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Pharmaceutical manufacturing Plan for africa

Business Plan



This document has been produced without ormal United Nations editing. The designations employed and the

presentation o the material in this document do not imply the expression o any opinion whatsoever on the part

o the Secretariat o the United Nations Industrial Development Organization (UNIDO) concerning the legal status

o any country, territory, city or area or o its authorities, or concerning the delimitation o its rontiers or

boundaries, or its economic system or degree o development. Designations such as “developed”, “industrialized”

and “developing” are intended or statistical convenience and do not necessarily express a judgment about the

stage reached by a particular country or area in the development process. Mention o rm names or commercial

products does not constitute an endorsement by UNIDO. The opinions, statistical data and estimates contained

in signed articles are the responsibility o the author(s) and should not necessarily be considered as refecting the

views or bearing the endorsement o UNIDO. Although great care has been taken to maintain the accuracy o

inormation herein, neither UNIDO nor its Member States assume any responsibility or consequences which may

arise rom the use o the material.

Cover photographs

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Pharmaceutical manufacturing Plan

for africa

Business Plan

Addis Ababa, 2012



ACKNOWLEDGEMENT

This Business Plan was developed by a partnership o the Arican Union Commission

(AUC) and the United Nations Industrial Development Organization (UNIDO) to accel-

erate the implementation o the Pharmaceutical Manuacturing Plan or Arica (PMPA),

with unding rom the German government. The Commission thereore extends special

appreciation to UNIDO or the resourceul collaboration through which this Business Plan

has been developed.

The Commission greatly appreciates all member states constituting the Technical Com-

mittee o the Pharmaceutical Manuacturing Plan or Arica rom North Arica (Egypt andLibya), West Arica (Ghana, Nigeria and Senegal), Central Arica (Burundi, Cameroon and

Gabon), East Arica (Kenya and Ethiopia) and Southern Arica (South Arica and Angola)

or their support to the process.

The Commission urther wishes to recognize the eort o other members o the Technical

Committee such as NEPAD Planning and Coordinating Agency, WHO, UNAIDS, Region-

al Economic Communities, Southern Arican Generic Manuacturers Association, Fed-

eration o Arican Pharmaceutical Manuacturers Associations, COHRED, EDCTP, and

ANDI, who since joining the Technical Committee, have supported the implementation o

its broadened mandate.

The Commission thanks all the organizations including members o the consortium o theAMRH Programme that are supporting Arica’s development agenda through implement-

ing programmes geared towards promoting access to quality aordable medicines.

The Commission acknowledges the eorts o the authors o the Business Plan, a team com-

posed o Dr. Skhumbuzo Ngozwana & Mr. Alastair West rom UNIDO and Dr. Ademola

Olajide & Dr. Janet Byaruhanga rom the Health, Nutrition and Population Division o the

AUC Department o Social Aairs.



iii

FOREWORD

During the last decade promoting sustainable access to quality and aordable medicines

and integrating local production as part o the overall health systems strengthening package

has been o signicant concern to Arican leaders.

A viable pharmaceutical industry in Arica shall not only impact on the Arican health sys-

tem and its capacity to respond to the health needs o the people but also will contribute to

the overall socioeconomic development o the continent.

For this reason, Arican governments have committed to enhancing the attainment o one o the set targets o the 8th Millennium Development Goal, to increase the proportion o the

population with access to aordable essential drugs on a sustainable basis.

The Arican Union Commission has been at the oreront in galvanizing the necessary po-

litical will and providing the leadership to the broad range o processes required or promot-

ing a sustainable local pharmaceutical industry.

The Commission has made signicant eorts towards ensuring delivery on set objectives o

Arica’s highest decision making body (The Assembly o Heads o State and Government)

as they relate to the implementation o a Pharmaceutical Manuacturing Plan or Arica

(PMPA). These range rom conducting studies to establish Arica’s local pharma production

capacity, building strategic partnerships required or the development o a concrete actionplan, to engaging governments in the development o the Business Plan or the operation-

alization o the PMPA.

This Business Plan is a product o multi-stakeholder eorts all geared towards providing a

package o solutions to address the various challenges conronting the Arican pharma sec-

tor in general. It is not an end in itsel but rather a means through which governments either

through their national systems or regional economic communities will engage with relevant

partners to implement specic activities according to their unique needs/priorities.

The road ahead remains long and challenging but the desired objectives remain compelling

and non-negotiable. Consequently I invite all stakeholders rom member state governments

to Regional Economic Communities; rom the Private or Prot Sector to Donors and De-

velopment partners to strategically engage and collaborate, creating the unity o purpose

and necessary synergies to realize the noble objectives o this Business Plan.

Bience P. Gawanas

Commissioner or Social Aairs



iv



v

contentS

acKnoWleDgement ...........................................................................................................

oreWorD ..........................................................................................................................

ls abbvs .......................................................................................................... v

ls s ....................................................................................................................... x

ls tbs ....................................................................................................................... x

eXecutiVe SummarY ..........................................................................................................1

SWot analYSiS ................................................................................................................... 6

1. id d Bkd ..........................................................................................11

1.1 THE STRATEGIC CONTEXT OF AFRICA’S HEALTHCARE CHALLENGES ................................ 12

1.2 THE PHARMACEUTICAL MANUFACTURING PLAN FOR AFRICA ........................................... 18

1.3 BUSINESS PLAN ................................................................................................................ 20

1.4 SUMMARY OF CHAPTER 1 ................................................................................................. 22

2. ovvw P m a .................................................... 25

2.1 INTRODUCTION: THE PHARMACEUTICAL MANUFACTURING SYSTEM ................................ 25

2.2 THE CURRENT STATUS OF THE PHARMACEUTICAL INDUSTRY AND

OTHER STAKEHOLDERS ...................................................................................................29

2.3 CHALLENGES AND OPPORTUNITIES FOR LOCAL PRODUCTION ........................................472.4 SUMMARY OF CHAPTER 2 ................................................................................................ 54

3. Ss .........................................................................................................................57

3.1 THE GENERIC SOLUTIONS PACKAGE .................................................................................58

3.2 OTHER ACTIVITIES ...........................................................................................................77

3.3 SUMMARY OF CHAPTER 3 ................................................................................................ 82

4. ip P ..................................................................................................... 85

4.1 PHASED APPROACH TO IMPLEMENTATION ...................................................................... 86

4.2 STAKEHOLDER ENGAGEMENT .......................................................................................... 91

4.3 PROPOSED STRUCTURE FOR DELIVERING THE PMPA ....................................................93

4.4 RESOURCE REQUIREMENTS ............................................................................................95

4.5 MONITORING AND EVALUATION .......................................................................................99

4.6 RISK MANAGEMENT.........................................................................................................101

4.7 SUMMARY OF CHAPTER 4 .............................................................................................. 102



vi



vii

LisT OF AbbREviATiONs

AA artesunate/amodiaquineACT Artemisinin-based Combination Therapy

ADB Arican Development Bank

AL artemether/lumeantrine

ALMA Arican Leaders Malaria Alliance

AMFm Aordable Medicines Facility or malaria

AMRH Arican Medicines Regulatory Harmonization

ANDA Abbreviated New Drug Application

ANDI Arican Network or Drugs and Diagnostics Innovation

API Active Pharmaceutical Ingredient

ARIPO Arica Regional Intellectual Property Organization

ARV antiretroviral drug

BA/BE Bioavailability/BioequivalenceAU Arican Union

AUC Arican Union Commission

BRIC Brazil, Russia, India and China

CCATP Collaborating Centre or Advocacy and Training in Pharmacovigilance

CHAI Clinton Health Access Initiative

CL Compulsory Licence

CMS Central Medical Store

COHRED Council on Health Research or Development

CSIR Council or Scientic and Industrial Research (RSA)

CTD Common Technical Document

DE Data Exclusivity

DFI Development Finance InstitutionDFID Department or International Development (UK)

DNDi Drugs or Neglected Diseases Initiative

DRC Democratic Republic o Congo

EAC East Arican Community

ECCAS Economic Community o Central Arican States

ECOWAS Economic Community o West Arican States

EDL Essential Drugs List

EGA European Generic Medicines Association

EIU Economist Intelligence Unit

EMA European Medicines Agency

EML Essential Medicines List

FDA Food and Drug Administration (U.S.)

FDC Fixed Dose Combination

FEAPM Federation o East Arican Pharmaceutical Manuacturers

FKPM Federation o Kenyan Pharmaceutical Manuacturers

GDP Good Distribution Practice

GIZ Deutsche Gesellschat uer Internationale Zusammenarbeit

GLP Good Laboratory Practice

GMP Good Manuacturing Practice

GWP Good Warehousing Practice

GPO Government Pharmaceutical Organization (Thailand)

HAI Health Action International

HAT Human Arican Trypanosomiasis



viii

ICH International Conerence on Harmonisation o Technical Requirements

or Registration o Pharmaceuticals or Human Use

IDMA Indian Drug Manuacturers’ Association

IFC International Finance Corporation

IFHA Investment Fund or Health in Arica

IPA Indian Pharmaceutical Association

IPO Initial Public Oering

HR Human Resource

ICT Inormation and Communications Technology

KEMRI Kenya Medical Research Institute

KETAM Kenya chapter o the Pan Arican Treatment Access Movement

KSP Kilimanjaro School o Pharmacy

LEAP Leishmaniasis East Arica Platorm

LDC Least Developed Country

LNCPP Laboratoire National de Contrôle des Produits Pharmaceutiques (Algeria)

MASC Medicines and Allied Substances ControlMDR-TB multidrug-resistant tuberculosis

M & A Mergers and Acquisitions

M & E Monitoring and Evaluation

MCAZ Medicines Control Authority o Zimbabwe

MCC Medicines Control Council (RSA)

MeTA Medicines Transparency Alliance

MMV Medicines or Malaria Venture

MoF Ministry o Finance

MoH Ministry o Health

MRC South Arican Medical Research Council

MSF Medecins sans Frontieres

MUHAS Muhimbili University o Health and Allied Sciences (Tanzania)NAFDAC National Agency or Food and Drug Administration and Control (Nigeria)

NEPAD New Partnership or Arica’s Development

NGO Non-Governmental Organisation

NIPER National Institute o Pharmaceutical Education and Research

NMRA National Medicines Regulatory Authority

NRF National Research Foundation (RSA)

OECD Organisation or Economic Co-operation and Development

PDP Product Development Partnership

PE Private Equity

PEPFAR U.S. President’s Emergency Plan or AIDS Relie

PIC/S Pharmaceutical Inspection Co-operation Scheme

PMAG Pharmaceutical Manuacturers Association o GhanaPMI Presidents’s Malaria Initiative (U.S.)

PMPA Pharmaceutical Manuacturing Plan or Arica

PPP Public Private Partnership

QC Quality Control

QMS Quality Management System

R & D Research and Development

REC Regional Economic Community

RoK Republic o Korea

RSA Republic o South Arica

SADC Southern Arican Development Community

SAGMA Southern Arican Generic Medicines Association

SARPAM Southern Arican Regional Programme on Access to Medicines andDiagnostics



ix

SEZ Special Economic Zone

SLF Saint Luke Foundation (Tanzania)

SMZ Sulamethoxazole

SPC Supplementary Protection Certicate

SRA Stringent National Medicines Regulatory Authority

SSA sub-Saharan Arica

TA Technical Assistance

ToR Terms o Reerence

TPI Tanzanian Pharmaceutical Industries

TPM Total Productive Maintenance

TPS Toyota Production System

TRIPS Trade and Related Aspects o Intellectual Property Rights

UK United Kingdom

US United States o America

USP U.S. Pharmacopeial Convention

XDR-TB extensively drug-resistant tuberculosisUNAIDS Joint United Nations Programme on HIV/AIDS

UNCTAD United Nations Conerence on Trade and Development

UNDP United Nations Development Programme

UNICEF United Nations Children’s Fund

UNIDO United Nations Industrial Development Organization

VC Venture Capital

WAHO West Arican Health Organisation

WAPMA West Arican Pharmaceutical Manuacturers Association

WHO World Health Organization

WIPO World Intellectual Property Organization

WTO World Trade Organization



x

LisT OF FiGuREs

Figure 1: Schematic representation o the overlap o RECs and trading blocs onour continent ...................................................................................................................11

Figure 2: Arican Pharma Growth Drivers, ............................................................................... 14

Figure 3: Table rom AEI working paper by R. Bate ................................................................. 17

Figure 4: Schematic representation o the small molecule ‘Pharmaceutical manuacturing

system’.......................................................................................................................26

Figure 5: Typical operations o a local oral solid dosage orm manuacturer ......................... 31

Figure 6: Illustration o challenges across the manuacturing value chain .............................. 54

Figure 7: Illustration o oundations required, key interventions and ultimate ambition

or the Business Plan ................................................................................................57

Figure 8: Schematic indicating the interdependence o critical aspects o the system ...........58

Figure 9: Indicative package o solutions to address the wide ranging issues involved ........60

Figure 10: Proposed structure or implementation o the Business Plan .................................. 94



xi

LisT OF TAbLEs

Table 1: Summary o fndings rom WHO report on 26 National Medicines RegulatoryAuthorities in Arica .....................................................................................................38

Table 2: Key challenges identifed by the pharmaceutical sector in achieving universal

GMP standards ............................................................................................................48

Table 3: Status o partnerships impacting on the pharmaceutical sector in Arica .................. 53

Table 4: Indicative list o the broad array o stakeholders in areas related to

pharmaceutical manuacturing in Arica ...................................................................... 92

Table 5: Indicative estimate o resource requirements or ull implementation o the

Business Plan ..............................................................................................................96

Table 6: Potential indicators or national and continent level M & E ..................................... 100



xii



1

EXECuTivE suMMARY

This Business Plan addresses a complex industry and covers a diverse range o contextsacross our 54 member states. Strengthening our ability to produce high quality, aordable

pharmaceuticals across all essential medicines will contribute to improved health outcomes

and the realization o direct and indirect economic benets. This is the vision o the Phar-

maceutical Manuacturing Plan or Arica (PMPA) endorsed by our Heads o State and

Government at the summit in Accra in 2007. This Business Plan outlines a recommended

approach or achieving these aims. It is designed to benet all our member states through

contributing to improved access to aordable, sae and ecacious essential medicines.

In Arica, we bear a disproportionate burden o disease with, or example, 75% o the world’s

HIV/AIDS cases and 90% o the deaths due to malaria. Our people suer more than most

rom tuberculosis and there are many other inectious diseases that cause substantial mor-

bidity and mortality. The extreme impact o inectious diseases is largely elt in sub-Saharan

Arica (SSA) as our countries in the North have disease proles that are more closely re-

lated to those o industrialized countries, with cardiovascular disease, diabetes and cancer

being public health priorities. Non-communicable diseases are also becoming increasingly

prominent across the rest o the continent given the demographic changes that are taking

place and they are predicted to overtake inectious diseases as the leading causes o death

in Arica by 2030.

These orecasts refect the changing liestyles that are associated with economic prosperity,

a uture that is predicted or much o our continent over the coming years. The uture will

also likely see a reduction in the level o donations in support o our healthcare systems as

the global nancial crisis plays out. Thereore, it is imperative that we implement a plan ordeveloping our industry so that we can ensure access to quality aordable medicines inde-

pendent o donations. Furthermore, there is the need to improve the quality o products to

which our people are exposed across the Essential Medicines List (EML) as evidence sug-

gests that there is signicant penetration o sub-standard and countereit products in our

markets.

The 4th Conerence o Arican Ministers o Health directed the Arican Union Commission

(AUC) to develop a Business Plan or the operationalization o the PMPA, a directive that

was urther re-emphasised at the 5th meeting in Namibia in 2011. The AUC duly convened

a stakeholders meeting in Chad to review terms o reerence which have guided the develop-

ment o this Plan. That meeting reconrmed that the objectives o the Business Plan should

be to develop a sustainable supply o aordable, quality essential medicines; to improve

public health outcomes; and to contribute to industrial and economic growth.

This Business Plan is premised on the belie that industrial development o the pharmaceuti-

cal sector will contribute to improved public health outcomes, provided that the development

o the industry is based on the principle that all manuacturers supplying pharmaceuticals to

our people should ultimately meet international standards o production. However, it is also

recognized that we need to be pragmatic and that change cannot happen overnight. In view

o this, we propose a road map approach where the industry is both supported and required

to reach international standards o production over a period o time. Furthermore, the impact

o ‘sub-standard’ production will be mitigated through ensuring that critical products that

would have serious public health consequences should they be o unsatisactory quality areonly manuactured by those o our companies that have reached certain requisite standards.



2

Pharmaceutical manufacturing Plan for africa - Business Plan

The context in which pharmaceutical manuacturing takes place is determined by a num-

ber o actors who orm the ‘pharmaceutical manuacturing system’. These entities include

the manuacturers themselves, national medicines regulatory authorities (NMRAs), various

government ministries, trade associations and an array o distribution channels. Other key

players include institutions that develop the human capital or this knowledge intensive sec-

tor.

Moreover, given the capital intensive nature o the pharmaceutical industry, manuacturers

need to access investment. An appetite rom various dierent sources o investment capital

or the sector is essential i companies are to be able to make the signicant investments

required to reach and maintain international standards.

The combined impact o these dierent actors determines the ability and desire o com-

panies to manuacture products to international standards and the degree to which such

manuacturing can be sustainable. The regulator should play a key role in ensuring that

products are manuactured according to Good Manuacturing Practices (GMP). It shouldalso oversee the distribution o products to ensure adherence to Good Distribution Prac-

tices (GDP) and Good Warehousing Practices (GWP), as well as oversee the market place

through pharmaco-vigilance and post marketing surveillance. Various government minis-

tries have policy tools at their disposal that can be used to support the development and

sustainability o the industry sector in a country.

The level o development o the manuacturing system in our countries varies dramatically.

The number o companies that are registered ranges rom over 200 in Nigeria to none in

a number o our countries. In total, it is estimated that some orm o manuacturing takes

place in 38 countries. There is wide divergence in the level o regulatory oversight, with the

Republic o South Arica (RSA) and countries such as Algeria and Tunisia in the Northhaving strong institutions. A World Health Organization (WHO) survey o 26 o our coun-

tries ound that many regulatory authorities lacked the capacity to ull the basic unctions

required or the satisactory protection o public health. Given this limited capacity, it is im-

possible or many o our regulators to oversee the supply o products rom a thousand plus

companies spread across dierent continents. In view o this, the proximity o high quality

production through developing our industries in situ is a means by which our resource-

constrained regulators can establish secure sources o supply.

In other developing countries, such as China and India where there are fourishing phar-

maceutical sectors, the industry is reputed to benet rom a number o policy measures

including protection through tari regimes and procurement preerences as well as direct

support such as interest subsidies, export credits, cheap utilities, working capital credits andtax holidays. Consequently, imports into our continent have oten been subsidized through

signicant support rom their respective governments. Furthermore, they oten enjoy zero

taris when they come into our countries.

Conversely, in some o our nations, domestic manuacturers have to pay up to 25% duty on

imported raw materials. Thereore, whilst a number o Ministries o Health and/or NMRAs

have, or example, identied strengthening the local manuacturing sector as an important

objective, there is oten policy incoherence across government ministries. This creates an

overall environment that is not conducive to the development o our pharmaceutical indus-

tries.



3

EXECUTIVE SUMMARY

There is very limited manuacturing o Active Pharmaceutical Ingredients (APIs) in Arica

(limited exceptions being RSA, Egypt and Ghana) and most o our companies are involved

in nal ormulation and packaging o drugs. The quality standards to which our manuac-

turers adhere vary signicantly between countries and within countries. As mentioned, RSA

and most North Arican countries have strong, well developed industries. We have examples

o companies across our continent that have reached or are striving or international stan-

dards. We have others that have the ambition to do so but who have, as yet, not been able to

access the detailed technical know-how or the investment needed to progress towards this

mark. There are other entities that are happy to continue with the current status quo given

that they operate with a relatively low cost base and there is limited political power or capac-

ity or NMRAs to take action against them.

The industry does ace serious challenges i it is to achieve and maintain the standards that

should be required. These challenges include limited access to nance; limited availability o

skilled human resources; inability to access the detailed know-how necessary to implement

an upgrading programme or design a new plant; signicant costs involved in the properdevelopment o new products; the aorementioned policy incoherence; and underdeveloped

supporting industries.

The perspective o individual manuacturers is somewhat dependent on where they stand

in terms o ambition and progress towards improved quality standards. A major actor ham-

pering achievement o the overarching goal o universal high quality production is insu-

cient regulatory oversight. Such oversight is a key actor since lack o it can result in sub-

standard products (both domestically produced and imported) and countereit products

taking market share rom domestic rms genuinely aspiring to high quality production. This

has knock-on eects and it is, or example, one o the issues that investors cite as limiting

their appetite or the sector.

In addition to the challenges aced by the industry, there are underutilized opportunities to

assist and promote the development o pharmaceutical manuacturing on our continent and

or it to contribute to improved public health outcomes. For example, the Trade Related As-

pects o Intellectual Property Rights (TRIPS) fexibilities have generally not been utilized;

there are limited links between industry and academia; and collaboration between compa-

nies in Arica, as well as with international manuacturers, is quite rare. In most countries,

the range o products is limited to a small proportion o those required by a ully unctioning

health system. These underutilized opportunities oer substantial potential benets, includ-

ing expansion o the current range o locally manuactured products.

Given the diverse range o contexts and the array o aspects that need to be addressed to agreater or lesser extent in each country, this Business Plan proposes an approach where a

generic package o solutions is developed. This can then be tailored to the specic needs o

each o our countries. The solutions package includes guidance on incentives in support o

the sector; a Good Manuacturing Practice (GMP) road map and associated risk assessment

o WHO’s Essential Medicines List (EML); a syllabus or developing the human resources

required or the long term sustainability o the industry; various mechanisms or accessing

know-how in the short term, including a Partnership and Business Linkages Platorm (that

would also assist companies to, or example, establish relationships with local, regional and

international players in order to increase product ranges, mobilize investment, etc.); and

includes technical assistance to enable regulators to devise and implement organizational

development plans. It also proposes a process by which the dierent stakeholders in a coun-try can come together to develop a shared strategy or the sector and a means by which this

strategy can be implemented.



4


Key to the sustainability o manuacturing on the continent is the degree to which our

manuacturers can compete with imports. As pointed out, remedying the policy incoher-

ence will go some way to improving competitiveness and achieving ecient production by

using modern production management techniques has the potential to increase capacity

utilization o plants. Evidence suggests that our companies can compete with, or example,

schedule M compliant manuacturers in India whilst still operating according to interna-

tional GMP. Thereore, another key part o the solutions is assisting companies to embrace

such approaches and constantly look to improve the eciency with which they produce.

As well as the generic solutions package or implementation at country level, we will under-

take activities at the regional and continent wide levels, such as lobbying or an extension to

the TRIPS fexibilities beyond 2016. Also, upon request, we will assist Regional Economic

Communities (RECs) to develop strategies and will work with centres o excellence to de-

velop novel ormulations or dissemination to companies that have reached international

GMP standards. There is also the need or urther deliberation on issues such as traditional

medicines, expanded manuacturing o APIs on the continent, and the need or improvedsupply o blood products. Recommendations on such issues will be developed in the course

o implementing the Business Plan (e.g. WHO is proposing to conduct a easibility study

into blood products in Arica, the ndings o which could be incorporated into the PMPA

in the uture).

This Business Plan puts orward a comprehensive package o solutions or the development

o pharmaceutical manuacturing on our continent. The broad range o disciplines that need

to be covered and the expertise required mean that no one entity can deliver all the neces-

sary aspects and a range o organizations will need to collaborate to ull the ambition. An

important issue to be addressed is the ragmentation o our markets and work under the

Arican Medicines Regulatory Harmonization initiative (AMRH) is well advanced. It willbe critical that the broader work under this Business Plan is coordinated closely with the

AMRH work in order to advance towards the objectives set by the PMPA.

As well as collaboration with AMRH, we propose to establish a consortium o key partners

who will assist us in this undertaking. Initial discussions have taken place with various A-

rican and international bodies that could come together to cover the ull range o interven-

tions required. Under the implementation approach or this Business Plan, a key rst step

will be to establish the legal basis or the consortium and to develop the chemistry between

the dierent actors so that genuine progress can be made. We have invited the United Na-

tions Industrial Development Organization (UNIDO) to assist us in setting up the con-

sortium and to play a coordinating role as we move orward. In addition to establishing

the consortium, we will need to mobilize signicant resources or the implementation o this Business Plan. A detailed budget will be prepared once the consortium has designed a

shared action plan. However, an indicative budget has been prepared and it is estimated that

implementation will cost US$ 54mn over a ve year period.

Other activities during the early stages o implementation will include urther renement o

the generic solutions package and inviting expressions o interest rom member states who

wish to engage with the Arican Union Commission (AUC) or the development o their in-

dustry or o their regulatory systems. This would enable those states to realize public health

gains rom access to regional sources o high quality medicines. During a scale up phase,

agents acting on behal o the PMPA will work with national level stakeholders to develop

strategies to achieve their shared ambitions. Once dened, these ambitions will be translatedinto a detailed action plan based on the expertise within the consortium which will also as-

sist in national level implementation.



5

EXECUTIVE SUMMARY

This Business Plan does not represent a source o unding or public or private sector play-

ers but is a package o technical assistance which countries can access. Initial discussions

with the World Bank have suggested that there could be interest in supporting investment

in, or example, National Medicines Regulatory Authorities (NMRAs) although ultimately

it will be the responsibility o individual countries to nance the recommended investments

(whether in terms o bricks and mortar or through support to the industry in the orm o

incentives).

The nature o the manuacturing industry and the complexity o the system within which

it operates mean that it will take time or the ull benets to be realized. There will also be

the need or coordination o many dierent actors at the country level and at the interna-

tional community level. In view o this, a prerequisite or the success o this Business Plan

is the ongoing political will at the highest level to bring parties into alignment and to enable

sustainable progress to be made. Only then will the vision o increasing access to essential

medicines or our people, through a strengthened Arican pharmaceutical industry, become

reality.



6


sWOT ANALYsis

This Business Plan puts orward a detailed approach to strengthening pharmaceuticalmanuacturing in Arica in order to improve public health outcomes and to contribute to

economic development o our continent. Public health will benet rom improved security

o supply and robust regulatory oversight (easible due to proximity o production) as well

as providing a basis rom which novel ormulations and new products can be developed to

tackle specic diseases and treatment challenges that are to be ound on our continent. As

the global nancial crisis continues to evolve, the development o the sector will provide

a basis or sustainable treatment programmes as the contribution that donors can make

plateaus or even begins to diminish. The sector can also make a contribution to economic

growth through enhanced exports, increased intra-Arican trade, emergence o supportive

industries and the reduced reliance on imports that use up precious hard currency and or

which only limited regulatory oversight by our national regulatory authorities is possible.

The situation across our countries varies dramatically, however general themes apply to a

greater or lesser extent. The ollowing chart summarizes the top line strengths, weaknesses,

opportunities and threats that are pertinent to the sector’s ability to contribute to progress

across public health and economic development dimensions.

Strengths Weaknesses

•Heightenedpoliticalinterest(andwill)tosup -

portthelocalproductionofmedicines.

•Demonstratedthathighqualityproductionof

essentialmedicinesisfeasibleacrossourconti-

nent.•Strengtheningoflegal/regulatoryframework(off

aweakbase).

•Existenceofscienticandtechnicalinstitutions

withtherelevantskillsinanumberofcountries

(asyetunderutilized).

•Increasingpoliticalstabilityandrapideconomic

developmentprovideastrongbasisfordevel-

opmentoftheindustry.

•Developmentsinhealthinsuranceschemesand

healthsystemswithincreasinginvestmentin

publichealth.

•Somecountrieshavewellestablishedpharma-

ceuticalsectorsandregulatoryinstitutionsthat

arerelativelystrong.

•Comparativelylowlabourcosts,especiallyas

Indianlabourcostsbegintoescalate.

•Somecountriesalreadyexportingtoindustrial -

izedmarkets.

•Levelof regulatory oversightvaries but ingen-

eralitisinsufcienttoprotectourcitizensand

toallowfair competition in our pharmaceutical

markets.

•Currentlyheavilydependentonimportswhichoftenbenetfromexportincentivesaswellas

favorable dutiesand tariffs when compared to

domesticallymanufacturedproducts.

•Policy incoherence and absent sector develop-

ment strategiesleadto anenvironmentthatis

notconducivefortheindustrytoourish.

•Highutilitycostsandunreliablesupply.

•Limited availability of affordable nance of suf -

cient magnitude and duration constrains the

sector’sabilitytoinvestinnecessaryupgradesto

achieveestablishedqualitystandards.

•Smalldomesticmarketsandfragmentedregional

marketshampercompanies’abilitytomanufac-

tureefciently.

•Situation varies dramatically, but in for many

companiesthesystems,processes,premisesand

equipmentatplantlevelareinsufcienttoassure

qualityofproduction.



7

SWOT ANALYSIS

Strengths Weaknesses

•Limitedsupportingindustriesincludinglocalpro -

duction of inputs such as APIs, packaging and

excipients, as well as availability of services tomaintainandrepairequipmentandtoconduct

necessarytrialstoattesttosuitabilityofproducts.

•WHOprequalicationschemecoversonlyalim-

ited range ofproducts whilst thequalityassur -

anceformostmedicinesisundertheauthority

ofourhighlyresourceconstrainedNMRAs.

Opportunities Threats

•Awareness of importance of local production

amongstinternationalpartnersanddonors,and

growingcommitmenttosupportthisagenda.

•Evidence suggests given a conducive environ-

mentourmanufacturerscancompetewithim-

portsandproducehighqualityproducts.

•Time limitedsupport toindustry coupledwith

requirements(andregulatoryoversight)tode -

velopprovidesviablerouteforbuildinganinter -

nationalstandardindustry.

•Creatingmorefavorablemarketconditionswill

encourageinvestmentinthesector.

•Development of the sector (and requisite na-

tional and regional level legislation) will enable

TRIPSexibilitiestobeutilizedforimprovedac -

cesstokeymedications.

•Increasedprevalenceoflifestylediseasescanbemore comprehensively addressed through en-

hanced local production and they represent a

growingmarketopportunity.

•Training programmes and institutions exist but

needtobeexpandedandscaledup.

•More advanced countries can look to export

drugstointernationalmarkets.

•On-going work under the African Medicines

RegulatoryHarmonizationinitiativecouldleadto

defragmentedmarketsatthesub-regionallevel.

•Stronginterestfrominternationalgenericindus-

tryandthereforethepossibilityforlocalcompa-

niestoformallianceswithinternationalplayers.

•Without a holisticandrobustapproachto de-

veloping the sector efforts from committed

manufacturerswillbeunderminedbyon-going

penetration of sub-standard and counterfeit

medicines.•Anon-goinglack ofevidenceas tothe preva-

lenceandimpactofsubstandardandcounterfeit

medicationscouldunderminethelongtermpo -

liticalwillrequiredtodeveloptheindustry.

•Development of the sector requires coordina-

tionacross publichealth andindustr ialdevelop-

mentcomponentsotherwiseobjectivesonboth

frontswillnotbeachieved.

•WithoutconcertedactionrelianceonAsianim-

portsmayincreaseandqualityofproductsmay

beincreasinglysuspect.

•Ifdonorassistanceplateausapossibleincreaseinsub-standardproductsforthepandemicdiseases

couldjeopardizethehealthofpatientsandlead

toacceleratedresistancegenerationagainstcriti-

calproducts.

•Donorinitiativesthatcaninadvertentlyhavedet-

rimentalconsequencesfortheAfricanpharma-

ceuticalindustry.



8

I N D I C A T I V

E A C T I V I T I E S T H A T C O U L D B E C O N D U C T E D D U R I N G T H E I M

P L E ME N T A T I O N O F T H I S B U S I N E S S P L A N

A r e a o f w o

r k

T i m e f r am e ( Y r s . )

K e y a c t i vi t i e s

K e y s u c c e s s f a c t or s

S e t t i n g u p t h e pr o g r a mm e

1

E s t a b l i s h c on s or t i um

R e s o ur c em o b i l i z a t i o

n

I n v i t e c o un t r i e s i n t er

e s t e d i n w or k i n g wi t h

t h eP MP A t o ex pr e s s t h ei r i n t er e s t

G en ui n e c ol l a b or a t i v e s pi r i t b e t w e en c on s or t i um

p a r t i e s

A l l p a r t n e

r s i n v ol v e d i n d e t a i l e d d e s i g n of pr o-

g r a mm e

C r e d i b i l i t y of pr o p o s a l f or d on or s

D e v el o p t h e s ol u t i on s p a c k a g e

1

D e s i g n a g en er i c GM

P r o a d m a p

C on d u c t r i s k a s s e s s m

en t of t h eE s s en t i a l

M e d i c i n e s L i s t

D e v el o p t h eHR d e v

el o pm en t p a c k a g e

C ol l a b or a

t i on b e t w e en p a r t i e s ( p a r t i c ul a r l y i nH

R

d e v el o pm

en t )

A d d r e s s i n

g c om pl ex t e c h ni c a l i s s u e s ( e. g .E ML r i s k

a s s e s s m en t ) i n a pr a g m a t i c b u t s c i en t i c a l l y s o un d

w a y

E s t a b l i s h P M

P A el d r e pr e s en t a t i v e s

1

A p p oi n t r e g i on a l c o or d i n a t or s t o o v er s e e

t h e c o un t r y l e v el d e s i g n a n d i m pl em en t a t i on

of s t r a t e g i e s

S u b j e c t t oi n v i t a t i on s f r omi n d i v i d u a l

m em b er s t a t e s ,r e c r ui t n a t i on a l ex p er t s t o

c o or d i n a t e s t r a t e g y d e s i g n a n d i m pl em en t a -

t i on

G o v er nm en t p ol i t i c a l wi l l

I ni t i a l s e e d f un d i n g f or P MP A m o b i l i z e d

H um a nR e s o ur c eD e v el o pm en t

1 -> 5

D e v el o p t r a i ni n g pr o

g r a mm e s

Of f er t r a i ni n g

−R e g ul a t or y a f f a i r s

−P h a r m a c e u t i c a l b u s i n e s s m a n a g em en t

−P h a r m a c e u t i c a l m a n uf a c t ur i n g

−P l a n t o p er a t i on s &

m a i n t en a n c e

F a c i l i t a t e s h or t t er m

a c c e s s t ok n o wh o w

( e. g . b u s i n e s s p a r t n er s h i p s / c i t i z en s en c o ur -

a g e d t or e t ur nf r om

Di a s p or a )

E a s y a c c e s s t o v i s a s a n d w or k p er mi t s f or ex p a t r i -

a t e s t a f f a n d P MP A t e a m of ex p er t s

C ol l a b or a

t i on wi t h S t r i n g en t R e g ul a t or y A u t h or i -

t i e s ,I C H ,P I C S

I n d u s t r y - a

c a d emi a -r e s e a r c h i n s t i t u t e s i n t er f a c e

&

p a r t n er s h

i p s

O v er a l l c r e d i b i l i t y of c o un t r y c ommi t m en t

s t i m ul a t e s

i n t er e s t f r om p a r t n er s a n d en c o ur a g e s

c i t i z en s t o

r e t ur n

A d v i s e g o v er nm en t s on d e s i g n a n d

i m pl em en t a

t i on of a h ol i s t i c s t r a t e g y

f or b ui l d i n g

s u s t a i n a b l ei n d u s t r y a n d /

or b en e t t i n g f r omr e g i on a l s o ur c e s of

h i g h q u a l i t y

m e d i c i n e s

1 - 3

C on d u c t ex t en s i v e c

on s ul t a t i on s wi t h i n d u s -

t r y a n d a l l r el e v a n t k e y s t a k eh ol d er s

I ni t i a l s t r a t e g y s u b mi t t e d f or c on s i d er a t i on

b y s t a k eh ol d er r o un d t a b l e pr o c e s s

I m pl em en t a t i on u t i l i z i n g t h e ex p er t i s e

wi t h i n t h e c on s or t i um a s d e s c r i b e d i n t h e

“ s ol u t i on s p a c k a g e”

t a i l or e d t o t h e s p e c i c

n a t i on a l c on t ex t

F ul l p a r t i c

i p a t i on b y a l l s t a k eh ol d er s

On g oi n g p ol i t i c a l s u p p or t a n d b u y -i n

C ommi t m

en t b y m em b er s t a t e s t h r o u g h t h e a p-

p oi n t m en t of mi ni s t r y l i a i s on of c er s



9

A r e a o f w o r k

T i m e f r a m e ( Y r s . )

K e y a c t i v i t i e

s

K e

y s u c c e s s f a c t o r s

A s s i s t a n c e w i t h r e g u l a t o r y s y s t e m s

s t r e n g t h e n i n g & b u i l d i n g r e g u l a t o r y

c a

p a c i t y a t c o u n t r y l e v e l

1 - > 5

T A

t o N M R

A s o n o p t i m u m o r g a n i z a t i o n a l

s t r u c t u r e &

d e v e l o p m e n t

S u

p p o r t A M R H w o r k o n r e g u l a t o r y h a r m o -

n i z a t i o n

P o

l i t i c a l s u p p o r t

R

e g u l a t o r a u t o n o m y

R

e g u l a t o r w e l l - r e s o u r c e d

A s s i s t a n c e t o l e a d i n g c o m p a n i e s t o

a c

h i e v e s t r i n g e n t r e g u l a t o r y a p p r o v a l

2 -

3

S u

b j e c t t o c r i t e r i a e s t a b l i s h e d b y t h e T A ,

i d e n t i f y l e a d i n g c o m p a n i e s i n a c h i e v i n g p r e -

q u a l i c a t i o n o f p r o d u c t s

I d e

n t i f y i n d i v i d u a l r e q u i r e m e n t s a n d s e t

u p a p p r o p r

i a t e t e c h n i c a l a s s i s t a n c e p r o -

g r a m m e s

C

o m p a n i e s w i l l n e e d t o t a k e a d v a n t a g e o f t h e a s -

s i s t a n c e ( w h i c h w i l l m a i n l y b e i n k i n d )

S u

s t a i n a b i l i t y o f s u c h c o m p a n i e s w i l l a l s o d e p e n d

o n o t h e r a s p e c t s o f t h e B u s i n e s s P l a n s u c h a s s p e -

c i c g o v e r n m e n t s u p p o r t i n t h e s h o r t

t e r m

F a

c i l i t a t e a n d p r o m o t e a c c e s s t o p r o d -

u c

t s a n d t e c h n o l o g y f o r i n t e r n a t i o n a l

G M P c o m p l i a n t l o c a l m a n u f a c t u r e r s

2 - 5

W

o r k i n g w

i t h c e n t r e s o f e x c e l l e n c e a n d

p a r t n e r s , a c c e l e r a t e r e s e a r c h i n t o n e w

p r o d u c t a n d f o r m u l a t i o n d e v e l o p m e n t ,

s e l e c t p r o d

u c t s f o r d e v e l o p m e n t b a s e d o n

E M L

D

i f f u s e p r o

c e s s & o t h e r t e c h n o l o g y t o l e a d -

i n g c o m p a n

i e s

A

c c e s s t o e x p e r t i s e – A N D I C o E ’ s a n d A m e r i c a n

p a r t n e r s

A

b i l i t y t o g e t V o l u n t a r y L i c e n c e s o r t o

e x p l o i t

T R I P S e x i b i l i t i e s

T e

c h t r a n s f e r t e a m s

F a

c i l i t a t e a c c e s s t o a f f o r d a b l e n a n c e

2 - > 5

T

h r o u g h t h

e P a r t n e r s h i p a n d B u s i n e s s

L i n k a g e s P l a t f o r m a d v o c a t e f o r D F I s s u c h a s

t h e A f r i c a n

D e v e l o p m e n t B a n k & A f r i c a n

E x p o r t - I m p

o r t B a n k ( A f r i E x i m ) t o i n v e s t i n

t h e p h a r m a

s e c t o r

A

s p a r t o f h o l i s t i c a p p r o a c h , a

d v i s e g o v e r n -

m e n t s o n a

p p r o p r i a t e i n i t i a t i v e s t o a t t r a c t

i n v e s t m e n t

i n t o t h e s e c t o r

P o

l i t i c a l l e a d e r s h i p

P a

r t n e r s h i p s w i t h n a n c i a l e x p e r t s

G

o v e r n m e n t c r e a t e s a c o n d u c i v e e n v i r o n m e n t f o r

i n v e s t m e n t

A t t a i n i n g i n t e r n a t i o n a l q u a l i t y s t a n d a r d s

1 - > 5

A

s p a r t o f c o u n t r y l e v e l i m p l e m e n t a t i o n o f

h o l i s t i c s t r a t e g y , a s s i s t r e g u l a t o r s t o t a i l o r

a n d e x e c u t e a G M P R o a d M a p t o g u i d e t h e

m i g r a t i o n t o i n t e r n a t i o n a l G M P s t a n d a r d s

I n

c e n t i v e s a n d n a n c i n g a v a i l a b l e f o r i n

d u s t r y t o

u p g r a d e

R

e g u l a t o r h a s p o l i t i c a l a u t h o r i t y a n d c a p a c i t y t o

e n f o r c e r e q u i r e m e n t s

F a

c i l i t a t e p a r t n e r s h i p s , c o l l a b o r a t i o n a n d

b u

s i n e s s l i n k a g e s

1 - > 5

E s

t a b l i s h p l a t f o r m s f o r f a c i l i t a t i n g m a t c h -

m a k i n g

M

o n i t o r d e

a l o w a n d a d v i s e g o v e r n m e n t s

o n k e y c o n s i d e r a t i o n s f o r F D I

M

u t u a l l y b e n e c i a l r e l a t i o n s h i p s c a n b e e s t a b l i s h e d

P l a

t f o r m d e s i g n e d t o a l l o w f o r w i d e v a r i e t y o f r e l a -

t i o n s h i p s b e t w e e n a s s o r t e d t y p e s o f s t a k e h o l d e r



10

A r e a o f w o

r k

T i m e f r am e ( Y r s . )

K e y a c t i vi t i e s

K e y s u c c e s s f a c t or s

E nh a n c i n g m a r k e t d a t a c ol l e c t i on

1 - 5

A p pr o a c h I M S I n s t i t u

t e t o p a r t n er a n d of f er

t r a i ni n g onm a r k e t d a t a c ol l e c t i on t o ol s

I m pl em en t t r a i ni n g

Wi l l i n g n e s s t o s h a r e d a t a b y a l l s t a k eh ol d er s

I M S s e e s p o t en t i a l g a i nf r om t h e p a r t n er s h i p

F a c i l i t a t i n g m a r k e t a c c e s s & pr om o t i n g

i n t r a -r e g i on

a l t r a d e

2 -> 5

S u p p or t a s r e q ui r e d

t oA MR Hi nm o v i n g

t o w a r d s r e g ul a t or y h

a r m oni z a t i on

P ol i t i c a l w

i l l

H a r m oni z

er e g i s t r a t i onr e q ui r em en t s

P r o v i d i n g a s s i s t a n c e t o ex pl oi t T R I P S

F l exi b i l i t i e s

1 -> 5

A p pr o a c h A R I P O , UNDP , UN C T A Dr e

of f er i n g T A a n d s u p p

or t f or a m en d i n g I P R

l e g i s l a t i on t oi n c or p o

r a t eT R I P S exi b i l i t i e s

L o b b y f or ex t en s i on

of T R I P S d e a d l i n e of

0 7 / 0 1 / 1 6

A p pr o a c h R E C ’ s onh a r m oni z a t i on of I P R

P ol i t i c a l w

i l l

Wi l l i n g n e s s t o a m en d n a t i on a l l e g i s l a t i on t oi n c or -

p or a t e t h eT R I P S exi b i l i t i e s

C om p a ni e s s h o wi n t er e s t i n ex pl oi t i n g T R I P S

P r om o t i n g a n d c a t a l y z i n g A P I P r o d u c -

t i on

1 -> 5

I d en t i f y pr o d u c t s f or

l o c a l pr o d u c t i on

M o b i l i z ef un d i n g a n d

en t i c e en t r e pr en e ur s

t oi n v e s t i nA P I pr o d

u c t i on

C a n v a s s u p p or t f or l o c a l A P I pr o d u c er f r om

l o c a l f or m ul a t or s

F un d i n g

P r o d u c t i o

n of c om p e t i t i v eA P I ( pr i c e a n d q u a l i t y )

P r o v i d i n g a s s i s t a n c e t o a c c el er a t er e-

s e a r c h a n d

d e v el o pm en t i n t o t r a d i t i on a l

m e d i c i n e s

1 -> 5

I d en t i f y p a r t n er s a l r e

a d y en g a g e d i n t h e a r e a

a n d of f er s u p p or t

W or k i n g wi t h i d en t i e d p a r t n er s , c o d i f y

t h ek n o wl e d g e b a s e

a n d c r e a t e a l i b r a r y of

pl a n t s wi t h m e d i c i n a l pr o p er t i e s

F un d i n g

R e s e a r c h

ex p er t i s e a n d c ol l a b or a t i on s

P a r t n er s h

i p s wi t h t r a d i t i on a l h e a l er s

E s c or t i n g t h ef or m a t i on a n d s t r en g t h en-

i n g of ph a r m a c e u t i c a l t r a d e a s s o c i a t i on s

1 -> 5

F a c i l i t a t ef or m a t i on o

f n a t i on a l a n d r e g i on a l

t r a d e a s s o c i a t i on s

C on s ul t wi t h i n d u s t r y s t a k eh ol d er s

E x t en s i v e

c on s ul t a t i on s wi t h i n d u s t r y a n d r el e v a

n t

s t a k eh ol d er s

I n d u s t r y w

i l l i n g n e s s t o p a r t i c i p a t e

G o v er nm en t a n d R E C l e v el s u p p or t



11

INTRODUCTION AND BACKGROUND

1. iNTRODuCTiON AND bACKGROuND

This Business Plan addresses a complex industry and covers a diverse range o contexts.Our continent is comprised o 54 countries, and has a total population o just over 1 billion

people which equates to about 14% o the global population. With the exception o Mo-

rocco, all these independent nations are members o the Arican Union (AU). They are also

organized into various sub-groupings, including Regional Economic Communities (RECs)

and trading blocs, with overlap and membership o multiple RECs and trading blocs be-

ing commonplace. The picture below is a schematic representation o the complexity o the

multiple memberships o various Arican states and o how we are situated in the dierent

regional economic and trading blocs.

1: S ps vp recs d d bs

UMA

African Union

WAMZ

LGAUEMOA

COMESA

MRU

EAC

SADC

SACU

CEPGL

CEMAC

Compounding the complexity o the RECs and trading blocs, there are substantial varia-

tions in disease proles and pharmaceutical-sector specic issues in North and sub-SaharanArica (SSA). The SSA region suers rom a high inectious disease burden whilst the North

has a prole not dissimilar to that o the developed world, with cancer, diabetes and car-

diovascular disease being leading public health priorities. The industry in the North is also

generally more developed than in the SSA region.

As well as signicant dierences between northern and southern Arica, the status o the

pharmaceutical industry varies signicantly within SSA. For example, the Republic o South

Arica (RSA) has a highly developed industry with some level o primary manuacturing.

Other member states have emerging industry sectors with companies at dierent stages o

development whilst others have a handul o manuacturers. Some states have no local phar-

maceutical manuacturing at all.



12

PHARMACEUTICAL MANUFACTURING PLAN FOR AFRICA - BUSINESS PLAN

The level o regulatory oversight o medicines varies dramatically across our continent.

A ew member states have strong regulatory authorities; others have institutions in place

which, to a greater or lesser extent, ull the unctions necessary to oversee the pharma-

ceutical markets; and some have virtually nonexistent regulatory systems. This multiplicity

o regulatory environments and widely varying capacities make regulatory harmonization

on the continent a massive challenge and continue to hamper access to aordable quality

essential medicines. It is against this background that the Arican Heads o State and Gov-

ernment adopted the Pharmaceutical Manuacturing Plan or Arica (PMPA) in May 2007.

The PMPA was adopted with the explicit aim o contributing to a sustainable supply o

quality essential medicines to improve public health and promote industrial and economic

development on the continent1. Broadly speaking then, the objective is to improve the qual-

ity o medicines even in countries that are neither involved in nor contemplating local phar-

maceutical production. The Arican Union Commission (AUC) is o the view that, even in

such countries, the PMPA will be o benet in contributing to access and security o sup-

plies o regionally produced high quality medicines. Such high quality regional sources willallow or a speedier response to country needs. Moreover, the proximity o producing coun-

tries will enable closer oversight o the quality o products compared with oversight o those

derived rom numerous plants across dierent continents. The quality o products available

in such countries will also benet rom strengthened supply chains and the development o

post marketing surveillance competencies.

1.1 the Strategic conteXt o arica’S healthcarechallengeS

Arican healthcare systems ace severe challenges which negatively impact on access to a-

ordable quality healthcare and lead to morbidity and mortality rom eminently treatable

conditions. The challenges are complex and, amongst others, include a disproportionately

high inectious disease burden, a growing chronic disease burden, a shortage o the requisite

human resources and the necessary inrastructure to deliver healthcare services, as well as

signicant unding and budgetary constraints.

1.1.1 High infectious disease burden

The International Finance Corporation (IFC)2 estimates that Arica accounts or:

• 25% o the global disease burden

• More than 50% o the global deaths o children under ve

• 3% o the world’s healthcare workers deployed

• Consumes only 1% o global healthcare expenditure

Specically, Arica accounts or the bulk o the global inectious disease burden with about

75% o the HIV/AIDS pandemic, 90% o the malaria cases and deaths. In addition, nine

Arican countries (excluding North Arica) rank among the 15 countries with the highest

1 Pharmaceutical Manuacturing Plan or Arica – CAHM_MIN._8(111) 20072 IFC – The Business o Healthcare in Arica 2007



13


tuberculosis (TB) burden in the world. The incidence o multidrug-resistant tuberculosis

(MDR-TB) and extensively drug-resistant tuberculosis (XDR-TB) in Arica is one o the

highest in the world.3

Furthermore, according to the World Health Organization (WHO), 90% o child deaths

in Arica are attributable to neonatal causes, pneumonia, diarrhoea, measles and HIV and

AIDS4 whilst the major causes o adult mortality are also related to HIV/AIDS, TB and

Malaria.

1.1.2 Growing chronic and non communicable disease burden

In addition to the pandemics and other uniquely Arican inectious diseases, the continent

aces a signicant and growing non communicable disease burden. These diseases are major

public health issues in the North already and are projected to increase dramatically in SSA

due to improving social conditions and rapid urbanisation; environmental issues like air

pollution; and an increase in the consumption o alcohol and tobacco products. The rise inchronic diseases will also be exacerbated by sedentary liestyles. It is estimated that by the

year 2020 Arica could have5:

• 60 million people with hypertension

• 1 million cases o cancer annually

• 18.6 million people with diabetes

Along with the specic conditions mentioned above, there will be an explosion o other

cardiovascular conditions, chronic respiratory diseases and neuro-psychiatric conditions.

For example, predictions are that by 2030 non-communicable diseases will have surpassedinectious diseases as the leading cause o death in Arica6.

1.1.3 The changing economic context and pharmaceutical industry growth

As well as the changing epidemiology o diseases and demographic changes, the Business

Plan will be implemented over a period o time when Arica is expected to undergo substan-

tial economic development. Various commentators have predicted that the continent will

experience substantial growth and economic development. For example, the World Bank in

November 20107 envisioned Arica’s prospects thus:

‘’We conclude that Arica could be on the brink o an economic takeo, much like China was 30

years ago, and India 20 years ago.”

The McKinsey Global Institute also made the ollowing observation:

“Arica’s growth acceleration resulted rom more than a resource boom. Arguably more important

were government actions to end political conficts, improve macro-economic conditions, and create

better business climates, which enabled growth to accelerate broadly across countries and sectors” 8 .

3 WHO Global Tuberculosis Report 20114 WHO Global Tuberculosis Report 20115 WHO & DFID (UK)6 Colin D Mathers & Dejan Loncar. Projections o Global Mortality and Burden o Disease rom 2002-2030. PloS

Medicine Nov 2006, Vol. 3, Issue 117

The World Bank; Arica’s uture and the World Bank’s role in it - http://siteresources.worldbank.org/INTAFRICA/Re-sources/Arica_s_Future_and_the_World_Bank_s_Role_in_it.pd

8 McKinsey Global Institute – Lions on the Move: The progress and potential o Arican economies. June 2010



14


Thereore, the industry, like that o other emerging markets, is expected to grow tremen-

dously in the coming years. The expected growth will largely be driven by economic and

medical actors as presented in Figure 2 below. This Business Plan articulates an approach

or the PMPA that is designed to catalyse the development o the industry, shorten the time

needed or the progressive realization o international quality standards and lead to an in-

crease in product portolios to address the needs o the continent.

2: a P gw Dvs9 10,

The growth of the pandemics and

increasing numbers of people on

treatment

An improving health insurance

and coverage environment, and a

consequent increase in the

number of people with access to

healthcare

An ageing population leading to

increased prevalence of geriatric

disorders

An increase in lifestyle diseases

associated with growing

economic prosperity and

urbanization

Pharma

industry

growth

1.3 billion population by 2020

A combined GDP of 2.9 trillion

USD

Healthcare expenditure of around 200 billion USD

A pharmaceutical market

valued at an estimated 23

billion USD,

50 percent of households will

have a disposable income of

more than 20 USD per day;

Investments in healthcare

reforms

The patent expiries of many

leading medicines

Economic factors Medical factors

1.1.4 Shortage of the requisite human resources and infrastructure

The delivery o healthcare requires more than just medicines. There are widespread reports

o understaed health centres and acilities are oten not situated where they are most need-

ed. When they are present, they oten lack the essential medicines that are needed. It is ur-

ther estimated that more than a third o the available highly skilled Arican scientists are now

living in the developed world11. A recent survey on the nancial cost o doctors emigrating

rom sub-Saharan Arica revealed that a large number o doctors in sub-Saharan countries

were, in act, working in the United Kingdom, Australia, Canada and the United States.

The actual numbers are estimated by various parties to be in the thousands and accountor an estimated loss o return on investment or the nine countries o almost US$2.17bn

whilst the net gain or the developed countries to which they emigrated was estimated at

US$4.55bn12.

This points to the act that the training capability and talent in the basic and advanced sci-

ences is there. However, a key problem or the continent is the high attrition rate and the

brain drain although we also need to increase the output o skilled scientists. It also means

that there is a large pool o people who can be tapped to support the continent’s objectives

and that, as in the case o India and China, it may be possible to repatriate skills rom the Di-9 Arica Progress Report 2010.10McKinsey Global Institute – Lions on the Move: The progress and potential o Arican economies. June 2010.

11Joint Statement by the Network o Arican Science Academies July 2009 - www.nationalacademies.org/includes/NA-SACbraindrain09.pd (accessed December 2011.)

12Edward J. Mills et al. The nancial cost o doctors emigrating rom sub-Saharan Arica: human capital analysis. Brit-

ish Medical Journal publication. BMJ 2011;343:d7031 doi: 10.1136/bmj.d7031 (published 24 November 2011.



15

IntroductIon and Background

aspora when the environment in Arica becomes conducive to the expression o such skills.

1.1.5 Inadequate distribution infrastructure

The lack o proper inrastructure also contributes to poor health outcomes. For example,

there is anecdotal evidence that due to the distribution diculties caused by insucient

inrastructure in some countries, a percentage o donated drugs expire on shelves in govern-

ment central medical stores without ever reaching the areas o greatest need in rural clinics

and hospitals. Conversely, there is a body o evidence that suggests that locally manuactured

products are more readily available in the remote rural parts than imported products13, 14.

This is an important development and speaks to the potential impact o assisting the devel-

opment o local industry.

1.1.6 Chronic healthcare underfunding

Arican healthcare systems have historically been severely underunded. Despite the Abuja

Declaration in which Arican Heads o State and Government committed to spending 15%

o GDP on healthcare, very ew countries have done so and many still grapple with chronic

underunding and very limited healthcare budgets. Inevitably, this unding gap compromises

care since the delivery o healthcare in Arica is largely dependent on public sector unding

albeit that a ew markets have airly developed private sector healthcare delivery platorms.

Even in instances where the public sector is the primary method o health delivery, various

sources estimate that out o pocket spending, especially or medicines, is as high as 60% as a

result o requent medicine shortages at public institutions. As a consequence o the unding

gap, many donors have come orward and today a large proportion o the health budgets and

treatment programmes on the continent are nanced or subsidized by international donors.

The over reliance on donor unding, especially or the pandemic conditions, is laden with di-

culties especially in the current setting o reducing donor commitments and increasing treat-

ment gaps. O necessity, this calls into question the sustainability o treatment programmes

and healthcare delivery. The Economist Intelligence Unit (EIU) makes this observation:

“By 2022 continued global economic instability will lead to cuts in oreign aid budgets and leave

many donor organisations overstretched, with the result that many o them are orced to pull out o

Arican countries. The migration o skilled medical personnel to developed countries is likely to ac-

celerate. The initial consequences o such a development could be empowering or many countries, as

well as catastrophic or a smaller number. Countries with greater resources will use the opportunity

or emancipation rom charity to build up their own local manuacturing capability or basic drugs

and medical equipment. In the medium term, booming economies in these more ortunate countries

will attract international companies rom high-growth markets to develop generic drugs locally, to

train local medical sta, to oer new insurance products and to set up research and development

centres on the continent” 15 .

This view is supportive o similar sentiments raised by various other sources that have spo-

ken o the need or Arica to begin planning and preparing or health provision post the aid

boom. Attention is drawn to the urgent need to develop local pharmaceutical production ca-

13 Mackintosh M, Mujinja P.GM. Pricing and competition in essential medicines markets: the supply chain to Tanzania

and the role o NGOs - IKD Working Paper No. 32 July 2008.14Mackintosh M. Essential Medicines, supply chain and inequalities - DIME / FINNOV / IKD Workshop

INNOVATION AND INEQUALITY: The Need or New Indicators rom Pharma and Beyond: Sant’Anna School o Advanced Studies, Pisa, Italy 15 - 16 May 2010. May 2010.

15 The Economist Intelligence Unit - The Future o Healthcare in Arica 2011.



16


pacity to help ease the problem o access in the long term. For example, UNAIDS published

an Issue Brie in January 2012 in which it identied local production o HIV treatments as

being critical or the long term sustainability o the HIV/AIDS response16.

1.1.7 Limited access to essential medicines

Compounding the disease burden and the shortage o human resources or health is the act

that many people still do not have access to the essential medicines they need. This is a result

o a multitude o actors, including the lack o local production capacity, weak institutional

capacity and poorly regulated supply chain systems that enable sub-standard products (lo-

cally produced and imports) to reach patients, and the emerging scourge o Arica’s insidi-

ous public health crisis - countereit drugs. As a consequence, access to essential medicines

in Arica has been hampered because products are not available, not aordable, or ineec-

tive, amongst other reasons.

For example, the availability o medicines at the retail pharmacy level in most Organisationor Economic Co-operation and Development (OECD) countries is over 90%. In Arica, it

is estimated that the availability o essential medicines (excluding North Arica) is way be-

low 40% in the public sector, which caters or the bulk o the population, and less than 60%

in private sector medicines outlets17. The end result is poor access to essential medicines

with the resultant poor health outcomes. Notwithstanding the act that there has been con-

siderable progress – especially in the treatment o HIV/AIDS, TB and malaria - anecdotal

evidence rom across the continent suggests that the observation made in 2001 in a WHO/

World Trade Organization (WTO) brieng paper, as captured below, still holds:

“In Arica and South East Asia, prompt diagnosis and treatment could save an estimated our mil-

lion lives each year. Two-thirds o all deaths o children under 15 are due to seven diseases or whicheective prevention and treatment exist. Put simply, people are dying because the drugs they need

are not available to them. The opportunities or rapid health gain through better access to health

technology are immense” 18 .

It is a matter o concern that, even when medicines are available, their quality is suspect due

to the weak nature o regulation and widespread non compliance with international Good

Manuacturing Practice (GMP) and other critical components o the quality system. There

have been a limited number o surveys on the quality o drugs in Arica with most ocusing

on products or the high prole pandemic diseases such as tuberculosis and malaria19, 20. De-

spite the lack o inormation across the much broader range o drugs required or a unction-

ing health system, there is already a critical mass o evidence to suggest that the impact o

sub-standard drugs is grave. For example, a recent WHO study21 looking at product quality

o anti-malarial products in selected Arican countries ound that 39% o products tested

in Ghana were sub-standard and the proportion was as high as 64% o products tested in

Nigeria (the samples taken included imported as well as locally produced drugs).

16 AIDS Dependency Crisis, Sourcing Arican Solutions – UNAIDS publication. January 201217 Rockeeller Foundation, Dalberg and MIT Zaragoza; 2008. Private sector role in health supply chains. Report avail-

able online at http://www.dalberg.com/html/PDFs/Health_Supply_Chains.pd (accessed October 2011)18 WHO Secretariat. 2001. More Equitable Pricing or Essential Drugs. Background paper or the WHO-WTO Secre-

tariat workshop on dierential pricing and nancing o essential drugs.19 A summary o the major prevalence surveys or sub-standard drugs can be ound in J. M. Caudron et al’s paper –

Substandard medicines in resource-poor settings: a problem that can no longer be ignored. Tropical Medicine and

International Health Volume 13 No. 8, pp 1062-1072, August 2008.20 A non-exhaustive list o publications on poor quality medicines can be ound on QUAMED’s website: http://www.

quamed.org/en/news-articles/quamed-actsheet-on-access-and-quality.aspx21Survey o the Quality o Selected Antimalarial Medicines circulating in Six Countries in Sub-Saharan Arica. WHO,

January 2011



17


There are those who say Arica need not bother with local production as aordable quality

medicines are readily available rom the East. The inherent weakness with this view is, rstly,

that the current WHO prequalication system is limited to a very narrow range o essential

medicines (HIV/AIDS, TB, malaria, pandemic fu, opportunistic inections, zinc sulphate,

and some oral contraceptives), whilst the oversight o all other products used on a daily basis

depends largely on National Medicines Regulatory Authorities (NMRAs), many o whom

ace serious structural, unctional and capacity constraints. Secondly, there is evidence that

many o the leading Asian companies are shiting their ocus to the more lucrative markets

o the West and may leave a gap that would be lled by second and third tier companies who

may not necessarily have the same quality credentials. Where regulatory oversight is less

strong (i.e. or products that are not assessed by the WHO prequalication process or by

stringent regulatory authorities), there is strong anecdotal evidence and some empirical evi-

dence to attest to the act that sub-standard imports are already signicant in many markets.

An American Enterprise Institute (AEI) working paper22 reports the results o products

tested or quality in Arica and identies the source o products ound deective by the au-thor, as refected in the ollowing gure:

3: tb aei wk pp by r. B

Source: AEI Health Policy Working Paper

Faced with these challenges, the PMPA presents an opportunity to develop the local phar-

maceutical industry and to enable it to respond to the needs o our continent or aordable,

high quality essential medicines. The projected disease gures highlighted above are indica-

tive o uture demand patterns and, when taken with other projections on the economic out-

look or Arica, speak to the uture viability and strategic imperative o our pharmaceutical

sector. They also clearly underline the need or planning today or an industry that will be

able to respond to the needs o Arica tomorrow. Most importantly, the gures point to the

need or planning or healthcare systems that cannot overly rely on donations and the good-

will o donors whose ocus may shit and whose ability to support programmes indenitely

is coming under question in the current economic climate.

22Bate, R. Are Drugs made in Emerging Markets good quality? AEI Health Policy Working Paper. December 22 2010.

http://www.aei.org/paper/100178 (accessed January 2012).



18


1.2 the Pharmaceutical manuacturing Plan or arica

In recognition o the enormous challenges acing healthcare systems, including lack o ac-

cess to essential medicines, and the reliance on others or solutions, our Heads o Statedirected the Arican Union Commission to develop a pharmaceutical manuacturing plan

or the continent. The PMPA was duly developed and adopted by the Conerence o Arican

Ministers o Health held in Johannesburg, South Arica in April 2007 and endorsed by the

Heads o State and Government in Accra, Ghana in July 2007.

The PMPA is premised on the inalienable principle that access to quality healthcare, in-

cluding access to all essential medicines that are aordable, sae, ecacious, and o good

quality, is a undamental human right. The PMPA proposes that the promotion o industrial

development and the saeguarding and protection o public health are not mutually exclu-

sive priorities and that the production o quality medicines and the development o an in-

ternational GMP compliant industry in Arica are possible, desirable and eminently doable.

This Business Plan is based on the belie that industrial development and the development

o the pharmaceutical sector is not in confict with public health imperatives and that the

industry should in act be developed with the long term aim o promoting access to quality

essential medicines.

The core objective o the PMPA is to support local pharmaceutical manuacturing in order

to contribute to the ollowing outcomes:

• Increased access to aordable quality medicines

• Sustainable supply o essential medicines

and it should have the ollowing impact:

• Improved public health outcomes

• Industrial and economic development

This vision, as articulated in the inception report adopted by the AUC PMPA Technical

Committee in December 2011, is to develop a competitive and enduring integrated phar-

maceutical manuacturing industry in Arica able to respond to the continent’s need or a

secure and reliable supply o quality, aordable, accessible, sae and ecacious medicines.

The vision calls or the planning o today to be inormed by the Arica o the uture; an Aricathat is on a high-speed train to prosperity and that will be able to aord to pay or medicines

needed by its peoples. It also recognizes the ongoing human tragedy on our continent regard-

ing the limitations in access to medicines and seeks to help address this situation through the

development o the pharmaceutical industry. It is a vision that demands courage, oresight

and the willingness to take tough decisions now in order to deal with the myriad o challenges

that the pharmaceutical manuacturing system currently aces. Such initiatives will enable the

industry to make the contribution to improved public health on the continent o which it is ca-

pable and will contribute to Arica truly becoming sel sucient in the provision o healthcare.

This is a plan that oresees the entry o Arica into new drug discovery and the development

and commercialisation o Arican developed and researched blockbuster drugs. It also recog-

nizes the critical need or governments to play a catalytic role in order to kick-start the growth

o the industry and to put a brake on overreliance on imports.



19


This vision leads to a path that calls orth Aricans in the Diaspora to come back home and

invites people o goodwill and unders o research to invest in Arican research and devel-

opment work. It requires that governments give the upstream support needed to grow the

industry and to assist it to realize its ull potential. The vision calls or a path that leads to

success, sustainability and sel-suciency in the provision o aordable quality medicines.

The key actors that will enable our pharmaceutical industry to be successul in delivering

on this vision include:

• Strong independent and predictable regulatory systems

• Availability o the requisite human skills and access to know-how in the short term

• Increased competition leading to continuous product improvements, increased pro-

duction and distribution eciencies, enhanced sales and marketing eorts and ser-

vice and business model innovation

• Reduced demand uncertainty and accurate orecasting

• Enhanced regulatory oversight

• Investment and access to aordable nance

• Provision o time-limited, easily understood, and accessible incentives

Finally, the success o the PMPA vision will depend on a recognition that, whilst this is the

overarching continental sector strategy document and road map, there are multiple ongoing

eorts on the ground and that some Regional Economic Communities and countries havealready developed and are implementing strategies and plans or developing the industry in

their regions. The package o solutions proposed here is not intended to supplant or take

precedence over the work already being done but will be deployed, as requested, to augment

and plug into regional and country specic initiatives. Where there are no sector strategies

in place, the AUC and our partners, subject to invitation, will look to assist in developing

and implementing them.

Similarly, it is recognized that there are a host o development partners, Non Governmental

Organizations (NGOs), Arican centres o excellence and others already engaged in various

activities including regulatory harmonization, skills development, technology transer and

so orth. The AUC believes that in implementing this Business Plan, the coordination and

integration o these various initiatives will be critical.

1.3 BuSineSS Plan

The 4th Conerence o Arican Ministers o Health directed the AUC to develop a Business

Plan or the ‘operationalization’ o the PMPA, a directive which was urther emphasized by

the 5th Conerence held in Namibia in 2011. The Arican Union Commission convened a

stakeholder workshop in N’Djamena, Chad, to review the Terms o Reerence (ToR) which

should guide the development o the Business Plan or ‘operationalizing’ the PMPA.



20


The Chad workshop reconrmed that the overall objective o the PMPA is to support local

pharmaceutical manuacturing in order to contribute to:

• A sustainable supply o aordable quality essential medicines

• Improved public health outcomes

• Industrial and economic development

Although there is recognition o the importance o this Business Plan to achieving the stated

objectives o the PMPA, the AUC acknowledges that it is not a panacea that will solve all

challenges and that its impact will ultimately also depend on other initiatives, including the

strengthening o health systems, developing human resources or health, and upgrading the

distribution inrastructure in order to be able to eectively deliver drugs to all points o care.

1.3.1 Partnerships

Given the need to coordinate and integrate work on the PMPA, the AUC invited UNIDO

to partner it in developing this Business Plan and to assist in the planning, organisation and

coordination o the Plan’s implementation. However, the Commission is acutely aware that

there is no single organisation with the breadth o expertise to deliver on the Business Plan

on its own. The AUC will thereore need the support and collaboration o various partners

in this endeavour. Initial discussions are ongoing with potential core partners including

the World Health Organization (WHO), the United Nations Joint Programme on HIV/

AIDS (UNAIDS), the U.S. Pharmacopeial Convention (USP), the Arican Network or

Drugs and Diagnostics Innovation (ANDI) and some o its centres o excellence, Saint Luke

Foundation / Kilimanjaro School o Pharmacy and various academic entities (in Arica and

beyond).

One component o the overall PMPA is the work being conducted by the New Partnership

or Arica’s Development (NEPAD), the World Bank, WHO and the Bill and Melinda Gates

Foundation on registration harmonization through the Arican Medicines Regulatory Har-

monization (AMRH) initiative. This work is well advanced with, or example, the launch o

the regional strategy or the East Arican Community (EAC) which took place in March

2012.

Deragmentation o our markets through harmonization o registration requirements and

urther progress toward regulatory harmonization is vital or the long term sustainability o

local production. With this in mind, the broader requirements or strengthening local pro-duction on our continent, as outlined in this Business Plan, will be closely coordinated with

the ongoing work under the AMRH initiative.

The AUC recognizes the critical importance o political commitment and leadership at the

highest levels and the need or inclusivity and proper coordination as prerequisites or suc-

cess. We will thereore seek to align and integrate the eorts o all key partners behind the

PMPA vision and the Business Plan since history suggests that ‘isolated’ and/or vertical pro-

grammes do not have the sustainable and substantive impact that can be achieved through

cooperation. The nature o the pharmaceutical industry is such that manuacturers’ viability

is dependent on, amongst others, a product portolio that cuts across a range o therapeutic



21


categories. Moreover, the sustainability o aordable high quality local production is depen-

dent on coordinated change across the whole pharmaceutical manuacturing system.

The PMPA is a vehicle through which the AUC will mobilize the requisite resources and

behind which various partners will align to provide technical support and insights in order

to assist those member states who aspire to high quality sustainable local production. For

those countries that do not have the ambition or capacity or developing their pharmaceuti-

cal industry, the PMPA will work on other initiatives to help strengthen quality and market

surveillance systems. This approach will improve access to medicines in those countries that

could source high quality, quality assured products rom manuacturing hubs in the region.

It is envisaged that, in order to realize the ultimate vision o the PMPA, concerted action

will be required over an extended timerame (15+ years). Nonetheless, signicant progress

is still possible over the next ve years. This Business Plan is weighted towards the near to

medium term, keeping the long term objectives as the target, and it represents an approach

or the rst ve year phase starting in 2013.

1.3.2 Methodology and Structure

The purpose o this Business Plan is to present the proposed approach or the operational-

ization o the PMPA. It outlines a number o interventions or a ‘package o solutions’ to ad-

dress the various challenges aced by stakeholders associated with the industry i they are to

contribute to the development o a sustainable pharmaceutical sector capable o responding

to our continent’s need or aordable essential medicines o good quality.

The proposed package o solutions is based on the ndings o extensive desk research and

consultations with stakeholders in various member states and with international experts. Italso refects consultations with various institutions engaged in one way or another with the

pharmaceutical industry. Fact nding missions were undertaken to various member states

in all parts o the continent. These visits incorporated consultations with a broad array

o stakeholders, including national medicine regulators; ocials rom ministries o trade,

industry, and health; government ocials responsible or pharmaceutical policy and plan-

ning and industrial strategy; procurement ocials and government central medical stores

or tender boards; investment promotion agencies; pharmaceutical trade associations; and

individual manuacturers.

The solutions are also inormed by UNIDO insights acquired through activities carried

out, including advisory services on policy and sector strategy development in countries like

Ghana and Kenya; institutional support to organisations like the Southern Arican Generic

Medicines Association (SAGMA), the West Arican Pharmaceutical Manuacturers Associ-

ation (WAPMA), assisting the Saint Luke Foundation / Kilimanjaro School o Pharmacy in

Tanzania in the development o human resources; and support to companies in Ghana and

Cameroon. It is urther inormed by the work o the World Health Organization, the Arican

Network or Drugs and Diagnostics Innovation (ANDI), the various AUC Technical Com-

mittee reports and the AUC PMPA Chad workshop; by AMRH and knowledge acquired

through the New Partnership or Arica’s Development (NEPAD); the work o the USP;

and ongoing work to explore the economics o production and to establish partnerships

with organisations like the World Bank, USP, WHO, and various Arican and international

universities.



22


The Business Plan incorporates knowledge gained rom this research and it has identied

challenges and problems that will be addressed by the PMPA. There are general themes

that, to a greater or lesser extent, are relevant in specic contexts but there is also a large

degree o heterogeneity o the pharmaceutical manuacturing systems across our continent

and these are refected in the fexible structure that is proposed.

The remaining parts o this document are structured as ollows:

Chapter 2 ocuses on the current state o Arican pharma and key challenges and opportu-

nities or its development.

Chapter 3 discusses proposed interventions (‘package o solutions’) to be undertaken un-

der the PMPA.

Chapter 4 outlines the implementation plan and estimated resource requirements.

1.4 SummarY o chaPter 1

Key messages rom Chapter 1 include:

• The status o the pharmaceutical sector varies dramatically across our continent

• In sub-Saharan Arica, we ace a huge inectious disease burden and a growing prev-

alence o chronic and non-communicable diseases

• In the North, the disease prole is similar to that o the West, with cardiovascular

disease, cancer and diabetes being key public health concerns

• Our continent is predicted to experience strong economic growth over the com-

ing years which should enable us to address some o the current limitations o our

healthcare systems and to improve access to essential medicines

• At present, many o our healthcare systems ace major challenges including un-

derunding, overreliance on donors, shortage o human resources, limited access

to essential medicines and signicant penetration o sub-standard and countereit

products

• As a means o addressing the access to medicines challenges in Arica, the Pharma-

ceutical Manuacturing Plan or Arica was adopted by the Conerence o Arican

Ministers o Health in April 2007 and was endorsed by the Heads o State and Gov-

ernment in Accra in July 2007

• The objectives o the PMPA are to increase access to aordable quality medicines

and to ensure a sustainable supply which will provide improved public health out-

comes as well as deliver associated economic development

• Following the directive rom the Conerence o Arican Ministers o Health held in

Namibia in 2011, the AUC was tasked with developing a Business Plan to operation-alize the PMPA



23


• A stakeholder workshop in N’Djamena in June 2011 established the Terms o Reer-

ence or the development o the Business Plan

• UNIDO was invited to assist the AUC in developing this Business Plan

• Partnerships with various institutions and ongoing initiatives are essential or the

genuine progress o our pharmaceutical industry. This Business Plan recognizes the

progress made by the AMRH initiative as well as other Arican initiatives and institu-

tions such as ANDI, the Kenya Medical Research Institute (KEMRI) and the Saint

Luke Foundation, as well as by international development partners such as UNIDO,

WHO, UNAIDS, and USP

• The Business Plan has been developed based on established expertise rom various

actors and through a consultative process that involved discussions with a wide range

o stakeholders (ministries, regulators, academia, private sector) in member states

rom all parts o our continent



24



25

OVERVIEW OF PHARMACEUTICAL MANUFACTURING IN AFRICA

2. OvERviEW OF PhARMACEuTiCAL

MANuFACTuRiNG iN AFRiCA

2.1 introDuction: the Pharmaceutical manuacturingSYStem

The context within which pharmaceutical manuacturing operates in a country is determined by

a number o stakeholders. Figure 4 provides a schematic representation o the roles and infu-

ence o key actors. This gure identies the unctions o the regulator who should ideally provide

oversight o the quality systems throughout the value chain o pharmaceutical production and

distribution. It also provides indicative examples o the tools that various government ministries

have at their disposal or infuencing the context within which the industry operates and rec-

ognizes that trade associations have an important role to play. In addition, it demonstrates that

the system is not sel contained within a country as imports compete with nationally producedproducts and the nature o export markets is dened by a similarly complex interplay o dierent

institutions that set policy, provide regulatory oversight and possibly oer support to local actors.

The impact o the international donor unded markets is also taken into account. For products

supplied to these markets, regulatory approval and oversight is largely a unction o international

actors (although registration at the national level should be required as well) and procurement

policies are dened by unding entities such as the Global Fund and the U.S. President’s Emer-

gency Plan or AIDS Relie (PEPFAR).

It should be noted that Figure 4 deals only with the system relating directly to the in situ

value chain o generic drug manuacturing. For example, in order not to overcomplicate the

picture, other stakeholders who play a less direct (although oten extremely important) role

have been omitted. Specically, the manuacturing processes, regulatory unctions, and pol-

icy making in this eld all involve specialized skills. Thereore human capital and the institu-

tions that develop and provide that human capital or the system are o great importance.

Pharmaceutical manuacturing is also a capital intensive activity and access to capital is

another key aspect that, or simplicity, has been omitted. There are a variety o sources and

mechanisms by which companies can access capital and, to some extent, the appetite o

those dierent sources (e.g. equity investors, providers o debt, oreign direct investment,

etc.) or engaging with the pharmaceutical industry is dependent on the dynamics o the rest

o the pharmaceutical manuacturing system in a country.

The actual manuacturing systems in place in dierent countries vary rom this schematic,which shows a somewhat idealized representation given that, or example, most NMRAs do

not have the capacity to ull the range o unctions that should be in place. Similarly, trade

associations may not exist, and policies rom dierent government entities may not be aligned

behind a strategy in support o the sector. The current status o the key dimensions o the phar-

maceutical manuacturing system across our continent is described in the ollowing section.

It is the interplay o the dierent components o the manuacturing system that determines as-

pects o pharmaceutical production, including competitiveness and quality o production. These

particular aspects are key i the undamental objective o the PMPA o improving access to high

quality drugs, whose production is sustainable (i.e. competitive with alternative sources o sup-

ply) is to be achieved. They are also critical or countries that aspire to export to developed mar-kets. Further, a unctioning manuacturing system has the potential to produce a broader range

o drugs than is currently produced by most o our countries engaged in local manuacturing.



26


g u e 4 :

S c e c r e p e s e e

s l l l e c u l e ‘ P c e u c l u c u g s y s e ’

I n p u t s

L o c al

M an uf a c t ur i n g

Di s t r i b u t i on

M ar k e t

Trade Associations*

N a t i on al M e d i c i n e s R e g

ul a t or y A u t h or i t i e s

e. g. ov er s i gh t of

c l i ni c al t r i al s an d

GL P

e. g. d o s s i er r ev i ew ,

pl an t i n s p e c t i on ,

GMP c er t i f i c a t i on &

m oni t or i n g

e. g.

ov er s i gh t an d

enf o

r c em en t of GDP

an d

GWP

e. g.P h ar m a-

c ov i gi l an c e an d

a d v er s e ev en t s

r e p or t i n g s y s t em

M a t er i al i n p u t s ( e. g.

A P I , ex c i pi en t s )

O t h er s u p p or t i n g

i n d u s t r i e s e. g.

M ai n t en an c e an d r e p ai r

of e q ui pm en t

C l i ni c al r e s e ar c h f or

B A / B E

U t i l i t i e s

B u s i n e s s p ar t n er s

- a c c e s s t of or m ul a t i on s

an d k n owh ow

- S u p pl y a gr e em en t s

- e t c

N a t i on al S t an d ar d s

B o ar d e. g. c al i b r a t i on of

e q ui pm en t

M

an uf a c t ur er s

F

or m ul a t i on

d

ev el o pm en t

F

i n al f or m ul a t i on

P

a c k a gi n g


- ar r a y of p u b l i c &

pr i v a t e s y s t em

s


-r an g e of

m e c h ani s m s

i n c l u d i n gn a t i o

n al

s y s t em s an d d

on or

o p er a t e d s u p p

l y

c h ai n s

N a t i on al M ar k e t s

P u b l i c pr o c ur em en t

P r i v a t em ar k e t

N G O pr o c ur em en t

S u b -r e gi on al ex p or t s

• P u b l i c pr o c ur em en t

• P r i v a t em ar k e t

• N G O pr o c ur em en t

D on or f un d e d

m ar k e t f or

p an d emi c s ( b o t h

n a t i on al an d

ex p or t ) , e. g.

• Gl o b al F un d

• P E P F A R

• P MI

e. g. d o s s i er

r ev i ew , pl an t

i n s p e c t i on an d

GMP c er t i f i c a t i on

an d m oni t or i n g

O t h er NMRA s

O t h er M oF

O t h er M oH

I n t er n a t i on al r e g ul a t or y

b o d i e s e. g.

-WH O pr e q u al i f i c a t i on

pr or g amm e

- S t r i n g en t r e g ul a t or y

a u t h or i t i e s ( e. g.F DA )

P r e q u al i f i e d pr o d u c t s

f r om o t h er c o un t r i e s

l ar g el y f r omI n d i a

P r o d u c t s f r om o t h er

c o un t r i e s

p ar t i c ul ar l y I n d i a a s w el l

a s i n t r aA f r i c anT r a d e

E x t er n al

P l a y er s

V ar i o u s N a t i on al Mi n

i s t r i e s i n c l u d i n gH e al t h ,F i n an c e ,I n d u s t r y ,T r a d e

e. g.T ar i f f s onI n p u t s ,

F DI i n c en t i v e s

e. g.I n c en t i v e s t o

s u p p or t i n d u s t r y

e. g. pr o c

ur em en t

p ol i c i e s an d f un c t i on s

of t h e C M S

e. g. c on t en t of E ML ,n a t i on al

d r u g p ol i c y , ex p or t i n c en t i v e s ,

i n c l u s i on of T RI P S f l ex i b i l i t i e

s i n

n a t i on al l e gi s l a t i on

* -N o

t e t r a d e a s s o c i a t i on s c an p er f or m ar an g e of f u

n c t i on s on b eh al f of t h ei r m em b er s t o

i nf l u en

c e t h e b u s i n e s s env i r onm en t , s u c h a s d i s s emi n a t i on of b e s t pr a c t i c e , p ar t n er s h i p b r ok er i n g ,

l o b b y i n g

K e y :

=M a t er i al f l ow s

= s u p pl y of s er v i c e s / a c c e s s t ok n owl e d g e

=i nf l u en c e ,i n c l u d i n g t h r o u gh r e g ul a t or y ov er s i gh t , p ol i c y ,l o b b y i n g e t c .



27


2.1.1 The manufacturing system and quality

The ‘quality’ o pharmaceuticals is a unction o many dimensions including, or example:

• The level o active pharmaceutical ingredient (API) content

• Appropriate ormulation impacting on the pharmaco-kinetics o the drug (e.g. peak

concentration, dissolution prole o drug)

• Degradation o the product due to many possible actors such as poor production or

inappropriate storage and distribution

• Contamination o the product with other drugs, with impurities, or ollowing the

degradation o the API, or example, during transport or once it has been ormulated

•

Mislabelling o products

• Microbial contamination o product

This is only an indicative list o some o the areas where product quality can be compromised.

In the developed world, the risk o such ailures occurring and o sub-standard products actu-

ally reaching patients is minimized by a complex interplay o regulatory oversight that enorces

concepts such as Good Manuacturing Practice (GMP) and other aspects o the quality sys-

tem including Good Laboratory Practice (GLP), Good Distribution Practice (GDP), etc., as

well as conducting pharmaco-vigilance activities to monitor products on the market.

Another vital element is having a unctioning and ecient adverse event reporting mecha-

nism such that problems can be rapidly identied and resolved. A undamental philosophyrequired or the pharmaceutical supply chain is that quality is manuactured into the prod-

uct at all stages and that inspection and quality control at the end o the production process

is not sucient; it is just one part o an integrated approach to quality assurance.

The saety and ecacy o a product are not only a unction o the processes ollowed in its

production and distribution and their regulatory oversight. These processes are intended

to ensure that products are manuactured consistently according to the specications de-

scribed in the product dossier reviewed and approved by the regulator prior to marketing

authorization being granted. Consequently, review o detailed evidence to conrm the man-

ner in which the product behaves when given to patients is another important component o

ensuring that products are sae and eective.

Most products on the Essential Medicines List (EML) are no longer covered by patent pro-

tection and generic versions can be legally produced without the need or voluntary licences

rom originator companies. A generic product is given marketing authorization on the basis

that it is therapeutically equivalent to the originator product. This means that large scale

clinical trials o generics are not required but that evidence to attest to their equivalence to

the originator product is. In most cases, the necessary evidence is a bioequivalence study in

which clinical trials are conducted to show that the generic product behaves in the same way

as the originator when given to patients. In some cases where, or example, an active ingredi-

ent is highly soluble, approval can be granted on the basis o a biowaiver, where non-clinical

evidence o the physical and chemical properties o the product are shown to be equivalent

to the originator. Samples o products also need to be tested at quality control laboratoriesprior to marketing approval being granted.



28


Thereore, the components o the manuacturing system required to ensure quality o pro-

duction and saety o the product are adherence to GMP by the manuacturer (which in-

cludes design o the plant, maintenance and integrity o equipment, established and vali-

dated processes and procedures or all aspects o production and quality control at various

stages o the production cycle); development o the ormulation that is to be manuactured

with accompanying evidence to attest to the equivalence o the product to the originator;

detailed review o the dossier and sample testing by the regulator prior to marketing ap-

proval; and regular inspection o production processes by the NMRA at the manuacturing

site. Following production, the regulator also plays a key role in ensuring that the product

reaches the patient in an appropriate condition through oversight o Good Distribution and

Wholesaling Practices. A urther post production unction o the regulator is overseeing the

market through pharmaco-vigilance activities and the establishment o adverse event report-

ing mechanisms. This is required to identiy instances o sub-standard products reaching the

market so that product recalls can be rapidly enacted and countereit products identied

and removed rom the market.

2.1.2 The manufacturing system and competitiveness

The increased investment and operating costs involved in setting up and running a GMP

compliant acility do not mean that international standard production on our continent

cannot be competitive or that very large manuacturing plants are required to achieve cost

eective production. Research commissioned by UNIDO indicates that the economics o

pharmaceutical production are highly complex. This as yet unpublished working paper indi-

cates that xed costs associated with upgrades are generally directly correlated to the output

o the acility such that technical economies o scale are not particularly signicant beyond

certain airly low volumes. In act, established wisdom that a capacity o 1.5 billion tablets is

necessary or competitive production is not borne out by the analysis.

Further, the signicance o xed costs means that capacity utilization has a critical impact

on the cost o each unit o production. The nature o pharmaceutical production is that it

is a batch process where dierent products are manuactured with the same machinery.

Changeover time required between batches o dierent products represents downtime when

assets are not being productively utilized. Machine downtime can also occur where a pro-

duction line is not balanced. For example, one piece o equipment may have a greater output

per unit o time than another leading to a bottleneck situation where the machine with the

greater output remains idle or periods o time. Downtime can also occur due to breakdown

o equipment but preventative maintenance programmes can minimize the impact o this.

Modern business practices have evolved methods by which downtime o equipment can

be kept to a minimum and capacity utilization optimized. This can, or example, involve

campaigning batches o the same product so that limited changeover time is required. The

degree to which campaigning can take place to achieve eciency o production is to some

extent also a unction o the market (size and procurement agreements) as another impor-

tant component o the economics o production is working capital requirements, in which

inventory carrying costs (inputs, work in process, and retained nal products) are critical.

The above comments reer to the manuacturing o approved products. However, the cost o devel-

oping new products is signicant, particularly i bioequivalence studies are required. Companies

can buy dossiers on the open market and go through a technology transer process to set up produc-

tion in their acility. However, the cost o high quality dossiers can run to US$100,000 and more.



29

Overview Of Pharmaceutical manufacturing in africa

These issues and the mechanisms by which the PMPA Business Plan can take them into

account and instigate solutions that enable competitive high quality production are explored

urther in the ‘challenges’ part o this chapter and in the ‘solutions’ chapter (Chapter Three).

2.1.3 The manufacturing system and breadth of product portfolio

The pharmaceutical manuacturing system described above can produce most o patent

pharmaceutical products (excluding, or example, biological products and blood products).

Moreover, by using TRIPS fexibilities or voluntary licences, even critical health products

still under patent protection, like second and third line antiretroviral drugs (ARVs), can be

manuactured. Products that involve novel combinations o active ingredients or new or-

mulations (e.g. paediatric ormulations) can also be produced through this system.

From a public health perspective, key products that a country’s health system needs to

source are listed in the WHO Model List o Essential Medicines, which countries can adapt

to their specic circumstances. The EML lists over 300 products across many disease indi-cations including analgesics, anti-allergy medicines, antibiotics, anti-helminthics, anti-TB

drugs, anti-ungal drugs, ARVs, malaria treatments, various products or tropical diseases

such as those to treat Arican trypanosimiasis, anti cancer agents, treatments or cardio-

vascular disease, gastrointestinal medicines, treatments or psychiatric disorders, drugs or

respiratory disorders, products or the treatment o diabetes and others. The WHO also has

a Model List o Essential Medicines or Children, which includes over 250 products across

a similarly broad range o indications.

These products cover dierent ormulation types including tablets, capsules, syrups, oint-

ments, gels, small and large volume parenterals, and dispersibles. The underlying quality

principles and the economics o production remain similar across ormulations (althoughor parenterals, or example, the need or sterility requires enhanced GMP). However, the

equipment required or various product types varies and the market dynamics or dierent

medications (e.g. volume requirements, level o competition, etc.) also vary. Over and above

the EML, there are many other products that are o patent and which Arica-based manu-

acturers could produce or local consumption and ultimately or export to other develop-

ing and developed markets. Some companies in countries such as South Arica and Tunisia

have, or example, been certied by American and European regulators.

2.2 the current StatuS o the Pharmaceutical inDuStrY anD other StaKeholDerS

This section describes the size and current levels o activity in the dierent segments o

the pharmaceutical industry. It also details the status o the various components o the

manuacturing system as they stand today, beore outlining the challenges aced by dierent

industry players.



30


2.2.1 Industry size and participants

The Arican pharmaceutical market accounts or only a small portion o the global pharma-

ceutical industry. In 2007, the International Finance Corporation (IFC) estimated that sub-Saharan Arica accounted or just under 0.6% o the global market or US$3.8bn23, whilst

the North Arican market is valued at several more billions. Recent estimates or the whole

continent put the market at between US$8bn to US$10bn. IMS Health recently estimated

that the Nigerian market was worth US$2.5bn in 2011 and that the Arican market as a

whole will be worth about US$24bn by 201424. The pharmaceutical market in the Republic

o South Arica is now worth over US$4bn25. Estimates o the value o the pharmaceutical

market on our continent vary signicantly as a result o dierent methodologies and this is

also indicative o the paucity o data.

Although, by any measure, the Arican pharmaceutical market is small compared with the

global market, it plays host to some o the leading global innovator and generic manuactur-

ers and has a growing number o local manuacturers. The majority o Arican manuactur-ers are small privately owned companies that mostly serve their national markets. However,

there are also examples o publicly listed companies (e.g. Ayrton and Starwin in Ghana)

and some companies that have invested in their acilities through accessing international

equity nancing (e.g. Universal in Kenya). There are also domestic manuacturers that are

comparable in size to leading international generic manuacturers. For example, Aspen

in South Arica is in the top ten largest generic manuacturers in the world. Furthermore,

manuacturing o pharmaceuticals on our continent is not exclusively the purview o the

private sector. We have public sector manuacturers such as Saidal (80% state owned) in

Algeria and Saphad in Tunisia, which is also majority government owned. Mozambique has

a government owned liquid acility and is currently in the process o constructing an ARV

plant with the help o Brazil.

A urther example o direct government involvement in pharmaceutical manuacturing is a

recent development which saw a US$211mn joint venture (Ketlaphela) being ormed be-

tween Lonza, a leading global API manuacturer rom Switzerland, and the South Arican

government (through Pelchem) or the production o ARV APIs in South Arica. In the eld

o vaccine production, the South Arican Government has also ormed a Public Private

Partnership called The Biovac Institute.

Currently, there are an estimated 38 countries that have pharmaceutical manuacturing

entities on the continent. The size o the sectors in these countries is widely divergent. For

example, Nigeria has more than 200 registered pharmaceutical manuacturers, South A-

rica has roughly 30 domestic producers, and Ghana and Kenya have an estimated 20 and40 active registered manuacturers respectively. Algeria has roughly 30 manuacturers and

Tunisia about 20. Other countries such as Uganda, Tanzania, Zambia and Zimbabwe have

dynamic but relatively small sectors with between ve to ten active companies. There are

also countries such as Cameroon, Namibia, Swaziland, Lesotho, Malawi and others that

have just one or two active manuacturers.

In addition to local manuacturers, there are many importers and distributors o medicines

who import rom and represent companies rom across the world, with India and Chi-

na being the predominant suppliers. Further, the leading global innovator (Pzer, Sano,

GSK, Merck) and generic (Ranbaxy, Aspen, Mylan, Cipla) companies either have a direct

23

IFC – The Business o Healthcare in Arica 200724 IMS Health Market Prognosis 201025 IMS Health TPM 2011 and South Arican National Treasury Contract Management gures



31


presence or work through agencies and distributors. Some o these leading pharmaceutical

companies have manuacturing acilities in various Arican countries. They include, among

others, GSK, Johnson and Johnson, Sano (with plants in six Arican countries), Sandoz

and Ranbaxy. The latter now has three manuacturing acilities situated in South Arica,

Nigeria and Morocco.

A ew international companies are also involved in joint ventures with local manuacturers

and some o these have involved the transer o technology and the licensing o products

to Arican players. They include leading global generic companies like Cipla, which has an

arrangement with Quality Chemicals o Uganda, Zydus Cadila, which is in collaboration

with Almeta Impex o Ethiopia, and Ranbaxy, which is working with Community Invest-

ment Holdings o RSA. This trend is not conned to local companies only. Whilst not a

ully-fedged joint venture, Sano Aventis in South Arica recently announced an agreement

wherein Hetero o India will supply it with raw materials or the manuacture o ARVs or

local consumption26. Sano Pasteur (the vaccine arm o Sano Aventis) has recently an-

nounced a technology transer agreement with the The Biovac Institute in South Arica.

Figure 5 is a schematic that represents the typical activities o local manuacturers and dem-

onstrates that the industry is largely involved in ormulating imported raw materials. In act,

some companies even procure ready-made granules and simply start at the compression

stage. This is just one example and other types o ormulations are produced including cap-

sules, liquids, large and small volume parenterals and ointments. The exceptions to the ocus

on nal ormulation and packaging are South Arica27 and Egypt28, which have commercial

scale production o a limited range o APIs29. There is also small scale API manuacturing

or internal consumption in Ghana or the production o azithromycin API30.

5: typ ps sd ds

2.2.2 Range of products manufactured in Africa

As with other areas covered by this Business Plan, the range o products varies signicantly

across our countries. The Republic o South Arica and North Arican countries have well

developed industries with participants producing a broad range o products. The majority o 26 http://www.businessday.co.za/articles/Content.aspx?id=16889527 Fine Chemical Corporation – www.cc.co.za28 The Pharma Letter - Egypt’s pharma market set or 11.4 per cent CAGR to 2014 - http://www.thepharmaletter.

com/le/95304/egypts-pharma-market-set-or-114-cagr-to-2014-helped-by-drug-pricing-reorm-that-will-boost-

generics.html (accessed October 2011).29 Personal conversations with Dr. Alexandra Graham and Paul Lartey o Lagray Chemical Company30

A lieline to treatment: the role o Indian generic manuacturers in supplying antiretroviral medicines to developingcountries; Brenda Waning, Ellen Diedrichsen and Suerie Moon. Journal o the International AIDS Society 2010,

13:35



32


manuacturers in the rest o SSA produce a limited range generally covering nutraceuticals,

cough and cold preparations, simple analgesics and sedatives, anti-malarials, older genera-

tion antibiotics, anti-helminthics and rst generation anti-hypertensives, anti-diabetics and

neuro-psychiatric drugs.

This mismatch between the EML and actual product portolios supplied by local manu-

acturers represents a signicant latent potential market or locally manuactured products

in many parts o the continent. So long as quality standards are enhanced to meet inter-

national GMP (see solutions Chapter or a pragmatic approach), this would also represent

an important opportunity or improved public health given the regulatory limitations and

supply chain challenges that orm the basic philosophy or why local production has such

an important role to play. Expanding the range o high quality locally made products is an

important dimension towards realizing this objective.

Arguably the most signicant public health issue on a large part o our continent is HIV/

AIDS. The majority o the market or ARVs is controlled by the international donor enti-

ties and Non Governmental Organisations (NGOs). Without exception, they require that

products be prequalied by WHO or approved by a stringent regulatory authority. To date,

ew o our companies have supplied the international donor markets and it is estimated that

80% o ARV nished ormulations on our continent are imported, with the majority coming

rom India31.

There are pockets o ARV production that serve markets other than those o international

donors. For example, Danadams o Ghana won a tender rom the West Arican Health Or-

ganisation (WAHO) to supply ARVs to The Gambia, Togo, Côte d’Ivoire and Burkina Faso.

Danadams has also received emergency orders to ll requirements or donor unded pro-

grammes when supply chain and procurement ailures have led to risks o stock outs o keyproducts. Furthermore, there are a number o manuacturers in South Arica that supply

ARVs to the national government-unded market. There are also other Arican manuactur-

ers, who (despite operating to international GMP standards) have not yet applied or WHO

prequalication as the international donor unded markets are viewed as unattractive. One

reason given or this is the advantages rom which Indian manuacturers in particular ben-

et in terms o government support. One company that has achieved international certica-

tion or an ARV commented that it could compete on price with Indian companies i there

was a level playing eld and the opportunity to campaign production batches.

Malaria is another critical public health concern. The range o products or treating the

disease includes artemisinin-based combination therapy (ACT), such as artemether/lume-

antrine (AL) and artesunate/amodiaquine (AA) now identied by WHO or rst line treat-

ment, as well as older generation products such as suladoxine/pyrimethamine (recom-

mended or intermittent preventative treatment during pregnancy). There is a signicant

donor unded market or these products (with prequalication/stringent regulatory approval

requirements) but also substantial private and government unded markets. Only one com-

pany in Arica is certied by WHO or an anti-malarial and thereore able to access the do-

nor unded markets although many others have been supplying older generation products

and, latterly, the ACTs to the other market segments.

Unlike most other product types, there have been a number o in-depth studies into the

quality o drugs or the treatment o malaria. The output o such studies is very detailed and31

A lieline to treatment: the role o Indian generic manuacturers in supplying antiretroviral medicines to developingcountries; Brenda Waning, Ellen Diedrichsen and Suerie Moon. Journal o the International AIDS Society 2010,

13:35



33


some o the specic results are recognized as lacking statistical signicance. In view o this,

sweeping generalizations need to be avoided. However, in the non-donor unded markets,

evidence suggests that the quality o products is a serious concern (although there is sub-

stantial variance among countries). The evidence also suggests that signicant proportions

o imported products are sub-standard as well as some locally produced drugs.

The quality standards o our manuacturers vary dramatically and it would be unortunate

to conclude that all sources o domestic production o anti-malarials pose a public health

threat. We need to make sure that all companies reach the standards o the leading players

to ensure a reliable, sustainable source o eective anti-malarials. We cannot rely on imports

rom a diverse range o geographies since a signicant proportion o such products have

been ound to be sub-standard (although, again, signicant variance is seen among compa-

nies in terms o their ailure rate).

Many commentators have identied the recent Aordable Medicines Facility or malaria

(AMFm) as damaging to the long term sustainability o supply o quality medicines to ghtmalaria. In the short term, the Facility has led to more prequalied products being available

in the countries in which it has been active. However, this has, in turn, severely reduced

the anti-malarials market or our manuacturers, including or those who are demonstrably

superior to some o the companies rom which we have imported. The danger is that, when

the AMFm ceases to subsidize these products, our local capacity will no longer be in place

and we will have to rely on imports that cannot be properly regulated and have been seen in

some instances to pose a risk to public health.

The international malaria community recognized the unintended consequences o this ini-

tiative and, in May 2011, the Arican Leaders Malaria Alliance (ALMA) convened a coner-

ence in Nairobi, Kenya to discuss the implications and appropriate action to minimize thelong term potential downsides. Support or local industry to reach international standards

and remain competitive across its product portolios was a key recommendation o the

meeting, a message that is consistent with the proposed approach o this Business Plan.

2.2.3 Access to inputs

Arican manuacturers depend on imports or the bulk o their production inputs. Further-

more, practically all the machinery and equipment, laboratory equipment and reagents, and

production raw materials including API, aluminium oil or blister packaging, other label-

ling materials, and excipients are imported. The local contribution to inputs is conned in

some countries to starches and sugars and it is estimated that almost 95% o the continent’s

API needs are met by imports.

This reliance on imports has very real and signicant nancial implications. The lead time

required or goods to arrive rom Asia means that credit terms oered by suppliers may be

used up prior to the inputs even reaching manuacturers’ warehouses let alone being con-

verted into nished products and distributed to the market. The implications or working

capital can be dramatic and, given the high cost o trade nancing in many o our countries,

ways o addressing this cash fow and cost issue will be one area where government interven-

tion (or a dened period o time) could make a meaningul contribution to the viability o

companies as the economic structure o the industry evolves into one that is sustainable in

the long term.



34


2.2.4 Quality of production

There have been no published systematic studies on the range o quality standards to which

manuacturers on our continent adhere. We know that production in RSA and North Aricais generally close to international standards with a signicant proportion o players actually

reaching international standards. Companies such as Medis in Tunisia are exporting products

to the highly regulated European market and a company like Aspen Pharmacare exports to

North America, Europe, South America and Australia among others. However, in other coun-

tries in SSA, the range o quality standards is more varied. There are two companies in the

rest o SSA that have achieved WHO prequalication o a product (Varichem in Zimbabwe

and Universal in Kenya) and Quality Chemicals in Uganda has been approved by WHO as an

additional manuacturing site or some products that have been prequalied by Cipla in India.

There are also a number o companies that are striving to achieve international manuactur-

ing standards with LaGray in Ghana, or example, having eectively achieved this as evi-

denced by the approach to the company o the United Nations Children’s Fund (UNICEF)and PEPFAR or possible supply o products such as zinc sulphate and a lamivudine/zid-

ovudine xed dose combination ARV. Cosmos in Kenya has received certication rom the

Pharmaceutical Inspection Co-operation Scheme (PIC/S). In Nigeria, the National Agency

or Food and Drug Control (NAFDAC) has been working with WHO and eleven compa-

nies, including May and Baker and Juhel Nigeria, to achieve international GMP standards

and to have products prequalied by WHO.

There are other examples o companies in SSA striving to achieve international standards,

with Cinpharm in Cameroon being an example o a company that is investing in upgrading.

Further, there are a number o companies that are investing in new plants which are be-

ing purpose built with international GMP requirements in mind. These include TanzanianPharmaceutical Industries (TPI) which has constructed a state o the art acility in Arusha,

Tanzania, and Azee Aqua and Lab and Allied, both in Kenya, which are constructing a large

and small volume parenterals acility and an oral solid dosage orms acility respectively.

Danadams is also in the process o constructing a new acility that is internationally GMP

compliant.

There is evidence then that production to international standards is possible across our con-

tinent and that we have entrepreneurs with the appetite or risk, energy, and commitment

to achieve these goals. However, as well as these (and other) leading players, we know that

there are many other companies licensed to manuacture products whose quality systems

all in some cases way below what should be acceptable. Whilst there has been no systematic

study, experts who have visited plants, and comments by regulators with access to conden-

tial GMP inspection reports, provide categorical evidence that this is the case.

There are genuine challenges conronting companies that aspire to improve quality and to

realize their ambition o achieving international GMP status. However, there are other man-

uacturers who are happy to maintain the status quo and produce to their current standards.

Discussions with various regulators revealed that, in certain cases where they were aware o

signicant non-compliance, they were either reluctant to act or were prevented rom doing

so due to political intererence.

It is encouraging that some NMRAs are working with industry to resolve such issues in a

pragmatic manner and to eect corrections gradually in order to reach acceptable interna-tional standards. One such example is the work o NAFDAC in Nigeria and the Medicines



35


Control Authority o Zimbabwe (MCAZ). However, the operating environment o compa-

nies is aected by many interrelated aspects o the pharmaceutical manuacturing system o

a country, many o which all outside the mandate o the regulatory authority. This Business

Plan proposes a systemic approach to developing the sector and identies solutions to the

various interrelated issues which, i implemented in a coordinated ashion, could support

and perhaps accelerate these initiatives. Such solutions could also enable regulators in other

countries, which aspire to become centres o excellence or pharmaceutical manuacturing,

to take similar steps.

2.2.5 Efciencyofproduction

As already pointed out, the economics o pharmaceutical manuacturing are more com-

plex than is perhaps generally realized. Key to the competitiveness o the industry is the

eciency o production. Various principles on achieving eciency have been developed in

countries like Japan and the US over the last ew decades (across industry sectors) and they

include approaches such as lean manuacturing, Total Productive Maintenance (TPM), 6Sigma and the Toyota Production System (TPS). UNIDO has conducted pilot work with

the aim o understanding how such approaches could impact on the competitiveness o the

pharmaceutical sector in Arica.

Unpublished initial reports have been shared and, although the ndings are based on a

very limited sample and top-level analysis o leading companies (rom a quality perspec-

tive), the output provides evidence that substantial eciency gains could be achieved i

Japanese-style production approaches were to be introduced. Rough estimates based on

this analysis indicate that productivity levels could be improved by around 30%. However,

the potential improvement will depend on the starting point o the company. One organiza-

tion interviewed in the course o research or this Business Plan claimed to have been ableto improve output veold through optimizing its production scheduling process, instituting

a change management process, and training all employees on the imperatives or quality and

eciency o production.

There is then substantial scope to improve the competitiveness o production through im-

plementing approaches such as TPM. However, actually realizing the benets o such ap-

proaches requires expertise, ‘buy in’ across the organization rom senior management to

production sta, and the embedding o a culture o ecient production.

2.2.6 Status of regulatory oversight

Oversight o the market is a unction o Medicines and Allied Substances Control regula-

tions. These pertain to the regulation and control o various aspects o the pharmaceutical

value chain, rom medicine registration to how the end users access medicines. The regula-

tions also speak to the unctional and operational structures o the NMRA and dene re-

sponsibilities, reporting structures, unding and so orth.

The unctions o a regulator are many and include the ollowing minimum unctions32:

• Making sure that the manuacture, import and export, distribution and wholesal-

ing o all medicines are properly licensed and that there is conormance with Good

Manuacturing Practice (GMP) and that Good Distribution Practice (GDP) is ob-

served in all activities and on all premises32 WHO Policy Perspectives on Medicines. No 7, 2003.



36


• Assessing the saety, ecacy and quality o all medicines prior to granting a market-

ing authorisation

• Conducting ongoing monitoring and surveillance o the quality and saety o mar-

keted medicines to guard against harmul, sub-standard and countereit medicines

being used by members o the public

• Inspecting and controlling the inormal market, including internet-based trade, in

order to prevent illegal trade in medicines

• The monitoring o the advertising and promotion o medicines and the dissemina-

tion o independent inormation on the rational use o medicine to public sector and

health proessionals

• Participation in orums in order to promote collaboration and acilitate the sharing

o inormation and discussion o issues o common interest with other regulators at

regional and international levels

• The continual monitoring and evaluation o perormance to identiy weaknesses,

review whether objectives have been realized and to take corrective action where

needed

Most Arican countries are not yet in a position to meet these basic minimum requirements.

The key ndings o a 2010 WHO Assessment o Medicines Regulatory Systems in 26 sub-

Saharan countries33 are summarized in Table 1 below.

The study concluded that there was adequate legal provision or:

• NMRAs’ unctions

• Medicines registration, relevant documents or applicants and assessors, advisory

committees, and use o external assessors/expertise

• Licensing (manuacture, wholesale, distribution, etc.)

• Monitoring o saety, ecacy and quality o marketed medicines

but identied the ollowing weaknesses:

•Complex legal rameworks, unclear denitions o responsibilities, and regulatorygaps and overlaps; some NMRAs are not ully established and in some countries

they are not perorming all regulatory unctions

• Lack o unding, shortage o sta, lack o operational resources, no quality manage-

ment systems, no sta development programmes

• Guidelines and assessment procedures not up to WHO standards

• Poor coordination among the various authorities/bodies involved in regulating the

industry

33 WHO. Assessment o medicines regulatory systems in sub-Saharan Arican countries. An overview o ndings rom

26 assessment reports 2010.



37


Nonetheless, there are countries on our continent that have more robust and ully unc-

tioning regulatory systems (although none is regarded as being stringent by international

donors). For example, the Medicines Control Council (MCC) in South Arica is a member

o PIC/S. Algeria has a rigorous inspection process whereby all batches manuactured in the

country are tested by the Laboratoire National de Contrôle des Produits Pharmaceutiques

(LNCPP), the national quality control laboratory which employs over 400 people.

Yet most Arican NMRAs ace immense challenges, inter alia a severe shortage o unding

and human resources, a high sta turnover and the consequent lack o experience in many

core unctions. They also suer rom antiquated ling and other administrative systems. The

capacity issues in most regulatory authorities go beyond a shortage o inspectors and in-

clude lack o laboratories or monitoring (or ill-equipped laboratories) as well as the skilled

personnel to operate them.



39


In addition, the vast challenge o overseeing many thousands o products rom numerous

plants spread across dierent geographies (e.g. products rom over 1,000 production sites

registered in Kenya where the Pharmacy and Poisons Board has just six ull time GMP

inspectors) is impossible to meet the desirable level given the resource constraints. Simi-

larly, the monitoring o the market through pharmaco-vigilance and post market surveil-

lance is ar rom robust in most countries. This provides opportunities or countereit and

sub-standard products, leads to adverse events oten going unreported or undetected, and

results in ailures to recall deective products. International development partners such as

USP and WHO have been helping to improve post marketing surveillance and, as part o

this Business Plan, these initiatives will be built upon and augmented to rapidly enhance the

oversight o the market place.

The entities charged with regulation o the pharmaceutical industry have a critical role to

play in the pharmaceutical manuacturing system. International stringent regulators have

substantial resources and a wealth o experience to mobilize in conducting the ull range o

regulatory unctions. However, even the US’ FDA aces capacity limitations as evidenced bythe ever increasing time taken to approve Abbreviated New Drug Applications (ANDAs).

Given the inherent capacity challenges aced by all regulators, and the particular resource

constraints in many o our countries, we need to work together to maximise synergies (un-

der the AMRH work) and to invest in the regulatory unctions critical or public health pro-

tection and a market place that is air and competitive. The proximity o high quality local

production, coupled with targeted investment in our NMRAs, is a means by which we can

maximise the ability o regulators to protect our people, especially when we are less and less

reliant on donations.

2.2.7 Policy and legislative landscape

There are many policy and legislative tools that impact on pharmaceutical manuacturing

and they are implemented by dierent ministries within government. One key instrument

specic to pharma is a national drug policy, which is in place in most o our countries and

normally has two core objectives:

• to promote access to sae, eective quality medicines at aordable prices

• to promote the rational use o medicines and EMLs

A urther objective is oten that o developing local industry via the promotion o local pro-

duction o essential medicines. However, Ministries o Health (MoH) in isolation do not

control the ull range o instruments that impact on the ability o the local pharma industryto develop. Consequently, whilst promoting local production may be an ambition, without

coordinated action across dierent ministries, there can be policy incoherence. Moreover,

the objectives o the MoH may not be refected in the activities o, or example, national

revenue authorities or ministries o trade and industry.

Historically, where dierent priorities guide the work o dierent government ministries

and departments, this has resulted in conficting approaches to the pharmaceutical industry.

Not many countries on our continent have an explicit strategy or the pharmaceutical sector

which coordinates the tools at the disposal o dierent government ministries. As a result,

there are requent examples o conficts in policy as implemented by dierent government

actors. There are many dierent policy and incentive tools that governments can employ or

various objectives yet, without specic consideration o how these tools aect the pharma



40


sector, policy incoherence is somewhat inevitable.

Countries with thriving pharmaceutical industries like India and China provide signicant

government support to their producers in the orm o incentives and protectionist policies.

Policy instruments that have been used to protect pharmaceutical sectors in developing

regions include:

• High taris on imported nished products. For example, India is reported to have

duties or nal ormulations o up to 56%; Brazil has a 15% tari or nished or-

mulations; and China has recently imposed import taris o up to 37% on Sula-

methoxazole (SMZ) imported rom India34

• Procurement preerences. Brazil has a 25% price preerence and Russia has intro-

duced measures to ensure that 70% o products procured by the state are locally

manuactured. This has apparently led to many Indian companies considering put-

ting up manuacturing plants in Russia35. South Arica has local production preer-ence points in tenders and is in the process o replacing these with a new system

where a percentage o designated products will be procured only rom domestic pro-

ducers. Procurement preerences legislation is in place in a number o other coun-

tries in Arica but is not always utilized

These examples highlight that some emerging countries have taken active steps to protect

and support their pharmaceutical industries. Manuacturers oten also benet rom other

means o support. In India, it is claimed that producers o nal ormulations receive sub-

stantial government assistance to promote exports including:

• Duty ree imports o equipment and raw materials or export products

• Ten year tax holidays i located in Special Economic Zones (SEZs)

• Export credits

• Low utility rates

• Working capital credits

• Enhanced depreciation allowances

The result is that nal ormulation imports to our continent have beneted rom substantial

government support in their country o origin and then oten do not attract duty. Con-versely, Arican manuacturers requently have to pay up to 25% taris on imported APIs

(and other inputs).

This situation is obviously working against local industry. The lack o a level playing eld

poses a genuine threat to the sustainability o high quality pharmaceutical production in

Arica and limits the ability o companies to make the investments required to upgrade their

plants. It is imperative that this imbalance is addressed i the enabling environment needed

or sustainable high quality production o nished products in Arica is to be achieved. Only

in this way will the dire consequences o relying on imported drugs rom a quality (and pos-

sibly price) perspective be avoided.34

http://www.thehindu.com/business/article2366488.ece35 Pharma exports to grow 35% this year. http://www.business-standard.com/india/news/pharma-exports-to-grow-

35-this-year/451194/



41


In other developing regions and some parts o Arica, protectionist tools such as restricted

lists have been used in support o the industry. These lists involve import prohibition on

identied products and have been used in countries such as Nigeria and Ghana. According

to local actors, these lists have been instrumental in the development o domestic industry.

For example, it appears that, until Ghana introduced a restricted list o 13 products, it

had ve local manuacturers and that today it has 22 active manuacturers. In Algeria and

Tunisia, once a locally manuactured generic is registered, the innovator is given two years

in which to commence local production. Failure to do this, results in a ban on importation

o the nished product and the market can then only be served through locally produced

products. This strategy has been important or local industry growth in both these countries

where, in addition to government owned laboratories, the market has seen the entry o a

number o private sector players in the last ten years.

However, the context in which restricted lists and other protectionist tools are introduced is

critical. In considering such steps, it is imperative that public health implications are priori-

tized. Direct support to industry to take advantage o the opportunities arising provides achance to upgrade to international standards over a dened period o time and to level the

playing eld or our manuacturers. Once a critical mass o companies has reached requisite

standards, a restricted list can be put in place.

Nonetheless, a recent study published by WHO36 (which supports development o local

production o essential medicines) nds that the evidence to link local production to im-

proved access (in terms o the range o dimensions) is ambiguous. Evidence is taken rom,

or example, India where the emphasis has perhaps been more on developing industry or

its export potential than on national public health. This is a cautionary observation since a

undamental objective o the PMPA is improved public health.

This Business Plan is premised on the view that high quality local production will benet

public health across our continent as well as provide economic benets. For this to be

achieved, industrial development tools must be utilized and coordinated with health priori-

ties in a coherent policy and regulatory ramework that supports and requires the industry

to meet established standards. Chapter Three will elaborate on how a pragmatic and holistic

approach can enable companies to continue to operate and have improved access to ac-

tors needed to upgrade whilst risk to public health rom short term non-GMP standards o

production is minimized.

2.2.8 Supporting industries and associated infrastructure

Well developed related and supporting industries and inrastructure are crucial or the phar-

maceutical sector. The supporting unctions encompass the creation o the appropriate sci-

entic and knowledge base and include educational and training institutions; laboratories

and research institutes involved in preclinical and clinical testing (clinical research organ-

isations and research labs); suppliers o all manuacturing equipment and inputs; as well

as a sound logistical system or distributing both inputs and the nished products. Other

supportive inrastructure includes legal and nancial systems; developed inormation and

communications technology (ICT); and a reliable and aordable supply o utilities.

Lack o related and supporting industries poses signicant challenges or the Arican phar-

maceutical sector. For example:

36 Local Production or Access to Medical Products: Developing a Framework to Improve Public Health. WHO publi-

cation. 2011.



42


• Whilst in some member states there are world-class research acilities, the majority

o Arican states lack clinical research organisations and bioequivalence centres. As

a consequence, companies have to seek out these services globally (many products

currently on the market have not been through such studies or provided similar evi-

dence – e.g. biowaiver)

• Distribution chains are ragmented and grossly inecient with as many as 724 li-

censed medical distributors in Nigeria37, over 200 in Zimbabwe38 and 296 in Sudan

and South Sudan39

• Utilities are unreliable and prohibitively expensive and supply interruptions are a

regular occurrence

• The nancial and legal inrastructure in the majority o Arican countries is not sup-

portive o the development o Arican pharma

• Specialised skills and know-how are required in areas including tooling and abrica-

tion, clinical research, instrumentation and equipment calibration to name but a ew.

The absence o these skills in some markets results in a situation where local compa-

nies oten incur additional and unavoidable costs or the maintenance o advanced

technologies because they have to fy in experts rom abroad

• The lack o a reliable supply o market intelligence services is also problematic as

it limits manuacturers’ ability to make decisions on product choice, portolio opti-

misation and production and supply chain planning. Investors have cited a lack o

credible market data as being an important issue that limits their enthusiasm or the

sector

2.2.9 Skilled human resources

The pharmaceutical manuacturing system requires specialized skills in a number o disci-

plines, including pharmacy, chemistry (analytical, organic, synthetic, medicinal), the bio-

logical sciences (biochemistry, microbiology, molecular biology), engineering (mechanical,

electrical, chemical, industrial, process), the lie sciences (medicine, pharmacology, toxicol-

ogy), and management (strategy, nancial and management accounting, operations, logis-

tics, commercial law, etc.) and Inormation and Communications Technology. The current

training and education landscape consists o various providers with the key partners being

traditional universities which oer various science, engineering and technology degrees.

These degrees are relevant only to the extent o providing solid grounding in scientic

theory which is crucial or industry. However, they lack industry applicability and practical-

ity. Thereore, a chemistry graduate will still need industry-specic training to gain the skills

which will render him/her productive in a manuacturing environment.

Stakeholders report, or example, that it takes up to three years to train a new recruit who

has a basic qualication in the various relevant disciplines and to convert him/her into a

skilled pharmaceutical operator. This is not uncommon and experience rom around the

world shows that there are a number o institutions that oer training to bridge such a

gap. Stakeholders also report that the lack o available skilled human resources across the

broad array o disciplines identied above is a major constraint and that the resources and

37

IFC38Personal communication with pharmaceutical executives39WHO



43


expertise needed to enhance the skills o workers across the industry system are insucient.

Furthermore, there is limited access to the know-how required to implement international

GMP. A number o companies who have sought guidance rom international consulting

rms have ound that guidance to be, at times, o questionable value and oten prohibitively

expensive.

There are a number o ongoing initiatives aimed at increasing the supply o skilled human

resources or the pharmaceutical manuacturing system. They include:

• WHO’s Essential Medicines Group which organizes ongoing training activities in

support o the industry as well as capacity building or regulators

• USP, which has been working with a number o regulators to enhance post market-

ing surveillance capabilities and has also developed a set o modules or training in

dierent technical aspects o production that could be developed or and rolled out

in Arica

• The collaboration between Saint Luke Foundation in Tanzania and Howard and

Purdue Universities in the US. This collaboration has already established a valuable

model or the training o industry actors and regulators at the Foundation’s indus-

trial pharmacy training centre in Moshi, Tanzania

• Various Arican universities and research institutes involved in training science un-

dergraduates

• Other Non-Governmental Organisations, such as Action Medeor, which run cours-

es on various aspects o the disciplines involved in pharmaceutical manuacturing

These and other worthy initiatives need to be built upon so that the requisite skills or the

sector can be developed and models rom other continents adopted in a concerted and com-

prehensive approach. In other geographies, there are specialized training institutions which

oer programmes specic to the pharmaceutical industry across many o the requisite skills.

Examples include institutions like Purdue University and Stephens Institute o Technology

in the United States and the National Institute or Pharmaceutical Education and Research

(NIPER) in India.

The Saint Luke Foundation/Kilimanjaro School o Pharmacy and Muhimbili University in

Tanzania are examples o specialized centres in Arica that have demonstrated a valuable

model or the training o industry actors. Expanding this and strengthening other entities

with the potential to provide specialist training is critical to the long term sustainability and

viability o the industry on the continent.

2.2.10Accesstonance

Access to aordable investment capital is regularly identied by the industry as a key chal-

lenge that limits its ability to make requisite investment in upgrading to international GMP

standards. In 2011, UNIDO conducted some research into the capital requirements o com-

panies and the availability o dierent types o unding. The options covered included tradi-

tional bank debt nancing, various types o equity nancing, and the opportunity or access-

ing nance rom international sources (including the well developed nancial community in

South Arica and Development Finance Institutions (DFIs) based in the developed world).



44


From a demand perspective, most companies in SSA (outside South Arica) wanting to in-

vest in upgrading acilities required long term capital (5+ years) to the tune o multi-million

dollar sums (specic cases vary dramatically but typically US$5mn as a bare minimum).

This research established that traditional bank debt nancing was problematic given the

high interest rates involved (15% to 30+% depending on the country or local currency

denominated loans). An added deterrent, which made such approaches unattractive in the

current context, was the risk o dollar-denominated debt, appreciating against the local cur-

rency. It also ound that loans in excess o US$3mn were rarely available and that the term

was usually less than ve years.

However, there are alternative sources o unds available (to a greater or lesser extent), in-

cluding:

• Local private equity (PE) and venture capital (VC) investors

• Some (though very limited) Initial Public Oerings (IPOs) on certain national stock

exchanges

• International private equity and venture capital investors

• DFIs

• Not-or-prot international organizations (both generalists and healthcare ocused)

• Pharmaceutical collaborative (technical) partners (including capital injection aspect

through to overall deal structure)

Nonetheless, these entities identied various concerns that limit their appetite or the do-

mestic pharmaceutical industry, including corporate culture, exit opportunities or equity

investors, and general pharmaceutical industry considerations.

Corporate culture

With regard to corporate culture, the issues most commonly cited included:

• Businesses generally controlled by one shareholder or amily

• Focus on retaining the business to pass on within the amily

• Reluctance to view exits such as M & A (Mergers and Acquisitions) or a stock mar-

ket listing positively

• Poor corporate governance

• Poor record and account keeping, lack o audited accounts and other records

• Poorly unctioning Boards o Directors – lack o outside independent business experts

• Poor planning; lack o long term strategy and vision



45


• Personnel issues (e.g. amily-owned companies hesitant to recruit external senior

management)

Exits or equity investors

For equity investors, the exit options are o concern. The most likely are:

• Initial Public Oering (IPO)

• Trade sale/M & A

• Buy-back by majority shareholder o equity stake

• Purchase o shares by strategic nancial investor (e.g. larger private equity group)

The IPO market is oten limited due to both immature public markets and aversion o

companies to seek a listing. In view o this, an IPO is oten not high on any investor’s list as

an exit strategy. M & A opportunities are also oten limited although, with time, increasing

demand, and evolving business models and management culture, this may change.

Given the current dynamic and limited opportunities or IPO and M & A, some venture

capital groups structure their exit into the initial investment agreement, aiming to allow the

investment to match both their requirements and to appeal to amily shareholders by using,

or example, call and/or put options (i.e. share buy-back clauses) and by dening upront

exactly what growth and increase in value is required. In other words, this share buy-back

structure entails purchase o the venture und’s stake by the major shareholder – generally

the controlling amily – at a pre-agreed price premium.

This creative deal structuring addresses the exit issues inherent in the local market. Im-

portantly, it also addresses a key concern o amily-owned businesses who want to retain

long-term ownership within a tight circle o shareholders since it gives them the ability to

buy out the investor. However, a negative aspect o this structure is that, should the major

shareholders not be in a position to buy back the shares, there are likely to be contractually

agreed penalties enorced by the investor.

The nal option, purchase o the share stake by a new private equity investor, is currently

relatively unlikely. However, with improved market conditions and the increasing attrac-

tiveness o local manuacturers, such exits may be more likely with time, especially wheninternational PE houses acquire stakes in these companies as a means o rapid expansion

into sub-Saharan Arica.

Pharmaceutical industry concerns

The industry specic issues most oten raised included:

• Need to recruit specialized, highly trained sta and the limited local availability

• Inability to manuacture quality products that are competitive with subsidized im-

ports



46


• Lack o accurate, comprehensive market data, analysis and orecasts

• Weak regulation and consequent penetration o sub-standard and countereit prod-

ucts which then erode the market

Overall implications or accessing capital

Sources o equity do exist and could be accessed by the dierent industry players although

no one capital structure or source o unding will be appropriate or all players. The observa-

tions rom this work are that an improved market context and evolving nancial systems will

increase options. However, it is also clear that direct government intervention in addressing

the weaknesses o the pharmaceutical system will be an important actor that encourages

all orms o investor to show greater enthusiasm or the industry. It would also be helpul i

international entities such as the IFC were to review their current policies on investment in

the sector in Arica (e.g. requirement or WHO prequalication). Such policies hinder themin ullling a role in supporting the development o high quality manuacturing o essential

medicines on our continent with the associated health and economic benets.

2.2.11 Status of intra Africa trade in pharmaceuticals

The ability to access regional markets depends on a number o actors, including com-

petitiveness, product portolio, product quality and price, as well as the ability to meet the

regulatory requirements and processes o regional NMRAs. Market penetration and access

also refect the ability to adapt to dierent circumstances and speak to the need to revise

and amend business models, orm partnerships and do what is necessary to succeed in other

markets. Access to markets is also reliant on the sector having ecient internal regulatoryprocesses, eective supply chains and willing buyers.

It is generally dicult or local manuacturers to access external markets because o poten-

tial buyers’ perception that their products may be o poor quality and the general lack o

aith in the competencies o other regulatory agencies. Furthermore, registration delays and

the peculiarities o regulatory rameworks in external markets are problematic. Improved

trade among our countries in the realm o pharmaceuticals is dependent on increasing the

links between our companies and on supporting local industry to compete with imports in

the short term whilst it evolves to a point o long term sustainability.

Data on trade in pharmaceutical products among our member states is limited, mainly be-

cause the ocial trade statistics are not suciently disaggregated to allow the precise iden-

tication o most pharmaceuticals. However, it is oten quoted that 30% o pharmaceuticals

used in Arica are made on the continent, suggesting that there is signicant room or expan-

sion. Outside the donor unded markets, the regulation o imports rom other continents is

extremely problematic. Consequently, increasing market share o products manuactured

under close scrutiny by our NMRAs through increased intra Arica trade in pharmaceuticals

will contribute to improved access to quality, aordable essential medicines.



47


2.2.12 International development assistance for local production

Our development partners have, until recently, adopted dierent stances on the importance

and imperative o strengthening local production o essential medicines. Now, however, thegeneral consensus is shiting towards our own position, which was publicly ormalized in

2005. Yet, despite this historical lack o consensus, many initiatives have already been taken

by the international community to support local production or in support o our health

systems (e.g. through improving pharmaco-vigilance). Actors have included multilateral or-

ganisations, bilateral arrangements between countries, universities, and non-governmental

organisations. The areas o intervention have included regulatory capacity strengthening,

regulatory harmonization, skills development, and technology transer.

However, despite concerted eorts on many ronts, we have still not seen the hoped or

development o the sector. In part, this may be due to lack o coordination among initia-

tives, a somewhat inevitable consequence o dierent institutional priorities, mandates and

time perspectives. Now that we have developed the PMPA Business Plan, this will provide acentral unction to acilitate coordination and cooperation so that there is a genuine impact

on improving health outcomes (and associated economic benets) through developing the

local pharmaceutical industry.

2.3 challengeS anD oPPortunitieS or local ProDuction

The previous section described the current status o the pharmaceutical manuacturing

system across our continent. It highlighted the diverse contexts but also embarked on iden-

tiying some general trends and issues that represent both challenges and opportunities orthe sector i it is to deliver on the vision o high quality, aordable essential medicines and

associated economic benets. Here, we lay out the specic challenges and opportunities

aced by the industry.

2.3.1 Challenges of achieving universal GMP

As demonstrated, achieving GMP standards is technically possible across our continent but

genuine challenges ace the industry i companies are to reach and maintain this level.

In general, these challenges can be broken down into technical considerations regarding

the expertise needed in setting up and running high quality plants; nancial considerations,

such as mobilizing investment capital; achieving and maintaining competitiveness given the

cost implications o setting up and running a GMP compliant acility; and inrastructure

to assist local production, such as access to bioequivalence acilities and other supporting

industries.

The current situation on many o these issues has already been described and a summary

o key challenges as perceived by the industry is now given in Table 2. However, pharma-

ceutical manuacturing companies currently display a wide range o attitudes. They include

companies that have already demonstrated their commitment to international standards

and achieved them; those who are currently in the process o upgrading their operations;

companies who aspire to improved quality but have so ar not been able to mobilize the

necessary range o expertise and resources; and those that are happy to continue producingat standards signicantly below GMP.



48


tb 2: Ky s dfd by p s v vs gmPsdds

Technical Expertise Financial Considerations Infrastructure Requirements

•Accesstoknow-howforde-

signing,upgradingtoandrun-

ningGMPcompliantfacilities

•Accesstoskilledhuman

resourcessuchasindustrial

pharmacists,microbiologists

andanalyticalchemists

•Accesstoaffordableinvest-

mentcapital

•Policyincoherence(e.g.taxon

inputsversustaxfreeimpor -

tationofnishedproducts,

restrictedlists,capitalcontrols,

etc.)

•Marketcontext(e.g.penetra -

tionofcounterfeits,uneven

playingeldversusimports–

tosomeextentafunctionof

policyincoherence)

•Variabilityinqualityamongstmarketplayers

•Accesstoexportmarkets

andtheircurrentfragmented

nature

•Competitiveproductiongiven

coststructure(functionofef -

ciency)

•Reliableutilities(implications

forcostaswellascompliance

withGMP)

•Accesstobioequivalence

centres

•Regulatoryoversight(impact

onaccesstocapitalandmar -

ketcontextconsiderations)

•Underdevelopedsupporting

industries(implicationsforcost

andquality)

•Lackofmarketdata(implica -

tionsforstrategicplanningandaccesstocapital)

•Uncoordinatedand/orvertical

approachestodevelopingthe

sector

Depending on where companies are positioned along the production chain, rom very low

to international standards, unsurprisingly, they have diering views on the challenges theyace and their ability to reach and maintain competitive production to international stan-

dards. For those that have achieved the mark, or are well on their way to it, concerns relate

to sustainability as technical challenges have already been addressed. For example, leading

manuacturers cite limited regulation o the market as a key challenge given that they have to

compete with rms with lower standards and thereore a lower cost base. For others, there

are concerns that the sector’s reputation or variable quality standards could limit the op-

portunity or exports and even create a preerence in their domestic market or international

products. They also cite ‘unair’ competition rom companies overseas who benet rom sig-

nicant government support and may also be manuacturing to standards below their own.

Furthermore, the lack o coherence in policies previously described is also a cause or con-

cern given the advantage that imports oten enjoy. Companies that aspire to manuacture

to international standards also cite lack o regulatory oversight as an important barrier. This

is one o the issues identied by investors as currently limiting their enthusiasm or the in-

dustry in many countries. Pharma companies oten also cite the challenges in accessing the

necessary know-how to implement upgrading programmes. However, or some companies,

these barriers and the lack o regulatory enorcement mean that they neither need nor aspire

to improve production standards.



49


2.3.2 Specicopportunitiesforstrengtheninglocalproductionofmedicines

This sub-section describes three particular areas - utilizing the TRIPS fexibilities; synergies

with R & D initiatives; and greater linkages between manuacturers as well as other actors – rom which local pharmaceutical manuacturing could benet in order to become a critical

public health asset or the continent.

Intellectual property rights and ull use o TRIPS exibilities

Many Arican countries belong to the World Intellectual Property Organization (WIPO) and

the World Trade Organization (WTO) and consequently observe international norms and

standards with respect to Trade-related aspects o Intellectual Property Rights (TRIPS).

Protection o such rights is enshrined in national legislation and, in cases o inringement,

intellectual property right holders can seek relie rom courts and assert their rights in cases

o patent, trademark and copyright inringements. Most Arican countries enjoy the early

working provision (Bolar) that allows companies to research and develop a product beore

patent expiry. Further, there are no data exclusivity (DE) provisions and no supplementary

protection certicates (SPCs).

Thus, market entry in non-LDC Arica can occur immediately upon patent expiry. How-

ever, despite these provisions and largely because o small markets and delays in medicine

registrations, many international companies rarely register patents in Arican jurisdictions

or launch generic equivalents already developed ahead o later patent expiries in Europe and

North America. Because many countries on the continent are classied as Least Developed

(LDCs), in line with WTO rules, they have until January 2016 to comply ully with the

TRIPS provisions. Furthermore, there is a strong possibility that the 2016 deadline may beextended. The TRIPS fexibilities include the ollowing:

• Exemptions rom patentability (Article 27.1, 27.3)

• Provisions to issue compulsory licences and authorize parallel imports (Article 31)

• Exhaustion o rights (Article 6)

• Limitations on data protection (Article 39.3)

• Bolar provision or early working (Article 30)

Article 31 grants governments the right to license third parties to use patents without the

consent o the rights holder i it is in the public interest; in cases o national emergency; i

there is ailure by the rights holder to exploit the patent or there is insucient working; and,

lastly, as a remedy to anti-competitive practices. This provision is mainly or the supply o

the local market but it does not preclude use or exports to LDCs without any manuactur-

ing capacity. It was introduced ollowing the adoption o Paragraph 6 o 2003 which waived

the requirement o Article 31() o TRIPS which stipulated that compulsory licences (CLs)

could only be issued or domestic use and was in recognition o the act that many LDCs

that needed to make use o the fexibilities had no domestic manuacturing capacity. Lastly,

it is important to emphasize that Article 31 is not intended or use only in emergencies and

is not limited to certain diseases.



50


For various reasons, only a ew member states have exploited the fexibilities. One o the

most important reasons is that many LDCs have not incorporated the fexibilities into their

national legislation as they are required to do prior to exploitation o the provisions. In act,

a review o many LDCs’ intellectual property laws reveals that they not only ully comply

with the WTO’s Trade-related aspects o Intellectual Property Rights (TRIPS) agreement

but, in some cases, ar exceed the protections o intellectual property rights expected o

them (TRIPS+).

Other reasons why LDCs and other Arican countries (with productive capacity) have not

taken advantage o the TRIPS fexibilities include:

• A lack o political will to enact the necessary amendments to intellectual property

rights law to enable countries to exploit the fexibilities

• A general lack o knowledge among the technocrats tasked with dealing with IPR

and access to medicine issues about the fexibilities and how to go about creating anenabling environment; and, nally

• Capacity constraints such as weak legal and regulatory rameworks and weak sup-

porting technical know-how and administrative capacity which remove any incentive

or inclination to act on the fexibilities

Arica thereore aces a simple choice in the next our years - to ully exploit the TRIPS

fexibilities and accelerate the ongoing negotiations or an extension to the 2016 transition

period or ace the prospect o paying more or drugs in the uture. The global economic

crisis has seen the scaling down o treatment programmes and the cancellation o Round 11

o the Global Fund. It is clear that in the long term the sustainability o treatment regimes

in Arica may well depend on the ability to ully utilize the fexibilities and to develop the

competencies to make our own medicines. Chapter Three o this document will propose

how the Business Plan can endeavour to acilitate the utilization o these fexibilities or the

benet o the peoples o the continent and or local manuacturers who are international

GMP compliant.

Research and development

Arica lags behind other regions o the world when it comes to innovation and knowledge

creation. In 2002, the continent spent just 0.3% o GDP on R & D versus the global average

o 1.7% and had only 1.2% o the world’s researchers40. The Organisation or Economic Co-

operation and Development (OECD) reers to research and development (R & D) as the

“creative work undertaken on a systematic basis in order to increase the stock o knowledge,

including knowledge o man, culture and society, and the use o this stock o knowledge to

devise new applications”41.

R & D activities broadly cover three areas o activity: basic research, applied research, and

experimental development, all with the sole intention o discovering and generating new

knowledge and products and ultimately providing solutions to problems.

The capabilities needed or R & D are important or innovation and the discovery o new

products, or reverse engineering current products, and or creating new ormulations and

40 A World o SCIENCE, Vol. 2, No. 1, January–March 200441 OECD denition



51


delivery systems. The shortage o researchers on the continent is exacerbated by the loss o

skills to the developing world. For example, it is estimated that more than a third o practis-

ing highly skilled Arican scientists are now living in the developed world42.

However, the situation is changing, with greater emphasis now being put on R & D and

with the ormation o key institutions like the Arican Network or Drugs and Diagnostics

Innovation (ANDI). At continent level, the need to promote research and development is

refected in a number o documents, including:

• Arica Health Strategy 2007-2015

• Global Strategy and Plan o Action on Public Health, Innovation and Intellectual

Property (WHA 61.21 o May 2008), a WHO document

• Abuja Declaration o March 2006

• Accra Declaration on Health Research o June 2006; and

• Algerian Declaration on Research or Health in the Arican Region o June 2008

Furthermore, various countries have national research strategies and are investing signi-

cant resources to scale up R & D. Government owned institutions and medical research

institutes now have active medicinal and drug discovery programmes and some leading

teaching institutions have also created drug discovery and development programmes, as well

as clinical trial centres which can be used or bioequivalence testing.

Local pharmaceutical companies on the other hand are not involved in any original R & D

work. A ew companies do have research and development programmes but most have onlysmall ormulation departments where reverse engineering o marketed medicines is done.

Innovator companies that are active on the continent do not undertake any direct original

research work in Arica although they outsource some parts o the development work to

institutions on the continent and spend considerable resources on clinical trials or new

chemical entities.

The PMPA and other Arican imperatives recognize the critical importance o original and

basic research (drug discovery and development) and its overall strategic importance to the

uture and long term viability o the industry on the continent. However, or the purposes

o this Business Plan, R & D is used broadly to reer to experimental development which

entails the use o existing scientic, technological and other knowledge and skills in order to

produce modied or improved products, processes and services. This is particularly relevant

to the creation o new ormulations, delivery systems, combination products and paediatric

ormulations, areas in which Arican manuacturers are ar behind their counterparts in

other developing countries.

Nonetheless, novel R & D should become an increasingly important ocus area or our

continent and competencies in this eld will have to be built up signicantly. This need is

evidenced by the act that less than one per cent o all the thousands o new chemical entities

developed in the last 30 years are or treating the neglected diseases which predominantly

aect Arica43. Consequently, organisations like ANDI need to be supported in their work so

42

Joint Statement by the Network o Arican Science Academies. July 2009 - www.nationalacademies.org/includes/NA-SACbraindrain09.pd (accessed December 2011)

43 Pierre Chirac, Els Torreele. Global ramework on essential health R & D. The Lancet Vol. 367 May 13 2006



52


that they can respond to the needs o the continent or eective medicines or the diseases

that plague us. Furthermore, ANDI has set up a network o 32 centres o excellence across

Arica involved in drug discovery, pre-clinical and clinical work.

The AUC believes that our continent should tap these skills sets and competencies to re-

spond to the needs o industry or innovative ormulations, improved delivery systems and

paediatric ormulations among others. Consequently, the AUC will, in partnership with

ANDI and others, seek to ast track the development o technologies and the speedy diu-

sion o these technologies to international-GMP-compliant Arican manuacturers.

There are a number o research partnerships between Arican and international organisa-

tions and they include:

• The National Research Foundation o South Arica/Emory University/SCYNEXIS

Advanced Drug Discovery Program

• The Drugs or Neglected Diseases initiative’s (DNDi) clinical research platorms:

Leishmaniasis East Arica Platorm (LEAP) in Kenya, Ethiopia, Sudan, and Ugan-

da; and the Human Arican Trypanosomiasis (HAT) Platorm based in the Demo-

cratic Republic o Congo (DRC) or ghting sleeping sickness

• The Medicines or Malaria Venture (MMV) network o clinical trial sites in malaria-

endemic countries

These partnerships need to be encouraged and accelerated and the AUC is keen to engage

with them and others to explore how work under the PMPA can assist in making new prod-

ucts widely available.

Partnerships, collaboration and improved business linkages

Partnerships and collaboration between industry and various players such as R & D institu-

tions, education and training providers are critical or the growth o the industry. Moreover,

partnerships between manuacturers themselves are needed to realize economies in product

development, raw material procurement, equipment servicing and maintenance among oth-

ers. In our industry, the practice o partnering is not well entrenched. Table 3 reviews the

current status o such partnerships which are critical or the growth o the industry and or

increased access to medicines.

The current limited number o relationships between regional and international entities

represents an opportunity or the sector. Facilitating partnerships between companies on

our continent, as well as with international rms, could enable access to various industry

needs including know-how, enhanced product portolios and investment capital. There is

also the potential to strengthen relationships between the corporate sector and academia on

the continent and via Product Development Partnerships (PDPs) among others.



53


tb 3: Ss psps p p s a

Partnership type Functions Status

R&Dpartnershipsbetweenin -

dustry,universitiesandresearch

institutes

Importantforinnovation,discov-

ery,developmentandcommer -

cialisationofnewproductsand

newgenericformulationand

deliverysystems

Nonexistent

ANDIseekstollthisspace

Technologytransferpartnerships

betweenlocalcompaniesand

externalpartners

Importantfortheintroduction

ofnewtechnologiesandprod-

uctsquicklyandtosignicantly

reducedevelopmentcostsand

timetomarketinthecaseof

generics

Afewexamples:

•CiplaandQualityChemicals

(Uganda)

•ZydusCadilaandAlmeta

Impex(Ethiopia)

•AspenGSK(RSA)

•SanoPasteurandTheBiovac

Institute(RSA)

Educationandtrainingprovision

partnershipsbetweenindustry

andinstitutionsofhigherlearning

Fortheprovisionofadequate

trainingandeducationrelevant

totheskillsrequirementsofthe

pharmaceuticalindustry

Scarce:

•MuhimbiliUniversity(TZ)

•SaintLukeFoundation(TZ)

Partnershipsbetweendevelop -

mentpartners

Forcoordinatedandintegrated

supportresponsivetotheneeds

ofindustry

Present:

•WHO&USP

•UNorganizations(UNIDO,

UNCTAD,UNDP,WHO,

WorldBank)

•UNIDO,

Cooperationbetweenindustry

andvariousstakeholdersin

government

Forthecreationofanenabling

andsupportiveenvironmentas

wellasasharedvisionforthe

industry

Weak–alotofworkneedsto

bedone

Businesslinkagesbetweenlo-

cal,regionalandinternational

companies

Thisisfortechnologytransfer,

accesstonewproductsandfor -

eigndirectinvestmentintothe

localpharmaceuticalsector

Multipleagenciesandproductor

distributionlicensingagreements



54



6: is s ss v

Research &

development

Capacity & skills shortages

Poor quality & counterfeit drugs

Facilites not GMP compliant

Weak regulatory framework

Lack of/poor technology

Limited access to markets

No market data

Lack of partnerships & linkages

• Conflicting policies & regulations

(trade, health & industrial)

• Absence of shared pharma vision amongst

stakeholders

• Lack of funding & government support

• Mismatch between industry needs & education

provision

ManufacturingSales &

Marketng Distributon

• Rigid IPR laws

• Weak supporting industries

• Poor business practices

O t h e r

C h a l l e n g e s

Key messages rom Chapter Two include:

• Pharmaceutical manuacturing occurs within a complex system with a wide range

o stakeholders

• The status o the ‘pharmaceutical manuacturing system’ in those o our countries

where manuacturing occurs is unique

• The current status o manuacturing activities on our continent varies dramatically

across countries

• In North Arica and RSA a broad range o products are manuactured but in most

o SSA product portolios are generally limited

• There are ew internationally certied (WHO prequalication or approval by a

‘stringent’ regulator) manuacturers or products against HIV and malaria

• Most inputs are imported, with an estimated 95% o APIs coming rom overseas,

largely rom India and China

• It has been demonstrated that production to international standards is possible on

our continent

• However, the quality standards to which companies on our continent produce vary

both across dierent countries and regions and also within individual countries



55


• Companies have a wide range o perspectives with regard to upgrading production

standards

• The issue o sub-standard products has grave implications or public health; we

thereore need to take steps to increase quality standards across the board

• Concerns exist as to whether international standard production can be competitive

on our continent

• Research and real world insights show that the economics o pharmaceutical pro-

duction are complex (and go beyond traditional notions o economies o scale) and

are impacted by eciency o production

• Simulation exercises and insights rom leading companies show that high quality

production can be competitive with imports rom India i there is a more level play-

ing eld (rom a policy perspective) and i eciencies in production can be realized

• The level o regulatory oversight in many countries is insucient

• The policy and legislative landscape in most countries is not supportive o local

industry and oten coners a disadvantage versus imports o nished ormulations

rom countries which provide signicant support to their sectors

• The sustainability o high quality local production will benet rom development o

supportive industries and associated inrastructure

• The dierent activities across the manuacturing system require signicant skilled

human resources and know-how but current availability is limited

• Access to nance is a challenge or many industry players given that long term bank

debt o the order o magnitude required is oten not available and the appetite o

equity investors or the sector is somewhat limited

• Intra Arica trade in pharmaceuticals is limited due to various obstacles rom a regu-

latory perspective as well as the reluctance o companies to work together. There is

a substantial opportunity or increased trade in high quality essential medicines and

or this to lead to improved health outcomes

• There are a number o untapped opportunities that could assist the industry and

enable it to become an important public health asset. These include ull utilizationo the TRIPS fexibilities, the output rom the increasing ocus on novel R & D, and

acilitating business linkages and partnerships with multiple aims, including access-

ing new products, investment capital and know-how



56



57

SOLUTIONS

3. sOLuTiONs

Chapter One o this Business Plan dealt with the challenges that impact on the delivery o quality healthcare on the Arican continent and presented current estimates and projections

o uture disease patterns, as well as orecasts or the economic outlook or Arica. Chapter

Two presented the components and complexity o the pharmaceutical manuacturing sys-

tem and identied the wide variety o contexts across our continent. It also outlined the

challenges across dierent dimensions o the system. Figure 7 below is a schematic repre-

sentation o the key aspects o the system that need to be tackled i the industry is to respond

to the continent’s ambition to achieve sel reliance and sustainability in the provision o sae,

aordable, ecacious medicines.

7: is ds qd, ky vs d b Bsss P

Policy Coherence

Political Commitment

Sound Sector Strategy

H R

D e v

e l o p m e n t

A c c e s s t o P r o d u c t & T e c h n o l o g y

A c c e s s t o A f f o r

d a b l e F i n a n c e &

T i m e L i m i t e

d I n c e n t i v e s

R e g u l a t o r y S y s t e

m s S t r e n g t h e n i n g

& E n f o

r c e m e n t

P a r t n e r s h i p s , C

o l l a b o r a t i o n s &

F o s t e r i n g B u s

i n e s s L i n k a g e s

E n h a n c i n g M a r k e

t D a t a C o l l e c t i o n &

F a c i l i t a t i n g M

a r k e t A c c e s s

Competitiveness, Sustainability & Self Reliance

Quality, Access, Availability, Affordability

The PMPA Business Plan puts orward an approach through which technical assistance can

be provided to member states across the key dimensions o the pharmaceutical manuactur-ing system so that our companies can respond to Arica’s need or a sustainable supply o a-

ordable, sae, ecacious, quality medicines. It identies the need or TA in non-producing

countries in collaboration with other associated initiatives (such as AMRH and the specic

activities o dierent RECs).

In structuring a continent wide plan or the pharmaceutical sector, the heterogeneity o A-

rica and the dierent aspirations o our member states in relation to pharmaceutical manu-

acturing and the need or action at various levels and across a number o dimensions are

critical. This Business Plan thereore describes an approach in which solutions to common

issues will rst be developed at a central level and then tailored to the specics o the coun-

try context.



58


Implementation o the PMPA will largely take place at the country level although there are

also specic aspects o policy and international development assistance that lend themselves

to action at the level o the RECs and the continent. Critical to success is the recognition

that the pharmaceutical manuacturing system involves a broad array o players and that

strengthening the dierent components requires a similarly broad range o expertise. No

one entity contains the necessary insights, capacity, mandate or skills to address the ull

range o requirements. Consequently, the need or collaboration between dierent parties

is o paramount importance. In view o this, building a consortium o partners is recom-

mended and the AUC will provide the central authority under which these parties can work

together. Further details o the nature o the envisaged consortium and how it will unction

are described in more detail in Chapter Four.

3.1 the generic SolutionS PacKage 8: S d dpd sps sys

Overall Market Context

Regulatory

environment

Government

Policy

Credibility of

Long Term

Commitment

Contribution of Development

Partners

Developments

in Sub-regions

Quality

StandardsKnow How

Skilled

Human

Resources

Infrastructure

e.g.

Bioequivalence

Facilities

Access to

Capital

Cost

Structure of

the Industry

Market

Opportunity

Individual

Company

Characteristics

Key: A B = B is dependent on A

Figure 8 illustrates the interconnectedness o key dimensions and requirements o the man-

uacturing system. It is a schematic simplication that provides some examples o how issues

are connected. The specics in each context dier depending on numerous variables, in-

cluding current status, ambition, level o development and access to capital markets, status

and capacity o the regulator and more.

The generic solutions will constitute a central repository o expertise, knowledge, skills and

capacity which can be accessed and tailored to the various contexts. This section will ocus

on a description o the solutions package, building on existing interventions and exper-tise. In the context o the PMPA, new tools and approaches will be developed that can be



59

SOLUTIONS

implemented with genuine collaboration between partners. The generic solutions package

includes:

• Development o Human Capital

• Development o a GMP road map in conjunction with a risk assessment o the Es-

sential Medicines List

• Insights and guidance on time limited incentive options which governments can em-

ploy to support industry given the specic country context as well as identication

o non-scal support such as acilitating access to know-how

• Recommendations and advocacy to acilitate access to aordable long term invest-

ment capital o sucient magnitude to enable upgrading o acilities to international

standards

• Insights into legislative and policy requirements, tools and options or development

o the local pharmaceutical sector and an understanding o which issues are to be

dealt with at country level and where regional level coordination/negotiation is in-

volved

• Technical assistance to regulators to identiy critical regulatory unctions on which

they should ocus (not just in the context o the PMPA but also in assuring product

quality in the market place) and to develop and implement an organisational devel-

opment plan or achieving these objectives

• A partnership or business linkages platorm which could cover an array o dierent

relationships, including those that provide access to capital and/or technology andknow-how

• Working with centres o excellence to develop ormulations to take advantage o

the TRIPS fexibilities and to assist companies that have reached GMP standards

to access aordable high quality dossiers or established generic products that have

signicant public health importance

• Development o new ormulations or transer to international GMP compliant

manuacturers

• Guidance or strengthening national and regional pharmaceutical manuacturers’

associations

• Developing options and recommendations or improved market data collection and

availability

The range o the solutions package is shown in Figure 9 below and a proposed mechanism

by which a tailored approach or each country context can be developed is also described

below.



60


9: idv pk ss ddss wd sss vvd

Package of Solutions

Business

Linkages

Platform

Expertise on

time limited

incentives and

policy coherence

Human Resource

Development:

Across actors

TA for strengthening

regulatory

infrastructure

Model GMP road

map and risk

assessment of

EML

Strengthening

Trade Association

as key portal for

dissemination of

expertise to

industry

Best practice

module for

efficient pharma

manufacturing

Assistance to

leading companies

to achieve WHO PQ

Liaison with e.g.

AMRH, ANDI, GF,

CHAI

Develop new formulations for

dissemination to leading

companies (e.g. 2nd line ARVs

and novel FDCs & pediatric

formulations)

Enhanced

market Data

Inputs Manufacturing Distribution Market

Inputs – Material,know how, HR,capital, utilities,service etc.

LocalManufacturers:

• Formulationdevelopment

• Final formulation

• Packaging

• Distribution-array of public & privatesystems

• Distribution -rangeof mechanisms

• National Markets

• Sub-regionalexports

• Donor fundedmarket for pandemics

T

r a d e A s s o c i a t i o n s

E x t er n al A c t or s

National Medicines Regulatory Authorities

Government / Ministries

Pharmaceutical Manufacturing System

3.1.1 Human resource development

One o the most critical aspects o the long term sustainability o the pharmaceutical in-

dustry on our continent is developing the human resources necessary to ull the dierent

unctions within the pharmaceutical manuacturing system. Historically, there have been

many worthy initiatives to develop skills. However, they have been uncoordinated and have

not had the impact they could have had had the HR requirements or dierent aspects o the

system been developed in a deliberate and considered way. The system requires enhanced

human capital in regulatory unctions, technical aspects o manuacturing, business and

management aspects o manuacturing, and in the policy making sphere across dierent

ministries.

There are various mechanisms available or building the skills o those already involved inthe sector and there is a need to increase the availability o skilled proessionals or long term

sustainability to be achieved. In view o this, the human resource development component

o this Business Plan identies both ormal academic training o sector participants at cen-

tres o excellence and a structured set o modules to be made available to industry actors

at individual country and/or country cluster levels. The importance o the country/cluster

level training cannot be overestimated. The progress o the industry requires not only the

dry technical skills involved but also a shit in industry culture across the system such that

quality and eciency become concepts embedded within the psyche o all practitioners.

At the enterprise level, those companies that have reached international standards have

repeatedly emphasized the need to adjust the internal culture o the company and haveutilized many mechanisms to do this. Experts in ecient manuacturing also emphasize



61

SOLUTIONS

the need or eciency to be part o a company’s core culture or continuing improvements

which lead to evermore competitive production. Best practice in terms o enterprise level

training programmes will be developed and disseminated to companies through trade as-

sociations. Companies themselves will be responsible or taking advantage o such materials

but sector level training will also be conducted as part o the PMPA. This will orm a basis

rom which enterprise level initiatives can be designed and implemented.

It is also necessary to recognize that, or the sector to embark on a new trajectory, we will

need to augment our current human resources through accessing know-how in the short to

medium term via various mechanisms. For example, the Partnership and Business Linkages

Platorm described later would provide a mechanism through which companies could en-

gage partners to assist in areas such as plant design. There are many skilled people in other

parts o the world whose expertise could be brought in and those in the Diaspora could be

encouraged to return.

For example, there are thousands o highly skilled pharmaceutical personnel currently un-employed ollowing the large scale retrenchments by multinational pharmaceutical com-

panies during the global recession. Pharmalot estimates the number o people retrenched

at 19,076 in 2011, 53,636 in 2010, 61,109 in 2009, and 43,014 in 2008. Means by which

governments could consider acilitating quick access to such expertise include increasing

the quota o expatriate working visas or pharmaceutical companies.

The specialized skills sets required to support local manuacturing are described in Chapter

Two where there is also a non-exhaustive list o organisations involved in training or the

pharmaceutical sector. The AUC, with the assistance o UNIDO, has had initial discussions

with WHO, USP, and the Saint Luke Foundation/Kilimanjaro School o Pharmacy about

building on their ongoing activities to accelerate human resource development or the in-dustry. Although these entities can assist in the development o human resources already

involved in the manuacturing system, the long term supply o skilled graduates who will

be vital or sustainability and sel reliance in the production o high quality medicines also

needs urther development. In view o this, the training curricula o schools o pharmacy

should be revised so that they incorporate industrial training although this is outside the

specic mandate o the PMPA. However, the technical partnership envisaged in the Plan

would make experts available to assist those institutions o higher learning that are inter-

ested in revising their curricula.

There is also a need to develop urther business skills, business culture, and expertise in

manuacturing eciency i the sector is to become sustainable in the long term. Thereore,

as well as developing the technical human resources or regulation and production, the con-sortium will also build on initial insights and establish training modules to provide materials

and guidance on which companies can draw to improve their operations and develop busi-

ness models and structures that are attractive to investors and increasingly competitive in

the medium term.

As already pointed out, developing human resources requires dierent models to develop a

strong basis o technical skills and to ensure that this knowledge is then reinorced through

continual learning and dissemination to other industry participants. This Business Plan will

seek to provide a comprehensive education syllabus through centres o excellence and ongo-

ing training at sector level. It will also be necessary or individual companies to recognize the

importance o ongoing training and corporate culture development and to take responsibil-ity or such activities (with sector level guidance rom the PMPA).



62


Technical manuacturing, regulatory and policy skills

Human resource development will involve dierent levels o intervention by the consortium

engaged to do the detailed design and implementation o this Business Plan. At a technical

level, training at academic institutions will include:

• A comprehensive syllabus o short term courses or current employees and those

aspiring to join the sector. This could initially be conducted at the Saint Luke Foun-

dation (with its partners) and then be subject to expanded roll out as the model is

extended (see above).The syllabus would include documentation (drug product/

substance, mock drug master le compilation), ormulation, design, excipients, coat-

ing, bioequivalence, method validation, equipment calibration, ling with the FDA/

WHO-PQ (SRAs). Muhimibili University is already oering short courses on these

modules as well as courses on validation and qualication, granulation, tableting and

coating; quality control o medicines; and coating and sustained release ormulations

• A syllabus o pharma-specic long term courses or regulators and industry. The

Saint Luke Foundation/Purdue and Howard universities collaboration oers a two

year Industrial Pharmacy Advanced Training Programme which will be expanded to

other regions o our continent. The ocus includes drug development and regulatory

quality compliance, drug manuacturing process (GMP), regulatory documents and

generic drug approval submissions, and drug discovery. The training is oered in the

Industrial Pharmacy Teaching Unit which boasts a ully equipped and GMP com-

pliant production line with 50kg batch size equipment. This programme is based on

Purdue University’s leading Industrial and Physical Pharmacy Programme

These training courses will be supplemented with the running o in-country/country cluster

courses made available to various industry actors. It is imperative that technical knowledge

rom academic courses is built upon and that there is a structured approach to developing

the broad understanding o the range o requirements or high quality production. Equally

important is the ability and awareness o all actors o the need to ull their particular op-

erational unction according to these standards. These in-country/country cluster courses

will include:

• A structured approach to building knowledge o GMP and associated processes,

practices and requirements

• Specic training aimed at changing the management culture o companies and o-

cusing on quality aspects. As with other courses, this training will be conducted ata sector level although companies requiring specic in-house training will be able

to access the AUC panel o vetted experts independently. Mechanisms or assisting

countries with limited numbers o manuacturers wishing to access such training

will need to be established, or example, via regional cluster approaches. However,

the PMPA will seek to develop materials to assist companies in their internal ongo-

ing training programmes around GMP, culture change and the importance o qual-

ity to the business

• Specic training or NMRAs over and above academic courses will also be necessary

to enable regulators to build on this knowledge and current expertise to enhance

their ability to oversee the market (dependent on inrastructure as well as human re-

sources – see below). WHO and USP activities in this space have already been men-



63

SOLUTIONS

tioned. However, it is recognized that these initiatives need to be enhanced and that

development o regulatory skills would benet rom more additional and perhaps

more extensive programmes o support. USP and WAHO have, or example, pro-

posed a ‘training o trainers’ approach or the ECOWAS region, where experienced

regulators who have retired could mentor individuals and transer their knowledge to

the next generation who should then act as agents or change within their NMRAs.

Such a concept could be developed and rolled out to other RECs. Furthermore,

many stringent regulatory authorities and related organisations oer training pro-

grammes or regulators rom developing countries. The PMPA will seek coopera-

tion with organisations such as the International Conerence on Harmonisation o

Technical Requirements or Registration o Pharmaceuticals or Human Use (ICH),

the U.S. Food and Drug Administration (FDA), the European Medicines Agency

(EMA) and WHO with a view to oering continuous development programmes or

participating Arican NMRAs. Any initiatives in this area will be coordinated with

the ongoing approach to training o regulators that is being developed by the AMRH

initiative

• Training or policy makers is a key area that needs to be addressed head on to in-

crease the industry specic knowledge o the technocrats tasked with ormulating and

implementing policies impacting on the pharmaceutical industry. Given the broad ar-

ray o ministries involved and the number o sta who will have input, whilst discrete

external courses may be appropriate or senior government ocials, it is anticipated

that a series o workshops and seminars to inorm policy makers o the reality o the

sector, its complexity, its potential or public health benets and its need or cohesive

policy rameworks will be oered at country level. Some leading Arican universities

have been approached and have already indicated a willingness to design and oer the

required training. The AUC will also approach other international training institutions

and development partners with the requisite know-how to develop and oer such a

programme and will endeavour to twin them with the interested Arican institutions

• Short term courses or engineering teams, artisans and machine operators. It has be-

come clear through interactions with various industry stakeholders that a key challenge

conronting manuacturers relates to the shortage o the requisite skills and experience

in tooling and abrication as well as in optimal plant maintenance and operations. The

AUC thereore proposes to start a series o short term courses or technical teams in

industry in order to disseminate international best practice and to equip companies to

be able to service, maintain and repair their own equipment. This is particularly urgent

since one o the causes o long downtimes is equipment breakdown which necessitates

the importation o skills, normally rom abroad. This is a major disruption in continu-ous plant operations and is costly or many cash strapped companies

Business skills or the pharmaceutical industry

The development and sustainability o the pharmaceutical sector is dependent not only

on the technical skills associated with manuacturing but also the business skills o the

entrepreneurs and corporate managers involved. Competitiveness is not only a unction o

a number o structural aspects o the industry or the development o an enabling environ-

ment rom a policy, regulatory and legislative perspective. It is also dependent on the ability

o entrepreneurs and corporate managers to take advantage o opportunities arising and toachieve their business objectives. The inherent skills o successul entrepreneurs, such as



64


energy, dynamism, and risk taking should not be underestimated. However, these skills can

be urther enhanced through the teaching o some key dimensions o doing business in the

pharmaceutical sector.

There is potential or establishing industry training programmes at institutions o learning

which, or example, could replicate the MBA in Pharmaceutical Management oered by

institutions like NIPER in India. The need or such programmes has been endorsed by vari-

ous pharma proessionals who identied the ollowing courses as relevant:

• Accounting and Financial Management

• Pharmaceutical Business Environment

• Business Law

•

Production and Operations Management in Pharma

• Strategic Management in Pharmaceuticals

• Pharmaceutical Sales Management

• Marketing Management

• Brand Management in Pharmaceuticals

• Logistics and Supply Chain Management or Pharmaceuticals

• Corporate Governance and Board Leadership

It should also be recognized that many entrepreneurs and corporate managers will not have

the time to participate in such extensive training. Nonetheless, the need or specic aspects

o business management to be disseminated to the industry is urgent since the time needed

or moving rom initial planning to mobilizing investment and to upgrading established

plants or building new plants is substantial. In view o this and to enable companies to take

action rapidly, training in the key skills required or the sector’s development will be pro-

vided, as requested, through entities such as trade associations.

A key component o this training will ocus on changing the prevailing business culture and

governance practices in the industry. The management and governance culture o Arican

pharmaceutical companies has consistently been identied as one o the major weaknesseso the industry and is a key reason why investors are unwilling to invest in the industry. This

is hardly surprising given that the investment community is understandably not keen to in-

vest in businesses where its views may not be heard and where record keeping, governance

structures and roles and responsibilities are not well dened. Thus it is imperative to oer

a number o modules or executive training and or building the requisite general manage-

ment skills and expertise.

Improving competitiveness is another key area or business managers. It is clear that achiev-

ing eciencies requires incorporation o eciency into the corporate culture but managers

need to be given the tools with which to identiy the opportunity and to eect change within

their organisations.



65

SOLUTIONS

3.1.2 GMP road map and risk assessment of the EML

The ultimate objective o the PMPA is that all production in Arica should adhere to inter-

national GMP standards. There are a number o guidelines set out by dierent regulatorsand agencies to dene what constitutes GMP but the PMPA recommends that WHO GMP,

as established in the WHO compendium on quality assurance 2006, should be the target to

which all countries aspire.

Where companies are developing new production acilities, it is recommended that coun-

tries immediately require WHO GMP standards but, where there already is an established

pharmaceutical sector, a trajectory towards GMP requirements needs to be established.

In an ideal world, all companies would immediately upgrade their standards to GMP but

this is not practical as substantial expertise is required to address all the aspects involved.

Moreover, signicant investment is oten needed, time is required to adjust the corporate

culture towards one that has quality as a central tenet, and processes and procedures need

to be dened and validated.

These and other actors mean that a pragmatic approach is warranted since most companies

will need to make improvements in order to reach GMP standard and they will require vari-

ous orms o assistance to do this (see section on other solutions involving both technical

support and incentives). Firms also need time to implement change whilst continuing to do

business. By the same token, most regulators will also have to increase their capacity and

capabilities i GMP is to be enorced widely. This, again, will take time and resources.

Recognizing this situation, the Business Plan recommends the establishment o a ‘GMP

road map’. Initial work with USP has resulted in the development o a prototype assessment

tool that seeks to quantiy the level o a company’s adherence to GMP. This could be usedunder the authority o the NMRA as part o country level PMPA implementation to assess

the level o compliance with GMP o manuacturers operating in a country. The purpose o

the assessment would be to establish a baseline rom which a GMP road map or the sector

can be established. During the set up phase, the AUC, in conjunction with core partners,

will develop a generic road map.

The objective or the uture is that all companies should be GMP compliant across all prod-

uct categories. However, as already pointed out, this is neither possible nor practical right

now. The implications o sub-standard production vary depending on the product type in

terms o implications or health i contaminated, i products are not eective, or i products

were to be mislabelled. Thereore, in the interim, it is proposed that those companies that

are not at GMP levels should be restricted to manuacturing only products that are deemed

to pose a minimal risk in the event o their quality being compromised. To identiy products

that would pose minimal risk, a technical review o the WHO Essential Medicines List will

be conducted (initial discussions with WHO regarding this undertaking have taken place).

Such a risk assessment would be used as a basis or NMRAs to determine which products

could be produced by which companies (it may be that there would be a number o tiers

below the ully GMP compliant status).

Despite the PMPA recommending a pragmatic approach to improving standards over time,

the implications o quality should not be underestimated and the GMP road map will in-

clude recommended prerequisites or certain product types (even in the minimal risk cat-

egory) which must be in place beore production can start or continue. For example, pro-duction o syrups should not be allowed without proper water treatment plants in place. The



66


risk o anaphylactic shock in people allergic to penicillin means that beta lactam production

should always be in a separate acility to other products. Further suggested prerequisites will

be recommended as part o the road map.

In summary, where there is an established industry with varied production standards, the

Business Plan espouses a pragmatic approach to improving quality standards with the ul-

timate goal being international GMP standards across the board. This requires a holistic

approach where regulatory capacity development, human resource development, access to

know-how and incentives/support to industry are coordinated to enable and require compa-

nies to adhere to a GMP road map which will:

• Consist o a series o milestones setting out specic components o GMP that com-

panies would need to have in place by a certain point in time. This would be leading

towards a point in the uture (probably established by the NMRA ollowing consul-

tations) where all components o GMP would need to be in place

• Need to be pragmatic but also identiy critical issues o GMP that should be ad-

dressed as an imperative at the outset

• Dierentiate between the dierent GMP requirements or dierent dosage orms

and certain product categories

• Need to be pragmatic, as certain aspects will take some time to implement (e.g.

where construction and/or capital mobilization is required)

• Be implemented in conjunction with a risk assessment o the EML whereby com-

panies operating below GMP standards would be limited to production o those

products that represent the minimum risk

3.1.3 Insights and guidance on time limited incentives to support industry

A key objective o the PMPA is that international standard production o essential medi-

cines in Arica should be sustainable. Some commentators have suggested that sustainability

in terms o competitiveness can only be achieved with large scale plants that are able to

‘achieve economies o scale’. However, the economics o production o nal ormulations

are much more complex, with many actors to consider.

As pointed out in Chapter Two, UNIDO has commissioned various pieces o research into

the economics o production or nal ormulations. They indicate that, with appropriatesupport and changes in business practices, local manuacturing o high quality products can

be competitive with Asian companies.

Long term sustainability o high quality production is possible on the continent and will be

a unction both o how well companies are run and o progress on a number o ronts (such

as harmonization o registration which is being pursued by AMRH). The human resource

development solutions outlined in this Business Plan provide assistance to companies on

how to run plants eciently and achieve competitiveness. However, time limited incentives

are required to assist companies to make the necessary investments and to protect and sup-

port those that have already done so.

The work being done on the economics o pharmaceutical production, coupled with in-sights as to the current status o production, the investment requirements or upgrades and



67

SOLUTIONS

the nature o the pharmaceutical industry provide the basis or advising governments on ap-

propriate time limited incentives. These will support the industry as it learns to be competi-

tive and strives to produce to international standards. The recommendations on a package

o incentives will be dependent on the specic country context since numerous variables will

need to be taken into account, including:

• Interest rates

• Liquidity o equity markets

• Currency volatility

• Current status o the industry in terms o investment requirements

• General and industry specic industrial policy tools and incentives that are already

in place (e.g. Special Economic Zones, export incentives, restricted lists, sot loans,

etc.)

• The specics o the tax regime

• Current production capacity and standards in the country

• The specics o the GMP road map as determined by the NMRA (with advice rom

the PMPA)

• Public health priorities

These and other variables will inorm the design o the package o incentives. Experience

rom within Arica, as well as other geographies and industries, provides examples o mecha-

nisms that can be utilized to provide scal support to manuacturers. They can be largely

divided into two categories: direct support and protective measures. Mechanisms or provi-

sion o direct support could include:

• Interest subsidies

• Working capital credits

• Underwriting Letters o Credit to improve the credit terms that companies can ob-

tain rom suppliers

• Zero rating/exemption or taxes/ taris on imported inputs or the industry

• Special depreciation provisions (e.g. in India, companies could allow or 150% de-

preciation o capital investments)

• Utility subsidies

• Subsidies to support training

• Export incentives

Protectionist approaches could include:



68


• Increased taris on imported nished products

• Restricted lists

• Marginal preerence or procurement o locally produced products

The likelihood is that a combination o dierent tools should be incorporated in an incen-

tives package and, as mentioned, the specics will inevitably vary rom country to country.

In advising on an incentives package, we will be mindul o certain considerations. These

include:

• Depending on the status o the industry, protectionist policies could be detrimental

to public health, or example, i they lead to price increases (e.g. through increased

taris) or i the local industry is not developed to the point where competition keeps

prices down i a restricted list is introduced

• The incentives package will need to recognize the dierent business models and

capital structures that exist and that are desirable or long term sustainability (or ex-

ample, interest subsidies alone would avour debt nanced operations when a blend

o debt and equity may be more appropriate)

• The incentives should keep in mind the medium term goal o stand-alone competi-

tiveness and should seek to encourage ecient production (India had price controls

in place so that companies had to be competitive rom the start but received support

in other orms)

• The incentives are intended to be time limited in duration

• Manuacturers are all starting rom dierent points and those that have already made

investments should not be penalized. They should receive some orm o protection in

the short term

• Any measures should be developed to work within the ramework o existing indus-

trial policy incentives and mechanisms

• The incentive package should not be overly complicated but should recognize the

complexity o the situation

• Measures should be coordinated with the GMP road map (and vice versa)

• The incentives will need to consider oreign investment and joint ventures as mecha-

nisms or sourcing investment and accessing technology as well as the degree to

which they should be encouraged through the package

• The incentives should not be token gestures and (based on the evidence) should

represent meaningul and appropriate support levels

• The incentives should not represent an unnecessary subsidy to the private sector

• It will be necessary to refect on the possible “unoreseen” consequences and per-

verse incentives that could result

• Finally, it should be recognized that incentives cannot resolve all things or all people.



69

SOLUTIONS

The importance o business skills, energy, initiative, appetite or risk, and ability to

adjust o entrepreneurs and corporate managers should not be underestimated, un-

dermined or devalued. Further, these attributes need to be enhanced (as described

above) in order to achieve long term sustainable manuacturing across our continent

3.1.4 Insights and guidance on legislative and policy considerations

Policy incoherence has been identied as a major impediment to the development o the

pharmaceutical sector. Later in this chapter, we present a proposed approach or developing

country specic plans or the sector. The consultative approach across stakeholders and di-

agnosis o the policy and legislative landscape, ollowed by development o a shared strategy,

are the means by which incoherence can be identied and resolved.

3.1.5 Technical assistance to regulators

Chapter Two identied the critical role o the regulator in the pharmaceutical manuactur-ing system and pointed to evidence rom a recent WHO study that shows that many o our

NMRAs (or equivalents) are not able to carry out the necessary unctions. The human re-

source development section o this Business Plan identies means by which human capacity

can be developed and more skills brought into the rame. However, as well as human capital

requirements, NMRAs require the inrastructure to ull their mandate to protect the public

and ensure that medicines on the market are quality assured, sae and ecacious.

Thereore, partners within the consortium will oer technical assistance to produce organi-

zational development plans, including the necessary regulatory inrastructure, and to guide

their implementation. This assistance will be provided to both producing and non-produc-

ing countries (within the context o ongoing AMRH activities) in order that all nation stateshave the opportunity to benet rom local sources o high quality production o aordable

essential medicines.

The specic unctionalities on which the regulator in each country should ocus will be de-

pendent on manuacturing aspirations, level o cooperation with other NMRAs, and critical

weaknesses in current systems directly relating to protection o public health. There is substan-

tial expertise within WHO and USP that can be brought to bear and the University o Ghana

Medical School (designated a WHO Collaborating Centre or Advocacy and Training in Phar-

macovigilance (CCATP) in 2010) has developed expertise and a pharmaco-vigilance ‘tool kit’

which could be utilized by the PMPA. However, technical assistance can only deliver progress

in this area i there is high level political commitment to invest in the regulatory authorities.

Accessing unding or such institutional development programmes will be the responsibil-

ity o member states. However, development banks such as the World Bank have inormally

indicated that there would be strong interest in requests rom governments or loans, sot

loans and grants (depending on country status and other priorities) or investment in this

critical public health unction.

3.1.6 Assistance to leading companies

The long term sustainability o treatment programmes or the pandemic diseases will ben-

et rom establishing high quality WHO certied production. There are three companies in

SSA outside South Arica that have reached this standard and a number o others who areworking hard towards this (and other stringent regulatory certication).



70


Fundamentally, this Business Plan adopts a philosophy whereby the whole sector should be

supported and required to improve GMP standards and advocates achieving this through

building capacity across the manuacturing system. However, there is a public health neces-

sity to rapidly increase local production o international standard drugs or the pandemic

diseases. Consequently, the Plan includes support to those leading companies that have

already taken bold steps towards achieving international GMP standards. Thereore, some

plant level support (based on application to and approval rom the PMPA) will be appropri-

ate to assist those that are close to prequalication to reach the requisite standard or prod-

ucts included on the WHO prequalication list. Support will also be oered to those who

already have prequalied products so that they can increase their portolio and access new

markets. Achieving WHO approval alone does not guarantee that products will be procured

so, in addition to assistance on issues such as dossier preparation, these companies would

warrant bespoke plant level assistance to improve their production eciencies. This would

enable them in the short term to be competitive with imports.

Other aspects o the solutions package also provide opportunities or leading companies thathave attained WHO standards, including access to new ormulations developed under the

PMPA and the business linkages platorm, under which advanced companies are more likely

to be interesting partners or leading international players.

3.1.7 New formulations

Initial discussions have been held with Arican (e.g. KEMRI and MUHAS) as well as inter-

national (Purdue and Howard) universities and centres o excellence regarding their interest

in developing ormulations or dissemination through the PMPA to companies that achieve

WHO GMP standards. Initial interest has been expressed and a model by which such work

will be unded and the priorities or ormulation development established is under develop-ment. It is suggested that the PMPA could provide seed unding or the development o

initial ormulations and that these would be disseminated to leading companies using a cost

recovery model.

This component o the solutions package serves to address some critical weaknesses in the

short to medium term, including:

• Expanding the product portolios o leading companies on the continent to include

more than just basic ormulations o old products. This will be an important public

health contribution

• Developing ormulations and then spreading the cost across a range o companies(through charging a ee to each refecting only a proportion o the real cost) would

be a means by which companies could aord to expand their portolios

• New ormulations or Arica are required in some critical areas. Ongoing work by

various Product Development Partnerships is looking to address this but the ANDI

centres o excellence could coordinate with these other entities to develop, or ex-

ample, paediatric ACT ormulations and novel FDCs or adults and children in the

realm o HIV

• Second and third line HIV therapy is largely still under patent protection and pro-

hibitively expensive or many programmes and countries. I TRIPS fexibilities are

properly incorporated in our legislation, then we could utilize these centres o excel-



71

SOLUTIONS

lence to reverse engineer these products and make the technology available to lead-

ing Arican manuacturers. They would then be able to provide such products to the

Least Developed Countries on our continent

There is thus a need to assist industry to access products and ull common technical docu-

ment (CTD) ormat dossiers and to make these high quality dossiers aordable to industry

through a ‘shared cost’ model. The AUC does not intend to provide this service indenitely.

It regards this as an urgent and time limited intervention that will taper o within ve to

ten years as companies acquire the capability and the nancial resources needed to develop

their own products.

It is critical to highlight that access to developed technology will be conned to companies

who have attained international GMP and will be used as a motivation or companies to

work towards international GMP certication. The ollowing key activities will be involved:

• Selecting products or development based on essential medicines lists and secondline antiretroviral medicines

• Signing product and technology development agreements

• Reverse engineering products and working with partners to compile CTD ormat

dossiers

• Setting up technology transer teams and recruiting experts

• Transerring technology to GMP compliant companies

To acilitate commercialisation o the technologies developed by the technology transercentres, licensing agreements will be directly negotiated with various IPR holders or the is-

sue o voluntary licences or international GMP compliant Arican manuacturers. Further,

given that technology transer is not a straightorward matter, it is proposed that, on comple-

tion o the process and ormulation development in various laboratories, the process should

then be transerred to Muhimbili University’s PharmD R & D Lab, whose laboratory-scale

production capacity is up to 5 kg. Ater this, the process would then be transerred to the

Saint Luke Foundation which has a pilot plant with a production scale o 50kg – sucient

to allow bridging rom laboratory production to commercial scale. Where such technology

transer is conducted, it will be necessary or a tech transer team to be established to ensure

that the highly involved and complex process is conducted correctly and that recipient com-

panies receive the appropriate training o production sta.

3.1.8 Partnership and Business Linkages Platform

Chapter Two describes the underutilized opportunities or business relationships and vari-

ous types o collaboration that could strengthen local production. There are a myriad o di-

erent relationships that could be entered into and the Business Plan suggests a platorm via

which these can be brokered. The opportunities or cooperation exist at country and region-

al levels as well as or intercontinental arrangements to be established to the mutual benet

o both/all parties. Country level collaboration between manuacturers can perhaps best be

acilitated through the strengthening o trade associations. Other regional and international

linkages could be acilitated through a Partnership and Business Linkages Platorm.



72


There is evidence as to the mutual benet that various types o relationship could deliver

and o the need or our companies to access various inputs, including know-how, capital,

products and technology. Despite the evident need and the latent interest in this, the num-

ber o relationships that have materialized is limited and the degree to which companies can

access investment (through equity joint ventures, proessional investors, or bank debt) and

know-how (through collaboration or on a ee or service basis) has been reported as a key

challenge.

We recommend that an experienced lie sciences investment and business development pro-

essional be recruited with a dedicated role to manage the various activities that would

constitute the Partnership and Business Linkages Platorm. The Platorm would use various

modalities to acilitate partnerships and business arrangements covering the diverse range

o potential structures and participants. They include:

• A web portal to include corporate proles, details o a pool o experts identied or

various orms o assistance that companies might require, dissemination o inorma-tion about upcoming industry conerences, and publication o materials or in-house

corporate development programmes.

• Active monitoring and engagement in the fow o business deals in the pharmaceuti-

cal sector. This could be achieved through attending conerences and building an

extensive network across geographies and types o institution (e.g. research entities,

manuacturers, service providers, equipment manuacturers, etc.) with the intention

o identiying opportunities or collaboration and promoting opportunities arising

out o pharmaceutical manuacturing in Arica.

• In coordination with consortium partners, monitoring the progress made by the sec-

tor in mobilizing investment and accessing technology, and identiying opportunities

or evolution to the action plan.

• Working with international unding entities such as the Investment Fund or Health

in Arica (IFHA), the IFC’s Health or Arica Fund and the Arican Development

Bank to mobilize enthusiasm or the sector and to encourage adjustments in invest-

ment requirements such as the IFC’s prerequisite or WHO prequalication beore

investing in Arican manuacturers.

• Holding two matchmaking events over the ve year period to provide opportunities

or stakeholders to meet and establish initial interest in working together

• Working with strategy development and implementation processes at country level

to identiy opportunities and recommend approaches designed to acilitate collabo-

ration and to diagnose the investment climate and recommend strategy components

that could improve access to investment (e.g. specic aspects o the incentives pack-

age that investors would need to see in place)



73

SOLUTIONS

3.1.9 Strengthening industry trade associations

Most in-country interventions and inormation dissemination workshops and training ses-

sions will be organized and delivered through large group settings. The AUC and partnerswill prioritise the strengthening o trade associations both at a regional and country level

since they will be valuable partners in the organization o such training programmes and as

inormation dissemination portals.

UNIDO has signicant experience in supporting the ormation and development o trade

associations both in the pharmaceutical sphere and in the wider industrial context. For ex-

ample, it supported the oundation o the Southern Arican Generic Medicines Association

(SAGMA) and has worked closely with the West Arican Pharmaceutical Manuacturers

Association (WAPMA), the Pharmaceutical Manuacturers’ Association o Ghana (PMAG)

and the Federation o Kenyan Pharmaceutical Manuacturers (FKPM). Knowledge gained

through this experience, together with its institutional strengthening skills, will be brought to

bear in assisting the strengthening o industry associations under the auspices o the PMPA.

Trade associations can provide valuable services to their members and can act as a mouth-

piece or the industry to raise awareness o the challenges that exist or areas where interven-

tion by government is needed. The associations are also an important means or dissemi-

nation o best practice. However, it should be recognized that associations are de acto a

collaboration o competitors (creating some internal tensions) and that their job is to rep-

resent the interests o their members. It will thereore be important that, whilst the PMPA

should seek to assist such associations to develop capacity, their undamental mandate

means that, even when strengthened, they will remain independent rom the PMPA core

partners. The PMPA is not a mechanism or promoting the wishes o the private sector but

it can perorm an honest broker unction between parties across public and private sectors.

3.1.10 Indirect impact of the PMPA solutions package and opportunities for col-

laboration

As repeatedly emphasized in this Business Plan, the pharmaceutical manuacturing system

is complex and interventions at a number o key points are recommended. However, this

Plan cannot and should not attempt to resolve every aspect o the system directly. As de-

scribed, access to capital and strong related and supporting industries are also imperative to

both the short term development o the sector and its long term sustainability.

Certain specic initiatives have been articulated to address these particular aspects. For

example, the provision o time limited support, which may include interest subsidies, is

intended to enhance access to capital. Similarly, support to artisans and other relevant ac-

tors is proposed under the training programme. However, these catalytic initiatives need to

be just that - catalytic - with the intention o the plan being to provide the opportunity or

governments to address the key dimensions o the manuacturing system and, in doing so,

to create new enthusiasm or the sector rom associated actors. For example, investors have

expressed caution about the sector or a variety o reasons that credible commitment rom

government in this area (or example, regulatory oversight) would help to address. Those

involved in supportive industries may also see new opportunities or establishing capacity on

our continent (e.g. in Tunisia, it is viable or international equipment suppliers to maintain

oces or servicing their manuacturing equipment given the density o pharmaceutical

manuacturers and the advanced nature o the machinery that is used across the board).



74


Other areas where the PMPA does not look or direct intervention are where there are ongo-

ing initiatives that will provide valuable opportunities or the manuacturing systems on the

continent. For example, ANDI has a network o 32 centres o excellence (and is establishing

more), some o which already have the competencies and requisite skills to become ully

fedged bioequivalence study centres. Through the business linkages activities, and as new

ormulations are developed under the PMPA, these centres will be engaged or carrying out

the clinical component o product development activities. The centres will also be able to

assist regulatory authorities with market surveillance activities where these are weak.

The need or less ragmented markets to enable manuacturers to achieve eciencies o

production is a vital long term requirement or sustainable local production. The AMRH

work being conducted under the overall ramework o the PMPA will be supported, where

necessary, under the activities described in this Business Plan. However, the registration

and regulatory harmonization components are the mandate o the established parties inthis initiative and whilst (as requested) the activities described in this Business Plan can

help capacity building at individual regulatory authorities, the Plan deers to AMRH and its

partners in the realm o regional integration.

Another area where increased enthusiasm or the sector should provide a virtuous eect

is market data. This Business Plan will endeavour to explore means by which data can be

collected and disseminated. However, this is an area where substantial expertise is required

and, in the developed world, the unction is generally conducted by private sector service

providers. The implementation o the PMPA and the growing interest in our markets rom

overseas players may well create a market opportunity or inormation providers. In view

o this, the PMPA will explore interest amongst the likes o IMS Health (through the IMSInstitute) as to whether a viable business case can be made or building a platorm or data

collection and dissemination.

3.1.11 Country level implementation

The previous sections have described the generic solutions to be developed under the PMPA.

The specics o how these are implemented at country level will vary depending on the in-

dividual country context and its ambitions and aspirations. Thereore, as well as providing

a repository o expertise, the Business Plan proposes a process that can assist country level

stakeholders to establish their nation’s ambitions or pharmaceutical manuacturing and

to develop a bespoke strategy and implementation plan or realizing them. Further, once

an implementation plan has been developed, the PMPA will (as required) escort the actual

execution o the dierent components o the Plan through accessing the requisite expertise

and coordinating the implementation in collaboration with national level stakeholders. De-

veloping national level strategies requires processes to be adopted so that the complex array

o considerations and perspectives can be incorporated. Whilst the specics will vary, an

indicative approach that could be adopted at the country level is described here.

In Chapter Two, a schematic representation shows the complexity o the pharmaceutical

manuacturing ‘system’ and identies the roles o the many types o stakeholders involved.

Historically, it has been suggested that there are mutually exclusive, non-compatible, per-

spectives amongst this diverse range o actors. However, experience suggests that, through

a consultative process and a thorough diagnosis o the specic objectives, mandates andchallenges aced by individual actors, it is possible to develop a comprehensive strategy that



75

SOLUTIONS

can be endorsed by all parties. Experience also suggests that high level political engagement

rom the outset is critical i rapid progress is to be made rom the time o initial engagement

between parties through to strategy development and implementation.

The nature o the process or designing and implementing a strategy at national level is

thereore a critical part o the ‘package’ o solutions. As with all other areas o the PMPA, the

specics will depend on the context. However, an indicative approach is described below.

Stage 1: Project set up

On receipt o an invitation rom the government o a country, PMPA representatives will have

initial discussions with the key stakeholders to determine an agreed approach or diagnosis,

consultation and strategy development. The key stakeholders are likely to include the Minis-

tries o Health, Industry, and Finance (or their equivalents), the NMRAs, academia, and indus-

try representatives. The discussions would likely include the establishment o a working group

with high level representation rom the key stakeholders. This group would provide oversight

or the development o the strategy and its implementation and would also establish the activi-

ties to be conducted and milestones to be set and draw up a timeline or their completion.

The stages now outlined would be dependent on these initial discussions, so, once again,

they should be seen as indicative rather than cast in stone.

Stage 2: Situational analysis

A situational analysis will involve collection o hard data on, or example:

• Health budgets

• Pharmaceutical expenditure

• Current industrial policy rameworks and industry development support, as well as

other pertinent policies and legislation such as IPR and national procurement rules

• Taxes and taris applicable to the industry

• Imports and exports

• Range o products produced

• Access to capital considerations (such as interest rates, currency volatility, equity

markets)

It will also include a qualitative component in which the dierent stakeholders (including

entities such as civil society and the donor community) are engaged to garner their perspec-

tives on the pharmaceutical sector, including the major challenges aced.

Consequently, the situational analysis will capture key hard data but, more importantly, will

be a consultative process whereby the dierent perspectives and the consequent implica-

tions and concerns about strategic direction are captured at the outset.



76


In collaboration with the working group, PMPA representatives would produce a report on

the ndings to be submitted to key stakeholders or consideration prior to a ‘round table’

where stakeholders would discuss the ndings and initial proposals on ways orward.

Stage 3: Detailed strategy design

Subject to the conclusions o the round table, the expertise outlined in the PMPA ‘solu-

tions package’ would be mobilized to work with specic stakeholders to tailor a package

o interventions based on the strategic vision articulated by the round table. The detailed

work (such as developing a package o incentives or determining the needs o the regulator

regarding its capacity) will need to be conducted separately. However, a key unction o the

PMPA representative will be to ensure that the specic deliberations are put together in a

manner that ensures that they are mutually reinorcing and represent a coherent holistic ap-

proach to developing the sector.

For example, detailed work on industry incentives that may need to take place with the

Ministries o Finance and Industry should be coordinated with the detailed work with the

regulator and industry on establishing a GMP road map. The incentives (and other aspects

o the strategy) will need to be aligned with the requirements o the road map. This is the

case both rom a timing perspective and in terms o reinorcing the regulatory requirements

whereby incentives may be triggered upon achieving certain milestones. Unless this is done,

progress at the implementation stage is likely to be highly problematic.

Where there is an established industry, subject to approval by the regulator and other gov-

ernment bodies, a diagnostic (as opposed to regulatory) GMP audit should be considered at

this stage. This will provide a baseline or purposes o monitoring and evaluation and a basiso understanding or developing an upgrading schedule and programme or the country.

A generic GMP road map will be developed as a central solution but, unless it is tailored

according to the specic country reality, its value may be compromised. Similarly, the risk

assessment o the EML will be a guide and local considerations will need to be refected in

any specic limitations adopted on manuacture.

This detailed strategy design phase will produce an overarching articulation o the strategy

and an implementation plan. This plan will, where appropriate, involve specic organiza-

tional development plans or the regulator and the industry association. It will also identiy

any policy or legislative requirements that need putting in place. The strategy will involve a

detailed cost benet analysis or consideration by government, whose authority at the high-

est level would be required to move to implementation. Following consultation with govern-

ment, it will also include indicators by which progress towards the vision can be assessed.

Stage 4: Implementation

The pharmaceutical industry is complex, capital intensive, and, at the plant level, calls or

detailed expertise and sophisticated processes, equipment and acilities. I these are not

already in place, they will take time to develop. Similarly, the capacity o the National Medi-

cines Regulatory Authority is critical to the development o the industry. However, putting

in place the appropriate regulatory systems is likely to require enhanced human resources

and organisational development, neither o which can take place overnight. Consequently,



77

SOLUTIONS

the implementation phase o the work will need to recognize that momentum and political

will must be maintained over a period o years.

It is expected that, through coordination under the PMPA, the partners will be able to move

rom talk to demonstrable action at the country level and that this will be an important

component in maintaining momentum. Appropriate government structures should also be

established and specic aspects o the national pharmaceutical industry development plan

should be incorporated into the perormance metrics or organizations and individuals.

In Chapter Four, a proposed structure or implementation o the Business Plan is outlined.

It recommends that regional PMPA coordinators should oversee activities in individual

countries that would be managed on a day to day basis by national experts. It would be the

role o these regional coordinators to access the expertise o the consortium and the generic

solutions package in order to ensure that national level implementation plans are conducted

as approved by the governments o each country. The representatives o the PMPA based at

regional and country levels would also, where invited by the Government, be responsible orensuring that developments are coordinated. In addition, they will be empowered to identiy

specic challenges present in any particular country and to mobilize expertise under the

PMPA to address them.

The specic activities carried out under the implementation phase will take place over a

period o years and will represent combinations o generic solutions described earlier and

tailored to the country context as well as bespoke solutions where necessary.

This central package o solutions is intended to provide the fexibility to advise and as-

sist countries acing very dierent contexts. Whilst the complete range o activities may

be required in some hubs that aspire to enhance manuacturing, other aspects may not be

relevant in all contexts. For example, the GMP road map component will have no relevance

to a country such as Botswana, which is looking to establish pharmaceutical manuactur-

ing capacity rom scratch and thereore does not require a quality upgrading road map.

Similarly, the availability o a central repository o expertise will enable the PMPA to assist

other non-producing countries or those with very small pharmaceutical sectors to consider

their options. For example, technical insights and understanding o the business and public

health aspects o local production could be mobilized to support countries such as Chad

and others to determine whether they wish to develop a strategic asset in this space and

to develop the model (perhaps a Public Private Partnership - PPP) by which one could be

achieved.

3.2 other actiVitieS

In addition to the generic solutions package, there are other initiatives proposed by this

Business Plan including the need or certain activities at the sub-regional and continent

level, as well as urther work on developing strategies or parts o the Essential Medicines

List and production value chain not already covered by the central solutions.

The manuacturing o ormulations is part o a value chain which extends back to the pro-

duction o raw materials including APIs. The core o this Business Plan looks at enhancing

the ormulations component o the value chain on the continent. However, long term sus-

tainability, competitiveness and innovation aspirations need to take into account enhanced



78


API capabilities at the continent level. In the shorter term, there are also likely to be oppor-

tunities or local production o other inputs.

This Business Plan covers various ormulation types but ocuses largely on small molecule

products. There are other products on the Essential Medicines List or which local produc-

tion is very desirable, particularly blood products.

3.2.1 Initiatives at continent level

There is a growing interest in local production o generic pharmaceuticals amongst our

development partners, an evolution in approach that is to be welcomed. We established the

concept o the PMPA as early as 2005 and the plan itsel was endorsed in 2007. As em-

phasized earlier, the PMPA respects the sovereignty o individual nations to take decisions

and to work bilaterally with institutions as desired. Similarly, the autonomy o our Regional

Economic Communities is also respected by this Business Plan and interventions at both

levels under the PMPA would be subject to invitation rom the respective political bodies.

However, the AUC will provide a central hub where those interested in continent level plans

which impact on the pharmaceutical industry will be able/expected to discuss their plans

and to align behind the PMPA. For example, the AUC, working with a consortium o part-

ners able to provide expertise and insights on many ronts, would have been an appropriate

partner in advising on the design o the AMFm, which has implications or the sustainability

o our local industry. The malaria community is to be congratulated that it recognized this

issue and took steps to address the concerns o local industry and seek solutions through its

conerence in Nairobi.

In uture, those working on public health initiatives and policy changes at, or example, theGlobal Fund, will be able to seek input rom the AUC (with advice rom the consortium)

when they consider the impact o initiatives on the long term sustainability o local produc-

tion. For example, the Global Fund’s market dynamics committee may wish to coner with

the AUC and its partners as it considers procurement policies that could assist in increasing

access to essential medicines and looks to transition to a uture model where we will take an

increasingly large share o the responsibility or providing essential medicines or our people.

The TRIPS fexibilities issue is another area where a continent wide position and the ability

to speak with one voice will have increased weight in discussions on extending the fexibili-

ties. Working together with international organisations like ARIPO, UNDP and UNCTAD,

the PMPA partnership will join the eort to lobby or the extension o the January 2016

TRIPS fexibilities window. The partnership will also mobilize all those involved to lobby or

the simplication o requirements to exploit the fexibilities given that the current onerous

and time consuming process has seen many companies either abort or elect not to partici-

pate, even when an opportunity presents itsel.

3.2.2 Regional level initiatives

There are a number o legislative, policy and trade issues that need resolving at the regional

level. They include the regional ramework or incorporating TRIPS fexibilities, registration

harmonization, and strategy rameworks under which national level progress can be made.

Equally important is the need or cooperation to maximise the benets o pharmaceuti-

cal trade among our countries and to minimise the impact o protectionist policies amongpartner states that could stand in the way o mutual benet and progress. In view o this,



79

SOLUTIONS

the consortium o partners would be available to assist regions to resolve some o these is-

sues, subject to invitation, and could orge links between national level strategies and the

rameworks put in place at regional level. Moreover, where regional level strategies are as

yet incomplete, the AUC and its partners could also work with the regional departments o

health, industry and trade to assist various counterparts to work together to establish policy

coherence at the regional level.

3.2.3 Regulatory harmonization

Lack o regulatory harmonization presents a serious challenge to manuacturers and inad-

vertently leads to reduced access and higher prices due to reduced competition when some

companies opt out o certain markets. Resolving this conundrum is thus critically impor-

tant. There are a number o very good ongoing initiatives under the auspices o the AMRH

initiative led by NEPAD among others.

The AMRH initiative has been working in the area o medicines regulatory harmonizationsince 2006 and has to date developed a number o regional proposals or harmonization in a

number o RECs. The harmonization processes or RECs like the Southern Arican Devel-

opment Community (SADC), Economic Community o Central Arican States (ECCAS)

and Economic Community o West Arican States (ECOWAS) are at an advanced stage and

the East Arican Community (EAC)’s plan has been nalized and was ormally launched in

March 2012. Lastly, the AMRH has also been mobilizing political support and the nancial

and technical resources needed to bring this to ruition.

Given that the lack o capacity in some NMRAs is partly responsible or the low levels o

trust among respective Authorities, the training o regulators is a key intervention on which

the partnership will ocus. The remaining harmonization initiatives will continue to be ablymanaged by the AMRH and it is envisaged that the role o this Business Plan will be con-

ned to supporting the development o country policies and strategies conducive to regula-

tory harmonization and to oering support to the activities o the AMRH through ongoing

technical assistance and training and capacity building o NMRA employees.

3.2.4 TakingadvantageofTRIPSexibilities

One o the key policy and legislative changes needed in order to benet our continent, its

patients and local industry is in the domain o intellectual property rights. Most countries

have ailed to take advantage o current opportunities presented by TRIPS fexibilities. A

ew have enacted the TRIPS provisions but the common consensus is that the requirements

are too onerous and too time consuming. Exploitation o the provisions is only permissible

i they are written into national laws yet many LDCs have not even incorporated TRIPS

fexibilities into their national legislation or the reasons cited above. In act, not only have

LDCs not incorporated the fexibilities, some actually have ar stricter IPR than required

under the TRIPS agreement.

Furthermore, negotiations to extend the window period beyond January 2016 should be

intensied and Arica should push or another ten year transition period. The AUC rmly

believes that the TRIPS fexibilities present the same opportunity or Arican pharma as did

the Indian Patent Act o 1970 or Indian industry. The Commission is convinced that ull

exploitation o the fexibilities would lead to a transormation o local industry. Thereore,

working together with ARIPO, UNDP and UNCTAD, the PMPA will:



80


• Lobby or simplication o the means by which fexibilities can be exploited. The

current system is onerous and wasteul

• Advise and assist governments to revise and amend their patent laws to incorporate

the fexibilities

• Assist international GMP compliant Arica based companies wishing to make ull

use o the fexibilities in order to supply LDC markets with the documentation and

in negotiating the legal mineeld

• Work with RECs to harmonize national patent laws to acilitate exploitation o the

fexibilities or the benet o the continent

This initiative creates an avenue to partner with European and North American companies

who oten develop molecules considerably ahead o time. Some o these companies have

already developed molecules whose patents will expire in 2017 and beyond. Given that they

have already committed the unds and invested in product development, they could transer

the technology to international GMP compliant Arican manuacturers who can then ex-

ploit the TRIPS fexibilities and market these much needed drugs in LDC markets.

3.2.5 API production

Measures to enhance API production capability on the continent are worthy o detailed

consideration in view o their potential to impact on the sustainability o production and

to become an asset or innovation (e.g. through novel synthetic pathways). The level o API

production on the continent at the moment is minimal but due consideration will be given

to enhancing capabilities and the models by which this could be achieved (such as the PPP

approach with Lonza in RSA) as a discrete part o the PMPA.

Whilst the production o various APIs remains a long term ambition, in order to exploit the

TRIPS fexibilities, our continent will need to develop the competencies to manuacture its

own APIs or products like second line ARVs. This is necessary given that the large Asian

bulk drug producers would, in the absence o voluntary licences, be unable to manuacture

and supply API to local ormulators. Similarly, the owners o the intellectual property would

be unlikely to provide API to our manuacturers even though our market contributes only

a miniscule amount to their revenues or any given products. Our partnership with leading

academics who have the expertise and have already developed a number o environmentally

riendly, more ecient and less costly processes or developing various molecules will be

very valuable.

3.2.6 Blood products

The collection o blood, and the separation o dierent components into plasma, various

blood actors, platelets and red blood cells is a specialized process that has limited correlation

to the generic pharmaceutical production which is the ocus o this Business Plan. However,

the availability o blood products in Arica would benet greatly rom local capacity or col-

lection, ractionation, etc. WHO is proposing to conduct easibility studies on the expansion

o blood product production on the continent. This work is welcomed by the AUC and, once

initial ndings are developed, could be incorporated as a component o the PMPA.



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SOLUTIONS

3.2.7 Vaccines and biological products

An area that will require urther work is establishing a model or enhancing the production

o human vaccines. Vaccines are a cornerstone o any primary healthcare programme andare an essential tool in preventing disease. The signicance o vaccines in public health in

general, coupled with the requirement to be able to respond rapidly to pandemics (note the

limited availability o fu vaccines during the 2009 infuenza crisis) mean that developing

our own capability to provide or our vaccine needs will be explored. The Arican Vaccine

Manuacturers’ Initiative is currently being ormulated. Historically, much emphasis has

been placed by international agencies and donors on the supply o vaccines and in doing so

many lives have been saved. However, we should build production capacity on the continent

so that, in the medium to long term, we will be able to rapidly respond to our needs and will

have a sustainable source o high quality products to address vaccine preventable diseases.

Developing our continent’s ability to produce biological products also needs urther con-

sideration. A number o important medicines based on recombinant DNA technology weredeveloped with the advent o biotechnology in the latter part o the 20th century and the

eld continues to be a source o novel treatments. In the realm o diabetes, recombinant

human insulin and epithelial growth actor are critical or managing the disease and associ-

ated symptoms; biological products have improved ecacy or many diseases compared to

some earlier generation treatments (e.g. tumor necrosis actor inhibitors or the treatment

o rheumatoid arthritis and betaintererons or treating multiple sclerosis); and a number o

the o latest generation cancer treatments are biological products (e.g. trastuzamab – trade

name Herceptin – a monoclonal antibody or the treatment o breast cancer). As ‘Western’

and non-communicable diseases become more prevalent having aordable, quality assured

sources o such products and others will be vital or providing our people with the best

treatment options or some emerging public health issues. We currently have very limitedcapacity or production o biological products and will need to consider dierent models or

the development o this segment o the industry given the unique manuacturing, distribu-

tion and market considerations that apply. Biotechnology may also hold the key to treating

uniquely Arican diseases and provide an option or optimizing traditional medicines, thus

building R&D expertise in this eld as well as production capacity should be part o the

objective.

3.2.8 Traditional medicines

Our continent is home to a large and diverse plant lie, much o which has ormed the basis

or many o our traditional medicine systems. It is also a act that these plant based remedies

remain the treatment o choice or many people in Arica. The AUC is acutely aware o this

and, o course, the PMPA itsel recognizes the important role that traditional medicines play

in healthcare delivery on our continent. Whilst research has been carried out on some o the

most well known treatments, and notwithstanding the act that some have even been com-

mercialized by international companies, there is an urgent need to accelerate research into

the extensive fora, especially those or which medicinal claims are made.

This process would lead to the codication o the traditional medicines and an elucidation

o properties, side eects and related aspects o the plant lie, as well as the creation o a li-

brary or these ndings. The AUC is very aware o the potential value o such medicines and

believes that the diverse Arican fora may well provide the world with another wonder drug

to replicate the importance o artemisinin, which has been used in traditional Chinese medi-cine or centuries. The USP is proposing to establish a Medicines Compendium or drugs



82


used outside the US and this would include traditional medicines. Moreover, initial discus-

sions have taken place with experts in the eld about approaches that could be adopted to

enhance availability and consistency o eective traditional Arican remedies.


The key messages rom this Chapter include:

• The heterogeneity o contexts across our continent requires that a solutions package

is designed to be fexible and able to assist countries at various stages o development

in the pharmaceutical eld and with diering ambitions

• The various dimensions o the pharmaceutical manuacturing system and the ‘inter-

connectedness o issues’ mean that implementation o dierent ‘solution modules’

in a country must be coordinated as part o a holistic strategy or development o

the sector

• The Business Plan proposes a Generic Solutions Package across dimensions that in-

clude approaches or strengthening human resources, guidance on incentives to the

industry, the utilization o a GMP road map and associated risk assessment o the

EML, brokering o partnerships and business linkages, and assistance to strengthen

regulatory capacity

• A process or developing and implementing national level strategies upon invitation

rom governments would likely include initial discussions with key stakeholders, adetailed consultative and diagnostic process, detailed strategy design, and imple-

mentation

• This process and the solution packages could be implemented in all countries rang-

ing rom those with no ambition to enter into manuacturing but with a desire to

improve regulatory oversight and to benet rom high quality local production rom

neighbours to advanced countries in the North who wish to urther develop their

industries or public health and economic development objectives

• This Business Plan espouses an approach whereby the industry as a whole is as-

sisted and required to improve standards to eventually achieve international GMP.

However, in the short term, individual assistance to leading companies to prequaliyproducts is also a critical requirement

• There is the need or novel ormulations such as new FDC ARVs and paediatric

ACTs. The opportunity also exists to take advantage o TRIPS fexibilities through

reverse engineering o second and third line ARVs. In view o this, research centres

will be assisted to develop such products or transer to companies that meet inter-

national GMP standards

• Implementation o solutions and genuine commitment rom partners and govern-

ments will lead to indirect improvements in the business context or the pharmaceu-

tical industry by, or example, making it more attractive to investors and through the

establishment o supporting services and industries



83

SOLUTIONS

• As well as country level activities, this Business Plan identies some additional areas

o work at regional and continent level (such as lobbying or an extension to the

TRIPS fexibilities) and identies associated areas such as API production, blood

products and traditional medicines where ongoing work will need to be built upon

and insights incorporated under the PMPA



84



85

IMPLEMENTATION PLAN

4. iMPLEMENTATiON PLAN

The earlier Chapters o this Business Plan have detailed the ambitions or pharmaceuticalmanuacturing on our continent, outlined the current situation in the sector and the chal-

lenges and opportunities in realizing the vision o the PMPA. They have also proposed an

indicative ‘package o solutions’ that will be developed to address the complexity o the vari-

ous dimensions o the pharmaceutical manuacturing system in a holistic and coordinated

ashion. This package o solutions will represent a central repository o expertise that can be

tailored to implementation at the country level.

The main thrust o the document is that, whilst ambitions and aspirations vary amongst our

member states, there are generic themes that apply to a greater or lesser extent across coun-

tries that are actively engaged in pharmaceutical production or in those that may wish to en-

ter the sector. Critical to the design o this proposal or implementation is that the solutions

required cover a diverse range o skills, expertise and capabilities which no one organisation

or entity can provide. In view o this, a consortium approach, with core partners contrib-

uting to the design and implementation o the solutions package, is recommended. Initial

discussions have taken place with organisations identied as having the critical expertise

and mandates to cover the range o requirements. During the initial stages o implementa-

tion, detailed discussions will be necessary to lay the oundations o the consortium and to

establish the specic roles and responsibilities o the dierent parties.

I this Business Plan is to translate into genuine sustainable progress to the benet o our

continent, it is imperative that the partners (both Arican entities and international develop-

ment bodies) within the consortium genuinely collaborate over an extended period o time

and that a positive dynamic is established between the various organisations. The achieve-ment o a unctioning consortium will be dependent on a number o actors, including:

• The degree to which partners have the opportunity to provide input into the details

o what this Business Plan will deliver and how this will be achieved

• The availability o central resources to und the activities o various parties under

the PMPA

• Establishing mutual trust between organisations and between the individuals who

represent them

• Establishing the legal basis or the consortium

• Developing a detailed shared work plan with roles and responsibilities identied

along with the measures by which organisations will be held accountable or their

contribution

• The governance and reporting structures or the consortium

• The degree o fexibility or the work plan such that learning over time can be in-

corporated and activities adjusted according to the evolving reality on the ground

(subject to oversight rom the PMPA governance structures)

• The central authority o the Arican Union Commission as the leading entity which‘owns’ the plan on behal o our member states



86


This implementation plan is crated with a clear recognition o the multiplicity o eorts

and initiatives across the various RECs and countries on the continent. Whilst it recognizes

the need or some regional interventions, it also appreciates the crucial importance and

centrality o country level implementation. Key to real progress at the country level will be

the coordination o activities on the ground and the collaboration between a diverse range

o national level stakeholders. As well as coordination at the central level, this Business Plan

proposes a mechanism by which (subject to invitation by individual member states) agents

acting on behal o the PMPA will be able to ull an ‘honest broker’ role as national level

stakeholders come together to ormulate, develop and implement a shared national strategy

or the development o the ‘Pharmaceutical Manuacturing System’.

The PMPA is an Arican initiative and is the responsibility o the AUC on behal o our

member states. We have invited UNIDO to be a core partner in accelerating the implemen-

tation o the PMPA and it has agreed to continue in this role as we move to implement this

plan. UNIDO will also work with us as we set up the consortium o partners and seek to

mobilize the necessary resources.

Moving orward, it will be imperative that the consortium is a partnership under the leader-

ship and authority o the AUC. UNIDO has been asked to provide planning and coordina-

tion unctions at the central and eld level as part o the role it will ull in this partnership.

The Organization has indicated that, backed by nancial support rom the German govern-

ment, it will be sel-nanced as it works with us through the initial phase o the Business

Plan.

In the longer term, central unds (mobilized or the implementation o the PMPA) will be

allocated and disbursed according to the shared work plan developed by the partnership on

condition that this work plan is endorsed by the governance structures o the PMPA/AUCand the respective donors.

A phased approach to the implementation o the Business Plan is envisaged. This chapter

rst describes the various phases to be worked through. It then details specic components

o implementation such as the nature o the resources required, a proposed structure, ap-

proaches or engaging the broad range o stakeholders operating in this eld, and nally

discusses the monitoring and evaluation dimension o the plan.

4.1 PhaSeD aPProach to imPlementationFour main phases or the implementation o the plan are envisaged:

• Set up phase

• Pilot phase

• Scale up phase

• Full scale implementation

The ollowing sub-sections describe in more detail the activities to be conducted duringeach phase. It should be noted that a strict linearity is not anticipated and, or example,



87

IMPLEMENTATION PLAN

given that a ew countries and regions have already developed plans that are ready or ur-

ther elaboration, the pilot phase is likely to overlap with the set up phase. Moreover, whilst

it has been designated as a specic ‘phase’, perhaps an alternative way o perceiving the pilot

phase is that it provides or the launching o ull scale implementation in countries that have

already developed plans o action and where the solutions developed in the set up phase can

be implemented without the need or the consultative process required in most countries.

4.1.1 Set up phase

The set up phase will involve the ollowing key aspects:

• Building the consortium and establishing its legal basis

• Detailed discussions to develop a shared work plan

• Resource mobilization

• Development o solutions or which urther work is required (e.g. GMP roadmap,

EML risk assessment, detailed design o syllabus or HR development across the

dierent dimensions o human capital requirements)

• Identication o member states and, i appropriate, RECs who wish to actively en-

gage with the PMPA

• Identication o experts and service providers

• Interaction with other stakeholders involved in activities related to pharmaceutical

manuacturing in order to derive inputs and identiy opportunities or collaboration/alignment with the PMPA

• Setting up eld representation or the PMPA

Establishing the central consortium

Initial discussions have taken place with prospective partners in the central consortium that

would assist the AUC in the implementation o this Business Plan. This consortium should

include partners with sucient expertise to cover the ull range o disciplines required or

the pharmaceutical manuacturing system, including regulation o the industry, industrial

development, GMP, human resource development, and ormulation development/R & D,

as well as political authority in the realm o public health. It will comprise Arican organiza-

tions and international development partners but should consist o a limited number such

that it does not become unwieldy. Consequently, whilst some overlap in expertise is inevi-

table, duplication o expertise will be limited.

The introduction to this chapter identied some o the aspects needed or the consortium

to become a genuine partnership with positive internal dynamics so that it is able to eect

change. One component o this is establishing the legal basis or the consortium and urther

legal advice will be required as to the specics o the appropriate legal structures. Partners

will also be expected to sign memoranda o association or letters o agreement that identiy

the undamental role that each organization will play.



88


Whilst a legal basis or the relationship between the parties is required, it should also be

borne in mind that extended deliberations should be avoided as there is an urgent need or

progress on the ground. The legal documents will outline the core role o each constituent

but will in all likelihood also reer to the action plan or identication o the detailed ac-

tivities to be undertaken by each partner. Such an approach will enable fexibility since the

action plan should be a ‘living document’ that will be reviewed regularly with substantive

changes submitted to the Technical Committee and respective donors or approval. Further-

more, it should acilitate a relatively ecient approach to establishing the legal basis or the

consortium.

Developing a shared action plan

Once agreements in principle have been reached with partners, the development o a shared

action plan will be a top priority. Initial bilateral discussions will be held between the AUC/

UNIDO and dierent potential partners prior to a proposed retreat when the consortium

will meet to discuss and agree on the details o the shared action plan. This plan should rep-

resent a common understanding o the detail required or each component o the solutions

package and will probably include indicative (depending on resource mobilization progress)

timelines or production o concrete deliverables. The specics o the action plan will enable

a detailed understanding o the magnitude, nature and timing o resource requirements and

will eed into the resource mobilization activities conducted by the AUC and UNIDO.

Resource mobilization

A description o the resource requirements or the Business Plan is given later in this chap-ter. AUC/UNIDO will take the lead in developing and implementing a resource mobiliza-

tion strategy. This will involve initial contact with donors to explain the philosophy and

recommended approach o the Business Plan or the PMPA and to explore their level o

interest. This Plan provides indicative gures as to the timing and magnitude o resources

required over the next ve years and this will orm the basis or discussions. However, the

action plan will need to be nalized beore detailed negotiations can take place and in order

to establish the monitoring and evaluation requirements o the unders o this initiative.

Further development o the solutions package

The current status o the individual components o the indicative solutions package varies.

For example, deep insights into regulation o the industry are inherent within the expertise

o potential partners such as WHO, although the implementation o this Business Plan will

require the scaling up o ongoing activities and identication o technical expertise that can

be mobilized (probably on a ee or service basis) in order or technical assistance (TA)

across dierent countries to be delivered in parallel. Similarly, UNIDO has extensive expe-

rience in working with countries to develop strategies across the manuacturing system and

a proposed stepwise approach to engaging with stakeholders is described in this document.

However, other aspects, such as the development o a generic GMP roadmap, need more

work. WHO has (in another context) identied the risk assessment o the EML as being a

potential activity or the near uture and discussions as to how this can be supported by the



89

IMPLEMENTATION PLAN

PMPA will be necessary. Various academic institutions in Arica have the capability to de-

velop new ormulations but the products to be developed will need prioritizing. A compre-

hensive syllabus or developing human resource capacity across the manuacturing system

largely exists across dierent stakeholders. However, the critical issue is to ensure coordina-

tion o the syllabus in such a way that it builds on itsel over time. This will require urther

deliberation during the set up phase.

In view o this, during the set up phase it will be necessary to rene existing tools and ex-

pertise as well as to ensure that substantive progress is made on certain specic elements o

the solutions package.

Identifcation o interested member states and RECs

We will invite expressions o interest rom our member states to establish which countries

and possibly RECs would like to work with the AUC and its partners. The Business Plan

is designed to benet all countries on our continent whether through strengthening the

manuacturing system itsel or through providing secure sources o high quality aordable

medicines across much o the Essential Medicines List. The PMPA is not intended to be

a unding mechanism or public or private sector investment but is a proposed package o

technical assistance that would be provided to enable countries to ull their ambitions in

this eld and to help develop and implement tailored strategies that take into account the

specic context o a country or region.

For countries that do not seek to become manuacturing hubs, the PMPA would look to pro-

vide guidance on improvement in regulatory oversight to enable them to take advantage o

high quality regional sources o supply. Such activities would be conducted in coordinationwith other ongoing initiatives (such as the AMRH work and regional strategies) and will not

seek to override these endeavours. However, improved market oversight is a key requirement

i the benets o local production are to be realized and the AUC and its partners would

seek, where necessary, to increase the emphasis on this aspect and to mobilize the requisite

support such as loans rom development banks or investing in regulatory inrastructure.

Subject to the number o requests received, as well as available resources and the timing

o those resources, it is likely that some means o prioritizing requests will be necessary.

Depending on the volume o demand, the AUC would seek guidance rom the Technical

Committee as to the criteria to be applied when scheduling support or individual countries.

Ultimately, the prioritization would only be relevant during the set up, pilot and scale up

phases as, at ull implementation (subject to available resources), the AUC and its consor-

tium partners would look to work with all countries requesting support to establish their

priorities and develop and implement the strategy or achieving them.

Identifcation o service providers

In addition to the consortium o partners, there will be a need to engage external expertise

rom service providers in the realm o, or example, improving production eciencies, ad-

vice on accessing the best technologies, and so orth. The AUC will, through the business

linkages platorm, identiy a number o experts who are available to work with trade as-

sociations to disseminate best practice and, secondly, to assist companies willing to pay or



90


additional in-house training which would build on the sector level modules and materials

developed or manuacturers to utilize.

Interaction with other stakeholders

O necessity, the size o the central consortium will be kept to a limited number o organiza-

tions. However, many entities are active in areas related to local production and their part-

nership with the PMPA and alignment with its approach will be critical to the success o this

endeavour. Thereore, as well as the establishment o a consortium, mechanisms by which

other partners can be engaged or inputs and or coordination will be explored. In the initial

set up phase, or example, bilateral discussions between the AUC (and/or UNIDO acting

on behal o the AUC) and the many entities involved would be appropriate. A stakeholders’

conerence would also be a possible mechanism or building awareness, seeking inputs and

allowing or constructive debate as to how dierent parties could align with the overarching

objectives o the PMPA.

It is also likely that, although not members o the central consortium, other stakeholders

could become directly involved in implementing activities through direct unding o their

activities rom central PMPA resources. For example, there are a number o academic orga-

nizations in Arica that have expressed interest in working with the PMPA and it is essential

that Arica’s academia should be represented within the consortium. However, it will not be

possible to have all such institutions represented even though they may be conducting criti-

cal unctions under the PMPA (training, ormulation development, etc.).

Setting up feld presence or the PMPA

Experience suggests that there is a need or an ‘honest broker’ unction at the country level

to bring dierent stakeholders together to develop shared strategies or the manuacturing

system. It has also been established that such collaboration requires close escorting so that

momentum is built and maintained. It is thereore proposed that a dedicated (though mini-

mal) eld presence be established, with coordinators covering a number o dierent coun-

tries. A proposed structure or implementing the PMPA is elaborated later in this chapter.

4.1.2 Pilot phase

Given that various organizations have already been working in some o the identied priorityareas in some countries, the package o PMPA solutions will be mobilized in those territories

where there is already broad consensus among stakeholders about what needs to be done.

USP, UNIDO and WHO have, or example, all been actively engaged in Ghana and Kenya

on various dimensions o the local production agenda. Furthermore, through a stakeholder

consultative process, strategies have been developed that are supported by the dierent na-

tional actors across public and private sectors. In view o this, these countries would be well

positioned to benet immediately rom implementation o solutions and could thereore be

considered or assistance as part o the pilot phase.

It should be highlighted that the pilot phase is not envisaged as reaching a ‘conclusion’ prior

to scaling up o activities as progress in the pharmaceutical sector will materialize over an

extended timerame. However, there will be the opportunity to learn how the consortium



91

IMPLEMENTATION PLAN

works at the country level and to seek to adjust the model as experience is gained. It is in-

tended that the scale up phase (subject to resources) will take place in parallel with activities

in these countries although strategy development at the national level will be needed prior

to detailed implementation.

4.1.3 Scale up phase

Ultimately, the PMPA is designed to be a mechanism by which real progress can be made

on the ground in our member states. Many countries do not have strategies or the pharma-

ceutical system. Consequently, prior to delivering change, national (and regional) strategy

development exercises will be necessary.

In view o this, the scale up phase reers largely to the need to enter into detailed strategy

design at the country level prior to implementation. Subject to demand rom our member

states, resource mobilization, and the level o capacity available or eld level coordination

under the PMPA, it is likely that some means o prioritizing countries will be necessary asalready pointed out. The Technical Committee’s guidance on this matter will be sought.

However, it is worth reiterating that such prioritization is purely a scheduling issue and that

the development o national level strategies or all interested countries would be initiated as

expeditiously as possible.

4.1.4 Full scale implementation

Some countries have already developed strategies that can be built on through a detailed

implementation planning process ollowed by the implementation itsel. Thereore, it is pro-

posed that the PMPA move rapidly to conduct this work under what is described as the

pilot phase. Full scale implementation will eectively be the phase when strategy designrom other interested countries comes on stream and the PMPA is mobilized to deliver the

tailored package o solutions in-country.

4.2 StaKeholDer engagement

This section identies the broad range o stakeholders and reviews the steps needed to en-

gage them and align eorts behind the PMPA. It will also outline a plan or maintaining the

channels o communication with all stakeholders.

The AUC recognizes that one o the reasons why various pharmaceutical development ini-

tiatives have not achieved the desired success is the lack o participation and coordination

across various stakeholders. To ensure that there is widespread support and buy-in rom all

stakeholders and that their activities are consistent with objectives, the AUC will seek to in-

volve all interested parties throughout the various phases outlined in the Business Plan. The

Commission has thus undertaken a stakeholder mapping and analysis which takes into con-

sideration the current initiatives in place to support local manuacturing on the continent. It

also includes direct beneciaries such as industry trade associations, individual companies

and the patients who will benet rom the realization o the PMPA’s goals.

We propose to develop a plan to establish and maintain channels o communication with

all stakeholders such that they are kept inormed and can provide insights and eedback on



92


their activities. We at the AUC will also be a ocal point with which any organizations whose

activities in Arica are relevant to the sustainability o pharmaceutical manuacturing on our

continent will be able to/expected to engage. In this way, we will seek to ensure that policy

incoherence at the continent level as a result o uncoordinated initiatives does not material-

ize. The AUC is nonetheless aware o a number o good initiatives on the ground and has

no intention o interering with bilateral initiatives at a country or regional level that have

been entered into by our member states or RECs; we will only seek to augment eorts on

the ground and not to supplant them.

The Arican Union Commission will thereore develop a stakeholder engagement strategy

which will likely involve communicating inormation on developments under the PMPA

and the establishment o mechanisms by which stakeholders can come together to provide

eedback and to discuss their activities under the overarching PMPA ramework. Table 4 lists

some o the present and potential stakeholders (but is by no means the denitive list) and

the areas in which they are active.

tb 4: idv s bd y skds s d p a

Area of Work Organization

Humancapitaldevelopmentandcapacitybuilding

(productionandbusinessmanagement)

•ActionMedeor

•Africanacademicinstitutions

•AfricanMedicinesRegulatoryHarmonization

initiative(AMRH)

•HowardUniversity

•InternationalConferenceonHarmonisation

•PurdueUniversity•SaintLukeFoundationinTanzania

•StringentRegulatoryAuthorities(e.g.FDA)

•U.S.PharmacopeialConvention(USP)

•WorldHealthOrganization(WHO)

Intellectualproperty •Afr icanRegionalIntellectualPropertyOrganiza-

tion(ARIPO)

•DeutscheGesellschaftfuerInternationale

Zusammenarbeit(GIZ)

•UnitedNationsConferenceonTradeandDe-

velopment(UNCTAD)

•UnitedNationsDevelopmentProgramme

(UNDP)•WorldIntellectualPropertyOrganization

(WIPO)

Procurement • ClintonHealthAccessinitiative(CHAI)

•GlobalTBDrugFacility

•MedecinsSansFrontieres(MSF)

•NationalTenderBoards

•President’sEmergencyPlanforAIDSRelief

(PEPFAR)U.S.

•TheGlobalFundtoFightAIDS,Tuberculosisand

Malaria

•UNICEF

•UNITAID



93

IMPLEMENTATION PLAN

Area of Work Organization

Policyandgeneral •GIZ

•SouthernAfricanRegionalProgrammeonAc-

cesstoMedicinesandDiagnostics(SARPAM)•UKDepartmentforInternationalDevelopment

(DFID)

•UNAgencies

Fundinginstitutions • AfricanDevelopmentBank(ADB)

•Equityinvestors

•IndustrialdevelopmentCorporation(IDC)

(RSA)

•InternationalFinanceCorporation(IFC)

•OtherBanks

R&D,bioequivalenceandcentresofexcellence •AfricanUniversities

•AfricanNetworkforDrugsandDiagnosticsIn -

novation(ANDI)anditsCentresofExcellence•CouncilonHealthResearchforDevelopment

(COHRED)

•DrugsforNeglectedDiseasesInitiative(DNDi)

•Howard&PurdueUniversity

Potentialpartneringorganizations •EuropeanGenericMedicinesAssociation(EGA)

•IndianDrugManufacturers’Association(IDMA)

•IndianPharmaceuticalAssociation(IPA)

•Otherinternationalpharmaassociations

Potentialinternationalcollaborators •HealthActionInternational(HAI)

•KenyachapterofthePanAfricanTreatmentAc-

cessMovement(KETAM)

•MedicinesTransparencyAlliance(MeTA)•MedecinssansFrontieres(MSF)

•Oxfam

Industr yassociations • FederationofEastAfricanPharmaceutical

Manufacturers(FEAPM)

•SouthernAfricanGenericMedicinesAssociation

(SAGMA)

•WestAfricanPharmaceuticalManufacturersAs-

sociation(WAPMA)

•FederationofAfricanPharmaceuticalManufac -

turersAssociations(FAPMA)

4.3 ProPoSeD Structure or DeliVering the PmPa

Figure 10 details a proposed structure or the PMPA. The central consortium, the coordi-

nating roles o UNIDO and the imperative o engaging with a broader set o stakeholders

are detailed elsewhere in this chapter. A urther critical component o the envisaged struc-

ture is a dedicated eld presence. Yet, however comprehensive and appropriate the solutions

package is, true progress will only be achieved through the actual real world implementation

o these aspects on the ground. Experience and historical evidence rom other endeavours

suggest that sustainable progress requires coordinated implementation that is dependent on

the cooperation o a number o actors at the country and REC level. This is both a technicaland a human challenge. In some circumstances, it will require overt leadership to instigate,



94


motivate, and coordinate dierent parties. In other instances, where initiatives are already

underway, it will be imperative that the PMPA supports ongoing eorts and does not try to

replicate and/or take over the agenda.

Experienced individuals with the credibility and ability to recognize and adapt to the di-

erent dynamics as well as to infuence high level oce bearers will be imperative or the

success o the programme. It is proposed that our regional coordinators be placed in the

eld with responsibility or managing the implementation o the PMPA (whether as a ‘go it

alone’ or as a supporting initiative) at country and regional level. They would be responsible

or accessing the package o solutions rom the central hub on behal o the stakeholders in

the eld both at the REC level and in individual countries that have engaged the PMPA to

help develop their industries.

It would not be easible or necessarily appropriate (as capacity building or the long term

should also be an objective) to engage such individuals or each and every country and na-

tional level experts would be employed to manage the administration o the solutions. Theregional coordinators will provide the high level support as and when necessary. Figure 10

below gives a schematic representation o the relationships between the dierent aspects o

the proposed structure.

10: Ppsd s p Bsss P

Regional

Expert A

African

Union

Commission

PMPA Technical Committee

Consortium

of

Partners

Country

Expert B

Country

Expert C

Country

Expert D

Regional

Expert B

Country

Expert E

Country

Expert F

Regional

Expert C…

… ……………Country

Expert A

Additional temporary expertise will be required and will include the pool o experts that

will be recruited to oer various services to the industry and to assist the PMPA programme

team when needed. This pool o experts will be assisted in the regions and at country level

by the permanent team members leading the various interventions.



95

ImplementatIon plan

4.4 reSource reQuirementS

The AUC and UNIDO will take the lead in mobilizing the resources required to deliver this

Business Plan. It is proposed that UNIDO hold a trust und or central PMPA resourceswhich would be disbursed to dierent consortium partners and the broader range o stake-

holders according to the action plan developed (including identication o expertise beyond

the consortium to be nanced rom central programme unds). The details o the resource

requirements in terms o dierent components, timing and magnitude will be developed in

line with the action plan. However, at this stage it is possible to identiy the major compo-

nents o the plan which will require unding and to provide some indicative gures or the

overall resource requirements as well as the expected timing o those resources.

There will be some elements o xed cost in setting up the human ‘inrastructure’ required

or the Business Plan and or the operation o the central consortium. There will also be

xed costs associated with urther work on developing the solutions package. In addition,

there will be variable costs that will depend on the number o countries and (RECs) that ac-

tively engage with the PMPA and the level o activity required in each country. For example,

the complexity o the situation in countries with well established industry sectors is likely to

require more detailed and wide ranging activities at the dierent stages o the country level

process than in a country that has limited or no pharmaceutical manuacturing.

A signicant proportion o the overall cost o the Business Plan is expected to be incurred

in the process o developing human resources or the pharmaceutical manuacturing sys-

tem. Investment in acilities or training will be beyond the scope o the PMPA so estab-

lished centres o excellence will be utilized and the PMPA will actively lobby or expanding

the model o training provision, or example, at the Saint Luke Foundation. The nature o

sponsorship or participants on these courses will also need to be considered. For example,UNIDO currently sponsors participants on the extended course at Saint Luke Foundation

providing 50% o ees or private sector actors and 100% o ees or public sector represen-

tatives (travel and subsistence costs are covered by the individual or his/her organization).

Similarly, an extensive syllabus o in-country training modules is anticipated and the degree

to which these are ully unded under the PMPA or whether some ees will be recouped will

need urther consideration and may vary depending on the specic nature o the module

and the resource requirements.

This Business Plan also proposes utilizing the expertise o research entities or the devel-

opment o new ormulations and or developing synthetic pathways or APIs required in

products covered by patents that could be developed or production under the TRIPS fex-

ibilities. These APIs would be used in ormulations that would also need to be developed.

It is envisaged that these initiatives would require initial seed unding and that their ongo-

ing activities to develop urther products would be nanced by recouping the investment

through charging ees to GMP-compliant companies and taking a cost sharing approach.

The ollowing table lists the main cost components described above and provides guid-

ance on the expected timing implications as well as, where possible, indicative gures. The

total resource requirements identied in this indicative budget are roughly US$54mn over

ve years, with an annual breakdown o US$4mn, US$16mn, US$14mn, US$10mn and

US$10mn in years 1 to 5 respectively.



97

ImplementatIon plan

C o s t C o m p o n e n t

T i m i n g I m p l i c a t i o n s

A s s u m p t i o n s

E s t i m a t e d m a g n i t u d e

I n - c o u n t r y / c o u n t r y c l u s t e r t r a i n i n g

c o

u r s e s a c r o s s v a r i o u s d i m e n s i o n s .

W i l l d e p e n d o n d e v e l o p m e n t o f s y l -

l a b u s a n d f u n c t i o n i n g o f T r a d e A s s o c i a -

t i o n s

A s s u m e s :

C o u r s e s i n - c o u n t r y i n 1 0 c o u n t r i e s a n d

f o r 4 c o u n t r y c l u s t e r s . 2 0 s e s s i o n s p e r

y e a r f u n d e d b y P M P A ( o t h e r t r a i n i n g

p r o v i d e r s w i l l a u g m e n t w i t h t h e

i r o w n

f u n d i n g ) w i t h c o s t s l i m i t e d t o v e n u e ,

m a t e r i a l s a n d t r a v e l a n d p r o f e s s i o n a l

f e e s o f t r a i n e r . T o t a l p e r s e s s i o n

U S $ 4 k

( p o s s i b i l i t y o f c h a r g i n g f e e s b u t

a s s u m e s

f u l l c o s t b o r n e b y P M P A ) . S c a l e

u p w i t h

5 0 % i n 1 s t y e a r , 7 5 %

i n 2 n d y e a

r a n d

1 0 0 % i n 3 r d , 4 t

h a n d 5 t h y e a r s

Y e a r 1 : U

S $ 5 6 0 k

Y e a r 2 : U

S $ 8 4 0 k

Y e a r 3 : U

S $ 1 . 1 2 m n

Y e a r 4 : U

S $ 1 . 1 2 m n

Y e a r 5 : U

S $ 1 . 1 2 m n

T o t a l : U S $ 4 . 7 6 m n

I m

p l e m e n t a t i o n p h a s e

T A

a c r o s s m a n u f a c t u r i n g s y s t e m i n a c -

c o

r d a n c e w i t h a g r e e d s t r a t e g y

S u g g e s t e d t h a t i n G h a n a a n d K e n y a

i m p l e m e n t a t i o n s t a r t s b e g i n n i n g

2 0 1 3 . O

t h e r c o u n t r i e s b e g i n t o e n t e r

i m p l e m e n t a t i o n p h a s e i n 2 0 1 4 w i t h

a l l

s t r a t e g i e s i n 3 0 c o u n t i e s c o m p l e t e b

y

e n d 2 0 1 5

R e s o u r c e r e q u i r e m e n t s f o r i m p

l e m e n t a -

t i o n s u p p o r t w i l l v a r y w i d e l y b u

t a v e r -

a g e e s t i m a t e d a t U S $ 2 5 0 k p e r y e a r p e r

c o u n t r y . A s s u m e 5 y e a r s s u p p o r t f o r

r s t t w o c o u n t r i e s . A f u r t h e r 8

c o u n -

t r i e s r e c e i v e 4 y e a r s a n d 2 0 c o u n t r i e s 3

y e a r s T A

Y e a r 1 : U

S $ 5 0 0 k

Y e a r 2 : U

S $ 2 . 5 m n

Y e a r 3 : U

S $ 7 . 5 m n

Y e a r 4 : U

S $ 7 . 5 m n

Y e a r 5 : U

S $ 7 . 5 m n

T o t a l : U S $ 2 5 . 5 m n

N e w f o r m u l a t i o n d e v e l o p m e n t

O n e o f f p a y m e n t ( a l t h o u g h c o u l d b e

p h a s e d ) . w i t h r e v o l v i n g f u n d m o d e l

A s s u m e s :

F i v e e n t i t i e s r e c e i v e s e e d f u n d i n

g i n 2 n d

y e a r o f p l a n

E a c h o r g a n i s a t i o n r e c e i v e s ' w o r

k i n g

c a p i t a l ' o f U S $ 1 m n T e c h n o l o g y

t r a n s f e r

c o s t s w i l l b e b o r n e b y t h e r e c i p

i e n t

c o m p a n y

T o t a l c o s t i n y e a r 2 : U

S $ 5 m

n

B u s i n e s s l i n k a g e s p l a t f o r m

D e d i c a t e d P M P A s t a f f m e m b e r ( i n -

c l u d e d a b o v e ) b u t a n n u a l o p e r a t i n g

c o s t s w i l l r e l a t e t o s t a f f t r a v e l a n d P R

a c t i v i t i e s . A s s u m e o n e p a r t n e r i n g e v

e n t

i n 2 n d a n d 4 t h y e a r s

W i l l i n c l u d e a w e b p o r t a l m a n a

g e d b y

c e n t r a l P M P A s t a f f . M a r k e t i n g o f s e r v i c e

r e q u i r e d s o P M P A s t a f f t o t r a v e

l t o

c o n f e r e n c e s f o r a w a r e n e s s b u i l d i n g . 5

c o n f e r e n c e s p e r y e a r a t U S $ 6 k

e a c h .

A l s o t r a v e l t o B R I C S c o u n t r i e s a n d E u -

r o p e f o r p r o m o t i o n o f s e r v i c e - 3 t r i p s

p e r y e a r a t U S $ 8 k p e r t r i p

E v e n t i n y e a r 2 a n d 4 a t U S $ 1 5

0 k e a c h .

Y e a r 1 : U

S $ 5 4 k

Y e a r 2 : U

S $ 2 0 4 k

Y e a r 3 : U

S $ 5 4 k

Y e a r 4 : U

S $ 2 0 4 k

Y e a r 5 : U

S $ 5 4 k

T o t a l : U S $ 5 7 0 k



98


C o s t C om p

on en t

T i mi n g

I m pl i c a t i on s

A s s

um p t i on s

E s t i m a t e d m a gni t u d e

P MP A s t a k e

h ol d er e v en t s

On e e v en t d ur i n g t h e s e t u p ph a s e ; on e

i n y e a r

3 a n d on ei n y e a r 5 . On g oi n g

d i a l o g u

e wi l l b e c on d u c t e d b y c or e

P MP A s t a f f t om a i n t a i n c omm uni c a t i on

E a c h e v en t U S $ 1 5 0 k

Y e a r 1 : U S $ 1 5 0 k

Y e a r 2 : U S $ 0

Y e a r 3 : U S $ 1 5 0 k

Y e a r 4 : U S $ 0

Y e a r 5 : U S $ 1 5 0 k

T o t a l : U S $ 4 5 0 k

T e c h ni c a l C

ommi t t e em e e t i n g s

A nn u a l m e e t i n g s of t h eT e c h ni c a l C om-

mi t t e e

wi l l t a k e pl a c e , pl u s a n ex c e p-

t i on a l m

e e t i n g ex p e c t e d f or a p pr o v a l of

a c t i on pl a nh a l f w a y t h r o u g h y e a r 1 .

2 d

a y m e e t i n g s wi t h s i m ul t a n e o u s

t r a

n s l a t i on ,f a c i l i t i e s a n d t r a v el f or T C

m e

m b er s a n d P MP A s t a f f c o v er e d .A s -

s um e2 0 T C m em b er s p er e v en t , wi t h

c o s t s p er i n d i v i d u a l U S $ 2 . 5 k .

P l u

s f a c i l i t i e s e t c . U S $ 1 0 k p er e v en t

Y e a r 1 : U S $ 1 2 0 k

Y e a r 2 : U S $ 6 0 k

Y e a r 3 : U S $ 6 0 k

Y e a r 4 : U S $ 6 0 k

Y e a r 5 : U S $ 6 0 k

T o t a l : U S $ 3 6 0 , 0 0 0

C on s or t i um

m e e t i n g s

R e g ul a r m e e t i n g s of t h e c on s or t i um

a r e ex p

e c t e d t o t a k e pl a c e e v er y s i x

m on t h s a n d i n t h e s e t u p ph a s e wi l l b e

s el f n a n c e d . Wh enr e s o ur c e s m o b i -

l i z e d , c o s t s s h o ul d b e c o v er e d b y P MP A

A s s um e1 0 t r a v el l i n g p a r t i c i p a n t s wi t h

v en u e c h a n g i n g b u t a v er a g e c o s t of

$ 2 . 5 k p er t r a v el l i n g p a r t i c i p a n t

Y e a r 1 : U S $ 5 0 k

Y e a r 2 : U S $ 5 0 k

Y e a r 3 : U S $ 5 0 k

Y e a r 4 : U S $ 5 0 k

Y e a r 5 : U S $ 5 0 k

T o t a l : U S $ 2 5 0 k

S u p p or t t o

l e a d i n g c om p a ni e s t o

a c h i e v e pr e

q u a l i c a t i on

W ei g h t e d t o w a r d s t h e r s t h a l f of t h e

B u s i n e s s P l a n

A s s i s t a n c e d e p en d en t on s p e c i c n e e d s

of c om p a n y b u t b a s e d on t e c h ni c a l

a s s

i s t a n c en o t c a pi t a l i n v e s t m en t .A s -

s um e1 0 c om p a ni e s b en e t a n d e a c h

c om p a n y r e c ei v e s s u p p or t e q ui v a l en t t o

U S

$ 2 0 0 k s pr e a d o v er r s t 2 y e a r s

Y e a r 1 : U S $ 1 mn

Y e a r 2 : U S $ 1 mn

T o t a l : U S $ 2 mn

On g oi n g r e

s e a r c h i n t o d i m en s i on s of

ph a r m a m a

n uf a c t ur i n g s y s t em a n d c on-

t i n en t a l s t r a

t e g y d e v el o pm en t f or A P I

pr o d u c t i on , t r a d i t i on a l m e d i c i n e s , e t c .

( n o t e: b l o o d pr o d u c t w or k b ei n g c on-

d u c t e d s e p a r a t el y b y WH O.F i n d i n g s

c o ul d b ei n c or p or a t e d un d er P MP A a s

a d d i t i on a l a

c t i v i t y b u t n o t i n c l u d e d i n

t h i s i n d i c a t i v e b u d g e t )

R e s e a r c h f un c t i onh a s c on s i s t en t a nn u a l

b u d g e t

t h a t s t a r t s i n y e a r 2 .

D e

d i c a t e d P MP A s t a f f m em b er t o

m a

n a g er e s e a r c h a c t i v i t i e s ; wi l l r e q ui r e

ex p er t c on s ul t a n c i e s a n d ex p er t g r o u p

m e

e t i n g s . S u g g e s t e d b u d g e t of U S $ 2 5 0 k

p er y e a r .

Y e a r 1 : U S $ 0

Y e a r 2 : U S $ 2 5 0 k

Y e a r 3 : U S $ 2 5 0 k

Y e a r 4 : U S $ 2 5 0 k

Y e a r 5 : U S $ 2 5 0 k

T o t a l : U S $ 1 mn



99

ImplementatIon plan

4.5 monitoring anD eValuation

It would be premature to provide a detailed logical ramework or the PMPA as the spe-

cic activities to be conducted are subject to a number o variables including the detailedoutcome o discussions on the agreed action plan. That plan will include specic activities

to be undertaken by each party and metrics or assessing progress. However, a Monitoring

and Evaluation (M & E) philosophy, indicative key objectives and possible means by which

progress can be measured are identied in this section based on the undamental objectives

o the PMPA as articulated in the rst section o this Business Plan.

The key objectives should orm the basis o an approach to monitoring and evaluation

which should take into account that:

• This programme is intended to benet all member states

• The quality o pharmaceutical production should be raised to international GMP

standards and ultimately it should be a non-negotiable requirement that manuac-

turers must meet i they are to supply our people

• There is a need to expand the range o drugs that our manuacturers produce (sub-

ject to the manuacturer meeting international GMP standards)

• The industry must be sustainable in the long term and competitive whilst operating

to international standards

• NMRAs will be advised to limit the range o products that companies can produce

unless they meet GMP requirements

• There is a need to develop and implement coordinated strategies at the national level

• A undamental long term requirement is that regulatory capacity is strengthened

and that, in resource constrained environments, eorts are targeted at those aspects

o regulatory activities that are critical to protecting public health

• Some o our more advanced member states have well developed manuacturing sys-

tems but wish to reduce their reliance on imports and possibly develop/expand their

export markets to include those overseen by stringent regulatory authorities

• We have some companies that are prequalied or manuacture o products by WHO

and/or other stringent regulatory authorities and there are others who are striving

to achieve this milestone. We need to increase the number o internationally certi-

ed products rom Arican manuacturers (increased number o manuacturers and

broader product range)

This Business Plan underlines the act that the dierent countries on our continent cur-

rently ace a diverse range o realities. In view o this, the M & E approach should report

inormation at the national level as well as at continent level so that a true picture o the

progress in diverse situations is not lost through amalgamation o results at the continent

level. National level data will be a necessary component o strategy design and implementa-

tion in individual member states and it is important that this level o detail is also refected

in the overarching M & E or the PMPA.



100


Based on these observations, the ollowing table identies putative measures by which the

progress and success o the PMPA can be monitored. It describes a possible indicator and

provides a brie description o the rationale behind the indicator identiying the dimension

that it covers and limitations i individual indicators are considered in isolation.

tb 6: P ds d v m & e

Indicator Rationale and Limitations

Proportion(valueandvolume)ofpharmaceutical

marketsuppliedbyAfrica-basedmanufacturers.

Wouldindicatesustainabilityofproductionas

marketsharewilltosomeextentbeafunction

ofaffordability.Increasedmarketshareincertain

productcategoriescouldbebrokendownto

lookatincreasedrangeofproductportfolios.The

degreetowhichNMRAsenforcelimitationson

productionportfoliospriortoGMPcompliance

meansthatastrongperformanceonthisindicator

couldrepresentinsufcientregulatorysanctionandthereforemustbeconsideredtogetherwith

otherindicatorsrelatingtoquality.

Proportionofproductsinthemarketplacethat

arefoundtobesub-standardandtheseverityof

thenon-conformitywithrequisiteparameter s

TheintentionofthePMPAisthatweshouldbe

abletorelymoreheavilyonourownindustryfor

highqualitydrugstoreducerelianceonimports

whichoftencannotproperlybeoverseenbyour

NMRAs.Willrequireaninitialbaselinesur vey.

Importanttocapturethenatureofdeviationas

well,sincea‘pass/fail’binarymeasurementmay

missimprovementsthatwouldbecapturedifthe

trendisfortheproportionoffailuresduetoless

signicantissuestoincrease.

NumberofcompaniesachievingWHOprequali-

cationofaproductorcerticationbyastringent

regulatoryauthorityandnumberofproductsfor

whichcerticationachieved

Indicatorwouldcaptureprogressofleadingcom-

paniestowardsachievinggoalstosupplyinter -

nationaldonormarketsand,formoreadvanced

countries,wouldcaptureprogressinpenetrating

developedworldexportmarkets.

Proportionofproductsprocuredbyinternational

donorssourcedfromAfrica-basedmanufacturers

Companiesneedtollordersiftheirinvestment

istopaydividends.Wouldspeaktothecompeti-

tivenessofmanufacturersalthoughthedegreeto

whichincentives/supportcontributetothiswill

berelevantwithregardtolongtermsustainability.

Denitionofproportion(value/volume/treatment

courses)willneedtobeconsidered.

ImprovedCapacityofNationalMedicinesRegula-

toryAuthorities

Regulatoryauthorityfunctionsgobeyondthespe-

cicsoflocalproductionandcentraltothePMPA

isoverallimprovementinqualityandaccess.Need

toensurethatthePMPAdoesnotunintentionally

distortNMRAeffortstomakemaximumuseof

limitedresourcesinprotectingpublichealth.

NumberofNationalQualityControlLaboratories

prequaliedbyWHO

Anindicatorthatcouldprovideaproxyfor

improvedregulatorycapacitybutwhichshould

beconsideredinthecontextofwiderregulatory

infrastructurerequirementsformarketoversight,

etc.



101

ImplementatIon plan

Numberofcountriesthathavedevelopedandare

implementingstrategies

Implicitassumptionthatastrategyhasbeendevel-

opedthroughconsensusbuildingandthatthere

isdetailedengagementofallstakeholdersasthe

presenceofastrategyalonedoesnotmeasure thevalueoftheapproach.

Amountofcapitalinvestmentinpharmaceutical

manufacturingactivities

Aproxymeasureforthecredibilityoftheongoing

progressofthesectoranditsfutureviabilityas

providersofcapitalwillweighriskssuchasthreat

fromcounterfeitandsub-standardproductsin

theirinvestmentdecisions.

Numberofcountriesamendinglegislationto

incorporateTRIPSexibilitiesandthenumber

ofproductsonthemarketasaresultofexploit-

ingtheexibilitiesandpriceofproductsversus

originators

TRIPSexibilitiesrepresentanimportantoppor -

tunityforimprovingpublichealthandincorporat-

ingthelegislationisonestep;butthedegreeto

whichthistranslatesintoavailabilityofaffordable

versionsofpatentprotectedproductsinLeast

DevelopedCountries(LDCs)onourcontinentshouldalsobecaptured.Themeasureof‘price’

needscarefulconsiderationtoensurethatagenu-

inecomparisonismade.

Numberofindustryprofessionalstrainedacross

differentdisciplinesrequiredbythepharmaceutical

manufacturingsystem

Humanresourcedevelopmentiskeyandempiri-

calevidenceofprogresscanbecapturedthrough

thisindicator ;however,theabilityofthosetrained

toeffectchangeintheirrespectiveorganisa-

tionswillalsodependonintangibleaspectssuch

aschanging‘culture’oftheorganisationwhichis

implicitinanumberofmetricsrelatedtoquality

andcompetitiveness.

NumberofPartnershipsandBusinessLinkagesfacilitated

ThePartnershipandBusinessLinkagesPlatformwillcoveradiverserangeofpossiblerelationships.

TheimpactofthePMPAisintendedtoadjustthe

operatingcontextoftheindustrytomakeitmore

attractivetoinvestorsandencouragepartnerships,

etc.Anappropriatemetrictocapturethisdiversity

andtheindirectimpactofthePMPAwillrequire

furtherdeliberation.

Emergenceofsupportiveindustries Appearanceoflocalindustriesthat,forexample,

manufactureexcipientsandpackagingmaterialand

areabletoserviceandretoolequipment.These

supportiveindustrieswillbeessentialforthelong

termsustainabilityandcompetitivenessofourpharmaceuticalmanufacturers.

4.6 riSK management

This section reviews some key considerations and assumptions about the programme, iden-

ties potential risks or the successul implementation o the PMPA, and presents a risk

mitigation strategy including the necessary legal agreements and provisions and protections,

as well as the management and control o programme unds.



102


The AUC is acutely aware that implementing a programme o this nature, with the myriad

o contexts on the continent, and the various ambitions and stages o development o com-

panies, is a challenging undertaking. This is especially so because most interventions will be

carried out by partners who have their own governance and internal dynamics. The poten-

tial risks to the success o the PMPA implementation thereore derive rom the ollowing:

• The risk that external players do not align behind the PMPA given that uncoordi-

nated vertical programmes can create distortions

• Interactions with stakeholders will lead to the evolution o the programme, the addi-

tion o new partners, the expansion o the package o solutions, and result in modi-

cations o partner roles. Some may nd the increasing or reducing responsibility

unacceptable

• The challenge o a number o organisations engaging in genuine collaboration and

maintaining this over the long term

• Funding shortalls leading to the abandonment o some key interventions or even

the inability to commence PMPA implementation

Ways in which the above risks can be mitigated include:

• Continuous stakeholder interactions and consultations

• Continuous monitoring and evaluation o project implementation and reporting to

ensure that adjustments and corrective actions are taken or that interventions that

do not work are abandoned

• Open communication and reporting to the AUC PMPA Technical Committee and

all partners and stakeholders so that they are kept abreast o all developments

• Regular coordination meetings

• Governance and controls should be in place and should regulate all aspects o pro-

gramme management, including use o nancial resources

4.7 SummarY o chaPter 4Key messages rom this Chapter include:

• The implementation o this Business Plan will require a diverse range o skills, ex-

pertise and organisational mandates; no one entity can cover them all

• It is recommended that a consortium is established and genuine collaboration be-

tween partners will be essential

• UNIDO has been requested to assist the AUC to build the consortium

•

Initial discussions have taken place with potential partners; during the initial phaseo the Business Plan, detailed negotiations will take place, legal arrangements will be



103

ImplementatIon plan

established and the consortium will work together to establish a detailed work plan

• The initial or ‘set up’ phase o this Business Plan will also involve urther develop-

ment o the solutions package, resource mobilization and an invitation to our mem-

ber states to express interest in working with the AUC and its partners under the

PMPA

• The consortium will o necessity be limited in size so inevitably there will be many

stakeholders who are conducting related work and with whom collaboration and

alignment with the PMPA will be important. In view o this, the AUC and its part-

ners will ensure during implementation that channels o communication with the

wide array o players are kept open and that there are opportunities or regular ace-

to-ace-interaction

• A pilot phase is suggested as there are a number o countries that have already devel-

oped strategies or the sector and who would be in a position to benet rom detailedimplementation by the consortium

• Prior to implementation in other countries, a detailed strategy development process

will be conducted in each one (as described in Chapter 3) prior to ull scale imple-

mentation

• Experience suggests that coordination across stakeholders at the national level is

necessary and an implementation structure that includes dedicated PMPA eld co-

ordinators is recommended

• A complete budget proposal or the implementation o the Business Plan will de-

pend on the details o the action plan to be developed by the consortium partners.However, an indicative budget is proposed which estimates that over a ve year pe-

riod US$54mn will be required

• Indicative indicators have been suggested and the rationale and limitations o these

indicators discussed. A detailed logical ramework will be produced to capture the

details o the action plan and the measures by which it will be monitored and evalu-

ated

• Risks to the eectiveness o this Business Plan are highlighted and include the chal-

lenge o maintaining a unctioning consortium o parties over an extended period

o time. This is an issue that will benet rom continuous dialogue, regular meetings

and monitoring and evaluation activities.



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