China to heighten competition for pharma exports to SSA

Nonetheless, India is still expected to be the region’s top supplier.

Although India will remain a key pharmaceuticals supplier to sub-Saharan Africa (SSA), Chinese drugmakers are expected to ramp up the competition and grow their market share in the region over the coming years, according to a Fitch Solutions report.

India has been the top supplier of pharma products in almost all SSA countries over the past years, supplying over 50% of total imports in major markets in 2020. It accounted for over 55% of total imports in Zimbabwe, whilst the share of imports is smaller in countries like South Africa and Nigeria but still accounted for over 20% of total imports.

As such, the outbreak in India, if long-lived, could impact the supply of medicine in SSA. Because of SSA's high dependency on India, any disruptions in India's pharmaceutical industry will pose downside risks to the region's pharmaceutical market, the report stated.

“The coronavirus outbreak could create a supply chain gap, as we note that there are a number of travel restrictions imposed on India including temporary suspensions of flights, which could hinder supply to SSA markets,” Fitch added.

Against that backdrop, multinational drugmakers outside of India are expected to benefit from India’s slowdown, as other manufacturers of generic medicine could expand their import share in SSA as countries seek alternative suppliers.

In particular, medicines manufactured in China have grown in importance across the region over the past 10 years, with pharmaceutical exports from China to Africa more than doubling from $5.4b in 2011 to $13.2b in 2020, Fitch noted.

Still, SSA is expected to remain highly dependent on Indian medicines, driven by the country’s expertise in producing affordable generic drugs. Indian pharmaceutical companies are the largest providers of generic medicine in the world, and African markets benefit from these price competitive drugs, the report noted.

For example, the generic anti-retroviral and anti-malarial drugs have made it possible for cost-constrained African health systems to treat outbreaks of malaria in the region, as well as the HIV/AIDS epidemic.

India is also expected to continue assisting SSA in developing its healthcare sector. At the last India-Africa Forum Summit held in New Delhi in 2015 and brought together representatives from all 54 African countries, the two parties disclosed plans for cooperation.

One of the plans in the healthcare sector included enhancing joint cooperation in health and pharma development as well as telemedicine and traditional medicine; jointly combat diseases; and ramp up the efficiency of health institutes through training programs and coordination to harness modern scientific technologies.

The next summit was meant to take place in 2020 but has since been delayed due to the pandemic.