Why Tanzania offers huge potential for drugmakers

The deputy minister of Health, Community Development, Gender, the Elderly and Children, Dr Faustine Ndugulile, addresses participants in the Health Supply Chain Summity 2018 in Dar es Salaam early this month. PHOTOS|ERICKY BONIPHACE

What you need to know:

  • WHO, United Nations Comtrade and Business Monitor International show that the pharmaceutical market grew to $450m in 2017 from $107m in 2007

Dar es Salaam. Tanzania’s pharmaceutical market is forecast to grow to $700 million by 2021, up from $450 million in 2017.

The World Health Organisation, the United Nations Comtrade and Business Monitor International show that the pharmaceutical market grew to almost $450 million in 2017 from $107 million in 2007.

It grew by $47 million, down from the expected $497 million.

The forecasts were revealed last week by an industrial engineer in the Ministry of Industry, Trade and Investment, Dr Yuda Benjamin, during a two-day Health Supply Chain Summit that brought together over 200 participants.

In his presentation titled ‘Fostering private sector engagement to improve availability of health commodities in Tanzania’, Dr Benjamin said the sector was projected to grow by $35 million in 2018 to $532 million from $497 million in 2017.

“Projected growth is partly because of the government’s efforts to promote industrial growth so as to realise the country’s strategy to become a middle-income economy by 2025,” he said.

According to him, revenue generated by pharmaceutical industries will increase when investments are raised. He noted that the products of local industries are traded domestically. The sector’s contribution to the gross domestic product (GDP) is projected to be one per cent by 2021, down from 1.04 per cent in 2017.

“The country’s GDP keeps on increasing annually that is why it decreases even when revenue from the sector increases. Massive investment in the sector will increase the sector’s contribution in terms of GDP by 2021,” he told The Citizen.

He said by 2021 the Ministry of Health would spend 17.8 per cent of its budget on purchasing pharmaceuticals, down by 0.2 per cent from 18.00 per cent in 2017.

By 2021, Tanzania’s health spending is expected to be $3.908 billion, up from $2.765 billion in 2017.

He also spoke about government transformations in phasing the public sector out of production activities and encouraging the private sector to become the engine of the country’s economy. “Strategies are also provided for implementation of the Sustainable Industrial Development Policy, or SIDP, under the current business environment and extend it to 2025.”

He said the government had been implementing the 13-year Integrated Industrial Development Plan since 2012 whose objectives include improving the manufacturing sector, increasing its contribution to the GDP, raising revenue after value addition and exporting more goods.

According to him, while the manufacturing sector is expected to grow by 6.6 per cent from 8.4 per cent to 15 per cent annually, its contribution will increase from 6.59 per cent to 23 per cent by 2025.

“The sector will generate $16.8 billion by 2025 and that the export of manufacturing goods will be valued at $6.6 billion by 2025.”

Tanzania has 14 registered domestic pharmaceutical industries, 11 of them producing human medicines, two making veterinary medicines and one facility manufacturing health devices.

Most of them produce a narrow range of products, mainly generics.

According to him, the country lacks facilities to produce Active Pharmaceutical Ingredients, packaging manufacturing industries and industries to manufacture excipients.

Experts define excipients as substance formulated alongside active ingredients of a medication, included for the purpose of long-term stabilisation, bulking up solid formulations that contain potent active ingredients in small amounts (thus often referred to as “bulking agents”, “fillers”, or “diluents”), or to confer a therapeutic enhancement on the active ingredient in the final dosage form, such as facilitating drug absorption, reducing viscosity or enhancing solubility.

Dr Benjamin gives a list of non-medical supplies which are among the country’s opportunities for potential investors in the pharmaceutical sector to satisfy demand of the Medical Stores Department (MSD). The department also buys medicines for Southern African Development Community (SADC) countries in a new deal.

They include the manufacture of safety boxes for disposable used syringes, bedsheets, packaging boxes, dispensing envelopes, colour-coded waste bins, prescription forms (A5), patient registers, injection registers, ball-point pens, and many others.

The government has formulated a list of medicines and medical equipment that could be produced locally instead of importing them.

On the list are Paracetamol tablets & syrup, Co-trimoxazole tablets & syrup, Amoxycillin capsules & syrup, Ciprofloxacin tablets, Erythromycin tablets & suspension and Penicillin VK tablets & Syrup.

Others are Quinine tablets & syrup, Ampicillin+Cloxacillin capsules & syrup, Metronidazole tablets/suspension and Artemether+Lumefantrine tablets & syrup.

According to him, Tanzania’s geographical location simplifies export of products to neighbouring countries. It shares its borders with eight countries, and this is likely to attract investors who will have a large market for their products.

Moreover, Tanzania’s population has been growing rapidly population.

There is a prevalence of diseases and the presence of MSD as the bulk procurer and the availability of the national health insurance scheme.

“The country imports 89 per cent of medicines, 100 per cent of medical devices and manufactures 11 per cent of all pharmaceuticals. The situation makes it favourable for investors,” he said. He spoke about 17 companies that have expressed their intentions to invest in the sector.

They include Biotech Limited, Novabi Limited, Tabora Textiles Limited, Zinga Pharmaceuticals Limited, Guilin Pharmaceuticals (T) Limited, Simiyu Project and Bahari Pharmacy Limited.

Others are Africables Limited, Hester Pharmaceuticals Limited, Kairuki Pharmaceuticals Industry, Revital Healthcare Limited, Pharco, Mohammed Enterprises Limited, Suma JKT, Subhash Patel, Cure Afya Pharmaceuticals Limited and Emedics Pharmaceuticals.

MSD director general Laurean Rugambwa told The Citizen over phone that the department had been spending $800 million on purchasing medicines and medical equipment annually. He noted that the country had a huge potential for investors who met two criteria.

According to him, pharmaceutical companies should produce medicines and medical equipment that meet international standards and that they should be sold at reasonable prices.

“We, at MSD, are not obliged to spend our funds on providing manufacturers with subsidies. We are supposed to ensure value for money is realised. “Investors in pharmaceutical industries are lucky that the MSD market has expanded after we have signed a contract to procure medicines for the Southern African Development Community countries and that the ball is now in their court.”

Pharmaceutical Management and Supply Chain programme coordinator Emilian Ng’wandu said technology development, vibrant human resources and better policies were key for the country to build sustainable industries.

He said poor technology negatively impacted local manufacturers to meet required standards of medicines. It also affected the ability of the companies to produce large quantities of medicines.

He explained that while the country was facing a shortage of skilled human resources, policies governing the sector hindered efforts of building a sound pharmaceutical sector.

“The government should create an enabling environment for pharmaceutical companies to operate through use of local and imported technologies. Human resources should be trained at different levels to serve the sector,” he said.

“Policies and laws governing institutions such as the Tanzania Bureau of Statistics, the Tanzania Food and Drugs Authority and respective industries should be harmonised to avoid overlapping of activities.”

In his recent column titled ‘What it takes for re-birth of Tanzania’s drug sector’ in The Citizen, Dr Omary Chillo, underscored the need for a strong political will.

He expressed his confidence that President John Magufuli’s statement that Tanzania needed major reforms in the local pharmaceutical sector was a starting point.

When officiating at an MSD event, Dr Magufuli was quoted as saying “only 6 per cent of the medicines used in the country are produced locally. Why? We must do something…”

According to Dr Chillo, despite the President’s political will, the road to achieving a well-established local drugs industry requires a collective responsibility between the public and private sector.

“I would like to borrow the point of view of a report released in 2016, titled ‘Pharmaceutical Manufacturing Decline in Tanzania: How Possible Is a Turnaround to Growth?’ It actually said, it requires a change of mind-set for policy makers in Tanzania to prioritise and actively engage in selective support of the sector,” read part of his column.

But, Sikika director Irenei Kiria told The Citizen over phone that budget constraints, bureaucracy, poor infrastructure in supply chain and inadequate pharmaceutical experts were major challenges facing the country.

He clarified that while the government was confident of allocated budget (Sh270 billion) for purchase of medicines, not all the funds were disbursed and the amount provided was not released on time.

According to him, the government has been hoarding the purchase and distribution of medicines and medical equipment, causing bureaucracy in the sector and leading to citizens’ complaints about the shortage of drugs. “Regarding infrastructure, the government should formulate sustainable plans to ensure more lorries are bought annually to replace wrecked ones and reduce donor dependence in strengthening infrastructure,” he said. “Pharmaceutical experts should also be increased to enhance efficiency. The government should address the acute shortage of experts.” Dr Chakou Halfani said stressed the need for prioritisation of research on medicinal plants to ensure a strong healthcare system.

He said the country should heavily invest in research to see how extracts from various medicinal plants can be used or developed into pharmaceutical drugs.

“Tanzanians, by their nature, are used and interested in traditional medicine. “We all understand that most pharmaceutical products that are in the market have been developed from some indigenous plant species. But unfortunately, most drugs we use here are imported. Can Tanzania manufacture its own drugs from the variety of plant species that are in the country?” he questioned in his recent article published in The Citizen.

Speaking during the meeting, the deputy minister of State in the President’s Office (Local Government and Regional Administration), Mr Josephat Kandege, said Tanzania spent Sh1 trillion on purchasing health-related supplies annually, but only 10 per cent of the products were purchased locally.

“The private sector has a huge untapped potential because medicines and medical equipment currently supplied on the market are below demand,” he said.