West and Central Africa Pharmaceuticals and Healthcare Report Q4 2012
- ID: 2254652
- October 2012
- Region: Africa, Central Africa
- 90 pages
- Business Monitor International
The West and Central Africa 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 West and Central Africa's pharmaceuticals and healthcare industry.
hold to our view that Cameroon’s medium-to-long-term drug market expansion potential remains highly dependent on the country’s economic growth and is strongly linked to rising income and greater consumer purchasing power. We see Cameroon enjoying above-trend real GDP growth for the next several years as new oil production and a set of major new investments give a temporary boost to the economy. However, the government has limited funds to make the investment needed to improve the healthcare sector. In the meantime, private out-of-pocket expenditure will have to be sufficient to support elevated growth rates in the pharmaceutical market. Irrational consumption of pharmaceuticals,
counterfeit medicines, the very price-sensitive consumer, the prevalence of informal distribution channels and competition with traditional healers will be key challenges for drugmakers in the country.
Headline Expenditure Projections:
- Pharmaceuticals: XAF106.7bn (US$226mn) in 2011 to XAF114.8bn (US$222mn) in 2012;
+7.5% in local currency terms and -1.6% in US dollar terms. 2011 calculated growth revised down, 2012 forecast lower from Q312 due to macroeconomic factors.
- Healthcare: XAF643.0bn (US$1.36bn) in 2011 to XAF695.5bn (US$1.37bn) in 2012; +8.2% in local currency terms and -1.0% in US dollar terms. Forecast broadly unchanged in local currency terms, weaker in US dollars.
Within the 30-country MEA region, Cameroon is 26th in the table, holding steady in our latest RRR assessment. Cameroon remains near the bottom of the MEA markets assessed by BMI and is therefore one of the least attractive propositions to multinational drugmakers in BMI’s pharmaceutical universe. Cameroon scores 34.5 out of 100 in BMI’s proprietary RRRs system. Its industry and country risk profiles weigh most heavily on its overall performance.
Key Trends And Developments:
- In May 2012, Roche signed a memorandum of understanding (MoU) the Cameroonian government to reduce the cost of treating hepatitis C. The cost of drugs has been reduced by 33%, said the president of the Cameroon Network against Viral Hepatitis, Oudou Njoya.
According to the MoU, the number of times patients come for treatment every month has been reduced by 50%. The price of the ribavirin injection has been cut from XAF159,000 (US$308.4)
to XAF106,000 (US$205.6).
- In May 2012, a three-year programme to improve access to pharmaceuticals services has been launched in Cameroon. The US$3.5mn project, announced by Minister of Public Health André Mama Fouda and US ambassador to Cameroon Robert P. Jackson, involves financial assistance from the US government and is part of a USAID programme called Systems for Improved Access to Pharmaceuticals and Services (SIAPS). SIAPS will work with the ministry through the Directorate of Pharmacy, the Central Medical Stores, the regional departments for stocking drugs and the National AIDS Control Committee, Jackson said. He said the programme will support the National AIDS Control Programme to meet the proceeding conditions for round 10 of Global Fund grants.
BMI Economic View:
A surge of investment and new exports should boost growth to an average of 5.4% through 2015, while improved infrastructure will marginally raise the longer-term growth rate above the 3.3% trend. Risks are primarily to the upside, with oil production potentially exceeding expectations in 2012. We see Cameroon enjoying above-trend real GDP growth for the next several years as new oil production and a set of major new investments give a temporary boost to the economy. Our projection is for growth to climb to 4.3% in 2012, 5.6% in 2013 and then hold at 4.9% in 2014 and 2015.
This compares favourably with 2011's estimated 3.7% and the 2001-2010 average of 3.3% per annum.
Furthermore, the short-term risks are to the upside.
BMI Political View: The decision by Cameroon's government to increase fuel subsidies by XAF400bn
(US$760mn) is a surprising reversal of policy and a troubling sign that the state may be backtracking on necessary reforms in the lead-up to a legislative election in February 2013. The subsidy increase, which represents 14.3% of state spending, will redirect funds needed for infrastructure improvements.
Rewards Industry Rewards Cameroon’s score is stable in our latest Q412 assess after weakening in our Q312 ratings, a score of 30 for industry rewards to reflect a slightly moderate growth outlook, still trailing the regional average score of 40. This category is a measure of the size of the market and its potential for growth. The size of Cameroon’s pharmaceutical market is comparable to many of its closest neighbours. Per capita expenditure is extremely poor compared to developed states but not dissimilar to other markets in the region. The outlook for growth is elevated and relatively stable.
Country Rewards Cameroon scores relatively favourable in our country rewards indicator with a rating of 63, just above the regional average of 61. The split between urban and rural residents is not particularly attractive, nor is the West & Central Africa Pharmaceuticals & Healthcare Report Q4 2012
© Business Monitor International Ltd Page 9 size of the pensionable population, which is low. The most attractive indicator in the country rewards category is favourable population growth, which should lead to increased sales over the longer term.
Risks Industry Risks Cameroon scores poorly in our industry risks indicator, receiving a score of just 23, considerably below the regional average of 37. The government’s limited involvement in the provision or funding of medicine is unfavourable. The lack of control of medicine distribution is also discouraging.
More positively, Cameroon’s WTO membership and its steps to implement the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs) benefit the assessment of the country’s intellectual property (IP) regime. Less positively, in Transparency International’s 2011 Corruption Perceptions Index, Cameroon was 134th, with Syria above it and Eritrea below.
Country Risks Cameroon’s country risk profile weighs heavily on our overall assessment. It scores 37 for this indicator,
which is some way behind the regional average of a more respectable 52. This highlights the weakness of the local legal framework and the level of bureaucracy and corruption. However, the economic and political continuity scores are relatively favourable.
BMI View: A lack of domestic pharmaceuticals manufacturing facilities means that Côte d'Ivoire continues to depend upon pharmaceutical imports to meet domestic demand, with France, Morocco and Tunisia providing the majority of imported drugs. The government did attempt to boost the healthcare sector, by hosting a pharmacy exhibition in May 2012, and has launched campaigns to encourage Ivoriens to comply with national vaccination and healthcare campaigns. BMI forecasts that healthcare and pharmaceutical expenditure as a percentage of GDP will decline between 2011 and 2016, and that Côte d'Ivoire will not fufill its potential over the medium term. Security concerns persist, as illustrated by the July 2012 attack on a camp of internally displaced citizens.
Headline Expenditure Projections
- Pharmaceuticals: XOF170.3bn (US$360mn) in 2011 to XOF180.8bn (US$369mn) in 2012;
+6.2% in local currency terms and +2.5% in US dollar terms. Historic data revised downwards marginally from Q312 due to new imports data.
- Healthcare: XOF571.6bn (US$1.21bn) in 2011 to XOF601.7bn (US$1.23bn) in 2012; +5.3% in local currency terms and +1.6% in US dollar terms. Forecast revised downwards slightly from Q312 due to new historic data.
- Medical Devices: XOF19.25bn (US$41mn) in 2011 to XOF20.66bn (US$42mn) in 2012;
+7.3% in local currency terms and +3.6% in US dollar terms. Forecast revised downwards slightly compared to Q312.
Risk/Reward Rating: In Q412, Côte d'Ivoire kept its position in the penultimate rank in BMI's RRRs for the MEA region, although its overall score remains at 28.0 out of 100, significantly below the regional average of 44.2. Côte d'Ivoire only outranks Sudan in the table and is just under 2pp behind Zimbabwe.
Key Trends And Developments
- Health Minister N'Dri Yoman launched a national child polio vaccination programme in May 2012. The WHO and Rotary International have provided funding for the scheme.
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- In June 2012, Health Minister N'Dri Yoman launched an electronic vaccinations card, which the government aims will increase compliance with vaccinations campaigns, as well as a mother and child health card.
- President Alassane Ouattara met with Chinese private business owners in July 2012, indicating the Ivorian government's intention to increase international investment as a means of boosting economic recovery.
BMI Economic View: Côte d'Ivoire continues on its road to economic recovery, and advances towards peace are boosting the confidence of potential investors. Moves such as the President's meetings with representatives from China's business community are a positive development. We are now forecasting real GDP growth of 8.1% in 2012 and sustained growth of between 4% and 5% until 2021.
BMI Political View: Violence following Côte d'Ivoire's 2010 election killed over 3,000 people, and following the arrest of former president Laurant Gbagbo, we see many reasons to be positive about the country's political development. While the situation is still fragile – as attacks on a camp of displaced people in July 2012 illustrate – BMI predicts a gradual return to political stability.
BMI View: The attractiveness of Gabon’s healthcare sector to pharmaceutical companies and medical device manufacturers has decreased, albeit slightly, for the second consecutive quarter. Expenditure growth rates are lower, due to a less optimistic outlook for the economy, which is failing to fufill its potential, despite a stable political regime.
Headline Expenditure Forecasts
AF63.7bn (US$135mn) in 2011 to XAF68.3bn (US$132mn) in 2012;
+7.2% in local currency and -2.1% in US dollar terms. Forecast down slightly compared with Q312 in local currency and US dollar terms, due to lower macroeconomic projections and an expected weakening of the Central African CFA franc.
- Healthcare: XAF256bn (US$542mn) in 2011 to XAF284bn (US$551mn) in 2012; +11.2% in local currency and +1.6% in US dollar terms. Forecast down slightly compared with Q312 in local currency and US dollar terms, due to updated historic data and the forecast weakening of the franc.
- Medical Devices: XAF11.1bn (US$24mn) in 2011 to XAF12.1bn (US$23mn) in 2012; +8.8%
in local currency and -0.6% in US dollar terms. Forecast down slightly compared with Q312 in local currency and US dollar terms, due to lower macroeconomic projections and an expected weakening of the franc.
Risk/Reward Rating: Gabon’s pharmaceutical risk/reward rating (RRR) has decreased from 41.5 out of 100 in Q312 to 40 in Q412. This drop was due to a downward revision in the pharmaceutical market growth forecast, from 8.1% compound annual growth rate to 6.7%. This downgrade in our expenditure projection was itself due to a less optimistic macroeconomic outlook. The drop in Gabon’s RRR score means the country’s pharmaceutical market is now the 20th most attractive in the Middle East and Africa region. Previously, it had been ranked 19th.
Key Trends And Developments
- In July 2012, it emerged that the number of diabetes cases in Gabon had almost trebled from 2,300 cases five years ago to approximately 6,000. A local endocrinologist recommended improved prevention and management strategies, in both urban and rural areas. This development highlighted the evolving disease burden in Gabon, and potential commercial opportunities for diagnostic manufacturers and producers of diabetes therapeutics.
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- Also in July 2012, the National Communication Council banned the advertisement of prescription drugs on television and radio. This demonstrates the improving pharmaceutical regulatory regime in Gabon.
- July 2012 also saw the publication of a report by the Gabon Department of Health that revealed that 32 new cases of leprosy were reported in 2011. This represented a decline from the 40 new cases detected in 2010. However, there are still 10,000 lepers in the African country.
- In July 2012, the Caisse National d’Assurance Maladie et de Garantie Sociale (CNAMGS) was presented with an award in recognition of introducing mandatory health insurance in 2007. The scheme has improved key health indicators and the reduced the costs of many medical services,
such as pharmaceuticals in pharmacies.
- In June 2012, it was revealed that 63,000 people in Gabon were infected with HIV in 2010. This equates to a very high prevalence of 4.3%. In that year, there were 6,000 new cases of the disease and 2,000 deaths. We expect more funding to be allocated to prevention and treatment strategies, with particular commercial upside for manufacturers of antiretrovirals.
BMI Economic View: On a May 2012 visit to London, Gabonese President Ali Bongo Ondimba elaborated on the 'Emerging Gabon' initiative that he hopes will develop new industries to replace declining oil revenues. BMI believes that the country's financial markets will not be capable of supporting the complex financial instruments with which the president plans to fund his development programmes. We remain pessimistic on Gabon's long-term growth prospects, but flag iron ore mining has potential.
BMI Political View: The Gabonese Democratic Party (PDG) of President Ali Bongo Ondimba has won all six seats contested in by-elections across the country. The poll was called after a judge found that results from the December 2011 legislative election were unreliable due to fraud. Foreign observers believe that the last election was systemically biased in favour of the president's party, and most opposition parties boycotted the election. The results now give President Bongo's party, which has ruled the country since independence, 114 of 120 seats in Gabon's national assembly. SHOW LESS READ MORE >
Pharmaceuticals Risk/Reward Ratings 5
Table: Pharmaceuticals & Healthcare Q412 Risk/Reward Ratings 5
Executive Summary 7
Market Summary 10
Regulatory Regime 11
Industry Forecast Scenario 12
Overall Market Forecast 12
Table: Pharmaceutical Sales Indicators 2008-2016 14
Key Growth Factors – Healthcare 15
Table: Healthcare Expenditure Indicators 2008-2016 18
Table: Healthcare Governmental Indicators 2008-2016 18
Table: Healthcare Private Indicators 2008-2016 19
Key Growth Factors – Macroeconomic 20
Côte d'Ivoire 29
Executive Summary 29
Pharmaceutical Business Environment Ratings 31
Market Summary 34
Table: Côte d'Ivoire's Millennium Development Goals 35
Regulatory Regime 40
Pharmacovigilance (PV) 41
Industry Forecast Scenario 43
Overall Market Forecast 43
Table: Pharmaceutical Sales Indicators 2008-2016 44
Key Growth Drivers – Industry 45
Table: Healthcare Expenditure Indicators 2008-2016 46
Table: Healthcare Governmental Indicators 2008-2016 47
Table: Healthcare Private Indicators 2008-2016 47
Key Growth Drivers – Macroeconomic 48
Executive Summary 54
Pharmaceutical Business Environment Ratings 56
West & Central Africa Pharmaceuticals & Healthcare Report Q4 2012
© Business Monitor International Ltd
Gabon – Market Overview 57
Regulatory Regime 59
Industry Forecast Scenario 60
Overall Market Forecast 60
Table: Pharmaceutical Sales, 2008-2016 61
Key Growth Factors – Industry 62
Table: Overall Healthcare Expenditure, 2008-2016 64
Table: Governmental Healthcare Expenditure, 2008-2016 64
Table: Private Healthcare Expenditure, 2008-2016 65
Key Growth Factors – Macroeconomic 67
Demographic Outlook - Cameroon 72
Table: Population By Age Group, 1990-2020 (‘000) 72
Table: Population By Age Group, 1990-202 0 (% of total) 73
Table: Key Population Ratios, 1990-2020 74
Table: Rural/Urban Population Split, 1990-2020 74
Demographic Outlook - Cote d'Ivoire 76
Côte d'Ivoire's Population By Age Group, 1990-2020 ('000) 77
Côte d'Ivoire's Population By Age Group, 1990-2020 (% of total) 77
Côte d'Ivoire's Key Population Ratios, 1990-2020 78
Côte d'Ivoire's Rural And Urban Population, 1990-2020 78
Demographic Outlook - Gabon 80
Table: Population By Age Group, 1990-2020 (‘000) 80
Table: Population By Age Group, 1990-2020 (% of total) 81
Table: Key Population Ratios, 1990-2020 82
Table: Rural/Urban Population Split, 1990-2020 83
BMI Methodology 86
How We Generate Our Pharmaceutical Industry Forecasts 86
Risk/Reward Ratings Methodology 87
Ratings Overview 87
Table: Pharmaceutical Business Environment Indicators 88
Table: Weighting Of Components 89