INDIAN PHARMACEUTICALS IN EMERGING AFRICAN ECONOMY

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www.wjpr.net Vol 9, Issue 8, 2020. 252 INDIAN PHARMACEUTICALS IN EMERGING AFRICAN ECONOMY Ku. Sadhvi Tiwari* 1 and Amitkumar Patel 2 1,2 Department of Pharmaceutical Regulatory Affairs Graduate School of Pharmacy, Gujarat Technological University, Gandhinagar, Gujarat, India. ABSTRACT India being a global provider of Generic medicines at a competitive price will escalate its market to more than US$38.3 Billion by 2022. India should focus on leveraging its pharma export by strengthening its position in market and making long term strategy. Main aim of this review is to analyse market potential of Indian Pharmaceuticals in Emerging African Economy, especially Nigeria, Egypt and Tanzania. Regulatory Norms for Market Authorization is discussed in brief to create awareness in stakeholders associated with trade of pharmaceuticals alert of regulatory procedures in these countries. This review focuses on exploring trade opportunities in such African Economies. PESTEL Analysis is done to analyse, economic and trade indicators. Regulatory norms of these three countries are discussed for export and marketing. SWOT Analysis indicates higher profit if distribution of pharmaceuticals are protected from being counterfeit, which is prevalent in these nations. Exporting Anti-infective and Anti-malarial drugs would give major profit in such regions. KEYWORDS: Market potential, trade opportunities, regulatory norms, trade indicators, PESTEL analysis, and SWOT analysis. INTRODUCTION Indian pharma market is 3 rd largest in terms of capacity and 13 th largest in terms of value. Generic drugs constitute about 70% of the market, whereas Over the Counter (OTC) and patented drugs make up to 21% and 9% respectively. Few African countries are part of Emerging markets for Pharmaceuticals. [1] World Journal of Pharmaceutical Research SJIF Impact Factor 8.084 Volume 9, Issue 8, 252-266. Review Article ISSN 2277– 7105 Article Received on 10 June 2020, Revised on 30 June 2020, Accepted on 20 July 2020, DOI: 10.20959/wjpr20208-17962 *Corresponding Author Ku. Sadhvi Tiwari Department of Pharmaceutical Regulatory Affairs Graduate School of Pharmacy, Gujarat Technological University, Gandhinagar, Gujarat, India.

Transcript of INDIAN PHARMACEUTICALS IN EMERGING AFRICAN ECONOMY

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INDIAN PHARMACEUTICALS IN EMERGING AFRICAN ECONOMY

Ku. Sadhvi Tiwari*1

and Amitkumar Patel2

1,2

Department of Pharmaceutical Regulatory Affairs – Graduate School of Pharmacy, Gujarat

Technological University, Gandhinagar, Gujarat, India.

ABSTRACT

India being a global provider of Generic medicines at a competitive

price will escalate its market to more than US$38.3 Billion by 2022.

India should focus on leveraging its pharma export by strengthening its

position in market and making long term strategy. Main aim of this

review is to analyse market potential of Indian Pharmaceuticals in

Emerging African Economy, especially Nigeria, Egypt and Tanzania.

Regulatory Norms for Market Authorization is discussed in brief to

create awareness in stakeholders associated with trade of

pharmaceuticals alert of regulatory procedures in these countries. This

review focuses on exploring trade opportunities in such African

Economies. PESTEL Analysis is done to analyse, economic and trade

indicators. Regulatory norms of these three countries are discussed for

export and marketing. SWOT Analysis indicates higher profit if distribution of

pharmaceuticals are protected from being counterfeit, which is prevalent in these nations.

Exporting Anti-infective and Anti-malarial drugs would give major profit in such regions.

KEYWORDS: Market potential, trade opportunities, regulatory norms, trade indicators,

PESTEL analysis, and SWOT analysis.

INTRODUCTION

Indian pharma market is 3rd

largest in terms of capacity and 13th

largest in terms of value.

Generic drugs constitute about 70% of the market, whereas Over the Counter (OTC) and

patented drugs make up to 21% and 9% respectively. Few African countries are part of

Emerging markets for Pharmaceuticals.[1]

World Journal of Pharmaceutical Research SJIF Impact Factor 8.084

Volume 9, Issue 8, 252-266. Review Article ISSN 2277– 7105

Article Received on

10 June 2020,

Revised on 30 June 2020,

Accepted on 20 July 2020,

DOI: 10.20959/wjpr20208-17962

*Corresponding Author

Ku. Sadhvi Tiwari

Department of

Pharmaceutical Regulatory

Affairs – Graduate School

of Pharmacy, Gujarat

Technological University,

Gandhinagar, Gujarat, India.

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Factors in favour of Indian pharmaceutical market are

Industrialized data services in R&D.

Low regulatory barriers in United States of America (USA) and other countries.

Widespread population aging and sedentary lifestyles causing increased chronic diseases.

High urban pollution levels increasing the incidence of conditions like asthma, lead to rise

in health expenditure.

Reduced taxes & low drug prices.

GDP growth in India.

Emerging economies of world need better access to pharmaceuticals and there is high

demand for treatment of chronic diseases.[2] [3]

Following countries fall under emerging economies

BRICS (Brazil, Russia, India, China & South Africa)

Latin America (Argentina along with Brazil)

Middle East and North African region - MENA (Egypt, Iran, Saudi Arabia and Algeria

mainly)

Sub-Saharan African - SSA region (mainly South Africa, Tanzania, Uganda, Ethiopia,

Democratic Republic of Congo and Kenya)

Nigeria, Chile, Colombia, South Korea, and Turkey etc.

Many African countries are part of Emerging markets for Pharmaceuticals. Bilateral Trade

relation between Indian and Africa helps Indian companies to export their pharmaceuticals in

Africa.[2] [3]

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PESTEL ANALYSIS FOR PHARMA MARKET IN AFRICA[4]

Figure 1: PESTEL Analysis for Pharmaceutical Drug Market: Africa.

PESTEL Analysis provides theoretical insight that Africa can be a potential importer of

Indian Pharmaceuticals due to its exponential growth in economy and population.

Distribution of pharmaceuticals is poorly implemented in countries like Nigeria, Egypt and

Tanzania which are also the countries having huge market potential.

EXPORT POTENTIAL OF PHARMACEUTICALS IN AFRICA[5]

As per Exim India data, India‟s exports of pharmaceutical products to Africa were around

US$2.8 billion in Financial Year (F.Y.) 2017-18 and represented about 22% of India‟s global

exports of pharmaceuticals. South Africa and Nigeria were the leading destinations with a

combined share of 30% in 2017, due to demographic factors and the size of the health care

sector. The export potential for pharmaceutical products to Africa is estimated at US$4.2

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billion. The region with the greatest export potential is Eastern Africa (US$2.3 billion),

followed by Southern Africa (US$637 million)

Figure 2: Export Potential of Pharmaceutical products by region (US$ million)

Pharmaceutical export from India to Africa[5]

[6]

African markets are a natural fit for Indian Pharmaceuticals in, providing low price

competitive drugs. Generic anti-retroviral (ARV) and anti-malarial drugs from India have

helped public health departments to cope with such diseases. Africa as a region accounted for

21.3 per cent in India‟s total exports of drug formulations and biological during the year

2015-16. India‟s Pharma export to Africa in financial year 2018-19 was 3436.44 US$ million

with positive change of 2.67% in whole. South Africa, Nigeria, Kenya and Uganda were

among top 25 pharmaceutical importing countries from India.

Table 1: India’s Top Pharma Exports in Africa.

Exports in African country In US$ million %

Change Rank Country F.Y. 2016-17 F.Y. 2017-18 F.Y. 2018-19

3 South Africa 484.89 582.99 619.08 6.19

6 Nigeria 397.99 466.67 447.95 -4.01

12 Kenya 325.43 254.63 261.01 2.51

24 Uganda 153.57 155.82 177.13 13.68

Table 2: India’s export in 2018-19 of Drugs, Pharmaceuticals & Fine Chemicals for

Major African Region.

Country Export in mn $

Nigeria 447.95

Ethiopia 142.78

Egypt 145.25

Democratic Republic (DR) of Congo 92.31

South Africa 619.08

Tanzania 162.08

Kenya 261.01

Uganda 177.13

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DEVELOPING SCENARIO OF AFRICA

African continent is 2nd

largest and 2nd

most populous in the world. It is responsible for almost

25% of the global disease burden. 70% of all HIV/AIDS patients and 90% of malaria

fatalities are recorded in this continent. Despite of this entire African continent is growing

rapidly and few economies are showing steadfast determination to innovate and grow.[7] [8] [9]

Table 3: Economic Indicators showing growth of Major African Economies.

Country Population

% Change

in

Population

GDP (nominal)

per capita in

US$

Total Health

Expenditure

[US$]

Nigeria 200,963,599 #7 +2.6% 2,049 215

Ethiopia 112,078,730 #12 +2.6% 853 66

Egypt 100,388,073 #14 +2.0% 2,573 495

DR of Congo 86,790,567 #16 +3.2% 449 59

South Africa 58,558,270 #24 +1.3% 6,377 1,086

Tanzania 58,005,463 #25 +3.0% 1,134 32

Kenya 52,573,973 #27 +2.3% 1,857 157

Uganda 44,269,594 # 32 +3.6% 724 139

# World Population

Table 4: Trade Data of Major African Economies.[10] [11]

Country

Import of

Pharmaceuticals

in US$ (2017)

Import of

Pharmaceuticals

from India in US$

(2017)

Import of

Pharmaceuticals/No. of

Population *Total Health

Expenditure

Nigeria 358,040 167,912 0.38

Ethiopia 536,110 124,836 0.32

Egypt 2,187,899 24,977 10.79

Democratic Republic

(DR) of Congo 420,528 581 0.29

South Africa 2,234,654 492,843 41.44

Tanzania 425,233 251,904 0.23

Kenya 518,284 234,185 1.55

Uganda 271,063 140,736 0.85

Inference from Statistical Data

From Economic and Trade Indicators like:

No. of Population: It is clear that Pharmaceutical market size is huge and would

quadruple in upcoming years. Nigeria, Egypt and Tanzania are the countries which would

grow exponentially.

GDP of African Economy: Dominated by countries like South Africa, Egypt, Nigeria,

Kenya and Tanzania. They are highly capable of importing pharmaceutical from India.

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Health Expenditure: Countries like Tanzania, Nigeria and Egypt are not sufficient to

satisfy the needs of public for which they have to rely on private sectors, generating

opportunity to export.

Import: Major emerging economies have their own manufacturing establishments for

most of essential drugs though they import pharmaceuticals in large amount to fulfil its

requirement as Indian medicines are price competitive.

Opportunity for Importing Indian Pharmaceuticals

Bilateral Trade is quite developed between India and African Economy (mainly Nigeria,

Egypt and Tanzania) but regulatory norms to obtain market authorization and various

aspects of importing pharmaceuticals are yet unclear.

Opportunity Index to import pharmaceuticals in such countries is obtained by considering

the ratio of Total Import of Pharmaceuticals to the Total No. of Population multiplied by

Total Health Expenditure.

Opportunity Index to Import Pharmaceuticals = Import of Pharmaceuticals / No. of

Population*Total Health Expenditure

South Africa and Egypt have higher Opportunity Index to Import but regulatory norms of

Egypt is still unclear so it is explained in this review.

Nigeria and Tanzania have considerable Opportunity Index, having higher potential and

requirement to import and market cost effective generic pharmaceuticals. On

understanding the market potential via Economic Indicators and Trade Data three

countries Nigeria, Egypt and Tanzania are selected to study further potential.

SUMMARY OF MAJOR AFRICAN ECONOMY

Summary[12] [13]

Nigeria Egypt Tanzania

• Federal Republic of

Nigeria.

• Diversified West-

African country.

Nicknamed as „Giant of

Africa‟.

• Arab Republic of Egypt.

• A Mediterranean

country, part of Middle

East and North Africa

region.

• The United Republic of

Tanzania, merger of

Tanganyika and

Zanzibar.

• Developing & depends

on agriculture.

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Epidemiology Profile[14] [15] [16]

Nigeria Egypt Tanzania

Non communicable

diseases dominate

HIV- major issue.

UNAIDS - around

3.5mn people suffer

from HIV/AIDS.

Around 500 deaths, reported in

2018 due to HIV/AIDS.

Various diseases of Food/Water,

Vector borne, Animal and

Water contact are prevalent.

Hepatitis, malaria, & typhoid

dominate.

Great burden of

malaria, HIV/AIDs

and tuberculosis.

Around 8, 23, 000

persons with diabetes

in Tanzania.

India's Pharma Export as per Harmonized System (HS) Code in Major African

Economy in US$[11]

Table 5: India’s Pharma Exports in US$.

Product

HS Code Product Label

2018

(Nigeria)

2018

(Egypt)

2018

(Tanza-nia)

3004

Medicaments consisting of mixed or unmixed

products for therapeutic or prophylactic uses put up in

measured doses "incl. those in the form of transdermal

administration" or in forms or packings for retail sale

(excluding goods of heading 3002, 3005 or 3006)

178,493 178,493 111,091

3002

Human blood; animal blood prepared for therapeutic,

prophylactic or diagnostic uses; antisera and other blood

fractions and immunological products, whether or not

modified or obtained by means of biotechnological

processes; vaccines, toxins, cultures of micro-organisms

(excluding yeasts) and similar products

21,900 21,900 10691

3003

Medicaments consisting of two or more constituents

mixed together for therapeutic or prophylactic uses, not

in measured doses or put up for retail sale (excluding

goods of heading 3002, 3005 or 3006)

4,429 4,429 1,296

3006 Pharmaceutical preparations and products 499 499 2,161

3005

Wadding, gauze, bandages and the like, e.g. dressings,

adhesive plasters, poultices, impregnated or covered

with pharmaceutical substances or put up for retail sale

for medical, surgical, dental or veterinary purposes

47 47 171

3001

Dried glands and other organs for organo-therapeutic

uses, whether or not powdered; extract of glands or

other organs or their secretions, for organo-therapeutic

uses; heparin and its salts; other human or animal

substances prepared for therapeutic or prophylactic uses.

0 0 2

PHARMACEUTICAL MARKET IN MAJOR AFRICAN ECONOMY

Nigeria

Pharmaceutical Market in Nigeria[17] [18]

Nigeria is a net importer of medical equipment and prescription medicines, as local

production of medical equipment is limited to peripheral items. For medicines, limited local

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capacity exists in the private sector for over-the-counter drugs especially those for treating

common cold, malaria and headaches. Its Pharma market was around $ 607 mn in 2017 was

dominated by OTC sector (43.1%) & Generic sector (38.9%), rest of the 12% consisted of

patented sector.

India-Nigeria Bilateral Economic & Commercial Relations[19] [20]

India and Nigeria enjoy warm, friendly and deep-rooted bilateral relations. India established

its Diplomatic House in Lagos in November 1958. At present, India is Nigeria‟s largest

trading partner and Nigeria is India‟s largest trading partner in Africa. Overall India-Nigeria

trade and commercial relations remained buoyant and steady.

Current Demand[21]

[22]

On the basis of type, the anti-infective therapeutic segment will lead the total pharmaceutical.

Demand of medical equipment would continuously rise in future. Top priorities for Nigeria‟s

healthcare agenda include: polio eradication, maternal and infant care, malaria control,

pandemic influenza prevention and control, and non-communicable disease prevention,

among others. Nigeria also provides major per cent of the health products consumed in the

Economic Community of West African States (ECOWAS). Like the majority of African

countries, Nigeria's pharmaceutical market is extremely reliant on importing its medicines.

Egypt

Pharmaceutical Market of Egypt[23]

It is one of the strongest Middle East and North African regional markets. Its rapid population

growth and beginning of the universal health insurance system provide a solid longer-term

growth potential. Need to prioritise the use of generics and persistent issues with its

regulatory and intellectual property will hamper multinational interest, as majority of the

population remains unable to buy expensive patented medicines. The growth of the industry

is contingent on high population growth, an expanding generic drug sector, and increased

health awareness.

Egypt maintains a Risk/Reward Index of 44.3 out of 100, remaining above the regional

average of 40.4, making it the 4th most attractive pharmaceutical market in Africa.

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India-Egypt Bilateral Economic & Commercial Relations[18] [24]

Traditionally it is one of India‟s most important trading partners in the African continent. The

India-Egypt Bilateral Trade Agreement has been in operation since March 1978 which has

increased more than five times in last 10 years. India is Egypt‟s 11th

largest trade.

Current demand[21]

The pharmaceutical industry in Egypt is import-dominated in terms of volume as it imports

roughly 90% of raw materials used in domestic production. Its market is dependent on

foreign Active Pharmaceutical Ingredients (API) due to weak domestic manufacturing

capabilities.

Tanzania

Pharmaceutical Market of Tanzania[25]

The market is limited by low per capita spending on medicines and an underdeveloped

healthcare sector. Country lacks facilities to produce API‟s, packaging and excipients. It

imports 89% of medicine, 100% of medical equipment‟s and manufactures 11% of all

pharmaceuticals. Its pharmaceutical market is among the largest in Sub-Saharan Africa,

valued at US$ 496 mn, with per-capita drug expenditure at just over US$ 8.7 in 2017.

Forecast show that it would reach $730 mn by 2022 with CAGR of 8%, fairly modest in

global terms and even by regional standards. Due to low purchasing power, generic drugs

comprise the majority of its pharmaceuticals market.

India-Tanzania Bilateral Economic & Commercial Relations[26]

India and Tanzania enjoy a vibrant business and commercial relationship. India is a leading

trading partner of Tanzania.

Current demand[25]

Demand for medicine will increase over the long-term, driven by the country‟s rapidly

expanding population and high disease burden. Pharma sector will be dominated by generic

drug, with a majority coming from India. Tanzania imports majority of its medicines from

India, Kenya and the US, accounting for over 80% of the market in 2016.

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REGISTRATION & LICENSING REQUIREMENTS[22] [25] [27] [28] [29]

Table 6: Registration and licensing requirements in selected countries.

Requirements Nigeria Egypt Tanzania

Regulatory

Authority

National Agency for Food

and Drug Administration

& Control (NAFDAC)

Egyptian Drug

Authority (EDA)

Tanzania Food and

Drugs Authority

(TFDA)

Website http://www.nafdac.gov.ng/

http://www.eda.

mohp.gov.eg/

https://www.tfda.go.tz/

Fees USD 1100 EGP 10, 000. 2000 USD

Duration 12 Months 12 Months 12 Months

Dossier Format Non Common Technical

Dossier (CTD) CTD CTD

Local agent/

Subsidiary Subsidiary Local agent Local Agent

Registration steps in Nigeria[30]

Figure 3: Registration steps for drug at NAFDAC.[30]

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Registration steps of Egypt[30]

{15 Working Days} {30 Working Days} {60 Working Days}

Figure 4: Human Drug Registration Work flow Over View in Egypt.

DOCUMENTS ESSENTIAL FOR REGISTRATION[22] [28] [29] [30]

Nigeria Egypt Tanzania

Drug Registration Form Appointment request Cover letter

Application letter Application letter Application Form

Contract Manufacturing

Agreement

Contract Manufacturing

Agreement -

Manufacturing Licence

Manufacturing License/

Certificate (for India and

China Only).

Medicinal product dossier

as per requirements and

formats

Certificate of Pharmaceutical

Products (CoPP) CoPP; WHO Format

Original CoPP (WHO

Format)

Certificate of Registration of

Brand Name

Brand Letter Confirmation,

issued by manufacturer

Adequate quantity of

samples

Certificate of Business

Incorporation.

A letter of invitation to

inspect the factory abroad. A site master file

Certificate of Analysis (CoA).

CoA: issued by the

manufacturer with the

name & designation of

analysts.

Certificate of Analysis

(CoA).

Pharmacists License Pharmacists License Pharmacists License

Pharmaceutical Premises License Pharmaceutical Premises

License

Pharmaceutical Premises

License

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Dossier in CTD Dossier in CTD Dossier in CTD

GMP Invitation letter

Current Good

Manufacturing Practice

(cGMP) Certificate of the

manufacturing facility.

-

Notarized Declaration - -

Copy of Expiring

Certificate/License – Renewal

Application

Copy of Expiring

Certificate/License –

Renewal Application

Copy of Expiring

Certificate/License –

Renewal Application

SWOT ANALYSIS[22] [25] [27]

Nigeria Egypt Tanzania

Strength

No primary base

industries.

Zero tariffs are applied

to imported medical

equipment, pharma

manufacturing

machinery and

packaging materials.

Government aims to expand

access to good quality

medicines.

It is the largest consumer of

Pharmaceuticals in the

MENA region.

High rate of population

growth & urbanisation.

Pharma expenditure fares

well against other

countries in SSA.

Weakness

Huge market gaps.

Government lacks the

capacity to undertake

painstaking inspections,

testing and reviews,

clearance of imports are

typically little delayed.

An undesirable pricing

scheme.

The drug regulatory system is

complicated, with

overlapping responsibilities

and a general lack of

transparency.

Low Purchasing power.

Regulatory uncertainty and

inadequate healthcare

services.

Opportunity

Demand of Anti-

infective drugs.

Government lacking

funds to implement its

health sector plans, the

private sector is

emerging as the

indispensable player to

improve Nigeria‟s

healthcare fortunes.

Gateway to other Middle-

East, Asia and African

countries.

Government is continuously

working to make business

environment more attractive

in order to attract investor.

Self-medication is

prevalent, OTC an

attractive market.

Good scope to associate

with local companies for

manufacturing (re-packing

is also considered as

manufacturing), would

help addressing sub-

Saharan markets.

Threat

Distribution of counterfeit

drugs.

Poor infrastructure of

pharmaceuticals.

Drug pricing policy biased

towards local producers.

Stringent drug registration

policies and procedures.

Counterfeiting industry,

corruption, regulatory

environment deficiencies.

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CONCLUSION

From the statistical data we can understand that African regions will have a huge market

potential due to spontaneous increase in its population. These countries do not have basic

facility to produce Active Pharmaceutical Ingredients, for which they rely upon export from

India and other countries. From WHO life expectancy data we can reach to a conclusion that

there is exponential demand of Anti-infective and Anti-malarial drugs. These countries are in

search of affordable and quality medicines for their citizens. Profit margins are high when

pharmaceuticals are imported so traders are more involved in importing rather than producing

locally. PESTEL Analysis marks huge market potential in such region. Regulatory norms for

registration of pharmaceuticals and obtaining marketing authorization are still unclear in

Indian exporters, so important points are highlighted over here. SWOT Analysis indicate that

profit margin will be huge if pharmaceuticals exported from India will be protected from

Illicit Trafficking of drugs.

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