Dr Reddys, Lupin, others mull expanding Africa operations
Domestic pharmaceutical companies are expanding their Africa operations with a series of product launches, besides planning to foray in new markets.
In FY 2017, drug makers exported medicines worth $ 3 billion to Africa and the continent is the second largest export market for Indian companies after the United States of America.
According to healthcare service provider Quintiles IMS, the overall African drug market is estimated to grow from $20 billion in 2016 to $30 billion by 2021. Much of the projected growth will come with several changes in regulations, increase in health spending and a rise in demand for medicines to treat chronic and lifestyle-related ailments.
One such change in regulation came into force in June with the formation of the South African Health Products Regulatory Authority (SAHPRA) and that is expected to quicken the pace of new product approvals in the country.
“The recent establishment of SAHPRA could usher in a new and much more effective era for the local pharmaceutical sector as the existing Medicines Control Council has struggled to cope with the volume of applications for new medicines and clinical trials. Based on industry figures registering new products with the MCC took three to five years and in some cases even exceeded seven years. We are hopeful that the new body will streamline the process to deal with the backlog and by 2020 registrations will be completed within 18 months of submission,” said Erik Roos, CEO of Pharma Dynamics, Lupin's subsidiary in South Africa.
South Africa is the biggest market for Indian pharma companies and accounts for nearly a fifth of their exports to Africa. Cipla is the largest generic company in South Africa and Lupin and Sun Pharmaceuticals also figure in the top list of generic drug makers.
In FY 2017, Pharma Dynamics crossed the one-billion revenue mark in local currency for the first time at around Rs 481 crore. The firm it is now looking to grow sales of its tuberculosis products and expand operations in parts of the continent.
“Most of the African countries will increase their generic consumption and more than 70 per cent of the growth is likely to emanate from generic consumption. India has a good potential to contribute big in the situation,” said Udaya Bhaskar, director general of Pharmaceutical Export Promotion Council of India.
Others too are expanding their businesses located in the world’s second most populous continent. Torrent said it plans to launch 7-10 products in Africa each year and its focus markets include South Africa, Kenya, Tanzania and Zimbabwe. Dr Reddy's Laboratories (DRL) is tapping opportunities in French-speaking countries in Africa, where the presence of Indian drug firms has been limited so far.
Over the last few years, DRL saw a double-digit growth from Africa by strengthening its field force in unrepresented markets and looking at inorganic growth opportunities.
Other than South Africa, DRL is focused on North African countries such as Algeria, Egypt, Morocco and Tunisia. However, the North African market has its own challenges.
“The industry is yet to come to terms with the over 100 per cent depreciation of Egyptian pounds in the last six months. Although there are entry barriers in Algeria and Morocco, yet we are working towards addressing market needs with a focus on complex generics and proprietary products. Some of our filings have already commenced in these markets,” said M V Ramana, the executive vice president & head branded markets of India and emerging countries.