Indian pharmaceutical companies are making a beeline for African countries to tap a market that has not been ravaged by Big Pharma.
It will be tempting to put it down to the fact that they are struggling to make deep inroads into the lucrative, but highly regulated, markets of Europe and the United States. However, to be fair, the dark continent has enough silver linings of its own.
Glenmark Pharmaceuticals has just acquired South African Bouwer Bartlett and Matrix Labs has forged a joint venture with Aspen Pharma and invested in Fine Chemicals Corporation. Ranbaxy recently signed a deal with Lupin Labs to market its tuberculosis drug in north and west Africa.
Wockhardt and Dr Reddy's are active in South Africa, Kenya, Ghana, Nigeria, Tanzania, Egypt and Zimbabwe.
The biggest draw is the $70-100 million market there for anti retroviral drugs, used to treat AIDS. (Africa is home to 26 million HIV-infected people.) The total pharma market in Africa is worth $5-8 billion and is growing at 8-10 per cent per annum.
Many parts of Africa have almost no domestic industry and are pro-generics. Due to hazy patent regulations, pharmaceutical MNCs have left the door ajar for Indian companies. Then there is the question of the people's purchasing power.
"Innovator companies are present but they haven't really focused on Africa as it is not a big market for them," said GVK Biosciences chairman DS Brar.
Seconds Glenmark managing director Glenn Saldanha: "Affordability is a big issue in these countries and that is where international innovator companies lose out."
South Africa, for one, has persuaded innovator companies into compulsory licensing of patented drugs.
"There are certain patent issues, especially in South Africa, but Big Pharma have agreed to compulsory licences...that is the advantage Matrix is looking to leverage by partnering Aspen," said Rajiv Malik, chief executive officer of Matrix Labs.
Ranbaxy's tie-up with Lupin adds to its majority owned subsidiary in Nigeria (Ranbaxy Nigeria Ltd), a wholly owned subsidiary in South Africa (Ranbaxy SA) and business operations in Senegal, Egypt, Zimbabwe, Mauritius and Morocco.
"We are present in 45 African countries. The market needs more focus and has an unmet need. Our new malarial drug too would become a part of our product portfolio in Africa," said Malvinder Mohan Singh, president (pharmaceuticals), Ranbaxy Laboratories Ltd.
Wockhardt is present in South Africa, Kenya, Ghana, Nigeria and Tanzania. Dr Reddy's has a subsidiary in South Africa. Sun Pharma has operations in Kenya and South Africa. "We are increasing it gradually," said a Sun spokesperson.
Tunisia has been inviting Indian pharma, dangling the carrot of its Free Trade Agreements with Switzerland, Norway and Iceland.
