Africa highlighted as a market with high potential for life sciences & healthcare companies and as growth in developed markets stagnates, companies in the life sciences and healthcare market are increasingly looking for growth in Africa.
This is according to Andrew Mitchell: President EMEA (Europe, Middle East and Africa) Life Sciences & Healthcare at DHL Customer Solutions & Innovation, who was speaking at the 5th annual DHL Regional Life Sciences & Healthcare conference held in Johannesburg, South Africa today. He says this trend calls for global industry players to adopt smarter strategies in order to operate successfully across the continent.
According to the Africa: A continent of opportunity for pharma patients1 report by McKinsey & Company, the value of Africa’s pharmaceutical industry jumped to $20.8bn in 2013 from just $4.7bn a decade earlier, and will be worth $40bn to $65bn by 2020. It also reports that between 2013 and 2020 prescription drugs are forecast to grow at a compound annual growth rate of 6% in Africa, generics at 9%, over-the-counter medicines at 6%, and medical devices at 11%.
Mitchell says that when it comes to transporting medicines across Africa, there are many common challenges that the industry experiences, such as ensuring temperature-controlled environments in accordance to Good Distribution Practice regulations, cost efficiency, trade compliance and regulations, and innovation for continuous improvement – of which all are key to success. “We wanted to address changes affecting our industry at the conference, and discuss how the industry can adopt the best supply chain strategies to capitalize on Africa’s growth potential and achieve regulatory compliance,” says Mitchell.
The conference hosted representatives from leading pharmaceutical and healthcare companies to discuss the latest trends, innovations and solutions impacting the Life Sciences supply chain, with a specific focus on Africa as a region with high growth potential.
Hennie Heymans, Managing Director of DHL Express Sub-Saharan Africa, says that logistics has long been considered a key supporting function within the life sciences sector, but that its importance is rapidly growing in Africa due to the increasing relevance of pharmaceuticals in emerging markets.
He says that there are various trends that are shaping the sector, one of which is urbanization. “DHL anticipates pharmaceutical and medical device manufacturers to expand their capabilities into major African cities, eventually to emerging cities and even rural areas, and with this, there will be various approaches to distribution and logistics.”
Heymans adds that e-commerce is also fundamentally transforming the supply chains for business-to-consumer (B2C)/ over the counter (OTC) life sciences markets, such as cosmetics, vitamins, contact lenses and nutrition, as well as business-to-business (B2B) markets, such as diagnostics and lab supplies.
“It is believed that life science manufacturers will build up more direct-distribution channels to the end consumer, and will either develop their own e-commerce operations or distribute their products via third-party platforms.”
Heymans says that the changes within the market and decentralised supply chains will lead to new transportation routes. “In certain parts of Africa, supply and distribution chain mechanisms still pose challenges, which range from inadequate or undeveloped infrastructures to a country’s specific regulations. Due to more complex supply chains, policy makers worldwide are enforcing stricter regulations for manufacturing and logistics, and customs clearance times and potential regulatory delays can influence a product’s ability to reach a laboratory or customer.”
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