As multinational pharmaceutical companies seek revenue growth, they are increasingly looking to emerging markets including sub-Saharan Africa as a major opportunity. However, to capitalize on this opportunity, companies must shift away from traditional marketing and sales approaches and adopt access-driven commercial models.
One of the key challenges in African markets is pricing. With lower income levels and a high prevalence of poverty, many African consumers cannot afford the same prices that companies charge in other markets. Furthermore, local clinical pathways and disease prevalence are often different from those in other regions, which means that strategies that work well in other markets may not be effective in African markets.
Political dynamics and policy changes also present challenges for market access and expansion. Governments in African countries often play a significant role in the healthcare sector, and policy changes can have a major impact on the industry. Companies that are able to build strong relationships with local governments and adapt to changing policies are more likely to succeed in African markets. Moreover, the significant variations in country-to-country dynamics stem from the distinct policies in each country.
To thrive, pharma and other healthcare companies need to adopt innovative market access approaches. One key strategy is to invest in local production and license manufacturing. This not only helps to lower costs, but it also builds local capacity and creates jobs. Ultimately, this leads to the empowerment of local companies to engage in materials engineering of native resources for use in global pharmaceutical production.
Another important strategy is to upgrade market access talent. This involves developing a deep understanding of the local healthcare landscape, as well as building relationships with key stakeholders such as healthcare providers, patient groups, and procurement institutions.
Creative pricing strategies are also important in African markets. Companies need to find ways to make their products more affordable for consumers, while still maintaining profitability. This can involve offering discounts for bulk purchases, and/or exploring group purchasing organizations as s means to consolidate the currently fragmented health landscape.
Supply chain excellence is also critical in African markets. Companies need to ensure that their products are available and accessible to patients, even in remote areas. This may require significant investments in logistics and distribution networks.
Finally, entering clever access partnerships can help companies to expand their reach and increase their impact. Volume agreements with procurement institutions, for example, can help to ensure a steady stream of demand, while outcome-based contracting can align incentives and ensure that both parties are focused on achieving positive health outcomes.
The potential for growth in African markets is significant for multinational pharmaceutical companies. However, success in these markets requires a rapid shift towards access-driven commercial models. Companies that are able to build strong local relationships, invest in local production, upgrade market access talent, utilize creative pricing strategies, and enter clever access partnerships are most likely to benefit from Africa’s pharma industry growth.
