Annual global spending on medicines will reach US$1.2 trillion by 2016. But while the growth potential in Africa is huge, so are the pitfalls, cautions Dr Iain Barton of Imperial Health Sciences.
THE EMERGING markets in Africa offer significant growth potential for pharmaceutical brand owners as it is expected that developed markets will only account for 57% of total spend. Barton, managing director of Imperial Health Sciences, stresses that partnering with the right supply chain partner is critical for companies aiming to unlock the African pharmaceutical sector’s vast promise. “Africa’s fractured and complex geographies and trends provide as many opportunities for failure as for success,” he states. “In responding to the potential of Africa, there is an immediate need for a structured approach which recognises the challenges and dangers, provides a flexibility and responsiveness of supply and yet achieves a cost-conscious efficiency that maximises sales in price sensitive markets. There is an intermediate need to define a supply model that is future proofed for the developing economic and customs unions, and there is a long-term need for channel and partner development that meets global best practice standards for quality, security and sustainability.”
Imperial Health Sciences, member company of Imperial Logistics, specialises in multichannel solutions for delivering essential medicines and consumer health products in South Africa and to Namibia, Botswana, Mozambique, Zimbabwe, Zambia, Kenya, Tanzania, Malawi, Uganda, Ethiopia, Rwanda, Ghana, Ivory Coast and Nigeria.
Understanding the challenges
Barton explains that hurdles in the medicinal “route to market” exist at every stage in the process and differ between public and private sectors and between countries. Expanding on these obstacles, he says: “Regulations for registering drugs vary significantly throughout Africa, are time consuming, and are often obscure and open to corruption. Non-transparent tendering and procurement processes, the absence of pricing regulations, limited insured patient volumes and the lack of tiered pricing levels impose access limitations. Commercial challenges include fragmented wholesaler and distributor channels, expensive credit and variable quality standards.” He adds: “Sales are hindered by limited knowledge among physicians regarding disease states and medicine needs. Insufficient numbers of pharmacies and clinics, and limited business experience among staff and owners also inhibit change. Governments have limited means of monitoring use and treatment guidelines are not established for many conditions. In distribution, key challenges are inadequate regulatory oversight, which risks the entry of substandard and counterfeit medicines, as well as weak infrastructure in ordering, transport and the cold chain.”
Overcoming the obstacles
The cold chain is an area in which Imperial Health Sciences has taken a leading role, with the development of a cold chain solution that is suitable for use in extreme case delivery routes, like those in Africa.
Conducting more than 134 studies over a two-year period, the company accumulated data that contributed directly to the development of a cold chain solution and packaging configuration that is validated in line with global client and regulatory guidelines and requirements. “Imperial Health Sciences’ approach to cold chain validation allows for a cold chain solution suited to African delivery lanes, thereby reducing cost and allowing for the sustainable supply of quality medicine at an affordable cost point to the patient,” Barton states.
Imperial Health Sciences was also a founding member of the South African Cold Chain Forum, where industry leaders meet and share experiences and knowledge with the industry in an effort to create a South African industry standard for a cold chain that is recognised globally.
Model for Success
With almost a decade of learning, Imperial Health Sciences has developed a matrix model that provides clients with a framework for developing their strategy for the dynamic markets of Africa. Barton elaborates: “We have designed a methodology to assist pharmaceutical clients to deploy marketappropriate supply and trading models that allow them to exploit the opportunities of Africa. This model looks at three specifics: the geographies to be targeted, the commercial models to be deployed and the timing issues of prioritisation and evolution of the commercial model over time.
“Understanding that markets move at varying speeds of regulatory and commercial development requires a timeand-milestone based approach, with strategies for each phase and trigger points that must be achieved before moving to the next stage. To achieve efficiency of supply, Imperial creates scale where none exists through clustering of products and markets, and consolidation of lanes and regional stock holdings. Collaboration creates symbiotic market growth.” He adds that flexibility and responsiveness are imperative in supporting market and brand development.
Developing a competitive edge
Through the recent acquisition of MDS – a wholly owned subsidiary of UAC of Nigeria – Imperial Health Sciences is further enhancing its service offering to its pharmaceutical clients. Acquiring a 49% interest in MDS, a leading logistics provider in Nigeria, strengthened the group’s African footprint and provided it with warehousing and distribution solutions through a network of 50 distribution centres inover 600 cities and villages across Nigeria.
He explains that through this acquisition, Imperial Health Sciences can now offer its pharmaceutical clients the huge competitive advantage of an end-to-end capability that encompasses warehousing, logistics, distribution and brand building in this high-growth industry and region.
Imperial Health Sciences’ head office is in Centurion, Gauteng, where the company’s main warehouse and distribution centre is also located.
Measuring 26 500 m2, it can accommodate 22 500 pallets, with cold room storage for 1 100 pallets . The company’s new Cape Town facility features 8 096 pallet locations, 8 184 fine pick locations and 504 pallet locations in the cold room. Imperial Health Sciences is ISO 9001:2008 certified for the receipt, storage and distribution of pharmaceuticals and other healthcare products.
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