East African pharmaceutical market losing out to imports

The east African pharmaceutical market, which is worth $5 billion, is missing out on significant opportunity as market demand continues to be captured by imports.

Regional lifestyle changes are leading to higher rates of non-communicable diseases such as diabetes. Due to these changes the market is expected to grow by more than 12% per year.

Despite the growth, the region’s 65 manufacturers have only been able to satisfy around 30% of market demand, leaving imports to satisfy the other 70%.

Christopher Spennemann, in charge of United Nation’s Conference on Trade and Development (UNCTAD) said: "The biggest challenge facing local producers is the lack of capital they need to invest in improving product quality. Local companies need to invest in new and better production and research facilities, but conventional banks see them as too risky and are reluctant to finance their projects”.

Boosting production requires foreign investors, but many investors want to see further harmonisation of national drug regulations in the region. In other words investors want drugs to be able to be sold in more than one country.

Many differences currently exist between national regulations making it difficult for this to happen. More so, local pharmaceutical industries require a supportive domestic policy for things such as tax, research and development and trade policies.

However, boosting local pharmaceutical production is hot on the political agenda for East African Community governments, looking to reduce medical costs for families and to increase access to essential medicines, especially in rural areas.

UNCTAD is supporting the East African Community secretariat to look at proposals from the Federation of East African Pharmaceutical Manufacturers for boosting investment into the region's pharmaceutical industry.