The Viability of Pharmaceutical Manufacturing in Ghana to Address Priority Endemic Diseases in the West Africa Sub-Region
(2007; 98 pages)

Major tensions and reiterating vicious cycles exist concerning the issue of developing local pharmaceutical production in the context of addressing Priority Endemic Diseases in Developing (DC) and Least Developed (LDC) countries: the tensions of

(i) globalisation and localisation (buying or making) and

(ii) public health goals and profits; and two vicious cycles exist that need breaking in Africa as a whole:

(i) the poverty-sickness cycle, and

(ii) the dependency cycle.

As the recent Ghana National Health Policy states, the priority should be on creating "Wealth through Health".

There are a number of Ghana-specific and sub-region "Access to Drug initiatives" operating that address communicable and non-communicable disease problems, but it is beyond the scope of this report to examine these initiatives, how they are coordinated at a national and sub-region level and how they contribute toward an overall public health strategy.

In the context of the aforementioned tensions and vicious cycles, this report examines the viability of pharmaceutical manufacturing in Ghana to address Priority Endemic Diseases in Ghana specifically and with reference to the West Africa sub-region as a whole. This report also examines the operating environment of the local pharmaceutical manufacturing industry including some issues that have West Africa (ECOWAS) sub-region relevance, particularly pharmaceutical regulation.

Severe difficulties with financing and implementing development projects in the African pharmaceutical industry undermine sustainable development across Africa. However, Ghana has a well established and developing pharmaceutical manufacturing base and this report provides profiles of six of the major Ghana pharmaceutical manufacturers. The profiles provide some interesting contrasts in manufacturing strategy against the background of many common constraints for local pharmaceutical manufacturing development in Ghana. In the absence of accurate pharmaceutical market statistics, it is estimated that the Ghana pharmaceutical market (both for non prescription – OTC and prescription medicines) is made up of approximately 30% locally produced and 70% imported products that originate mainly from India and China, the latter arguably being of better quality and certainly cheaper than those locally produced. Pharmaceutical market supply is divided approximately 50/50 between the private sector and the public donor sector. The local manufacturing sector is focused largely on providing OTC products in a saturated local OTC market (which exists for several reasons), while the public donor sector (particularly The Global Fund to Fight Aids, Tuberculosis and Malaria) provides the majority of products that address Priority Endemic Diseases.

While there is no shortage of pro-activeness on the part of many of the local major pharmaceutical manufacturers, some of which are beginning to produce drugs that address Priority Endemic Diseases, the Ghana pharmaceutical manufacturing industry faces a number of barriers and constraints (weaknesses and threats) for its future rational development which theoretically is founded on the supply of essential drugs to Ghana and the sub-region. A major symptom of the constraints that the local industry is facing is significant under utilisation of manufacturing capacity, often by more than 50%. The major constraints facing the development of the local pharmaceutical industry consist of:

(i) a chaotic and unregulated pharmaceutical distribution chain that leads to high prices and which seriously compromises pharmaceutical supply chain security;

(ii) a focus of local production on OTC product manufacturing in a highly saturated local OTC market against the background of an "ad hoc" local pharmaceutical market;

(iii) inability to produce essential medicines that meet the standards for international tenders (i.e. WHO prequalification with its emphasis on manufacturing and product international regulatory compliance);

(iv) relatively high manufacturing costs, for a number of reasons, of locally manufactured pharmaceutical products compared for example to imports from China and India;

(v) absence of a local "enabling business environment", i.e. effective and coordinated incentives and support for local pharmaceutical production of essential drugs according to international pharmaceutical standards;

(vi) difficult access to cost-effective investment;

(vii) limited attention and support for pharmaceutical R&D, when clear opportunities exist;

(viii) weaknesses and gaps in implementation of IPR issues relating to TRIPS flexibilities and inefficiencies in the usage of in-licensing – whether by voluntary or compulsory means;

(ix) inadequate and in-coordinated sub-region pharmaceutical regulatory framework;

(x) arguably poor perception of sub-region produced medicinal products;

(xi) the growing threat of counterfeit and diverted medicines – both for finished dosage forms and for active pharmaceutical ingredients (from India and China in particular);

(xii) local inaction and in-coordination leading to increasing reliance on imported medicines (from international donors, China, India and from elsewhere in Africa and the subregion); and

(xiii) unmet professional human resource development / capacity building needs.

For a number of reasons, there are strong grounds for encouraging local pharmaceutical manufacturing that addresses the "double burden of disease" in Ghana and the sub-region (Priority Endemic Diseases and chronic degenerative illnesses such as cardiovascular disease). It is probably neither sustainable nor desirable for West Africa to rely to a large degree on its drug supply (including the import of manufacturing materials) from outside sources such as China and India. The latter two countries have received a lot of investment and development incentives from their national governments to develop their growing pharmaceutical industries, and indeed perhaps can provide good case studies for the development of the African pharmaceutical industry. Although it is in the interest of vertically integrated Chinese and Indian pharmaceutical manufacturing companies with large manufacturing economies of scale to supply West Africa, this is not ultimately in the long term interest of West Africa.

Given the increasing economic and political stability in Ghana and several other countries in the sub-region, the time appears to be right to address local pharmaceutical industry development issues full on and in a way that deals with the cycles of poverty-sickness and dependency that exist in Africa.

This report presents a number of detailed recommendations that can potentially address the barriers and constraints facing local pharmaceutical production in the context of supporting better long term sustainable and cost effective health care and wealth creation in Ghana and the sub-region.

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