Why do pharma investors avoid captive markets?

Thursday September 09 2021
By Karl Lyimo

Generally, an ‘investor’ is one that puts money into financial plans, property, etc. hoping to make a profit.

And a ‘captive market’ is one where potential-cum-prospective buyers have very limited choice – and, unless they buy from just one or two suppliers, their only other option is NOT to buy at all!

In a captive market, sellers have the upper hand – and can raise prices without worrying about competitors grabbing ‘their’ customers.

Fair enough, I hesitatingly say – partly because, in My Book of Things, that definition of a ‘captive market’ doesn’t go far/deep enough, limited as it is to sellers and buyers.

In trade/business are also other major stakeholders. These include – but are not limited to – the manufacturers/producers of goods that are traded in ‘captive markets.’

Take, for instance, pharmaceutical products, especially medicinal drugs. In my humble view – and for what it is worth – medicines have a captive market worldwide.

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This is if only because humanity on Planet Earth this side of Heaven will always and forever need medicines for the bazillion maladies we have been cursed and accursed with by the Sisters of Fate and their co-conspirators.

So, if Mankind – 7.9-plus billion of us – cannot do without medicines and other pharmaceutical products: why then shouldn’t such products be the subject of a captive market?

After all, the products ‘assure/enable’ (so to speak) their manufacturers and traders to reap untold sums in profits as a matter of course.

On Monday, August 30 this year, this august publication had a report titled ‘Unido out to help E. Africa boost drugs manufacture.’

The report stated that the six member-nations of the East African Community (EAC) import a whopping 70 percent of their pharmaceutical needs, mainly from India and China.

This is a yawning breach which the United Nations Industrial Organisation (Unido) and the African Union (AU) smartly stepped into with their joint programme titled ‘EAC Regional Pharmaceutical Manufacturing Plan of Action’ (EACRPMPoA).

Formulated in 2011, this is a two-phase programme (2012-2016; and 2017-2027) designed and intended to cut annual pharmaceutical imports in the regional bloc from the current 70 to 50 percent by 2027.

Unido is a multilateral UN institution tasked with enabling countries to pursue sustainable development by functionally strengthening their industrial base and productivity.

During his official visit of the EAC Headquarters in Arusha on August 27 this year, the Unido Representative in Tanzania-and-Mauritius, Dr Stephen Kargbo, said Unido and the AU would together fast-track the Second Phase (2017-2027) of the EACRPMPoA. This is good news indeed, as the world has to contend with a bazillion hydra-headed monsters that are ravaging and devastating humanity and economies – including climate change and the mutating coronavirus ‘Covid-19’ pandemic.

Pharmaceuticals are one way of surmounting health-related maladies. Medicines cannot be avoided, thus inescapably making them the subject of a captive market in absolute favour of their producers/manufacturers and traders.

So, why don’t the automatic beneficiaries invest in Tanzania and other so-called ‘Third World’ countries, pray?

Looking at this from another angle... We’re told that there indeed are medicinal remedies for diabetes and several other non-communicable diseases (NCDs).

But Big Pharma doesn’t release them for use by sufferers, largely because the otherwise perpetual market for NCDs control drugs would collapse if patients were cured!

Now that you know the truth... Tears!