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Ghana Pharmaceuticals and Healthcare Report Q1 2011
Business Monitor International, Jan 2011, Pages: 54
The Ghana Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Ghana's pharmaceuticals and healthcare industry.
Ghana’s healthcare system is rapidly becoming a centre of excellence in West Africa. Furthermore, its pharmaceutical industry is attracting interest from foreign investors ahead of its neighbour Nigeria, as a potential entry point into the regional market. The National Health Insurance Scheme (NHIS), introduced in 2003-04 has had mixed success thus far, but more recently has been improving its standards, receiving plaudits from across Africa and non-governmental organisations.
In 2009 total pharmaceutical sales were GSH456mn (US$319mn). Market share is split quite evenly between patented drugs, generic drugs and over-the-counter (OTC) medicines, but due to the levels of wealth inequality across the population, pharmaceutical demand is predominantly influenced by drug pricing. Although, many pharmacists continue to purchase medicines from more expensive private sources, as foreign medications continue to be regarded as superior.
In November 2010, Ghana reviewed its IP laws and put forward a motion to bring them into alignment with international standards. The West African country has previously had an inadequate IP regime, which not only failed to protect the IP of foreign drug makers, but also made counterfeit medicines harde rto regulate. This development will encourage more foreign direct investment (FDI), but will probably not have an impact before late 2011, early 2012.
After the discovery and development of an oil industry in Ghana, large proportion of the revenues of the hydrocarbon industry will go to paying off a US$13bn loan and trade agreement with China, which was signed in September 2010. Personal wealth will increase, as a result of employment creation from infrastructure projects, paid for by the Chinese loan. This will correlate to a higher per capita expenditure on healthcare and pharmaceuticals. However, a possible consequence of this development is rapidly increasing inflation, which would damage the profitability of investments.
The National Health Insurance Scheme (NHIS) continues to increase in size and popularity, but there are fears that at its current rate of expansion, funding will become unsustainable by 2013 and the government may need to raise the NHIS value-added-tax (VAT) contribution, from 2.5% to 3.5%. BMI believes government funding to cover any shortfall in NHIS funding is a good idea, but subsidisation of employee premiums, which many have already accepted are necessary – with oil and gas revenues, could be counter productive to the economy's overall development.
In Q410, the FDB gave regulatory permission for Bafna Pharmaceuticals’ to market atenolol and metformin in Ghana. BMI believes that the continued success of Indian generic drug makers in Ghana will continue in the short term, however, we expect the government to begin to put more pressure oncompanies like Bafna to begin partnerships with local drugmakers.
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