Is Angola Ready for a Pharmaceutical Investment Boom?

Category - Medical

While the continent of Africa presents itself with a great number of opportunities in the pharmaceutical and healthcare sector, there are variables that both positively and negatively impact its growth. Let’s take a look at the pharma and medicines market in Angola.

The on-going pandemic as adversely affected both the production of goods and services, as well as the employment rate of the country. The unemployment rate in Angola shot up to 34% in the last quarter of 2020. Given the grim situation, the market consequently saw a dip in medicines sales which decreased by -21.3% in dollars and -23.9% in terms of units sold. But this was true specifically for brand-name drugs. Conversely, the Generic Medicines sales grew by both dollars and units, last year. This is indicative of the Angola being ready as a market to be invested in, especially with respect to generic medicines. As a whole, however, the Medicine Market recorded a negative growth in 2020, of -7.3% in USD and -23.2% in units.

Distribution Channels

One of the most important factors to consider while investing in Angola, is the performance and workings of the distribution channels attributed to the medicine supply in the country. The Public Hospital sector revealed a positive growth both in terms of value and units sold, when compared to the previous year (643 million USD in November 2019 compared to 1632 million USD in November 2020). The general population also has more access to the public hospital sector, rather than private. These hospitals are also likely to be operating on Government healthcare schemes deployed to them for the citizens, and would perhaps be dispensing the medication at a lesser rate than private establishments. The sector recorded a 3-digit growth when analyzed against the numbers in 2019. The Private Hospital Market also registered a positive growth in November 2020, when compared to the previous couple of months, although not as much as the Public Hospital sector.

In general health care provisions in Angola, are delivered mainly by the public sector. The emergence of private sector health care services has only recently begun, and will likely take more time, as their growth is mainly recorded in the urban cities, and more specifically, in the capital of Luanda.

Generic Medicines Market

All statistics point to the development and potential of the generic drug market in Angola. The future of investment therefore, lies within this sector. The Generic Medicines Market recorded an exponential growth in November 2020. Sales of Generic Medicines grew by 32.8% in dollars and 9.2% when it came to units sold. A significant number if compared to the same time period recorded the previous year. The reason for this unexpected growth, given the international health situation, is the Public Sector. For reasons stated above, the population in general has more access to public sector health care services, and this could be an indication of the areas to invest in.

Registering excellent growth in both value and volume, the Public Sector was the cornerstone of the Generic Medicines Market’s success in value and volume. In fact, November 2020 recorded the highest market share of Generic Medicines in the last 12 months preceding it. While the Pharmacy Market retained its market share in Generic Medicines compared to previous months, the Hospital Market recorded a substantial growth in market share, in this category.

Challenges of investing in the pharma sector:

Counterfeit drugs are a rising problem in Angola, and all over the African continent. Counterfeit pharmaceuticals are a concern in Angola, as are medicines sold under fake names. The WHO describes counterfeit drugs, as any drug manufactured by someone other than the original and genuine manufacturer. In 2012, custom agents in Angola nabbed what was known at the time to be the biggest fake medicine import in history. Anti-malaria drugs are the most commonly counterfeited drugs in the continent.

A less than ideal drug regulatory system, the weak economic structure, and a lack of control of manufacturing, production, and distribution are attributed to the booming counterfeit drug trade in Angola. The counterfeit market according to a report by the NCBI is about 25% in developing countries, of marketed medicines but in countries with increased poverty (like Angola) this number could rise up to 60% .

The US Trade Representative Annual Foreign Trade Barriers Report (2015) pointed out the many roadblocks in the development of Angola’s foreign trade. This includes complicated and lengthy processes in customs, a high tariff rate, lack of industry and government transparency, shaky intellectual property rights, and a cumbersome investment climate to develop and sustain trade in the country.

Pharmaceuticals are often dispersed through local pharmacies, private clinics and public hospitals. Far from being standardized, quality of products and their costs greatly vary depending on their location. Smaller pharmacies in the outskirts of the country often market low quality, unregulated, low-cost pharmaceuticals. These are mostly acquired from India and China. The urban centers usually have access to high quality, registered pharmaceuticals. Generic pharmaceuticals are also distributed in the Angolan Public Hospitals, while private pharmacies tend to sell branded pharmaceuticals.

Current opportunities:

While the Angolan healthcare sector and pharma market is undeniably complicated, there are opportunities in the industry both in the private market and government partnerships that exist. A few sub-sectors in particular are wanting - mother and child healthcare and medicine, healthcare and medicinal access to rural areas, medication for communicable diseases.

The Health Inspection Office oversees the Ministry of Health and is responsible for monitoring the inflow of imported pharmaceutical products in Angola. To ensure regulation standards are met, the Ministry’s National Directorate for Pharmaceuticals and Equipment (DNME) develops the criteria necessary to meet the pharma and medical equipment requirements necessary for companies to import their products into the country.