to reduce dependency on imports. The country is grappling with non-communicable diseases such as cardiovascular diseases and diabetes. The increasing burden of diseases drives the demand for pharmaceutical products, including treatments, vaccines, and diagnostic tools.

Rising population in the Democratic Republic of Congo, coupled with increasing healthcare needs, drives the demand for medicines, vaccines, and other pharmaceutical products. This makes the Democratic Republic of Congo a prominent market for players looking out for opportunities in the market.

Category-wise Insights

Which Dosage Form Accounts for Higher Sales of Pharmaceuticals in Africa?

“High Sales of Oral Formulations Driven by Their Simplicity of Administration and Affordability”

Oral formulations, by dosage form, occupied 47.3% share in 2022 of the market.

Oral formulations, such as tablets and capsules, are generally easy to administer. They do not require specialized medical personnel, making them suitable for self-administration at home. This is particularly important in regions with limited healthcare infrastructure. Oral medications are familiar to most patients and are often preferred due to their convenience. Patients are more likely to adhere to prescribed treatments when they are comfortable with the administration method.

Manufacturing oral formulations are often more cost-effective compared to more complex dosage forms like injectables or inhalants. This affordability makes them more accessible to a larger portion of the population in Africa.

The high occurrence of chronic illnesses in this area impacts the favorability of oral dosage formats. Since a significant number of ailments can be efficiently managed using oral medicines, pharmaceutical enterprises are placing increased emphasis on the creation and promotion of oral formulations.

Competition Landscape

The pharmaceutical sector is highly fragmented, with several rivals providing products at a regional scale. Pharmaceutical and biotech companies are investing in research and development to introduce new drugs in the African market. Also, key players consider pricing strategies that align with local market dynamics and reimbursement systems. Strengthening collaborations and long-term contracts with other manufacturers of pharmaceutical products foster market growth.

• In January 2023, Sanofi Ventures unveiled an extended multi-year dedication from Sanofi, involving a raised capital amount surpassing US$ 750 million for the Evergreen Venture Fund. This augmentation is expected to boost the growth and investment capabilities of Sanofi Ventures' global investment unit.
• In August 2022, Aspen initiated a collaborative arrangement with the Serum Institute of India to produce and supply four vaccines under the Aspen brand specifically for the African region.
• In January 2021, Pfizer Inc. allocated a combined sum of US$ 120 million to support four biotechnology firms in clinical stages. This commitment is part of the Pfizer Breakthrough Growth Initiative (PBGI), wherein Pfizer is dedicating up to US$ 500 million to biotech companies, offering financial backing and access to Pfizer's scientific proficiency to sustain the progress of encouraging clinical development programs.

Similarly, the team at Persistence Market Research has tracked recent developments related to companies active in the Africa pharmaceuticals market, which are available in the full report.

Africa Pharmaceuticals Industry Report Scope

Key Segments of Africa Pharmaceuticals Industry Research

Dosage Form:

• Oral Formulations
  • Tablets
  • Capsules
  • Powders & Granules
  • Lozenges & Pastilles
  • Gummies
  • Others
• Parenteral Formulations
  • Solutions
  • Suspensions
  • Emulsions for Injection or Infusion
  • Powder for Injection or Infusion
  • Gel for Injection Implants
• Topical Formulations
  • Pastes
  • Ointments & Oils
  • Creams, Lotions, and Foams
  • Gels, Tinctures, and Powder
  • Sprays & Patches
• Inhalation Formulations
  • Pressurized Metered Dose Inhalers
  • Dry Powder Inhalers (DPIs)
  • Nebulizers

Country:

• Nigeria
• Benin
• Democratic Republic of Congo
• Republic of the Congo
• Ivory Coast
• Sierra Leone
• Rwanda
• Rest of Africa

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