Incentivising The Private Healthcare Sector In Africa

Author:Mr Robert Breedon, Jonathan Brufal, Elwin Morgan and Tom Gray
Profession:Gowling WLG

Africa is experiencing a period of strong economic growth, which in turn is accelerating the development and diversification of the health and care sector across the continent. As levels of urbanisation and the working age population increase, the African health and care sector needs to adapt to new challenges (such as increased levels of non-communicable diseases), growing demand for healthcare (both in urban and remote areas) and the most efficient way to take advantage of new financial and technological solutions.

In this, our second insight into the growth of the healthcare industry in Africa, we look at some of the policies and mechanisms that incentivise private sector investment. You can find our first look at this burgeoning sector in our insight: Maximising the return on healthcare investment in Africa.

Between 2003 and 2013, industry sales per capita throughout Africa increased to US$16 billion and are projected to grow to US$60 billion sales per capita by 2020. While this figure is comparatively small when compared to global sales, the potential for growth is what attracts interest from the private sector. It has been predicted that pharmaceutical spending in Africa will reach US$43 billion by 2020.

Shoring up the local market

Many African governments recognise that a continued dependency on imported pharmaceuticals, (currently comprising an estimated 80% of all pharmaceuticals), is neither economically nor logistically viable. Through initiatives such as the Kenya Good Manufacturing Practice (GMP) Roadmap, Good Manufacturing Practices for the East African Community Medicines Regulatory Harmonisation, and the Pharmaceutical Manufacturing Plan for Africa, African governments have instead shown a commitment to, and allocated extensive resources for, the adoption and implementation of regulatory standards in domestic and regional pharmaceutical markets. This will begin to align these domestic and regional manufacturing processes of pharmaceuticals with international standards of Good Manufacturing Practice.

Implementing international standards of manufacturing enables domestically manufactured pharmaceuticals to be traded in confidence between countries that have similar manufacturing standards. However, implementation of good manufacturing practices is not a straightforward process and requires the alignment of domestic policies across various government departments such as health, commerce, trade, and industry.

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