Thursday, February 4, 2010

Zimbabwe pharmaceuticals market over 90% generics and OTCs; will expand at 23% CAGR

3 February 2010
While Zimbabwe’s difficulties cover the entire economic and political spectrum, encouraging stabilization and investment in the pharmaceutical industry should be among the government’s top priorities. Self-reliance on medicines will dramatically reduce import dependence and lower costs for patient, notes a new report offered by Research and Markets. The drug market summary indicates that, in the 12 months ending in December 2009, generic drugs will comprise 68.5% of the total drug market followed by the over-the-counter medicines segment at 22.5%. Health care spending is expected to rise from $220 million in 2009 to $650 million by 2014, representing a compound annual growth rate (CAGR) of 23%. The authors caution that a sizable portion of this money will come from foreign aid and, in light of Zimbabwe’s recent political and economic history, may not be entirely realized in the context of actual health care services. Per-capita spending on health care will rise from $17.58 to $46.97 by 2014. There is no operational or national health insurance scheme and therefore doctor fees and prescriptions are all paid for out-of-pocket.
Enjoying this article? Have the leading Biopharma news & analysis delivered daily on email by signing up for our FREE email newsletter here.In further developments during October 2009 aimed at assisting Zimbabwe’s economic recovery, the coalition government revealed that medical staff will be paid more substantial salaries, appropriate to their positions. The health care sector is an urgent priority for the re-establishment of core industrial segments, and one of the factors that contributed to its breakdown was the mass exodus of doctors and nurses. Political violence and general unrest also disrupted the medical supply chain, causing medicine shortages in hospitals and power and water cuts exacerbated by overwhelming demand from patients with traumatic injuries and communicable diseases. Retaining health care professionals and attracting new staff is now imperative to the re-building of functional hospital wards. In a particularly ambitious statement, the Health and Child Welfare Minister revealed an expectation that tourists may return to Zimbabwe as early as 2010, and that they will expect efficient and reliable health delivery. While this claim is bold, and perhaps unrealistic, any improvements to public sector healthcare should nevertheless benefit the local population. Cautious approach by foreign investorsWhile the Zimbabwean coalition government has prompted foreign interest in the country again, the tentative and understandably cautious approach by investors is reflected within the private pharmaceutical industry. Firms are prospecting South Africa in search of a significantly better operating environment with improved long-term outlooks to develop their business strategies for growth. Interest in South Africa is not unexpected, particularly since it has the most developed sub-Saharan African market, with infrastructure and a regulatory environment in place that is attractive to pharmaceutical firms. According to local newspaper the Sunday Mail, a report by the National Economic Consultative Forum (NECF) Health Taskforce said that the capacity of the local Zimbabwean pharmaceutical sector could reach 75% within the next year if the state implements a revised and urgent national drug policy. With nine drugmakers in Zimbabwe, government support would make a significant contribution to retention and long-term economic growth. Difficulties for local drugmakers Granite-side and VarichemZimbabwean drugmaker Granite-side Chemicals is currently struggling to achieve sustainable output. Staff shortages and a lack of adequate funding or credit-lines from the government have been highlighted as a massive part of this problem. According to the Sunday Mail, Granite-side is also listed as a strategic business in need of financial assistance. Seemingly, despite the deteriorating situation, production levels are still not viable. Generic drugmaker Varichem, the sole manufacturer of a combination antiretroviral (ARV) treatment, has closed one its two plants in Zimbabwe. A move to South Africa is likely imminent to protect further cuts. In addition, the protracted time over which domestic production has declined also indicates that the lack of maintenance and low availability of spare parts have caused operational facilities to fall into disrepair. Government long-term loans would significantly reform existing plants, in order for output to realistically meet a meaningful level of demand, the report concludes.

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