Africa highlighted as a market with great potential for life science and healthcare companies
DHL’s annual regional life sciences and healthcare conference, ‘Imagine the Future,’ focused on life sciences and healthcare supply chains, and enhancing the life sciences and healthcare sector.
As growth in developed markets stagnates, companies in the life sciences and healthcare market are increasingly looking for growth in Africa, Andrew Mitchell, President, EMEA, Life Sciences and Healthcare at DHL Customer Solutions and Innovation, told the conference. He says this trend calls for global industry players to adopt smarter strategies to operate successfully across the continent. According to a report by McKinsey & Company, the value of Africa’s pharmaceutical industry jumped to US$20.8bn in 2013, up from just $4.7bn a decade earlier, and will be worth $40–65bn 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 (OTC) 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 that comply with 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 sector can adopt the best supply chain strategies to capitalise on Africa’s growth potential and achieve regulatory compliance,’ says Mitchell.
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 owing 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 urbanisation. ‘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)/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,’ said Heymans, adding: ‘Changes in the market and decentralised supply chains will lead to new transportation routes.’
For pharmaceutical and medical device manufactures to gain a competitive advantage in Africa, they need to have the ability to innovate and adapt to new regulatory standards and the distribution requirements of products, he continued. ‘Providers wanting to capitalise on the continent’s growth in this market should seek to partner with local providers who are able to successfully implement and manage complex supply chains while navigating the continent’s complex markets and challenges.’