Drugmakers are investing early in Africa's middle classes
Pharmaceutical companies are being lured by new opportunities for treating chronic diseases afflicting the continent’s middle-class populations. It’s major shift for the industry, which has been focused on drugs for infectious diseases such as malaria and HIV, often on a humanitarian basis. Reuters reports.
The promise of Africa is that it will continue to grow in the next decade as Asia and Latin America start to reach maturity. "We're thinking hard about what happens when those emerging markets start to slow because they are not going to continue growing at the rate that they're growing forever," says Novartis Chief Executive Joe Jimenez.
The growth will be fueled by increasing economic wealth and demand for treatments for chronic diseases in the more urban middle classes.
- Non-communicable diseases -- like heart disease, lung disorders, diabetes and cancer -- are expected to account for 46 percent of all deaths in sub-Saharan Africa by 2030.
- By 2016, pharmaceutical spending in Africa is expected to reach $30 billion, driven by a 10.6 percent annual growth rate (second only to Asia and in line with Latin America).
- By 2020 the market will have more than doubled from current levels to $45 billion.
There are still plenty of hurdles, lack of regulation and infrastructure for example. And western companies must compete with drugs imported from India and China.
British drugmaker GlaxoSmithKline hopes to boost drug volumes fivefold in five years by accepting lower prices. Meanwhile, Sanofi of France is forging ahead with a third factory in Algeria, a $93 million investment.
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