Challenges Facing the South African Pharmaceutical Industry

bird-animal-nature-strauss-60692.jpg

As some of you may already know I am a firm and unapologetic believer that the partnership of NGOs, national and international health governance with the pharmaceutical industry, rather than its exclusion, is vital to the effective treatment of disease globally.

From my first experiences at intergovernmental organizations at the age of 16, I came to appreciate the importance of medical research in global health. I have interned at the World Health Organization on two occasions but my experience at Tropical Diseases Research in particular, working with an infectious diseases specialist, designing educational tools for community healthcare workers on the use of a rectal artesunate drug for infants with severe malaria, I realized the need for innovation in the design of drugs and drug delivery systems.

I don’t believe that big pharma is the enemy. I believe the industries of biotechnology and pharma are an invaluable resource; and that the market failures we encounter at scale are primarily a function of the market forces that govern every industry in our world today.

The fact is that the profitability of drugs and vaccines has been a primary driver in the development of the life saving treatments available today. As for those that have fallen through the ‘gaps in the market’, so to speak (see: Antimicrobial resistance; Alzheimer’s, Malaria), I will write on this in future.

  1. HIV: South Africa is doing pretty damn well dealing with the burden of disease

South Africa is a BRICS nation: the growing, middle-income giants of the world. It was the first nation in the world to make Antiretroviral treatment free to all HIV positive individuals at the point of presentation in 2001. Moreover, today, it’s virtually impossible to visit a clinic or hospital in South Africa without being tested for HIV – this means that infections are detected more rapidly than ever.

The result of this is excellent ARV coverage, bearing in mind that this is a lifelong treatment, and HIV positive individuals today live as long as the general population. What this also means is that the nation still has the second highest HIV infection rate globally. Not because management has been poor; but because unlike in many smaller African economies, a sizable proportion of HIV positive patients diagnosed in the mid 2000s survived. This is my measure of success. Moreover, free condoms are infamously everywhere and the South African education syllabus focuses on teaching children about HIV transmission; all this alongside endless television PSAs and government subsidized projects aimed at educating the broader population in this respect.

That said, for Pharma, there has been a decline in new infections. The local pharmaceutical company, Aspen, holds the government ARV tender and the greatest market share in the South African pharmaceutical industry currently.

Opportunity: HIV co-infections present a potential area for growth. The re-emergence of Tuberculosis and certain forms of meningitis present an opportunity for drug development and incremental improvement upon current treatments.

pexels-photo-89758.jpg

  1. Litigation: Pharma vs. Government

It’s this battle again. Multinational drug companies are constantly in litigation against the SA government; particularly after the introduction of the 1997 Medicines and Related Substances act.

One thing that has to be understood about South Africa is that, unless you are a South African, you may never fully understand South Africa.

We do overkill like nobody else. But for good reason. Our history of discrimination, dehumanization and suppression of our 90% non-white population means that many of our laws and constitutional requirements are very much shaped towards the complete protection of our population; and rightly so.

That said, our department of health has fought tooth and nail to ensure that drugs are available to the South African people cheaply, ethically and affordably.

Drug companies looking to break into / establish growth in the South African drug market have a lot of regulatory hoops to jump through; some of which may not be ideal for their bottom line – which make smaller, more loosely regulated, faster growing African economies more attractive.

Opportunity: South Africa has a huge growing middle and upper class who are privately insured and willing to pay top dollar for the highest standard of medical treatment. Assuming a firm has taken the potential legal climate into account in calculating their risks and opportunities; South Africa can be a highly profitable market.

  1. An excellent Segway: Generics

The market for generic drugs is massive in South Africa, particularly through the public sector. The highest growing pharmaceutical company in South Africa (by a long shot) is Mylan: a multinational firm that specializes in generics in South Africa (good move).

Moreover, since 2014, new drug compounds have reduced as a contributor to growth in the pharma industry. Price and volume changes are currently the two major areas driving growth in the industry. In my view, in the long term, this is not a sustainable model for growth: prices can only increase so much and South Africans have approximately 2 children per woman which indicates linear population growth and caps the extent to which volume can drive revenue.

Opportunity: In terms of market share, there is still room for growth in the generic drug market.

pexels-photo-140123.jpg

  1. Dual burden of disease

I have discussed this topic at length. South Africa is a perfect example of a nation facing the dual burden of communicable and non-communicable diseases. No, malaria has been fully eradicated. But Tuberculosis is a real and verifiable risk and diabetes and COPD are equally so.

Opportunity: See point 2.

  1. Supply chain: Cutting out the middle men?

The drug supply chain from manufacturer to point of dispensing to patient can be rather confusing. Manufacturers typically dispense their drugs through four major routes: independent couriers, wholesalers, distributors or directly to the three major points of dispensing, pharmacies, hospitals and clincs and grocery stores.

I was in Tel Aviv last December and was surprised that I could not purchase any analgesic drug (Tylenol, Panadol, Nurofen, etc.) at any major grocery store. In all of the countries I have lived in, these over the counter drugs were readily available in grocery stores and I had not realized that this is a relatively unique feature globally.

Opportunity: The primary problem with South Africa’s drug supply chain for the pharmaceutical industry and its consumers is that it becomes expensive and these are costs that may (or may not) be transferred to buyers. Streamlining this is an opportunity in itself; and a sector that manages to form valuable partnerships to successfully linearize this process may be able to drive profits.

  1. Reputation

Whilst South Africa is not the recipient of any foreign aid; a number of its geographical neighbors are. In fact, South Africa is the largest contributor of foreign aid to other African states globally.

Nonetheless, pharma doesn’t have the best reputation down south. One reason for this, rarely covered by the foreign media is the leakage of drugs sent to states meeting the criteria, back into the ‘West’.

An example is an OECD scheme to sell drugs to the 49 poorest states. These drugs are sold at either the cost of production plus 10% or at a price reflecting 80% off the average ex-factory price in OECD member states. This is an excellent aid initiative for those states that benefit from this based on World Bank and IMF standards.

Unfortunately, more recent investigations by Belgian customs authorities uncovered large quantities of GlaxoSmithKline products destined for Africa being sold in the European Union. This doesn’t help the already less than favorable view that many already hold of the pharmaceutical industry, not to the exclusion of Southern Africa.

Have a banging Friday

Cheers, peace and love,

Christiana

On Booze, Babies and Birth defects:

A brief commentary on Foetal Alcohol Spectrum Disorders

alcohol-party-glass-table.jpg_____________________________________________________

Foetal Alcohol Spectrum Disorders (FASDs) are a group of disorders of global concern. Entirely attributed to prenatal alcohol exposure, affected individuals suffer a lifetime of physical, psychological and social consequences. Foetal Alcohol Syndrome (FAS), has a global prevalence of 2.89 per 1000 live births, with some regions as high as 55.42 per 1000 live births. FASDs are preventable but there seem to be significant gaps in knowledge and practice.

In its 2014 Global status report on Alcohol and Health, the WHO emphasized the importance of strengthening capacity for prevention of FAS and the spectrum of associated disorders. As with many diseases of global concern, a variety of cultural, population and behavioral factors result in certain regions being more profoundly affected than others. FASDs are no exception. Some of the highest prevalence of the disorders globally is seen in South Africa, Canada and Croatia.

baby with cleft lip.png

The discussion on FASDs is part of a broader discourse. For the most part, the consequences of the harmful use of alcohol are well understood and documented. Most recent data from a systematic literature review estimates the global prevalence of FAS at 2.89 per 1000 live births. The prevalence of FASDs, however, including other disorders within the spectrum is estimated to be far higher.

The World Health Organization (WHO) estimates that 3.3 million annual deaths occur as a result of the harmful use of alcohol, accounting for 5.9% of preventable deaths worldwide.

who image blog.png

As shown above, after Alcohol use disorders, Foetal Alcohol Syndrome is the most significant cause of death or Disability, measured in Disability Adjusted Life Years (DALYS), attributed to harmful alcohol use. Unlike most health effects and consequences resulting from alcohol consumption, such as Alcohol-use Disorders and liver cirrhosis, FAS does not directly affect the individual. Instead it affects the foetus. Furthermore, unlike almost all other alcohol-attributable diseases, FAS is entirely attributed to alcohol exposure. This relationship between the alcohol consumption of the mother and the adverse, irreversible effects on the infant raises a number of ethical issues in preventing, measuring, interpreting and regulating the factors related to the condition.

DALYs are years of healthy life lost to disease due to disability. One DALY equates to one year of healthy life lost.

Whilst not always considered the most useful measure of morbidity in terms of disability, in conjunction with other indicators, it is generally accepted as a useful metric for understanding health status change and, from a broader perspective, the effectiveness of policy and intervention. In this regard, FASDs are unique. They are not acquired at some point in life as is the case with pancreatitis or accident related injury. In essence, every year of the affected individual’s life is a DALY.

Quality Adjusted Life Years (QALYs), as a metric, are also not immune to criticism. QALYs measure the quality of life provided by healthcare interventions. To its credit, this measure combines both qualitative and quantitative measures of patient’s life quality. In terms of FASDs, however, QALYs are a poor measure. FASD patients require lifelong medical and social intervention to thrive – this is a high level of resource allocation for a condition that can only be monitored, perhaps ameliorated, but never treated.

FASDs are important because they present an important social as well as public health problem in many communities. A major challenge lies in identifying appropriate intervention programs aimed at reducing alcohol intake by pregnant women who are at greatest risk of giving birth to infants with FASD.

In South Africa, the Western and Northern Cape regions have the world’s highest recorded rates of FASDs. Heavy alcoholism within certain groups remains very much commonplace, particularly in the nation’s rural areas. High levels of alcoholism and binge drinking behavior have their centuries old heritage in the dop system, directly translated to mean “tot” or “shot”, whereby Dutch colonists paid farm workers on vineyards entirely or partially in cheap alcohol.

Furthermore, it is reported that on many farms in the Cape provinces of South Africa the use of alcohol as a form of partial remuneration still exists covertly. Current legislation in South Africa prohibits dop, but the legacy of a culture of heavy alcoholism lives on: today some of my beloved country’s rural areas prevalence of FAS is as high as 10.2%.

Foetal Alcohol Syndrome is diagnosed using criteria of facial abnormalities, including smooth philtrum, reduced palpebral fissures and even cleft lip and/or palate. Often infants suffer impaired cognitive development. Those affected by FAS often experience brain dysfunction, mental impairment, psychological disorders and learning disabilities. Furthermore, it often goes undiagnosed for several years. There is no cure for FAS.

FAS brain comparison image blog.png

Foetal Alcohol Spectrum Disorders in particular, distinct from the syndrome, tend to be poorly diagnosed. Particularly where health workers are not very familiar with the condition. Nonetheless, the long-term consequences of FASDs, including pFAS, ARBD and ARND, have a profound impact on the intellectual and social development of the individual.

Although no formal international guidelines on primary, secondary and tertiary prevention of Foetal Alcohol Spectrum Disorders exist, a handful of regional and national studies have investigated prevention methods used in certain areas with an aim to better understand the effectiveness of these varied approaches and how they may be implemented at a larger scale. Indeed, one study showed that merely gaining access to prenatal care resulted in a significant decrease in alcohol use during pregnancy, a luxury to which many women globally, particularly from lower socioeconomic backgrounds, have little or no access

Nonetheless, I would argue that it is the culture of frequent and/or binge drinking that perpetuates prenatal alcohol exposure; perhaps even to a larger degree than ignorance, misinformation or apathy.

Images: whattoexpect; WHO; FASlink;