By 2030, it is estimated that local pharmaceutical firms would have invested up to Sh23.2 billion ($200 million) in human resources and infrastructure to match international standards.
Investments in these areas have been necessitated by the existing gaps in the country and the continent at large in the sector which is behind Kenya importing 70 per cent of pharmaceuticals. This has made Kenya lag behind in meeting the global manufacturing standards for pharmaceuticals - a challenge Nihal Shah, chief executive officer Biodeal Laboratories Ltd says manufacturers in the sector seek to address.
Mr Shah said that while in a conference in Lusaka, Zambia in 2005, he was under pressure to explain why Kenya, despite having many industries, could not then supply HIV and Aids or Tuberculosis medicines to the rest of the continent. He argued that such is possible only that manufacturers in the country did not know how to navigate through the Global Fund and The United States Agency for International Development (USAID) tenders.
It was until during a session with GIZ and The United Nationals Industrial Development Organisation (Unido) that the actual issue came up – standards. “To be honest, nobody really understands what are the (global manufacturing practice) standards required for us to be considered. People are talking about quality and affordable medicines. We are affordable and we think we have quality. What’s wrong?” he posed.
It is from this conversation that industries in the country through Unido started working towards having World Health Organisation (WHO) standards and a policy was formed which players in the country subscribe.
He said by 2019, members had invested Sh17.4 billion ($150 million) in capacity building on human infrastructure. And by 2030 it is estimated that another $200 million will be invested. Shah, also the vice chair of Federation of Kenya Pharmaceutical Manufacturers said the Kenyan medicine market is worth about Sh81.2 billion ($700 million). “Of which local manufacturers are supplying just around Sh46.4 billion ($400 million) and growing. We are not there yet,” said Shah adding that the Covid-19 pandemic has accelerated the need for affordable and quality medicine.
Speaking during the launch of a vocational training programme for professionals in the pharmaceutical sector at United States International University–Africa (USIU-Africa), Shah said such initiatives will go a long way toward ensuring quality medicines.
“We need to reposition ourselves as manufacturers of quality affordable medicines across the continent,” he said. Shah said such vocational programmes are key as the industry players are investing in high-tech equipment in pursuit of quality medicine and they cannot be operated by just anyone.
The Kenya Pharmaceutical Industry Diagnostic Report 2020 quotes Trade CS Betty Maina saying that with over 30 pharmaceutical manufacturing plants, Kenya’s pharmaceutical industry is the largest in the Common Market for the Eastern and Southern Africa (Comesa) region.
Health Chief Administrative Secretary Dr Rashid Aman said the establishment of The Kenya Biovax Institute Ltd by the government is a sign by the state to ensure affordable and quality medicines.
“However, insufficient drugs are manufactured in Kenya to meet domestic needs. As a result, approximately 70 per cent of locally used drugs are imported,” she said.
“The sector also relies heavily on imported raw materials for production.”
The report notes that Kenyan manufacturers sell less of their products locally and export more than companies in other countries. It also notes that the average revenue per local manufacturing company is low compared to that in other countries.
“This is largely due to the high cost of utilities and transport of goods and the country’s dependence on imported inputs,” it adds. “Although workforce costs in Kenya are lower, Kenyan firms (due to lack of capacity) rely on expatriates, which results in increased workforce expenses.”
For Kenya to become a hub for pharmaceutical manufacturing and a major exporter of pharmaceutical products to the rest of Africa, the 2020 diagnostic report says local manufacturers need to adopt technology and turnkey enterprise resource planning should be a required business standard for local pharmaceutical manufacturing firms.
“This will go a long way toward improving operational efficiency, reducing waste, and ensuring that products meet the highest quality standards,” the report reads.
The Kenya Biovax Institute Ltd, owned by the government will be key in manufacturing human vaccines among other health products and technologies.
“Moderna, for example, has made a commitment of Sh58 billion ($500 million) to set up a vaccine manufacturing plant,” said Aman adding that the nation is open to foreign direct investments.
Aman said if you look at the private sector, compared to the region, Kenya is leading in the hub with almost 38 to 40 production and export.
He said imports distort the level playing field for the industry as those manufacturers who produce locally are not then able to market their own products.
“We want to create a level playing field so that our own company can grow and fill that marketplace,” he said.