Designing market appropriate supply models for African expansion in the pharmaceutical industry

Abstract

Paper presented at the 33rd Annual Southern African Transport Conference 7-10 July 2014 "Leading Transport into the Future", CSIR International Convention Centre, Pretoria, South Africa.

The emerging markets of Africa present a significant growth potential for pharmaceutical brand owners. Africa’s appeal to drug companies lies in its growth potential, at a time when the major markets face an uncertain future. By 2016, pharmaceutical spend in Africa is expected to reach US$30 billion, and potentially represents a US$45 billion opportunity by 2020 (IMS 2013). However, hurdles exist at every stage in the medicinal path to market (Kudlinski, 2013): Long lead-times for drug registrations; Substandard and counterfeit medicines; Limited infrastructure; Small volumes; Large and dispersed populations in rural areas. Given this environment, increasing access to medicines and growing volumes and scale may seem impossible. However, innovative solutions can overcome them and ensure a sustainable business. Imperial Health Sciences (IHS) is a division of Imperial Logistics, specialising in pharmaceutical storage and distribution across 22 countries on the continent. With almost a decade of learning, Imperial Health Sciences has developed a matrix model which provides clients with a framework for developing their strategy for the dynamic markets of Africa. The Imperial service offerings include: 1. 3PL: Storage and distribution services through regional consolidation hubs at source and/or destination 2. International Buy and Sell: Function as registered trading entity in target country 3. Trading: Management of customers, product and market clustering 4. Brand Development: Channel and Partner development Understanding that markets move at varying speeds of regulatory and commercial development requires a time-and-milestone based approach with strategies for each phase and trigger points that must be achieved to lay the foundation for long-term sustainable growth and greater access to medicines.