The Viability of Local Pharmaceutical Production in Tanzania
(2007; 58 pages)
Resumen

This study argues that there is a case for promoting the local production of pharmaceuticals in Tanzania. Especially the donor market in Tanzania itself is sufficiently big to accommodate Tanzanian producers and offers realistic options for a viable business. However, in regional or international markets, where Tanzanian producers have to compete with producers from India and China, their prospective success is at least questionable.

Considering the background of the TRIPs agreement, which allows Least Developed Countries (LDCs) like Tanzania to produce essential drugs without introducing pharmaceutical product patents until 2016, there seems to be an opportunity to build up a pharmaceutical industry, using this transition period. There are several possibilities of taking advantage of the transition period in order to ensure access to essential drugs. One of them is the promotion of local pharmaceutical production. An extensive study on the international background and the implementation of TRIPs flexibilities is to be published by the Secretariat of the United Nations Conference on Trade and Development (UNCTAD).

Tanzanian producers are formulating active pharmaceutical ingredients (APIs) into Anti Retroviral Drugs (ARVs). That means they are importing the APIs and then formulate the combination and package the actual ARVs. The APIs that are needed and imported from China for the triple combination product which is to be manufactured by Tanzania Pharmaceutical Industries (TPIs) are off-patent. Thus, in this case the significance of the TRIPs agreement is not as relevant as anticipated.

The market size in Tanzania itself is large when it comes to the donor market. This “parallel” market is considered a “real” and very profitable market in the medium term.

There are two major local suppliers of the market: Shelys and TPI. Both have recognised and are aiming at the donor market. TPI is already producing ARVs (even though this could not be verified during the field study). All producers can participate in tenders issued by the government. Local producers enjoy a 15% preferential treatment and have to comply with Tanzanian Good Manufacturing Practices (GMP) standards. However, as no local producer complies with international standards yet, they are not eligible for international donor financed tenders, which are more profitable. Shelys is part of a Public Private Partnership (PPP) Initiative aiming at achieving international quality standards. The area of quality standards poses one of the three most significant challenges of local production and competitiveness of the pharmaceutical sector. German Development Cooperation (GTZ) can contribute to the improvement of quality standards, in particular through its PPP facility, but also through the facilitation of knowledge transfer or advisory services to the Tanzanian Food and Drug Regulatory Authority (TFDA).

The other main challenges are regional cooperation and human resource development. The regional market of the East African Community (EAC) is potentially big. To what extent Tanzanian producers will be able to meet foreign standards and consumer expectations in markets, where they have to compete both with attractive and well established third country producers (from India, China, etc.) and local producers enjoying preferential treatment through Medical Stores Department (MSD) tenders, is however unclear. The unused potential of regional integration, especially a regional approach to quality control by a common Drug Regulatory Authority (DRA), is huge.

Human resource development is highly relevant. Pharmaceutical companies have to recruit staff from India and Europe to be competitive. Even though a large majority of staff does not need to be especially trained, it is hard to find personnel. This indicates that there is a lack of general education, as well as specialised work force.


 
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