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Pharmaceuticals in Africa: The distribution pitfall

A new CAMELOT market report analyzes successful distribution strategies for pharma in the growth market of Africa

Mannheim, June 13th, 2017 – With an expected annual growth rate of 10.6 percent by 2020, the African pharma market is considered one of the most attractive within the pharmaceutical industry. While the difficulty of distributing products to patients continues to pose a significant challenge to making business in Africa profitable, a combination of local distribution centers, value-added services and partnerships can make these present complications manageable. These strategies are discussed in the recent market report “Pharma distribution in Africa: Navigating the labyrinth,” published by consulting specialists CAMELOT Management Consultants.

A majority of African countries import up to 70 percent of their pharmaceutical products. Numerous state and privately funded projects devoted to improving the African health system, combined with an expected total of 31 billion US dollars in healthcare expenditures in this year alone, make the African market highly attractive for foreign investment. Nevertheless, the complex variety of markets in Africa’s 54 states poses a challenge to distribution management. “In order to develop a successful and sustainable business operation, it is essential to make a careful study of the unique characteristics and central traits of each country,” argues Dr. Josef Packowski, a managing partner at CAMELOT. Principal challenges to distribution and supply chain management include difficulties in planning owing to inadequate data, volatile price increases, reduced availability of products due to unregulated markets and a loss of compliance and product quality control due to insufficient local contacts.

A local footprint, value-added services and partnerships as factors in success

The CAMELOT market report highlights the following strategies as critical to success:

  • Local distribution centers in stable African countries allow pharmaceutical companies greater flexibility and agility than is the case with direct distribution or European distribution centers. Moreover, in this way companies hold the advantage of value-added services over local logistics partners, for example an ability to manufacture products at the latest possible moment.
  • Investing in skilled local sales teams results in an improved understanding of the particular target market.
  • Partnerships with companies (bundling distribution of goods) and NGOs (greater access to rural areas, stakeholders, etc.) have a high synergistic potential, and improve access to customers.

Conclusion: A comprehensive reassessment and/or construction of an effective distribution network is indispensable to pharma companies that want to compete successfully in one of the most rapidly growing markets in the world. Optimizing distribution will lead generally to lower costs for patients, greater sales volumes, improved data quality and ability to plan, and thus finally to more profitable business operations.

The complete market report is available free of charge at www.camelot-mc.com.

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