An international consulting firm suggests that the Indian pharmaceutical industry sees good prospects for growth in Africa, with the sector having quintupled in size in terms of value in just over a decade, and expected to grow to upwards of $50 billion by 2020.
Mckinsey, which in a report has projected the continent's pharmaceutical market to grow from $40 billion to $65 billion by 2020, said the value of the industry in Africa has jumped to $20.8 billion in 2013 from just $4.7 billion a decade earlier.
"That growth is continuing at a rapid pace: we predict the market will be worth $40 billion to $65 billion by 2020," the consultancy firm said.
Mckinsey has projected that by 2025, two-fifths of Africa's economic growth will come from 30 cities of two million people or more and that 22 of these cities will have GDP in excess of $20 billion. It said that between 2005 and 2012, Africa added 70,000 new hospital beds, 16,000 doctors, and 60,000 nurses.
"Ace healthcare provision is becoming more efficient through initiatives such as Mozambique's switch to specialist nurse anaesthetists and South Africa's use of nurses to initiate antiretroviral drug therapy," the report said.
In order to enjoy the benefits that Africa is offering, McKinsey has suggested that market players build strong local teams. "Real talent is key and requires investment in big, effective local marketing and sales teams," it said.
This means hiring more pharmacy representatives, building teams' technical skills, and selecting and developing strong local managers to lead them. "Sales teams also should be set up in a flexible way that enables them to be responsive to the needs of local markets," Mckinsey said.
In addition, it said, global pharmaceutical companies need local business partners as "manufacturers, packaging companies, and distributors" to help them navigate the continent's many markets, with their widely varying consumer preferences, price points, manufacturing, and distribution infrastructures.
Another global consultancy, Deloitte, says India's research and development and low cost of production give an advantage to its pharmaceutical companies.
"The worldwide demand for cost-effective generic drugs is leading India to rise as a hub of generic drug manufacturing," it said.
Deloitte noted that India accounts for over 10 percent of global pharmaceutical production, with over 60,000 generic brands across 60 therapeutic categories, and manufactures more than 400 different active pharmaceutical ingredients (APIs).
"The country is the front-runner in a wide range of specialties involving the manufacture of complex drugs," it said. Moreover, a number of pharmaceutical companies are increasing their operations in India, which has 119 manufacturing sites approved by the US FDA, the highest in any foreign country, it added.