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Why Isn't South Africa The New India For Pharma
Why Isn't South Africa The New India For Pharma
20 November 2013
Mark Hollis
South Africa's got a lot going for it, great beaches, sunshine (important
to us Brits), plentiful wine. But what it doesn't have is a significant
generics manufacturing industry. On paper, South African drug
manufacturers have it all; the virtually untapped Sub-Saharan African
markets in close proximity, a robust IP environment, low cost labor and
bountiful cheap natural resources. So why, beyond a handful of
companies, have South African manufactures failed to grow to rival
large Indian companies? And why isn't South Africa the next big place
for drug development?
The South African market also presents another challenge in the form of
regulatory delays. At present it takes north of three years to get product
approval in South Africa, this likely acting to dampen the market. In
addition, for generics companies, some commentators argue that the
current South African IP environment allows ever greening. This will
however likely change in the future with a new IP policy promising
changes which will make it more challenging to obtain a patent.
Turning away from domestic markets and looking at the regional view,
South African producers should, in theory, be able to tap into the fast
growing markets of its northern neighbors across Sub-Saharan Africa. In
reality, these markets have already seen significant penetration by
Indian producers. With their higher manufacturing costs South African
companies cannot hope to compete. There may, however, be one ray of
hope and that may be in investing and moving into the cardiovascular
and oncology space. Many countries in sub-Saharan Africa have a
sizable risk factor profile for the spread of non-communicable diseases
in the future. With Indian companies primarily focused on supplying
Sub-Saharan Africa with anti-infectives and essential medicines the
time may be right for South African companies to look at expanding into
the African oncology and cardiovascular space.
The truth may be that South African companies have already missed
out on the chance of an Indian style industry and may want to look for
models elsewhere. Israel for example, punches above its weight, not
through bulk manufacturing but through innovation and research -
perhaps South Africa could examine strategies in this direction.
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