Africa within the global pharmaceutical market

In 2016, global pharmaceutical revenues totalled over US$ 1,105 billion and are forecast to reach US$ 1,400 billion by 2021, especially thanks to the growth in “pharmerging” countries1. The African Continent only accounts for 0.7% of this market (ten African countries2 represent 70% of the Continent’s revenues on their own).

1. Algeria, Egypt, Kenya, Côte d’Ivoire, Libya, Morocco, Nigeria, South Africa, Sudan, Tunisia.

1. Algeria, Angola, Cameroon, Egypt, Ethiopia, Ghana, Kenya, Libya, Marocco, Nigeria, South Africa, Sudan, Tanzania, Tunisia, Uganda

Source: McKinsey, Africa: A Continent of Opportunity for Pharma and Patients, April 2015Source: McKinsey, Africa: A Continent of Opportunity for Pharma and Patients, April 2015

1. China, Brazil, Russia, India, Algeria, Argentina, Colombia, Bangladesh, Indonesia, Mexico, Nigeria, Pakistan, Poland, Saudi Arabia, South Africa, Philippines, Turkey, Romania, Chile, Kazakhstan, Vietnam.

2. Algeria, Egypt, Kenya, Côte d’Ivoire, Libya, Morocco, Nigeria, South Africa, Sudan, Tunisia.

Source: IQVIA Institute; World Health Organisation (WHO)

49%

North America

21.8%

Europe

21.7%

Asia- Pacific

4.6%

Latin America 0.7%

Africa

2.2%

Turkey, Middle-East-

Eurasia

The African pharmaceutical market is booming

The African pharmaceutical market was worth US$ 19.9 billion in 2012 and is forecast to grow to US$ 50 billion by 2020, driven by the Continent’s demographic boom inter alia.

Rest of Africa

Top 15 countries1

Market size, US$ billions

2020, OPTIMISTIC2020, REALISTIC2010

66.5

58.7

7.852.2

7.1

45.1

17.5

14.5

3.0

201220062000

19.9

14.1

5.8

7.9

2.5

10.4

3.0

1.2

4.2

Rest of Africa

Top 10 countries1

1 8

P R I V A T E S E C T O R & D E V E L O P M E N T

K E Y F I G U R E S

A population forecast to boom

Population of Africa (millions)

Source : United Nations World Population Prospects: The 2015 Revision, 2015, IQVIA Institute

Source : IQVIA Institute

2015 2030 2050 2100

4,3872,478

1,679

1,186

Average annual growth in pharmaceutical sales (2011 – 2016)

6%

Morocco

9%

Algeria

14%

Egypt

8%

South Africa

COUNTRIES WITH STRONG GROWTH

13%

Nigeria

17%

Kenya

12%

Botswana

COUNTRIES WITH STRONG ACTIVITY

Nigeria

Kenya

Botswana

Morocco

Algeria

Egypt

SouthAfrica 1 9

Pharmaceutical industry and emerging marketsPharmaceutical supply chains in emerging markets

Source: International Finance Corporation (IFC), Private Sector Pharmaceutical Distribution and Retailing in Emerging Markets , 2017

PUBLIC SECTORPRIVATE SECTORLEVELS

International

National

Regional

District

Community

Multinational Suppliers

Local Manufacturers

Local Wholesalers

Distributor

Shops, Pharmacies

International Procurement Agencies

Government Supply Services

• Product Cards

• Procurement Unit

• Import Unit

• Inventory Control Unit

• Finance Unit

• Medical Strores

Regions• Medical Stores

• Hospitals

Regions• Medical Stores

• Hospitals

• Health Center

Community Health Workers

Community Health Workers

Patients

Multilateral Organizations

Local NGO Field Agencies

Regions• Mission Hospitals

Districts• Churches

• Health Center

3PL Logistics Providers

NGO

Source: International Finance Corporation (IFC), Private Sector Pharmaceutical Distribution and Retailing in Emerging Markets, 2017

Average mark-ups on medicines in emerging markets

CIF/TAX MARKUP IMPORTER MARKUP WHOLESALERS MARKUP SUB-WHOLESALERS MARKUP

RETAILERS GENERIC MARKUP

250%

200%

150%

100%

50%

0%

+5-10%

+25-30%

+25-50%

+75% (25%)

+50-80%There will often be

multiple sub-wholesalers in the supply chain, each of whom add a markup

of mark-up of approx. 25%Markups for

Branded Products can have markups starting from 25%, on average 260% and, in extreme

cases, up to 500%

Drug flow in traditional CM $ system

Alternative drug flow (planned and unplanned)

Information flow

2 0

P R I V A T E S E C T O R & D E V E L O P M E N T

K E Y F I G U R E S

Proportion of deaths due to non-communicable

diseases in Africa in 2012

Consolidation of pharmaceutical distributors and retail chains

Source: International Finance Corporation (IFC), Private Sector Pharmaceutical Distribution and Retailing in Emerging Markets, 2017

RESTRICTED BY LAW OR

REGULATION

Retail pharmacy or wholesaler/distributor

consolidation is restricted by national law or

regulation

Cambodia

Cameroon

Côte d’Ivoire

Uganda

Egypt

Morocco

Turkey

Vietnam

CONSOLIDATED

50%+ of the retail pharmacy market is consolidated into an

oligopoly

Mali

US

UK

Philippines

MODERATE CONSOLIDATION

National or city-level retail pharmacy chains

exist

South Africa

Latin America, Brazil, Peru, Mexico, Chile

China

INITIAL CONSOLIDATION

Initial stage of market consolidation with more than one retail pharmacy

chain growing beyond 5 stores

Ghana

Algeria

India

MOSTLY FRAGMENTED

Thousands of wholesalers/distributors

with no clear set of market leaders

Malawi

Mozambique

Nigeria

Sudan

Guatemala

Kazakhstan

DE

SC

RIP

TIO

NE

XA

MP

LE

CO

UN

TR

IES

CA

TE

GO

RY

Source: World Health Organisation (WHO), Noncommunicable Diseases Country Profiles, 2014

Data not available

75% or more

50% to 74%*

35% to 49 %

25% to 34 %

Less than 25%

*Includes only Cape Verde, 69%

+1

2 1