Drugmakers eye Africa’s middle classes as next growth market
PARIS (Reuters) – For pharmaceutical companies, Africa is changing.
Not only is the continent’s economic growth grabbing attention in boardrooms but the shifting nature of its disease burden is luring Big Pharma, as new opportunities open up for treating chronic diseases afflicting the middle classes, rather than just fire-fighting infection.
European companies, in particular, hope to reap rewards by investing early in a region where many of them already have historic commercial ties.
Violence in Mali and Algeria have put Africa in the headlines in recent weeks but Sanofi of France – the international drug company with the biggest sales in Africa – is still pushing ahead with a third factory in Algeria.
“Africa is becoming an extremely interesting market and we’ll continue to expand our commercial presence there,” Chief Executive Chris Viehbacher told Reuters.
According to IMS data, by 2016 pharmaceutical spending in Africa is expected to reach $30 billion, driven by a 10.6 per cent annual growth rate that is second only to Asia and in line with Latin America.
By 2020 the market will have more than doubled from current levels to $45 billion.
Although it is likely to remain a niche market, the promise of Africa is that it will continue to grow in the next decade as Asia and Latin America start to reach maturity.
It is that potential for the continent to act as a hedge against slowing long-term growth in established emerging markets that appeals to Novartis Chief Executive Joe Jimenez.
“We’re thinking hard about what happens when those emerging markets start to slow because they are not going to continue growing at the rate that they’re growing forever – and a place where we’re putting a lot of our attention is Africa,” he said.