News Room

AFRICAN PHARMACEUTICALS NEED TO PLAY A ROLE IN ADDRESSING AFRICA’S DISEASE BURDEN

“African pharmaceutical entities have got to take the lead in addressing the maladies of the continent. Fundamental research around basic medicines and the way they are administered is required. We also need to find effective ways of getting them to the end-user,” says Kofi Amegashie, Adcock Ingram Managing Executive - Africa.

Amegashie says large multi-national pharmaceutical companies invest heavily in researching diseases that prevail in their immediate communities. “Their main interest is in middle class or “western” ailments such as lifestyle diseases, oncology and erectile dysfunction, amongst others.

“Obviously, this is a generalisation. As recently as October 2013, GSK announced it may have found a vaccine for malaria, which could transform the lives of many people in sub Saharan Africa. That notwithstanding, research into the burden of disease in Africa is not the main focus for large western-based multi-national pharmaceutical companies,” he says.

Much of the disease burden on the continent can be directly linked to inadequate infrastructure development. “A lack of running water and poor sanitation provides the perfect breeding ground for diarrhoeal and upper respiratory tract diseases. The vast majority of people on our continent live in poor infrastructure environments. This results in compromised hygiene and the accompanying diseases.

“While the advent of generic drugs has helped with the provision of affordable, bulk medicines in the treatment of these diseases, pharmaceutical companies are not doing adequate fundamental research into improving existing medicines and the way in which they are administered. Take antibiotics, for example. Many of them are fairly old molecules and in some areas, their effectiveness is questionable because the bugs have mutated,” says Amegashie.

This is exacerbated by the inability of many African regulators to police their own regulations when it comes to dispensing higher schedule prescription drugs at pharmacies. “In South Africa or the West you cannot buy antibiotics over the counter without a script, but in the vast majority of sub Saharan African countries you can. This self-medication often results in the “abuse” or overuse of various drugs. While this scenario may seem great for business in the short term, it is not responsible in the long term as the efficacy of the drugs may be reduced when resistance to them increases,” says Amegashie.

There is another side to Africa’s disease burden. A growing middle class means more people are becoming increasingly urbanised, doing less manual work and being saddled with the burdens of a middle class life - sitting in traffic, not having too much time for themselves and being employed in sedentary jobs. This type of life is accompanied by middle class diseases such as hypertension, obesity and diabetes.

Amegashie says the latest drugs created to treat lifestyle diseases are relatively expensive. “Even though there is an emerging middle class on the continent that is falling prey to the maladies of the middle class, many do not have the purchasing power of the middle class in the West, which makes the drugs inaccessible to them.  

“The gap is once again taken up by more affordable generic drugs, but these are mass products with very low unit margins. If you’re first to market with a generic, you can make a lot of money, but by the time a second player comes in, the drug has become fairly commoditised. In addition, multi-nationals are starting to play in the generic space. And, why not? They have the original molecule and it’s coming off the same line as the brand.”

And therein lies the conundrum. “We’re a for-profit company, but we want to provide acceptable and affordable medicine to as many people as possible. We have to address the affordability issue by reducing the unit margin of our products. So, the only way to make our margins is to sell as many units as we can,” says Amegashie.

One of the solutions, says Amegashie, is to invest in distribution. “We need to build a comprehensive distribution network of depots, distribution trucks and salespeople. Your footprint or distribution capability in a country or geographical location is what drives your overall profitability when you’re selling low margin products.”

He cites the example of Coca Cola to illustrate his point. “If you climbed up to Mount Everest, you’d probably find someone selling Coca Cola at base camp. I’m exaggerating of course, but in most countries Coca Cola has a greater than 95% numerical distribution. That comes from investing heavily and cleverly in distribution on the ground. So, how do we replicate the Coca Cola distribution capability?

The game changer on the continent is the route to market. “Your ticket to the game is having the right quality product, the pharmacists, the correct formulation etc. Almost every pharmaceutical company has that. And you cannot just cater to the small upper to middle class consumer cohort. You’ve got to think “continent”. In South Africa, the focus tends to be on the nine-million people who have medical aid. But, what about the 40-million plus who don’t have medical aid? They’re not targeted because they ‘don’t have money’.

“The poor still need medicine and many of them are catered for by governments, corporate organisations (as part of their corporate social investment initiatives), or multi- and bi-lateral agencies. So we, as pharmaceutical companies, need to interact with the corporates with CSI programmes or the multi-lateral agencies such as the World Health Organisation (WHO) or bi-lateral agencies such as USAID. In addition to possibly partnering with them, we can learn from the insights and data they have gathered by being on the ground,” says Amegashie.

Importantly, African-based pharmaceutical companies need to acknowledge they cannot operate in isolation. “It is not possible to be a purely commercial endeavour on the continent. When the Malawian government hospitals ran out of saline drips earlier this year, we sent two container-loads of drips worth about R1 million.”

Amegashie says the purchasing power of the informal sector lies in the small ‘moms and pops’ stalls. “Many countries on the continent do not have the equivalent of our Pick ‘n Pay outlets and there is no buying of pallet-loads in one go. Distribution has to be flexible. It’s a major undertaking and we cannot adopt the same strategy we adopt here in South Africa. Instead of negotiating with a Clicks or Dis-Chem, we have to adopt a complex door-to-door approach and fight for every tablet sale.”

This requires a deep understanding of the markets, which can only be achieved by harnessing the insight and skills of the right people in the various regions. “These people understand their markets better than I do. I defer to them all the time. I cannot sit in Johannesburg and dictate what each market needs and wants,” says Amegashie.

“As African’s living in the community, I believe we have a duty to address the maladies of our people. It is not always easy to get people to rally around this type of thinking when they’re focused on the immediate bottom line. But, it’s important to think longer term. If the guys who started Adcock Ingram 120 years ago only thought about the there and then, the company wouldn’t be where it is today,” he says.

According to a West African proverb, we do not inherit the earth from our ancestors. We borrow it from our children. “It’s a very different way of looking at things. When we think about sustainability, we tend to blame our current situation on things that happened in the past. If we flip that idea on its head, we are forced to adopt a whole new approach, to think ahead. And who doesn’t want to give something better back to their children? It’s a no-brainer.”

Ends