Can (and should) Africa make its own medicines?

To Professor Walwyn: I agree that local production of medicine should not be discounted outright, but there are serious and legitimate concerns about the relatively higher price of locally produced medicines. Higher drug prices may especially be of concern when considering government-supported entities, such as South Africa's proposed parastatal drug manufacturer Ketlaphela, which could be given disproportionate tender access both in order to bolster local production efforts, and, more worryingly, potentially because of politically expedient connections. I don't think these concerns should de facto kill local production efforts, but they shouldn't be dismissed either.

There are also important questions to be asked about who pays for the higher-priced medicines as infant industries grow. Should countries' health departments be expected to foot the bill, especially given many competing interests and very tight budgets? Or should industrial development departments be expected to pick up the tab instead? One key way countries around the world and in Africa have supported local production efforts is to allow government tenders to give preferential procurement to local producers, and to allow for local producers to charge higher prices. That may make sense from an industrial development perspective, but in this scenario health departments are picking up the tab, provoking concern from health activists who keep a close eye on departmental spending and are constantly battling for more efficient use of scarce resources.

There's also a legitimate question about what should be produced. South Africa, for example, has focused its efforts on producing ARVs through Ketlaphela. But the ARV market is saturated, with Indian generics making more affordable versions each year. Although South Africa is the largest purchaser of ARVs anywhere in the world, it's unlikely that a new company would be able to make high-quality products that could compete with such low margins, even given significant government support. It's also not clear that there's a need for this. Because of effective negotiations and significant bargaining power, the South African government benefits from the lowest-priced ARVs anywhere in the world. Should Ketlaphela therefore focus on producing other medicines that are not already being procured in adequate numbers, and at competitive prices?

You're right that South Africa continues to import most of its medicines, but a large proportion of this trade imbalance is actually due to imported patented products from European countries, not generics from India and China. While the TAC has been a critic of Ketlaphela and other local production efforts, it's also been campaigning for a change in the country's weak patent laws, which they say could not only reduce the trade imbalance by promoting generics over patented products, but could also actually bolster local production efforts by supporting a generic industry within the country.

To Mr. Huang: Your suggestion that producers sell to multiple countries to reach economies of scale is apt. Many organizations, such as GIZ, are supporting regional integration, such as in the East African Community, to help countries create larger markets. Harmonization of medicine regulatory agencies, primarily by regional block (EAC, SADC, ECOWAS, etc.) is also being discussed within these forums, as well as by continental organizations like WHO AFRO.

You also note that Africa is battling tropical diseases, and that local production could provide one part of the solution. Indeed, this is a key argument for local production. But it remains to be seen whether African producers--who are profit-oriented companies, just like those in Europe and America--would be both technically able to make medicines for neglected tropical diseases, but moreover willing to make medicines for which there is no market. Many African producers focus instead on drugs that are cheap to make but with a captive market, such as cold and flu medicines, or, as in the case of Aspen in South Africa, looking to more lucrative markets like Australia. Getting private, profit-oriented African producers to focus on neglected tropical diseases would probably require financial and technical assistance from donors and/or governments.