The major players in the European and African pharmaceutical sectors have called on the European Union (EU) and the African Union (AU) to support the creation of a permanent “business platform” to foster the pharma industry’s development in Africa.

This emerged at a workshop Monday hosted by the the European Commission’s Directorate General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) along with the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), and other European-based pharma associations. The workshop was part of the European African Business Forum (EABF) taking place ahead of, and along with, the European Union–African Union Summit, which begins Thursday in Brussels.

The business platform should support the development of EU and AU policies conducive to trade and “sustainable financing mechanisms models with access to low-interest capital” and appropriate incentives to encourage local, regional and international private sector investment, according to IFPMA Assistant Director-General Greg Perry, speaking at the Monday EABF session leading up to the Summit.

Businesses also want a “stable business environment that respects business ethics and incentivises local innovation and entrepreneurship, including through intellectual property, ensure development and retention of local skilled workforces”, said Perry, reading from a joint statement by the EABF’s Healthcare Working Group, which also includes the European Federation of Pharmaceutical Manufacturers and Associations (EPFIA) and Vaccines Europe.

The pharmaceutical sector also wants voluntary and mutually agreed upon technology transfers and joint ventures; timely product registration, harmonisation of regulation particularly through the African Medicines Agency, and the implementation of the African Continental Free Trade Area to eliminate non-trade barriers and foster international supply chain security.

“We believe that creating this platform with the support of the EU and the AU, we could facilitate African and European partnerships, support existing continental and regulatory initiatives and create a win-win for both Africa and Europe,” said Perry.

Where is the money that was promised?

Emmanuel Mujuru, representing the Federation of African Pharmaceutical Manufacturers (FAPMA), said that the African pharmaceutical industry was struggling to access affordable financing. 

“This financing has to both long-term in nature and have affordable interest rates, either in the form of loans or equity participation in already established African pharma management companies,” said Mujuru.

He added that there was a significant opportunity for European investors as between 70 and 90% of essential medicines consumed in Africa were imported and that the pharmaceutical sector was growing at over 10% per annum, second only to Asia. 

Merck’s Karim Bendhaou, who also chairs the IFPMA Africa Engagement Committee, said that while setting up fill and finish operations “is easy to implement in two years”, he had tried to do so in three different African countries but “local private sector investors have never been able to get access to any finance”. 

“Why? The International Finance Corporation has announced $4 billion for the local vaccine manufacturing and the European Commission has announced one billion Euros,” asked Bendhaou

“We also have to invest in the health system capacity because otherwise, you can have a nice factory in in South Africa, a beautiful factory in Egypt, producing hundreds of millions of doses but if you don’t have a health system in place for the uptake and to absorb this capacity,” he added.

What about Gavi subsidies?

Meanwhile, Patrick Tippoo, CEO of the South African company, Biovac and part of the African Vaccine Manufacturing Initiative (AVMI) leadership, said that much of Africa’s vaccine supply “comes in a subsidised form, partially or completely by Gavi through UNICEF”. 

“We know that Gavi drives prices down to make vaccines more affordable so more vaccines can be purchased and therefore distributed,” said Tippoo

“We have a current situation where about 40 of the 54 countries depend on this mechanism. And therefore the market in Africa is actually in Copenhagen, as some people say. 

“This is a structural thing that will have to be addressed because, in order to stimulate and incentivize technology transfers, investment in skills, development, regulatory capacity building –  and all the things that we repeat ad nauseum – there needs to be an assurance that there’s going to be a market when all of this is built,” he stressed.

Tippoo added that African governments and other stakeholders had to understand that a “resilience premium” would need to be paid to ensure that pharmaceutical manufacturing capability is built in Africa.

“There is no way in which vaccines coming out of Africa in the next five or 10 years can compete on a cost of goods perspective, with Indian manufacturer factories, or even multinationals because they’ve monetised the investment over time, and they have economies of scale,” he added.

Diversification a ‘win-win’ for Africa, Europe and globally

However, other participants pointed out that over the long-term, diversification of sources for pharma procurement is going to be a win win, given the comparatively limited number of suppliers, for some key global health products. Interruptions to key medical supply chains were particularly evident during the early stages of the COVID pandemic, exposing their fragility, even for more affluent countries.

Sibilia Quilici, Executive Director, Vaccines Europe, pointed out that from the European perspective, too, it would be beneficial to reduce dependence on what is now a comparatively small number of suppliers, mainly from India and China, and integrate Africa’s supply chains with global ones:

“In the context of this discussion on improving manufacturing capacities in Africa, also for APIs [active pharmaceutical ingredients] it is good to be aware that the EU, the largest API importer in the world is looking for supply chain diversification for products where dependence on a small number of suppliers from India and China is a concern.

“This could be a win-win for Africa, EU, local and global industry”.

Image Credits: Rodger Bosch for MPP/WHO, WHO .