Pharmaceutical industry seeks US$10 million
PHARMACEUTICAL industry stakeholders say the sector requires at least US$10 million for recapitalisation and is advocating for the availability of more affordable finance for the sustenance of sector operations.
Lack of organised finance has been a stumbling block to the local pharmaceutical sector’s growth and development, exacerbating the sector’s over-reliance on imported raw materials.
According to a recent report on local content thresholds for the pharmaceuticals value chain, the sector has hitherto, not received the US$45 million as promised in the Government’s pharmaceutical sector growth strategy.
The Pharmaceuticals Manufacturing Strategy in Zimbabwe stipulates that US$43 million is required for factory upgrades, research, and development, while US$2 million should be earmarked for infrastructure developments.
Launched in 2021, the Pharmaceutical Manufacturing Strategy in Zimbabwe 2021-2025 endeavours to curb challenges inflicting the industry including enhancement of essential drugs production to 60 percent.
The blueprint also intends to grow the sector’s revenue to US$150 million per annum from local production moving up from the current US$32 million.
Data from the pharmaceutical sector’s local content thresholds shows that Zimbabwe’s average annual national demand for pharmaceutical products is worth around US$272 million while local manufacturers produce US$31, 5 million, and the remainder is imported.
The largest domestic firm manufactures pharmaceutical products worth US$15 million while the smallest manufactures products worth US$250 000.
According to stakeholders, there is a need for more attractive financial packages, including repayment terms and interest rates.
Establishing a strong pharmaceutical industry locally can be challenging due to several factors, which include limited access to finance.
“Access to funding is a key ingredient for the growth of the local pharmaceutical sector and a total of US$10 million is required to recapitalise the sector for it to be competitive.
“Working capital and fund for investment remain a major challenge for most firms in the pharmaceutical sector, there is a need for affordable credit lines and financial incentives that encourage investors and sector stakeholders to boost their economic activity,” said the Ministry of Industry and Commerce’s local content strategy report.
Difficulties in accessing affordable financing and venture capital make it challenging to scale up pharmaceutical manufacturing facilities.
High upfront costs for infrastructure, research and development, and production contribute to the limited investment in the pharmaceuticals industry.
Generally, there is a shortage of investment in research and development in Africa leading to limited innovation and new drug development.
Insufficient pharmaceutical manufacturing facilities, research and development centres, and distribution networks have long been barriers to the industry’s growth in Africa.
This leads to reliance on imported medicines and limits the country’s ability to develop and produce its own pharmaceutical products.
The local pharmaceutical sector is characterised by importation of most raw materials including glass bottles which are a critical component in production.
There are 10 pharmaceutical manufacturers licensed by the Medicines Control Authority of Zimbabwe (MCAZ) in the country.
Manufacturers of human-consumed medicines include Caps Pharmaceuticals, Varichem Pharmaceuticals, Datlabs Pharmaceuticals, Plus Five Pharmaceuticals, Zimbabwe Gulf Drug Pharmaceuticals, Cospharm Pharmaceuticals, and Sapps Pharmaceuticals while Ecomed Manufacturing makes veterinary products. About 80 percent of local pharmaceutical companies are involved in production while the rest are involved in product importation which gives Zimbabwe hope to enhance its pharmaceuticals value addition if proper funding is discovered.
Governments, private sector entities, and international partners need to collaborate to overcome these barriers and foster the growth of a robust pharmaceutical industry in Africa.
-herald
