How the pharmaceutical manufacturing industry in Africa can drive inclusive economic growth with prefabricated factory systems
Two birds, one stone
The USA, the UK, wealthy European countries, and other large economies appear to be nearing their saturation points. According to an analysis by McKinsey & Company, while many of these large markets are experiencing slow or stagnating economic growth, Africa presents one of the only pharmaceutical markets where exponentially high growth is still attainable. The pharmaceutical manufacturing industry in Africa will be an important driver of this success.
African biopharmaceutical manufacturing has already offered a glimpse of the possibilities in recent decades. Within the span of a decade, Africa’s pharma industry jumped from only $4.7 billion in value to $20.8 billion in 2013. Different estimates project different values for the medicine manufacturing industry here in recent years, but they all paint a promising picture of growth. Certainly, this is good news for multinational companies seeking to enter biopharmaceutical manufacturing in new markets. At the same time, it is also essential for African countries. With one stone, Africa can get two birds; by investing in biopharma production, Africa can achieve the dual objectives of biopharmaceutical self-sufficiency and economic growth.
All your eggs in one market?
A report from 2022 noted that 12 of the 15 largest biopharma companies derived 53% of their revenues from the US market – a 10% jump in a decade’s time. Over the past 10 years, just three of them reduced their dependence on the USA. Beyond the USA, many of these companies relied only on a handful of other markets like China, Germany, and Japan.
This targeted approach to large economies may have borne successful results in the past, but this strategy may not hold the pharmaceutical manufacturing industry in good stead in the coming years. In the past, a concentration in the US market was correlated with profitability for biopharma production companies. But in the decade ahead of us, a large proportion of the approximately two billion people born will be in developing markets.
In these developing markets, many of which are in Africa, the pharmaceutical manufacturing industry can be a significant contributor to inclusive economic growth. So, with genuinely promising prospects for not just pharma, but manufacturing as a whole, can governments and executives on the continent and off really afford to ignore the opportunity of localised medicine manufacturing?
Why biopharmaceutical manufacturing is the answer
Even with a population of over one billion, the entirety of the African continent is home to not even 400 drugmakers. Compared to similar-sized markets like China and India (with about 5,000 and 10,5000 drugmakers, respectively), this number is abysmal. It is no surprise, then, that for the past few decades, sub-Saharan Africa’s dependence on drug imports has been as high as 70 to 90%. Addressing this import dependence with biopharma production can have a two-fold impact.
Many pharma products are either extremely expensive in Africa as they are imported or they are not easily accessible since there aren’t enough local manufacturers to meet domestic demand. With no steady or reliable access to necessary drugs and treatments, countries in Africa have a high burden of untreated diseases, both communicable and non-communicable. The associated poor health outcomes have a spillover effect on people’s financial well-being. Ill health results in poor productivity, which means that many people have to step away from actively contributing to the economy. By increasing access and affordability, a localised pharmaceutical manufacturing industry can give people access to medicines previously unavailable to them, thereby improving their health and enabling them to contribute to the economy.
Second, expanding biopharmaceutical manufacturing in Africa can generate job opportunities for local populations. It will also provide a stimulus to allied industries as the demand for raw materials, utilities, and services increases. And by producing pharma products in high demand globally, the continent also has the potential to gain from export revenue. All of these factors, put together, can help propel economic growth in Africa.
Lessons from the US manufacturing industry
In the United States, the manufacturing sector represents only 10% of GDP and jobs, but it accounts for 20% of capital investment, 35% of productivity growth, 60% of exports, and 70% of business R&D expenditure. Despite the fact that its relative global share has fallen, we cannot deny the outsized contribution of manufacturing to the US economy. The decline in manufacturing has also been associated with increasing inequality.
Research from the McKinsey Global Institute has shown that revitalising competitiveness and growth in 16 manufacturing industries – one of which is the pharmaceutical manufacturing industry – can propel GDP growth by over 15%. In American counties where manufacturing is the economic bedrock, economic growth and employment opportunities are more inclusive. Most interestingly, many of these manufacturers don’t even need their employees to have four-year degrees.
This lesson from US manufacturing can offer a useful blueprint for using biopharma production to drive economic growth in the African context.
Looking to the model of medicine manufacturing in India
In India, the pharmaceutical manufacturing industry contributes about 2% to GDP and roughly 8% to total merchandise exports. Not only does it successfully create jobs and meet domestic demand, but it is one of many countries around the world which gains export revenue from biopharma production. With a turnover of about $1 billion in 1990, growing to $18 billion+ in 2018, the pharmaceutical manufacturing industry in India has contributed significantly to inclusive economic growth. The $45 billion industry value in 2021 was projected to touch $60 billion by the end of 2023.
Recreating this growth in Africa is possible. But it needs a long-term approach, increased investments in biopharmaceutical manufacturing, and a targeted focus on building capacity across the value chain, especially in manufacturing APIs, chemicals, small molecules, biopharmaceuticals, cell and gene therapies, and vaccines.
The path ahead
Concerted efforts are in progress to strengthen biopharma production capacity in Africa. Some countries already have capabilities in place for vaccine manufacturing, drug production, and fill and finish. South Africa’s Afrigen, Aspen, and Biovac have vaccine fill and finish capabilities. Ethiopia’s EPHI has rabies vaccine drug substance manufacturing capacity. The Institut Pasteur Tunis can produce the drug substance for the BCG vaccine. With support from BioNTech, Rwanda is building the capacity to produce mRNA vaccines in bulk, with a special focus on malaria and tuberculosis.
Still, Africa accounts for only a small proportion of global biopharma production, contributing only 3% to global drug manufacturing. Changing this will require a coordinated focus on modernisation, workforce development, speedy infrastructure development, and technology access. Globally, the manufacturing industry is undergoing transformational shifts in terms of digitisation, automation, and sustainability. If African economies want to see strong and inclusive growth, investing in a high-performing pharmaceutical manufacturing industry – which is so inextricably linked to the overall economy – is a non-negotiable.
Prefabricated factory systems to rapidly scale biopharma production
Partnering with companies which provide prefabricated factory systems is the surest shot to rapid biopharma capacity development in Africa. Innovations like PodTech™️’s podule™️ can help players in biopharma production halve the time spent on factory construction, without even disrupting existing operations. They provide the ideal solution for biopharmaceutical manufacturing, fill and finish, and a range of other pharma processes.
PodTech™️’s podules are pretty much a one-stop solution for all your pharma factory needs. These prefabricated units are self-contained, encased within shipping containers, and assembled entirely offsite. At manufacturing sites, biopharma production companies have to only connect the system to electricity and basic utilities and voila! You’re ready to kick off your medicine manufacturing. No need to worry about air handling, fire protection, utility distribution, or a building management system. No need for on-site validation. No need to halt ongoing production.
Need to quickly scale up or move production due to emergency situations? PodTech™️’s solutions are flexible, easily scalable, and fairly simple to relocate – just the right ingredients to adapt to changing market conditions. And with an operational life of more than 20 years, once you’ve set up, you can focus your precious time and energy on other aspects of production.
Most crucially, in Africa, accessing the intellectual property or technology underlying biopharma production is a challenge. But partnering with PodTech™️ means that you also have access to optional technology licenses and sharing options for fill and finish, inhalation suites, and onco and novel products with established manufacturers from around the world.
In a region that has historically been excluded from the global pharmaceutical market, these prefabricated systems promise to bridge that gap as quickly and sustainably as possible. PodTech™️ can help governments and entrepreneurs to contribute towards truly inclusive economic growth. By creating jobs, building the capacity to respond to evolving health emergencies, opening up the possibility of pharma exports, and contributing to a healthier African population, PodTech™️ is an important partner to anyone seeking to contribute to the African growth story.
With PodTech, it is possible.