Read the full report below.
The value of Africa’s pharmaceutical industry rose from $4.7 billion in 2003 to $20.8 billion in 2013. These totals include patented and generics prescription drugs and over-the-counter medicines. That’s good news for MNC and local pharmaceutical companies seeking new sources of growth as developed markets stagnate and good news for patients, who have gained access to medicines previously unavailable on the continent. But knowing where to find the next growth engine isn’t enough for the industry. Leaders must also understand where growth is concentrated, what challenges they are likely to face, and how to work collaboratively with health systems to overcome the barriers to fulfill Africa’s full potential.
A major growth opportunity…
Over the past two decades Africa has emerged from a troubled history to become one of the world’s fastest-growing economic regions. Africa’s GDP—$2.4 trillion in 2013, and expected to climb to $3.3 trillion by 2020—is already on a par with Russia’s. Household spending is rising too: Africa’s consumers spent $1.8 trillion in 2013, more than their Russian counterparts. By 2020, consumer spending is expected to reach $2.4 trillion.
So what does this mean for the pharmaceutical industry? Estimates indicate that the African market will be worth between $40 billion and $60 billion by 2020. That’s far below the US (with an estimated value of $393 billion) and Japan ($123 billion), for instance. However, Africa’s attractiveness lies not in its market size but in its rapid growth, with an estimated 9.8 percent compound annual growth rate between 2010 and 2020, compared with just 2 percent for the US and 1 percent for Japan.
Spurred by rising spending power and retail-sector growth, but also by the mounting cost of fighting disease, Africa’s healthcare spending rose from $28.4 billion in 2000 to $117 billion in 2012. Over the same period, its per capita expenditure almost tripled, from $41 to $112.