World’s oldest drug firm outlines plans for Kenya

Merck CEO Karl-Ludwig Kley   PHOTO: COURTESY

Kenya: Since last year, Merck has shown a sudden burst of interest in Africa; why?

Early 2012, the executive board of Merck took the decision to further invest in Africa. Since then, we have established new operations in six countries in sub-Saharan Africa. But we are not new to this region: first certifiable contacts to South Africa date back to 1897, and Merck opened its affiliate there in 1971.

We believe in the future of this continent. Therefore, we are now present in Kenya with all our businesses. We have the biopharmaceutical division and consumer health division, providing over-the-counter pharmaceuticals like Seven Seas.

We also decided to set up our two chemical divisions, selling high-tech chemicals like liquid crystals for TV displays and smartphones, and effect pigments for cosmetics and coatings.

What is Merck’s projected investment portfolio in Africa?

We decided to provide two things: access to health, and transfer of know-how and capacity building. This, I believe, is a sustainable way of building business in Africa.

We have provided market-leading drugs like the diabetes drug Glucophage, our hypertension treatment Concor, and Gonal-F to fight infertility. We are in the process of launching more products from our pharmaceutical portfolio in Kenya.

Through research partnerships with institutions like the Kenyan Medical Research Institute and University of Nairobi, and collaborations with local pharmaceutical producers, we also build up local capacities. 

What was the significance of opening a Merck office in Nairobi?

Kenya is the leading economy in East Africa. Furthermore, the country’s strategic location and its well-developed business infrastructure will enable us to boost our business in the region.

Kenya is the entry point to East Africa, and Merck has a lot to offer, such as accessible and equitable healthcare. We, thereby, want to contribute to the country’s social and economic development.

How will Kenyans benefit?

We are not here for the short term. More than 90 per cent of our staff has been hired locally, including in general manager positions.

We also partner with various institutions to work on state-of-the-art medical innovations and education.

Kenya is part of our Praziquantel donation programme, where Merck donates medication for school children to eliminate the widespread tropical worm disease schistosomiasis.

We work with local distributors as key partners in our supply chain for pharmaceuticals, chemicals and life sciences products. Together, we invest to ensure that local partners can comply with global standards and quality requirements in storage and logistics.

You see, Merck has come to Kenya to stay.

Has the entry of the firm made drugs cheaper for Kenyans in terms of pricing?

One of the big problems in the African pharmaceutical market is the large amount of substandard and fake drugs. These are creating problems in public health.

At Merck, we do not believe that the focus should be on being as cheap as possible, but on providing high-quality medicine at the right price. And Merck has been known for centuries for its quality standards.

What we see is that non-communicable diseases like diabetes are progressing quickly in Kenya, and also the rest of Africa. With our long-standing experience in fighting these diseases, we believe we can bring solutions to the country.

That is why we are fully committed to partnering with the Government, healthcare institutions, academics and other stakeholders to help increase access to health solutions.

We started our diabetes awareness campaigns earlier this year. And with our “minilabs” we support authorities in the fight against counterfeit medicines.

With the help of pre-defined test kits, pharmacists or lab technicians can identify inferior and counterfeit medicines rapidly and reliably.

How significant is the local market compared to other emerging markets?

As a more than 340-year-old family-owned business, we tend to think in generations.

Investing in other emerging markets like Russia or China would definitely bring a much higher return on investment today and tomorrow, but we do not invest for the next quarterly report.

As mentioned earlier, Merck came to Africa to stay because we believe in the long-term potential of the continent.

Are there any local materials or inputs that you get from Kenya or any of the African states where you operate to service your manufacturing needs?

Local partners and suppliers provide a lot of benefits: high flexibility, short lead times, good understanding of the market and customer needs, and local talent.

If we want to work with local partners, we have to invest mutually to achieve the standards that our products and services require. This includes know-how transfer.

How will the Merck Capacity Advancement Programme (CAP) contribute to improving Kenya’s healthcare system?

The CAP for diabetes is an important part of our corporate responsibility agenda. The five-year programme aims to improve accessibility and quality of diabetes healthcare in Africa, and builds mainly on strong stakeholder engagement and long-term partnerships.

The goal of this initiative is very simple: helping the population to better understand how diabetes can be recognised, and enabling physicians provide the most appropriate therapy. This will not only help the people, but also reduce the long-term costs for the Kenyan healthcare system.

What has been the experience of doing business in Kenya vis-à-vis other African countries, for instance, in terms of policies and regulations?

Regarding regulatory bodies and institutions in general, Kenya took the right direction when it voted for devolution in 2013. Increasing  institutional maturity will now be decisive for Kenya’s long-term economic success.

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