Sizeable South African Market Attracts, Challenges Pharma Industry Investment
South Africa’s pharmaceutical market, the largest and most developed in Sub-Saharan Africa, is expanding at a good clip, making it attractive to drug makers seeking a foothold in the broader African region. Those opportunities are challenged by such factors as intellectual property issues, regulatory inconsistency, remoteness from other global markets and relatively low per capital expenditure on pharma products.
However, a new regulatory agency and recently proposed new intellectual property policies may help to smooth over some obstacles over time.
South Africa claims one of the largest and most rapidly growing pharmaceutical markets in Africa. It stood at $5.16 billion in 2015 and is expected to grow at an annual rate of about 7% to $7.28 billion by 2020, according to PharmSource’s colleagues at GlobalData. However, the per capita expenditure comes nowhere near the absolute market size of markets in more developed nations, which could make the market less profitable, a US Chamber of Commerce analyst noted. Additionally, most of the market’s focus remains on generic drugs, with the bulk of manufacturers in the country producing generics under their own labels.
Cipla (Mumbai, India), for instance, announced last fall that it would build a $109 million manufacturing plant in Durban, KwaZulu-Natal, South Africa to produce biosimilar cancer drugs and other biosimilar products (September 2016 EMOR). The facility is slated to start operations in the third quarter of 2018; a spokesperson for the company declined to discuss for whom products at the site would be manufactured.
This article was written by Lisa Tilley Hinkle and Renee Richmond and is reprinted from the September issue of to Emerging Markets Outsourcing Report. The full article addresses the future of the contract services sector. To learn more, click here.