^{Figure 1: Africa - a continent of immense opportunity and diversity}

The population growth is driven by continuously high fertility rates, a decline in infant mortality and increased life expectancy¹. The median age in Africa is low at 18.8 years and will remain so with 2 out of 5 children born on the continent by 2050 – leading to a continues high demand for childhood vaccinations². At the same time, the continent will also age at unprecedented rates. As a result, non-communicable diseases (NCDs) will account for almost 50% of deaths by 2030, up from 28% in 2008³. Diabetes is a case in point for the transition of the disease burden profile away from infectious diseases. The age-adjusted diabetes prevalence varies largely by country (Figure 1 right panel) and healthcare systems are ill-equipped to treat and diagnose such chronic conditions.  54% of people with diabetes in Africa are underdiagnosed⁴. Moreover, the number of diabetes patients is expected to more than double from 24 million in 2021 to 55 million in 2045⁵.

Climate change will disproportionally affect Africa as increasing temperatures, sea levels rising and extreme weather situations threatening socio-economic development according to the World Meteorological Organisation (WMO). The increase in temperatures will lead to a shift of climate zones with extreme weather events becoming more likely. This inevitably will cause disruptions in medicines supplies, medical care and could lead to strengthened or changed migrations across Africa. Moreover, natural habitats of disease-carrying insects will expand and lead to outbreaks of diseases in areas that were previously spared. First steps are taken to address challenges around climate change. The African Development Bank implemented a framework to include ESG criteria when evaluating projects as part of its ten-year (2013-2022) strategy⁶. During UN Climate Change Conference (COP26) in Glasgow, a group of 50 countries including Egypt, Central African Republic, Ethiopia, Nigeria, Kenya, and Rwanda have committed to develop climate-resilient and low-carbon health systems⁷. The life sciences industry recognised the threat from climate change and is invested in developing medicines and vaccine⁸.

Past imperfect, inflections for change

Pharmaceutical spending per capita varies significantly by region globally, and by country within the African region (Figure 2 upper panel). Even with strong growth in the last decade, spend per capita at list prices remains higher in the major developed markets, with the US an extreme outlier. Africa’s spending ranges between $3 and $67 and with a median of $11 overlaps that of Southeast Asia, LATAM and CIS, but remains the lowest across regions⁹. Northern African states and South Africa have the highest level of pharmaceutical spending whilst 80% of African countries spend under $25 on pharmaceuticals per capita (Figure 2 lower panel).

^{Figure 2: Pharmaceutical spending varies largely across Africa}

Low medicine spend is a sign of unmet potential: except for certain vaccination and infectious disease programs, African demand for modern medicines is very far from being met- the question is why this has been the case, and what must change to meet needs and fulfil commercial potential.

Africa’s commercial medicine manufacturing - with the exception of North and South Africa – has historically been patchy and weak. Up to 95% of medicines consumed on the continent are imported, with some sub-Saharan countries importing almost their entire drug supply¹⁰. Inevitably, this negatively affects the availability, affordability and quality of essential medicines or vaccines. Lack of private investment, weak regulation, weak governance, counterfeit products, lack of local players and local innovation were among the main reasons. It is not only local manufacturing that must be solved. Weak and chaotic distribution networks increase costs to the patients, who must bear all or much of medicine costs themselves, and to entire health systems and allows for counterfeit and subquality medicines and must be addressed simultaneously for real change. Moreover, the lack of universal healthcare is an issue. Many African countries continue to face significant challenges in providing adequate healthcare to their populations, with limited access to essential medicines and healthcare services. The lack of universal healthcare coverage in Africa often means that the cost of essential medicines is prohibitively high, making them inaccessible to many people. This, in turn, contributes to high rates of morbidity and mortality.

The global rollout and distribution of COVID-19 vaccines exposed the vulnerabilities that this situation had created. As a result, and partly due to initiatives preceding the pandemic, change is starting. The African CDC, for example, represents a step forward in cooperation and coordination on healthcare policy and provision. The agency’s current focus revolves mostly around infectious diseases but also plays a pivotal role to accelerate and leapfrog on infrastructure changes to facilitate e.g., digital transformation¹¹. Several North African countries, including Libya, Egypt, and Morocco, are embarking on digital transformation projects in their healthcare sectors, with South Africa prioritising telemedicine and electronic prescribing. In addition, increased diagnoses and improved screening capabilities will contribute to increased pharmaceutical sales in the medium to long term.

We are also seeing investments in local drug manufacturing and distribution. In 2020, The European Investment Bank launched a €50 million initiative to scale-up local production of APIs and the Global Fund is partnering with local manufacturers and distributors to increase the availability of HIV, tuberculosis, and malaria medicines¹². Excitingly, the German biotech BioNTech wants to bring its mRNA-based vaccines closer to customers in Africa. The company’s state-of-the-art modular container solution in Rwanda will be the first of a future network of decentralised manufacturing nodes¹³. To address the Africa’s demand for insulins, Novo Nordisk has struck a deal with Aspen Pharma South Africa to manufacture insulins at their manufacturing facility¹⁴.

Africans are more genetically diverse than any other population¹⁵. This immense diversity is unfortunately not yet reflected in modern genomics databases with African samples only comprising 1.1% of global genomic studies¹⁶. Clinical research is equally concentrated in high-income countries – with Africa accounting for less than 3% of worldwide clinical trials – and this lack of diversity is to the disadvantage of everyone as interventions must be tested in diverse populations¹⁷.

The future – a modern African commercial medicines market

The African pharmaceuticals market – excluding COVID-19 vaccines – has reached $25 billion 2022 and is expected to grow at a 6% five-year CAGR to reach $34 billion by 2027 in our base-case scenario. This scenario is on-par with our global forecast growth rates⁷. The implementation and/or growth of universal healthcare across the continent will lead to improved access to medicines. As a result, higher pharmaceutical spending. In our upper-case scenario, IQVIA analysts forecast the African pharmaceutical market to reach $40 billion (Figure 3 left panel).

Figure 3: Africa pharmaceutical market size and outlook

Egypt will contribute most to Africa’s pharmaceutical growth and will remain the largest market at $5.8 billion in 2027 followed by Nigeria and South Africa. Growth for the latter, was related to price increased allowed by the government whereas Nigeria’s large population increased demand¹⁸ . French-speaking West African countries are expected to grow below the continent’s average forecast CAGR (Figure 3 right panel).

Healthcare has moved centre-stage in the public’s perception. Government and pharma industry leaders must not return to the pre-pandemic reactive way of operating. Instead, they must become more proactive. Below, we outline 6 priorities towards a modern African commercial medicines market:

Universal healthcare: As part of their sustainable development goals (SDGs), all UN member states try to achieve universal healthcare coverage (UHC) by 2030. To reach this goal, African nations must build and fund both health and IT infrastructure, invest in the education, and continue the training of essential health system workers. The path to meet local demand for HCPs is currently undermined by the brain drain to western countries in the global fight for talent. African countries can establish partnerships with western countries to share knowledge and resources to reduce the need for HCPs to leave for better opportunities abroad. Pharmaceutical companies must recognise their crucial role in achieving this goal. Improving access to medicines will also drive future pharmaceuticals demand.

Local clinical research: Africa’s genetic diversity and unique disease epidemiology requires more clinical research done on the continent. To make this a reality, African policy makers must increase the region’s attractiveness for pharmaceutical companies, address the causes why they were excluded in the past and establish policies and frameworks to achieve the standard to be considered by the industry. COVID-19 accelerated the development towards adoption of shared practices and protocols. The African Union’s African Medicines Regulatory Harmonisation (AMRH) aims to drive the adoption of shared practices and protocols¹⁹. Pharma must seek proactive collaboration with regional associations to support the development and implementation of regulatory framework²⁰. If successful, this will be a complete paradigm shift away from fragmentation towards more and faster approvals of medicines.

Business environment: The Africa CDC and the African Medicines Agency (AMA) are two important pillars towards cross-country collaboration to harmonise regulation and improve access to essential medicines. Collecting health and epidemiology data will be a vital part to support decision making both under normal conditions and during health crises. Africa’s 54 countries moreover must work together, remove trade barriers and foster a mutually-beneficial environment. This is an important step forward. A larger market is more attractive with more investments, healthy competition, better medicines access and ultimately better patient outcomes.

Figure 4: The future – a modern African commercial medicines market

Private sector: Africa must become more self-sufficient in its supply of essential medicines and vaccines. This requires governments to renew their focus on building a private pharma sector to remove the dependence on imports and manufacture APIs locally to achieve local sovereignty. Joint ventures or partnership models can be a viable first step, whilst the long-term goal must be the building of a sustainable supply chain to support local manufacturing to address future healthcare needs. In addition, the private sector can play a role in building inclusive health businesses, i.e., building point of care facilities to improve access to medicines in underserved remote areas.

Partnership models: Private-public partnerships (PPPs) are key to Africa’s future economic growth and ready the continent for its future health needs. During the pandemic, the African Export-Import Bank’s initiative founded COVID-19 vaccines for over 50 countries in Africa²¹. This development must continue to facilitate the role of the private sector in delivering health services. Patient organisations (POs) furthermore must be considered as they provide support during the entire patient journey. A strong patient community helps in raising disease awareness and POs are uniquely placed to speak with policymakers to address gaps and barriers to deliver care models²². Moreover, their close relationship with the patient community makes them an invaluable partner to understand the unmet need, as well as to improve patient activation and adherence²³. To strengthen PPPs, there needs to be a strong political commitment, fight against corruption, institutional support, integration in each country’s national health strategy, favourable fiscal policies, and clear regulatory frameworks.

Digital innovation: African countries lag in their digital maturity as shown in a 2021 IQVIA white paper²⁴. Going forward, African health system must take advantage of digital health to fill resource and capacity gaps. It will be crucial to established common standards for data exchange whilst staying compliant with local data regulations. Mobile – or telemedicine solutions must remain affordable and require funding models that keep costs down. In addition, building and funding a healthcare IT infrastructure will be a priority that will serve as the foundation in health information exchange, interoperability and as a result, an acceleration lever in the quest towards universal healthcare.

Private and public sector must rise to above challenges. It is in their common interest to unlock Africa’s commercial potential, to tackle existing and future healthcare challenges in a fit-for-purpose medicines market.

¹https://www.un.org/en/global-issues/population

²https://www.worldometers.info/world-population/africa-population/

³Temu F, Leonhardt M, Carter J, Thiam S. Integration of non-communicable diseases in health care: tackling the double burden of disease in African settings. Pan Afr Med J. 2014 Jul 5;18:202. doi: 10.11604/pamj.2014.18.202.4086. PMID: 25419329; PMCID: PMC4237574.

⁴IDF Diabetes Atlas, Diabetes around the world in 2021

⁵https://diabetesatlas.org/

⁶https://www.afdb.org/en/topics-and-sectors/topics/environmental-social-and-governance-esg/esg-principles

⁷https://www.who.int/news/item/09-11-2021-countries-commit-to-develop-climate-smart-health-care-at-cop26-un-climate-conference

⁸IQVIA White Paper – Race for Immunity: Exploring the Evolving Landscape of the Vaccines Market

⁹IQVIA Market Prognosis, May 2023

¹⁰https://www.orfonline.org/expert-speak/expanding-pharmaceutical-local-production-in-africa-an-idea-whose-time-has-come-49805/

¹¹IQVIA Expertise

¹²https://www.eib.org/en/press/all/2020-377-eib-launches-eur-50-million-africa-pharmaceutical-manufacturing-initiative

¹³https://investors.biontech.de/news-releases/news-release-details/update-first-biontainer-african-based-mrna-manufacturing-0

¹⁴https://www.reuters.com/business/healthcare-pharmaceuticals/novo-nordisk-contracts-south-africas-aspen-produce-insulin-african-nations-2023-09-19/#:~:text=LONDON%2C%20Sept%2019%20(Reuters),Danish%20drugmaker%20said%20on%20Tuesday

¹⁵https://www.washingtonpost.com/wp-dyn/content/article/2009/04/30/AR2009043002485.html?hpid=moreheadlines

¹⁶https://www.lshtm.ac.uk/newsevents/news/2022/diversity-genetic-research-vital-enhance-treatment-chronic-diseases-africa

¹⁷https://www.thelancet.com/journals/langlo/article/PIIS2214-109X(22)00243-1/fulltext

¹⁸IQVIA expertise

¹⁹https://www.weforum.org/agenda/2022/05/how-clinical-development-can-meet-africas-unique-health-needs/

²⁰https://www.iqvia.com/library/white-papers/attracting-investment-in-clinical-development

²¹https://internationalbanker.com/finance/creation-of-more-public-private-partnerships-is-key-to-africas-economic-growth/

²²https://www.iqvia.com/locations/united-states/library/white-papers/making-best-bets-prioritizing--expenditure-for-maximizing-impact-on--patient-communities

²³Climbing the Mountain One Step at a Time: How Patient Organizations in Africa Are Advancing Healthcare. IQVIA White Paper

²⁴https://www.iqvia.com/library/white-papers/switching-on-the-lights