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Continuous Glucose Monitoring Devices: Overcoming Barriers in LMICs

The rising prevalence of diabetes in low- and middle-income countries (LMICs) underscores the need for advanced diabetes management solutions. Continuous glucose monitoring (CGM) systems are highly valuable but face limited adoption in LMICs due to high costs, infrastructure inadequacies, issues with accessibility, affordability, and limited insurance coverage. On the other hand, these countries offer opportunities to develop scalable CGM solutions tailored to the needs of LMICs and to penetrate these markets.

Over the past decade, the global prevalence of diabetes has surged, with a notable concentration in LMICs, particularly across India, China, the Middle East, and Southeast Asia. The LMICs now host the majority of nearly 540 million people living with diabetes.


Read our related Perspective:
  The Future of Diabetes Care: Key Innovations in Continuous Glucose Monitoring

Effectively managing diabetes in LMICs is crucial and requires advanced solutions for precise and consistent monitoring of blood glucose levels. However, the CGM adoption rate remains low in developing and underdeveloped countries. As LMICs seek to incorporate these advanced solutions into their healthcare systems, they face numerous challenges.

Why is CGM adoption and acceptance lagging in emerging economies?

CGM systems are a revolutionary diabetes management tool. Despite the critical role it plays in advancing diabetes care, the high cost, uneven distribution, and inadequate infrastructure severely restrict their access, particularly in LMICs.

High costs hinder CGM adoption

A substantial barrier to adopting CGM systems in LMICs is their prohibitive cost. The average cost of CGM systems can be between US$120 and US$300 per month, placing them predominantly within the realm of those who can pay out of pocket.

For instance, the Dexcom G6 system, which includes sensors and transmitters, costs approximately US$300-US$350 per month. This price makes it out of reach for most individuals in LMICs, where average incomes are significantly lower.

As highlighted by a 2023 report by FIND, while an estimated 55,000 individuals live with type 1 diabetes in Kenya and South Africa, only about 10% are currently utilizing CGM systems. Many LMICs do not have subsidized healthcare or insurance coverage systems, which makes the situation worse. Consequently, the high cost of these devices creates a significant affordability gap, further entrenching healthcare inequalities.

In countries such as Iran, Lebanon, and Pakistan, the absence of governmental support and the unavailability of CGM technology highlight a broader issue. In many of these countries, private sector’s efforts are underway to bring diabetes-related innovations to the market, but the high costs associated with these technologies are a major obstacle.

Continuous Glucose Monitoring Devices Overcoming Barriers in LMICs by EOS Intelligence

Continuous Glucose Monitoring Devices Overcoming Barriers in LMICs by EOS Intelligence

Limited availability of CGM systems impedes diabetes management

In addition to high costs, the availability of CGM systems is another pressing issue. In many LMICs, including countries such as Turkey, Uganda, and Malawi, CGM solutions are either scarce or completely unavailable. This lack of availability limits access to advanced diabetes management technologies, crucial to improving health outcomes.

Similarly, In Egypt, where diabetes prevalence is notably high at 18.4% of the total adult population, the situation is equally challenging. The country lacks access to the latest innovations, while healthcare professionals need training in using CGM.

In LMICs, inadequate infrastructure poses a significant barrier to the widespread adoption of CGM devices. These tools rely on consistent power and internet connectivity to function optimally. However, frequent power outages, a common issue in many LMICs, can disrupt the continuous monitoring process, leading to data gaps and potential risks for patients who depend on CGM alerts for their health management.

Moreover, limited internet access, especially in rural areas, can severely impact the real-time data-sharing capabilities of CGM systems. This is particularly evident in African nations such as Niger, Nigeria, Chad, and South Africa, where infrastructure challenges are more pronounced.

For instance, South Sudan, with one of the lowest Infrastructure Index ratings in the region, faces critical limitations in accessing reliable power and internet services. These infrastructural deficits highlight the urgent need for targeted investments and solutions to bridge the infrastructure gap and enhance diabetes care in these regions.

Insurance coverage gaps stifle CGM access

The accessibility of diabetes management technologies, particularly CGM systems, is significantly hindered by inadequate insurance coverage and reimbursement policies.

This gap is especially noticeable in Asian LMICs such as the Philippines, where the healthcare system often does not include comprehensive coverage for these critical tools, placing a substantial financial burden on patients. In Vietnam, the National Health Insurance (NHI) scheme covers essential treatments such as oral antidiabetic medicines and insulin. However, it does not extend to glucose monitoring products. This lack of coverage forces patients to pay out-of-pocket for CGM, making it challenging for many to access.

What lies ahead for CGM in LMICs?

As diabetes increasingly poses a global health challenge, LMICs are ramping up efforts to enhance diabetes care. Progressive government policies, innovative programs, and manufacturers expanding reach across LMICs support this shift.

Government policies facilitating CGM integration with diabetes management

In many LMICs, government agencies and organizations are slowly working towards integrating advanced diabetes management solutions into healthcare infrastructure. This is visible through various initiatives undertaken that highlight the growing importance of CGM technologies.

For instance, the Chinese government demonstrated its commitment to standardizing CGM practices by issuing the Chinese Clinical Guidelines for CGM in 2009, with subsequent updates in 2012 and 2017. These guidelines establish clear protocols for device operation, data interpretation, and patient management. The guidelines also support training of healthcare professionals, improving quality assurance, and facilitating CGM integration into the national healthcare system. In several Chinese hospitals, the implantation, operation, and daily management of CGM systems are already handled by trained nurses and head nurses within the endocrinology departments.

India has also made significant strides, particularly in 2021, with the establishment of guidelines for optimizing diabetes management through CGM. The Indian government has introduced several initiatives to foster digital health advancements, including the National Digital Health Mission.

Advancing diabetes care, the ‘Access to CGMs for Equity in Diabetes Management’ initiative, a collaboration between the International Diabetes Federation and FIND, aims to integrate CGM solutions into African healthcare systems. This initiative seeks to double the number of CGM users in Kenya and South Africa by 2025, potentially impacting 21.5 million individuals with type 2 diabetes and 213,000 individuals with type 1 diabetes in Southern and Eastern Africa.

Government support for such initiatives is pivotal, as it can significantly enhance market access and ensure that CGM technologies reach underserved populations. These collaborative efforts and governmental actions are likely to drive extensive market reach and foster a more effective response to the global diabetes epidemic.

Manufacturers driving adoption by introducing affordable CGM solutions

Customizing CGM to meet the needs of LMICs offers manufacturers an opportunity to expand device access and adoption within these markets.

Medtronic is taking the lead by customizing its CGM solutions to reduce production and distribution costs specifically for LMIC markets. By optimizing its technology to be more cost-effective, Medtronic aims to increase the accessibility of its CGM systems in regions where diabetes management tools are often limited.

Similarly, emerging startups such as Diabetes Cloud (Aidex) and Meiqi are making strides in expanding CGM availability in South Africa. These companies are introducing more affordable CGM devices designed to meet the needs of local populations, thereby broadening access to critical diabetes management tools.

Manufacturers’ strategic initiatives accelerating CGM access

Manufacturers recognize the urgent need for effective diabetes care solutions in LMICs and the significant growth potential in the underpenetrated CGM market. To capitalize on this opportunity, they are focusing on expanding their product portfolios in these regions.

Additionally, Dexcom is planning to introduce the Dexcom ONE+ across the Middle East and Africa in the near future. This advanced CGM system can be worn in three locations on the body, enhancing comfort and usability. By accommodating individual preferences and needs, Dexcom aims to improve user experience. This strategic launch underscores Dexcom’s commitment to broadening its market presence and advancing its footprint in emerging regions.

Manufacturers are also supporting research initiatives across Africa. For instance, Abbott has donated its FreeStyle Libre Pro CGM devices for research in Uganda. The research’s favorable reviews and positive outcomes reflect a notable interest in and demand for sophisticated diabetes management technologies in these regions.

Moreover, strategic partnerships amongst manufacturers highlight a broader commitment to enhance the accessibility of CGM systems by leveraging combined expertise and innovative technologies. In January 2024, Trinity Biotech and Bayer partnered to introduce a CGM biosensor device in China and India. The collaboration is poised to leverage Bayer’s expertise and Trinity Biotech’s technological advancements to enhance diabetes care in these rapidly growing markets.

These strategic initiatives will likely impact the CGM market positively in emerging economies. Increased availability of CGM systems in LMICs will to drive higher adoption of glucose monitoring technologies and stimulate further investment in diabetes care.

EOS Perspective

Despite the challenges, the CGM market in LMICs presents a compelling growth opportunity for manufacturers. With diabetes cases on the rise, there is an increasing demand for CGM systems that offer real-time glucose data to improve patient outcomes. This demand, combined with progressive government initiatives and heightened awareness of diabetes care, creates a fertile ground for market development.

Manufacturers have a significant opportunity to capitalize on this emerging market by addressing the distinct regional needs. One of the primary challenges is the high cost of CGM systems, which limits their adoption. Hence, there’s a need to develop more affordable, scalable solutions tailored to the economic realities of LMICs. By focusing on local manufacturing and distribution strategies, healthcare companies can provide cost-effective solutions that meet the needs of underserved populations.

The shortage of trained healthcare professionals further complicates the widespread use of CGM. Manufacturers can address this by implementing comprehensive training programs for healthcare providers, equipping them with the skills needed to support patients in using CGM systems effectively.

This investment could foster greater acceptance of the technology. Non-profit organizations such as Medtronic LABS have made significant contributions, impacting over 1 million individuals with diabetes and training more than 3,000 healthcare workers across Kenya, Tanzania, Rwanda, Ghana, Sierra Leone, and India since 2013. The organization educates on diabetes management, equipping healthcare workers with skills to utilize CGM systems effectively. By enhancing the knowledge and capabilities of these health workers, Medtronic LABS ensures that communities receive better support in managing diabetes, ultimately leading to improved patient outcomes and CGM adoption.

Strategic partnerships with local entities, governments, NGOs, and international organizations can further enhance market reach. Collaborations can help manufacturers navigate the complexities of the market, overcome logistical challenges, and strengthen distribution networks. Partnering with organizations with established connections and regional expertise can facilitate more effective market entry and expansion.

For instance, organizations such as FIND, the International Diabetes Federation, and the Helmsley Charitable Trust are working to create business opportunities for CGM manufacturers. They specifically target manufacturers whose CGM products are unavailable in markets such as Kenya and South Africa improve access in these regions.

Further, programs such as the Access to CGMs for Equity in Diabetes Management and national health guidelines in countries such as China and India are laying the groundwork for improved diabetes care. By integrating CGM solutions into national healthcare plans and providing necessary training to healthcare professionals, these initiatives aim to establish a sustainable model for diabetes management. Other developing regions should replicate this approach.

In the future, sustained emphasis on innovation, affordability, and strategic collaborations are poised to transform the CGM landscape in LMICs, ensuring that these advancements are more accessible to all. As this gains traction, access to advanced diabetes management technologies is expected to improve, offering a promising outlook for millions of individuals living with diabetes.

by EOS Intelligence EOS Intelligence No Comments

Lessons for Africa: To-do’s from India’s Successful Vaccine Journey

India, still a developing country, has achieved tremendous success as the world’s largest vaccine producer. This accomplishment leads to many lessons that India can offer to other low- to middle-income economies across the globe, such as Africa, looking to ramp up their vaccine industry. The African continent should capitalize on this opportunity and seek guidance from India, considering that India’s pharma and vaccine sectors are four to five decades ahead of the African continent.

How did it all begin for the Indian pharma and vaccine sectors?

The Indian pharma industry is more than a century old, with the first pharmaceutical company founded in 1901 and started operations in Calcutta. Till 1970, the Indian pharmaceutical industry comprised foreign players with very few local companies. However, driven by the purpose of the Swadeshi (meaning ‘of one’s own nation’) movement during the pre-independence era, some pharmaceutical manufacturing firms were founded in India. Established in 1935 in Bombay, Cipla was one such company, which is now a multinational pharmaceutical firm.

Apart from pharma companies, the presence of the Bombay-based Haffkine Institute (founded in 1899) and Coonoor-based Pasteur Institute of India (founded in 1907) solidified the country’s vaccine industry foundation. These institutes manufactured anti-plague, anti-rabies, smallpox, influenza, and cholera vaccines, among others. Nevertheless, the British colonial government in India withdrew the funds during World War II, which led to the subsidence of a few of these institutes.

The Indian pharma industry’s dynamics began to change, with recognition given to process patents instead of product patents. This created an opportunity for local pharma companies to reverse-engineer branded drugs’ formulations. It also allowed the creation of low-cost medicines since the producers did not have to pay royalties to original patent holders. It fueled the generics market growth in India, along with improving the capabilities of the manufacturers to produce high volume at low cost, thereby increasing the cost-effectiveness of the products. This was followed by the exit of foreign pharma players from the country with the removal of the Indian Patents and Design Act of 1911 and the implementation of the Government’s Patents Act of 1970.


This article is part of EOS' Perspectives series on vaccines landscape in Africa. 
Read our other Perspectives in the series:

Vaccines in Africa: Pursuit of Reducing Over-Dependence on Imports

Why Can India’s Vaccine Success Story Be a Sure Shot Template for Africa?

The structural change in the Indian pharma industry was evident from the drastic increase in the number of domestic companies from 2,000 in 1970 to 24,000 in 1995, leapfrogging 12-fold in a span of 25 years.

Additionally, driven by public sector investment and the central government’s prioritization of localized vaccine and drug production, India had over 19 public sector institutes and enterprises by 1971 that produced vaccines and generic drugs. These public sector institutes included Gurgaon-based Indian Drugs and Pharmaceuticals Limited and Pune-based Hindustan Antibiotics Limited.

Some pharma companies entered the export market owing to the 1991 liberalization of the Indian economy, the experience gained from producing cost-effective generic drugs, and global expansion. With this step, the Indian vaccine industry forayed into the international market between 1995 and 2005.

The reintroduction of the product patent system encouraged foreign pharma firms to return to India as the 2005 Patents (Amendment) Act prevented domestic pharma companies from reverse engineering formulations of branded medicines protected by patents to produce generic drugs.

In the pursuit of staying competitive with their foreign peers, Indian pharmaceutical companies focused on improving R&D thereby increasing investments in this space from 2005 to 2018.

What did India do right in vaccine manufacturing?

From investing in education and R&D to making necessary policy changes conducive to the growth of a sustainable and resilient vaccine sector, the Indian government has always been at the forefront of reducing overall pharmaceutical costs and nurturing the pharma industry.

Experience, expertise, and conducive policies enabled India to achieve cost-effectiveness

Indian government’s concrete action in strategy and policy-making has empowered the pharma industry to grow in a conducive environment. These conditions enabled the sector to become cost-effective by producing low-cost generic medicines and vaccines at high volumes.

This is evident from the fact that Invest India, the country’s investment promotion agency, states that producing pharmaceuticals in India is 33% cheaper than in Western markets due to labor costs being 50-55% lower. The cost of conducting clinical trials in India is also much lower, approximately 40%-80% cheaper when compared to Western markets, according to a 2010 article by the International Journal of Pharmacy and Pharmaceutical Sciences.

Indian pharma firms sometimes reverse-engineer medicines produced by companies making branded drugs and sell the formulation at a much-reduced price. The unique selling proposition of the Indian pharma industry has always been high volume coupled with low costs to make its products more affordable and accessible to patients across low- to middle-income strata of society.

Investments towards a robust scientific workforce helped reduce API import dependencies

Backed by the central government’s prioritization of domestic vaccine and drug production, some pharma companies in India started manufacturing raw materials or key starting materials to minimize the dependencies on API imports.

Other initiatives to strengthen the foothold of the Indian vaccine sector were directed towards building a solid talent pool of professionals who could develop drugs and vaccines independently rather than copy the processes from branded medicines. A result of this approach was the Lucknow-based Central Drug Research Institute (CDRI), which was founded in 1951 and continues to be one of the leading scientific institutes in India.

With the creation of the Department of Biotechnology (DBT) in 1986, India took another massive step towards progressing its pharma industry. Since then, DBT has been at the forefront of providing financial and logistical support for vaccine development and production using new and advanced technologies. The organization is also involved in creating biotech training programs for universities and institutes across India.

Lessons for Africa To-do's from India's Successful Vaccine Journey by EOS Intelligence

Lessons for Africa To-do’s from India’s Successful Vaccine Journey by EOS Intelligence

What can Africa learn from India’s experience?

It would be too ambitious to anticipate Africa replicating the Indian vaccine sector’s strategies and mechanisms in every way and detail. Although the two regions share enough similarities regarding disease profiles, geographies, climates, economies, etc., differences in competition, technology, and market dynamics cannot be ignored.

These differences could benefit and challenge the vaccine sector in Africa. The region must prioritize the creation of a resilient, sustainable, and robust life sciences ecosystem that will support the pharma, medical technologies, and vaccine sectors in the long run.

Development of a strong life sciences ecosystem that nurtures the overall vaccine sector

Africa needs to form close ties with multiple supporting networks, similar to how the Indian vaccine producers networked with the local biosciences ecosystem. These supporting networks must be associated with the production of multiple pharmaceutical products for a region, building a strong scientific labor force alongside reinforcing its regulatory system.

Higher level of autonomy for the leadership teams of government-led vaccine facilities

One of the key learnings from the pitfalls of India’s vaccine sector is that the executive/leadership teams of government-owned vaccine facilities should receive a higher level of autonomy. Interferences from government agencies should be avoided to the maximum extent possible. A classic example from the Indian market is the 2020-2021 downfall of HLL Biotech Limited which could not produce any COVID-19 vaccine owing to government interferences in the technology upgrade and production-related decisions.

EOS Perspective 

For the African vaccine development and production industry to embark on a path of growth, it is imperative to learn from the valuable lessons available. However, with limited financial resources and insufficient infrastructure, it is crucial to prioritize the actions taken to ensure maximum progress.

To start building a favorable environment, it might be beneficial for the African markets to develop policies emphasizing process patents more than product patents, at least in the initial few years. This could be akin to regulations in the Indian pharma sector of 1970-1995, which proved quite effective and could fuel the growth of the generics market in Africa. Creating such an environment would waive off patent protection of branded drug manufacturers initially so that the local pharma companies can produce medicines at a low cost without paying royalties for copying the drug formulations of the branded drugs. Therefore, Africa can focus on building their generics market first and utilize the profits from there to reinforce the vaccine industry.

Secondly, African governments should initiate expanding the number of technology transfer hubs across the continent that focus not only on mRNA-based vaccines but also on newer DNA-based vaccines that are more suited for the African climate. Partnerships and collaborations with research institutes that are already working towards this goal can be a good first step.

One crucial step, which should not be delayed, is building a robust, skilled workforce to drive the sector development. Unfortunately, most African countries’ current education curricula are not in sync with the continent’s needs for vaccine manufacturing. Therefore, Africa urgently needs investment in education from various sources to develop the backbone of the vaccine industry so that the new education system can produce employable graduates in this field. It is important to note that the African governments should take a significant portion of this responsibility.

To begin with, new graduates can be something other than tertiary-educated, highly specialized professionals, such as PhDs. Rather than that, some form of vocational training in vaccine manufacturing or bachelor’s programs in relevant subjects, such as pharmacy, chemistry, etc., would help produce sufficiently skilled labor. This manpower can work and train further on the job under the guidance and supervision of foreign high-level talent and local high-level scientists who are present in the continent relatively sparsely.

These vocational programs should be designed in a collaborative effort between educational institutions and the existing and new vaccine manufacturing facilities in Africa. This would increase the chances of the African manufacturing facilities absorbing the graduating trainees.

India’s education evolution demonstrates the significance of having domestically bred relevant talent to augment and strengthen its own pharma and vaccine sector. This can empower Africa to curb the costs associated with foreign talent hunting and be more resilient to situations such as staff shortages, foreign staff availability fluctuations, etc.

Moreover, it is the responsibility of African governments to support the creation of jobs in vaccine manufacturing and R&D to attract the newly-trained workforce. A proven approach to this is to offer incentives for employing local talent to foreign and domestic investors who intend to set up vaccine facilities in the region. The incentives could range from tax rebates, exemptions, or credits, to offering employee training grants, subsidies for insurance coverage, etc. If this can encourage the creation of jobs in the sectors, young Africans will likely be keen on enrolling in related vocational programs.

Looking at the long-term objectives for the continent’s vaccine industry path, Africa’s primary aim should be to meet its own domestic vaccine needs in terms of both volume and disease spectrum.

Africa can learn critical lessons from India’s strengths and weaknesses in the vaccine sector. The weight of kick-starting the industry development inevitably lies on the African governments’ shoulders, and the sector will not develop on its own. It is high time for stakeholders, such as state governments, regulatory bodies, institutes, pan-African organizations, and local pharma companies, to speed up the process of absorbing and implementing these lessons. It is the only way to achieve the goal of 60% domestic vaccine production by 2040.

by EOS Intelligence EOS Intelligence No Comments

Why Can India’s Vaccine Success Story Be a Sure Shot Template for Africa?

Africa is currently facing significant challenges related to limited accessibility to vaccines as well as ongoing vaccine hesitancy. African CDC has identified these problems and is taking concrete steps to achieve its 2040 target of 60% of vaccines available on the continent to originate from domestic production. India is one of the key countries invested in the growth of Africa’s healthcare sector both financially and logistically. Due to similar geographies, climates, disease prevalence, and economies, Africa could take guidance, collaborate, or replicate Indian vaccine manufacturers’ strategies and mechanisms to scale up its vaccine sector.

Africa has one of the lowest average vaccine administration rates globally

Unbalanced access to vaccines in Africa compared to other regions became quite vivid during the COVID-19 pandemic. Africa’s average number of coronavirus vaccine doses administered per 100 people was 54.37 as of March 15, 2023. Seychelles administered the highest number of vaccine doses at 205.37 and Burundi the lowest at 0.27.

In contrast, the world average stood at 173, with high-income countries such as the USA and Canada administering 191 and 258 vaccine doses per 100 people, respectively. Interestingly, Cuba, despite being an upper middle-income economy, administered 385, a higher number of doses per 100 people than some high-income countries.

Even some low-income economies such as Vietnam (276), Bhutan (264), Bangladesh (218), Nepal (213), and Sri Lanka (184), among others, administered a higher number of coronavirus vaccine doses than the world average (173), and far more than Africa’s average.

These stark variations in the vaccine administration rates across countries could be attributed to the lack of easy accessibility, especially in Africa, apart from other factors such as vaccine hesitancy.

Africans’ vaccine hesitancy slows down the uptake of vaccination

Vaccine hesitancy is caused by several factors such as personal beliefs, misinformation or myths, healthcare infrastructure and access, religious and cultural beliefs, and vaccine safety concerns. These are typically the main reasons for vaccine hesitancy according to an October 2023 article published by ThinkGlobalHealth, and several of these reasons are likely to apply to the African continent.

In addition to these, another critical factor that cannot be ignored is people’s lack of trust in the health ministries, a relevant aspect in some African countries such as South Africa. This was largely due to the ministries’ involvement in procurement corruption of COVID-related aid according to an article published by GlobalData in November 2023.

Africa’s low vaccine administration rate is driven by limited accessibility

One major reason for the vaccine’s low administration rate in Africa is the limited accessibility to vaccines. This has been an ongoing issue on the continent and was not just limited to pandemics such as COVID-19 and Ebola.

The African continent is overdependent on vaccine imports, with 99% of its vaccine needs being satisfied from abroad. With a total of 13 operational production facilities across the continent, the current vaccine manufacturing industry is in its infancy in Africa and produces 1% of the continent’s vaccine supplies.

African countries have recognized this issue and begun working towards its goal of meeting 60% of the continent’s vaccine needs domestically by 2040, with interim targets of 10% by 2025 and 30% by 2030.


This article is part of EOS' Perspectives series on vaccines landscape in Africa. 
Read our other Perspectives in the series:

Vaccines in Africa: Pursuit of Reducing Over-Dependence on Imports

With some local talent available, Africa needs the right development template

While the local vaccine industry is underdeveloped, to say the least, the continent is not entirely without the talent required to produce home-grown vaccines and other pharmaceutical products such as test kits. For instance, Senegal-based Pasteur Institute developed a US$1 finger-prick at-home antigen test for COVID-19 in partnership with Mologic, a UK-based biotech company. Although the funding came partially from the UK, local talent was predominantly utilized.

To establish a sustainable vaccine sector, Africa does not need to reinvent the wheel. It could utilize lessons and success stories of other countries that have built this industry and share similarities with the African continent.

India is one such country with a vast size, diverse cultures, geography, and administrative structures under one roof, and has a tropical climate and disease profile similar to those in Africa. Additionally, India’s symbiotic relationship with the African healthcare sector would also play a significant role in empowering Africa to leverage the expertise of the Indian vaccine sector. This could be a step in the right direction for the African continent to achieve vaccine sovereignty.

Why Can India's Vaccine Success Story Be a Sure Shot Template for Africa by EOS Intelligence

Why Can India’s Vaccine Success Story Be a Sure Shot Template for Africa by EOS Intelligence

Africa’s partnership with India in healthcare is not new

Africa has a long-standing healthcare partnership with India, as the latter has been the largest supplier of generic medicines to Africa. Additionally, some US$3.4 billion worth of pharma products, i.e. close to 20% of India’s total pharma exports, went to African countries as of 2018. In 2020-2021, India’s pharma exports to Africa amounted to US$4.3 billion as per the Pharmaceuticals Export Promotion Council of India (Pharmexcil).

Between 2010 and 2019, India was also the third-largest contributor to Africa’s healthcare investment landscape, after the UK and the USA. During this period, India invested around US$210 million out of a total of US$1.1 billion in global investments into Africa’s healthcare sector, accounting for a 19% share.

In the past, African pharma companies have relied on Indian organizations to pivot and streamline their business in difficult times. For instance, South Africa-based Aspen Pharmacare could not sell a single dose of its COVID-19 vector vaccine owing to multiple factors, such as the rising popularity of mRNA vaccines. Ultimately, the company partnered with the Serum Institute of India (SII) in August 2022 to produce its vaccines to minimize business loss and idle production capacity. This is just one example showcasing opportunities where African vaccine producers collaborated with Indian vaccine makers. This kind of collaboration can also become a source of guidance and knowledge on how to create own sustainable ecosystem for vaccine production.

Collaborations between Africa and India have also extended beyond adverse situations. One example of this is a partnered research to produce a DNA-based dengue vaccine. Scientists from Bangalore and Goa in India and Nairobi and Cameroon in Africa have been working together in a partnership called the India-Africa Health Sciences Collaborative Platform (IAHSP), set up in 2019. The partnership results from a collaboration between India’s ICMR (Indian Council of Medical Research) and the African Union to create this DNA-based dengue vaccine, among other research work involving antimicrobial resistance, per a January 2022 Springer Nature article.

Furthermore, in December 2020, the Indian Healthcare Federation (NATHEALTH) and the African Health Federation (AHF) partnered to foster investment in healthcare and thus promote business opportunities in healthcare between India and Africa.

India’s pharma industry has merits to learn from

The Indian vaccine production sector is rapidly gaining steam in the global market and outpacing multinational players in this industry. A few prominent Indian vaccine producers, such as SII, Bharat Biotech (BBIL), and Biological E, have captured a considerable market share globally.

Interestingly, over 60% of the global vaccine needs in terms of volume are being satisfied by only five producers globally. Three of these five producers are based in India: Pune-based SII, Hyderabad-based BBIL, and Mumbai-based Haffkine. SII tops the list of these five global producers with a 28% volume share globally, and BBIL (9%) shares the third spot with Sanofi, followed by Haffkine (7%), as of 2019.

For many years, India has been supplying cost-effective and high-quality generic medicines and vaccines, which has earned the country the title of ‘pharmacy to the world’. The title is not exaggerated, as India alone accounts for 62% of global vaccines and 20% of global generic drugs’ production by volume as of 2023. The Indian pharma sector holds the third rank by production volume and tenth by value globally.

With an 18% share of pharmaceutical exports and vast needs, Africa is the second-largest importer of pharmaceutical products from India as of 2019.

Indian vaccines’ success in Africa proves that Indian producers understand African needs

In its quest to develop its own vaccine production sector, Africa can learn a host of aspects of vaccine production from India. This includes but is not limited to the cost-effectiveness of vaccines against diseases such as COVID-19, rabies, diphtheria, pertussis, tetanus (DPT), human papillomavirus (HPV), malaria, Ebola, and meningitis. India is four to five decades ahead of Africa in vaccine manufacturing and has already done its homework on how to do it right. That’s a useful source of knowledge for Africa’s budding industry, especially since Indian-made pharma products tend to align well with the needs of the African continent.

Serum Institute of India’s (SII) foothold in Africa

SII is now the largest vaccine producer by the number of doses manufactured and sold worldwide (over 1.6 billion doses across 170 countries in 2020), including for polio, diphtheria, tetanus, pertussis, haemophilus influenzae type b (Hib), BCG, r-Hepatitis B, measles, mumps, rubella, as well as pneumococcal and COVID-19 vaccines. According to estimates, nearly 65% of children across the globe receive at least one vaccine produced by SII.

SII has a strong foothold in Africa, with several of its vaccine products being extensively used or developed specifically for the continent’s needs.

MenAfriVac, manufactured by SII, is a vaccine to prevent meningitis and was rolled out in Africa in 2010. The vaccine was developed specifically to curb the spread of meningitis in Africa to cater to the vaccine needs of its population. The price of the vaccine is less than US$0.50 per dose, with an efficacy of 52% among 12–23-month-old children and 70% among older children and adults. Thanks to the vaccine, over 152 million people were inoculated by MenAfriVac by the end of 2013, enabling the elimination of meningitis epidemics in 26 African countries.

Another example of an India-made vaccine to particularly reduce Africa’s disease burden of malaria and cater to its people’s vaccine needs is R21/Matrix-M. SII, along with Oxford University, has produced this malaria vaccine using the technology of Novavax, a US-based biotech company. The vaccine has been approved for use by some African countries’ regulatory authorities, such as Ghana, Nigeria, and Burkina Faso, as of December 2023. According to a January 2024 press release by SII, the vaccine showed efficacy of around 78% in the age group between five- and seventeen-months children in Burkina Faso, Kenya, Mali, and Tanzania over the first year. The company is planning to roll out the 25 million vaccines produced in the coming four to five months.

In December 2022, SII acted rapidly on the Sudan Ebolavirus outbreak in Uganda by sending over 40,000 doses of the investigational ChAdOx1 SUDV vaccine in a record time of 80 days after WHO declared the epidemic.

These are some examples showcasing the fact that SII, along with other Indian producers, understands Africa’s vaccine needs, which is evident from the success of these vaccines in Africa. Consequently, it makes logical and economic sense for Africa to learn from Indian vaccine manufacturers to develop low-cost, effective vaccines.

Apart from successfully selling its vaccines in Africa, SII also actively contributes to the knowledge transfer into the continent. In January 2024, SII partnered with the Coalition for Epidemic Preparedness Innovations (CEPI) to foster low-cost vaccine production in Global South countries, including Africa (also comprising Latin America and the Caribbean, Asia (excluding Israel, Japan, and South Korea), and Oceania (excluding Australia and New Zealand)) to curb the outbreak of life-threatening diseases. CEPI is a global organization formed as a result of an international collaboration between public, private, philanthropic institutions and NGOs.

CEPI has three other members apart from SII: South Africa-based Aspen Pharmacare, Senegal-based Institut Pasteur de Dakar, and Indonesia-based Bio Farma. With this partnership, CEPI intends to capitalize on SII’s expertise in making affordable, cost-effective vaccines in record time. In this pursuit, CEPI is investing US$30 million so that vaccine developers who are already partners of CEPI can expedite technology transfers to SII within days or weeks of any outbreak. This will enable SII to produce vaccines against the impending disease.

Bharat Biotech’s (BBIL) foothold in Africa

With over 145 global patents and a portfolio comprising over 16 vaccines, BBIL has sent over 6 billion doses of vaccines to 125 countries worldwide. BBIL has produced vaccines against influenza H1N1, rotavirus, Japanese encephalitis (JENVAC), rabies, chikungunya, zika virus, and cholera. The company is also the creator of the world’s first tetanus toxoid conjugated vaccine for typhoid. In addition to these, BBIL has manufactured WHO pre-qualified vaccines, such as BIOPOLIO, ROTAVAC, ROTAVAC 5D, and Typbar TCV against polio, rotavirus, and typhoid infections, respectively.

BBIL has also been offering its products to Africa. In one of the recent examples, the company delivered its rotavirus oral vaccine, ROTAVAC, to Nigeria to immunize the country’s children in August 2022. The vaccine is expected to minimize the occurrence of the disease and death due to rotavirus among Nigerian children below the age of five years by at least 40%, according to research by the Johns Hopkins Bloomberg School of Public Health.

Another example of a vaccine made by BBIL that is aligned with the needs of the African population is MTBVAC. In March 2022, the company announced its partnership with Spain-based biopharmaceutical company Biofabri to develop, produce, and distribute MTBVAC, a novel TB vaccine. Phase 3 trial is currently underway in TB-affected regions of Sub-Saharan Africa such as South Africa, Madagascar, and Senegal. With 25% each, Sub-Saharan Africa and India account for the highest TB burden across the globe. The vaccine is being developed to target TB in these susceptible regions to eradicate the disease.

Several other Indian manufacturers have rolled out successful vaccines against various diseases in Africa that have significantly reduced the disease burden in the region.

EOS Perspective

Achieving 60% local vaccine production within 15 years will be possible only if Africa chooses a robust role model to learn from. India stands out as possibly the only near-perfect choice for that. To foster the development of a seamless and sustainable vaccine ecosystem, Africa should replicate, take guidance, and collaborate with Indian manufacturers as much as possible.

The world has evolved and many steps taken by India in the past cannot be directly transplanted into the current African scenario. However, India’s approach to building self-reliance in pharmaceutical production can undoubtedly offer valuable lessons. Direct know-how and technology transfer, collaborations, approach to talent training, production facilities management, procurement handling, supply chain management, licensing, and IP protection are critical aspects in which Africa could utilize India’s expertise and experience in vaccine making.

By choosing India as a role model and emulating its focus on nurturing a competitive pharma manufacturing industry, Africa could take a significant step towards achieving the goal of self-sufficient vaccine production.

by EOS Intelligence EOS Intelligence No Comments

A New Era of Vaccines – Will It Solve the African Malaria Issue?

Malaria, a treatable and preventable yet potentially fatal disease, is yesterday’s news in many developed nations. But this disease is still wreaking havoc in several developing countries, including the African continent. With the release of a new vaccine, many medical experts are examining whether this initiative will solve Africa’s malaria problem.

Africa’s crippling malaria burden has severe and lasting implications

Malaria is still a severe health issue in several countries, with the African region accounting for the lion’s share of the cases. WHO reported that in 2022, there were 249 million malaria cases, of which 94% were concentrated in Africa. Similarly, the number of deaths due to malaria was estimated to be 608,000, with 95% in Africa.

In the African region, about 78% of malaria-related deaths occurred in children under the age of five. Approximately half of malaria-related deaths were recorded in four African nations, namely Mozambique (4.2%), Uganda (5.1%), Nigeria (26.8%), and the Democratic Republic of the Congo (12.3%).

Malaria is mainly treated using artemisinin-based medicines. However, according to the WHO, partial artemisinin resistance is becoming a challenge in treating the disease in areas such as Tanzania, Rwanda, Uganda, and Eritrea. This has made developing a new solution to the malaria issue even more paramount.

New vaccines offer hope for eradicating malaria

In a significant effort to eradicate malaria from Africa, a new malaria vaccine has been introduced in the West African region in a first-ever routine vaccination program. Cameroon started the drive on January 22, 2024, by vaccinating children below the age of five with the RTS,S vaccine. Following the footsteps of Cameroon, many other countries have also opened their doors to this vaccine. Burkina Faso started the campaign on February 5. Similarly, Sierra Leone, Niger, and Liberia will also begin deploying the vaccine in late 2024.

UK-based pharmaceutical company GlaxoSmithKline (GSK) and PATH, a US-based NPO, developed the RTS,S vaccine after long clinical trials and tests. The initial version, which was developed in 1987 in GSK labs, underwent the Phase 3 trial between 2009 and 2014.

The RTS,S vaccine, commercially named Mosquirix, is designed to act against Plasmodium falciparum, a deadly malaria strain very common in the African continent, and prevent it from infecting the liver by targeting the circumsporozoite protein on the sporozoite surface. It was made by combining genes from the repeat (‘R’) and T-cell epitope (‘T’) of the pre-erythrocytic circumsporozoite protein (CSP) of the Plasmodium falciparum parasite with a hepatitis B virus surface antigen (‘S’). GSK researchers also used their expertise from developing the Energix-B vaccine against Hepatitis B to develop the RTS,S vaccine.

WHO has also pre-qualified another vaccine, R21/Matrix-M, developed by UK-based Oxford University and manufactured by Pune-based Serum Institute of India (SII), to prevent malaria. This vaccine is expected to be deployed in May or June 2024.

R21/Matrix-M functions similarly to RTS,S vaccine, but it is formulated to reduce anti-hepatitis B surface antigen antibody responses and raise anti-circumsporozoite protein antibody responses. Its initial focus was to induce a high degree of T-cell responses against pre-erythrocytic malaria antigens in the liver. But now, its focus also includes triggering high-level antibodies against the sporozoite stage of the parasite’s life cycle.

This vaccine also has the Matrix-M from US-based Novavax, a saponin-based adjuvant that boosts immune responses, enhances vaccine presentation in lymph nodes near the injection site, and increases vaccine durability and efficiency. This technology was successfully used in the COVID-19 vaccine produced by Novavax.

The new vaccines are effective in preventing malaria

Large-scale clinical trials have assessed the efficacy and safety of both vaccines. Also, in 2019, after the WHO accepted its advisory bodies’ counsel on malaria immunization, RTS,S was rolled out in a pilot program and closely observed within the initial Malaria Vaccine Implementation Programme (MVIP) in Malawi, Kenya, and Ghana. Around 2 million children were immunized during this drive. This helped experts assess the on-ground efficacy of the vaccine. A 2023 article published in Malaria Journal, a peer-reviewed open-access journal of BioMed Central, indicated that the pilot rollout of the vaccine demonstrated a roughly 30% reduction in the risk of developing severe malaria. R21/Matrix-M has a slightly higher efficacy. A 2022 study published in The Lancet, a peer-reviewed journal, indicated that R21/Matrix-M was 75% effective against both first and recurrent malaria cases following three vaccine doses over a 24-month follow-up period.

While both these vaccines are considered safe by experts, they have some side effects. In the case of the RTS,S vaccine, the incidence of serious adverse events (SAEs) and fatal SAEs was 24.2%–28.4% and 1.5%–2.5%, respectively, across all study groups, according to a 2019 article published in Human Vaccines & Immunotherapeutics, a peer-reviewed journal of Taylor & Francis. Also, 0.0%–0.3% of individuals self-reported experiencing SAEs as a result of vaccination. The common adverse effects reported in clinical studies were upper respiratory tract infections, pneumonia, and gastroenteritis.

In the case of the R21/Matrix-M vaccine, the common side effects reported in phase 3 trials included site pain (19%) and fever (47%). The phase 3 trial was conducted on around 4,800 children in Tanzania, Kenya, Mali, and Burkina Faso.

Some challenges await players willing to invest in the African vaccine landscape

Though the introduction of the new vaccines offers a glimmer of hope to eradicate malaria from African nations, several challenges are waiting for companies willing to invest in this sector.

The complex religious and social beliefs in Africa make vaccine acceptance difficult

One major bottleneck many players can face is the reluctance in African societies to accept the vaccines. This hesitancy is caused by numerous misconceptions and rumors spreading about both vaccines’ side effects, especially in rural areas. A similar issue happened in 2003 when five states in northern Nigeria refused the polio vaccine due to the fear that it rendered women sterile.

A senior immunization officer at Cameroon-based Value Health Africa said that conspiracies and myths regarding the malaria vaccines can be expected. In his opinion, understanding such dynamics in different communities and creating immunization drives accordingly will lead to a larger acceptance of the malaria vaccines.

Many African countries also lack the capability to track and record vaccine side effects, creating concerns about their safety and efficacy. This can also discourage people from receiving the shots.

Players can tackle this challenge by conducting awareness camps and education drives focusing on the positive effects of the vaccine and debunking the myths. Companies should partner with trusted community leaders, religious figures, and healthcare workers to address concerns directly. Also, developing culturally appropriate educational materials in local languages explaining the benefits and safety of vaccines can help build trust and encourage vaccine acceptance. Collaborations with international agencies such as WHO, UNICEF, and Gavi, the Vaccine Alliance, an international organization focused on improving vaccine access to children in poverty-stricken countries, can also increase the authority of these drives.

Infrastructural deficits in the African continent hinder vaccination storage and deployment

Vaccine storage and distribution are another bottleneck players can face. Many African countries face frequent power outages, poor road networks, and inadequate cold chain facilities, making it difficult to get vaccines and vaccinators to target communities. Lack of proper storage facilities can also severely hamper the potency of vaccines.

Also, neither of the malaria vaccines used in Africa are produced in the continent as of now. This adds to the transportation and logistics costs of the companies. Current market players are evaluating many strategies to reduce these costs to make immunization drives more profitable.

GSK, the producer of the RTS,S vaccine, is currently in talks with India-based manufacturer Bharat Biotech for technology transfer, owing to the country’s cost-effective vaccine production.

Similarly, SII is in talks with Nigeria and Ghana to produce the R21 vaccine locally. However, the lack of proper infrastructure and technical expertise makes it extremely difficult for the company to set up vaccine-producing plants in these countries. Currently, it is still profitable for players to mass produce malaria vaccines in other countries, such as India, and then transport them to Africa, even with the additional logistics costs.


Read our related Perspective:
 Vaccines in Africa: Pursuit of Reducing Over-Dependence on Imports

Financial challenges are creating roadblocks to immunization drives

Funding is also an issue in vaccination drives. Substantial funding is typically needed for these programs. For example, according to a 2016 report published in Vaccine, a peer-reviewed medical journal published by Elsevier, the cost of the DTaP vaccine (diphtheria, tetanus, and pertussis) for a child in Africa can range from US$25 to US$45, without including other logistics costs and requirements. Also, in many African countries, the expenses of vaccination drives are typically paid for by outside donors and organizations. This can make the widescale rollout much more challenging.

EOS Perspective

The malaria vaccination drive is expected to dramatically change the way the African continent fights this deadly disease, especially with 30 countries expressing high interest in adopting the vaccine, according to the chief program officer at Gavi. Till now, the focus of companies and organizations such as WHO has been more on treating the disease, but with the release of the new vaccine, the focus has shifted towards preventing and eradicating the disease from the African continent.

With international organizations and NGOs pushing to expand the vaccination drives to cover the entire continent, the currently competing market players focusing on immunization are in for a huge profit. Players such as GSK, which started research on the vaccine in the 1980s, have years of research behind product development, placing them miles ahead of their competitors. Other interested and capable companies will have to put more effort into R&D to compete with these veteran players.

While only two vaccines have currently received WHO recommendation, several more candidates are in the pipeline, with many in their phase I-IV development. According to the WHO, 133 vaccines are currently under clinical development, and 38 out of them are in active status. An example is US-based biotechnology company Sanaria’s PfSPZ Vaccine, which proved to be easy to administer, well-tolerated, and safe in a small trial on Malian adults. Similarly, Germany-based BioNTech hopes to use its mRNA technology to create a malaria vaccine and launched the early-stage clinical trials in 2022.

Several competitive players now understand the investment potential in the malaria vaccine industry. Since 2002, 221 trials involving malaria vaccines have either been initiated or completed, according to the WHO. This means that competitive and able players who can make early investments in the market might become strong competitors in the near future.

Gavi has reported that, as of February 2024, just 18 million units of the RTS,S vaccine will be available to reach 12 nations through 2025. Though the actual vaccine requirement numbers are not yet known, since the continent is home to over 207 million children under the age of four, it can be safely assumed that the demand for effective vaccination will not decrease anytime soon.

Also, with the establishment of the African Medicines Agency (AMA) set up to create a uniform regulatory framework across the continent, it is likely to become easier for vaccine producers to enter the market, as the requirements, which currently vary from country to country, are expected to be more unified. Currently, 37 out of 55 African countries have ratified or signed the AMA Treaty, and this is likely to increase soon.

Studies are now being initiated to create an effective single-dose vaccine. A preprint of a study by European researchers from Germany, The Netherlands, and Switzerland jointly researching the single-dose vaccine and its effectiveness was released in bioRxiv, an open-access preprint repository owned by the Cold Spring Harbor Laboratory. However, this study is yet to be evaluated by the medical community.

All in all, joint efforts from international organizations such as WHO and pharmaceutical companies are expected to not only decrease the disease burden but also serve as a foundation for future research into more potent and long-lasting vaccines.

by EOS Intelligence EOS Intelligence No Comments

Vaccines in Africa: Pursuit of Reducing Over-Dependence on Imports

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Pandemics such as COVID-19, Ebola, and the 2009 influenza instilled the need for a well-equipped domestic vaccine manufacturing industry in the minds of African leaders. Currently, due to insufficient local production, the continent depends heavily on imports from other countries, with the imports satisfying about 99% of vaccine demand in the continent. However, thanks to recent significant FDI, the vaccine industry in Africa had a market potential of around US$1.3 billion as of 2021 and is expected to range between US$2.3 billion and US$5.4 billion by 2030, as per McKinsey estimates.

Vaccine sovereignty is the need of the hour for the African continent

One of the most important lessons the COVID-19 pandemic has given to Africa is the pressing need to ramp up vaccine production locally. Biotech firms, such as Moderna and Pfizer, developed COVID-19 vaccines faster than any other producers. However, these vaccines were not easily accessible to most African countries.

Africans, in general, lack access to affordable and quality healthcare. Preventable diseases, such as pneumonia, malaria, and typhoid fever, have high fatality rates across the continent. This calls for localized production of pharmaceuticals and vaccines to lower the economic burden of these diseases and facilitate better access to affordable healthcare.

Currently, Africa relies heavily on other countries, such as China and India, for its pharmaceutical needs. The paucity of localized pharma production aggravates healthcare and vaccine inequity across the continent. To substantiate this, the COVID-19 vaccination rate at the beginning of 2022 in 16 African countries was less than 5% on average.

Currently, Africa consumes around 25% of the global vaccine production, whereas it produces less than 1% of its vaccine needs locally, as per the African Union (AU). Therefore, a lot remains to be done to materialize the goal of achieving 60% of vaccine needs to be satisfied locally by 2040, the vision of the Partnerships for African Vaccine Manufacturing (PAVM) under Africa CDC.

Increasing the vaccine production capacity from 1% to 60% in 15-16 years is not an easy task. Considering this, PAVM designed a continental plan for creating a vaccine production ecosystem capable of achieving the 60% target. This plan, called the PAVM Framework for Action (PAVM FFA), assessed that the African vaccine manufacturing industry would be expected to have increased the number of their vaccine production factories from 13 in 2023 to 23 (11 form, fill, finish, or F&F factories and 12 end-to-end factories) by 2040 providing a total of 22 priority products by 2040. It will require dedicated efforts from all involved stakeholders, such as producers, biopharma companies, industry associations, regulatory bodies, and academia.

Vaccines in Africa Pursuit of Reducing Over-Dependence on Imports by EOS Intelligence

Vaccines in Africa Pursuit of Reducing Over-Dependence on Imports by EOS Intelligence

Significant FDI will aid in driving localized vaccine production in Africa

The continent is attracting considerable FDI from the USA and Europe for vaccine development. Several foreign biotechnology firms are partnering with African governments to venture into localized vaccine production.

In March 2023, US-based biotechnology company Moderna partnered with the Kenyan government to set up a production facility for making messenger RNA (mRNA). The proposed annual capacity of Moderna’s first-ever facility in Africa is around 500 million doses of vaccines. The facility is expected to produce drug substances or active pharmaceutical ingredients and the final product for the entire continent.

In another example, a Germany-based biotechnology company, BioNTech, is contemplating commencing production of mRNA-based vaccines in its Rwanda facility in 2025. The construction of the facility began in 2022. With an investment of around US$150 million, this is Africa’s first mRNA manufacturing facility built by a foreign company. The proposed annual capacity of BioNTech’s mRNA facility is about 50 million vaccine doses. BioNTech also plans to set up mRNA factories in other African countries, such as South Africa and Senegal, and plans to produce vaccines for malaria, tuberculosis, HSV-2, and HIV in the future.

In September 2023, the South African government partnered with the KfW Development Bank of Germany. As per the agreement, South Africa will receive €20 million from Germany’s KfW Development Bank over five years for developing and manufacturing mRNA vaccines. The fund will be utilized for equipment procurement and API certification for vaccine production in South Africa.

A consortium of the Global Alliance for Vaccines and Immunizations (GAVI), AU, and Africa CDC established the African Vaccine Manufacturing Accelerator (AVMA) with the intent of fostering a sustainable vaccine industry. The formation of AVMA involved donors, partners, industry stakeholders, and non-governmental and not-for-profit organizations. GAVI planned to expand its supplier base, mainly in Africa, in 2021. Furthermore, the global alliance announced the commencement of around 30 vaccine manufacturing projects across 14 African countries.

Moreover, as of December 2023, over US$1.8 billion is planned for investment by a collaboration between the French government, Africa CDC, and other European and international investors to streamline the development and production of vaccines across the continent.

Desire to ensure vaccine effectiveness is seen as a biased vaccine preference

African governments are not only proactively putting in dedicated efforts to attract considerable FDI to build and strengthen the continent’s vaccine manufacturing industry, but they also focus on good quality, effective vaccine types. However, some perceive this as a lack of interest from the African governments to buy non-mRNA vaccines made by local companies.

For example, Aspen Pharmacare, a South Africa-based biotechnology company, put significant investments in ramping up the capacity of its manufacturing facility to produce viral vector vaccines against COVID-19. The company announced in November 2020 that it would be formulating, filling, and packaging the COVID-19 vector vaccine made by J&J. It also received €1.56 million investment from Belgian investors, BIO, the Belgian Investment Company for Developing Countries, which is a JV between the European Investment Bank (EIB) and several European DFIs.

However, millions of J&J COVID-19 vaccine doses made in South Africa were exported to Europe by J&J without the knowledge of the South African government, to support Europe’s domestic vaccine demand in August 2021, not complying with the initial agreement of vaccine distribution within the African continent. This created a political impasse between European and African governments over the distribution of the vaccines, which, in turn, delayed their production as the standoff resulted in a long waiting time for Aspen Pharmacare to produce the COVID-19 vaccine.

Ultimately, by September 2021, the European countries agreed to return 90% of the J&J vaccines to Africa. In March 2022, J&J gave Aspen Pharmacare the license to manufacture and distribute the vaccine under its brand name, Aspenovax. The expected production capacity of Aspenovax was around 400 million doses. However, not a single order came from African governments.

According to Health Policy Watch News, the reason for this was the rising production of Pfizer and Moderna’s mRNA COVID-19 vaccine distributed by COVAX that was being opted for by most African governments. Thus, in August 2022, Aspen Pharmacare had to close its production line, stating non-existent demand in Africa, partly due to the subsidence of the pandemic and partly due to African governments’ lack of interest in non-mRNA vaccines. The company could not sell a single dose of the vaccine, owing to multiple factors, starting from what was perceived as the lack of government’s intent to purchase home-grown vaccines to delayed production due to the Europe-Africa political clash and the rising inclination of the world towards mRNA vaccines.

It is interesting to note that of the total Covid-19 vaccines Africa administered to its residents, 36% were J&J vector vaccines, shipped directly from the USA.

Technology transfer hub and know-how development initiatives are set

To strengthen vaccine production capacity in low- and middle-income countries (LMICs), the WHO declared the establishment of a technology transfer hub in Cape Town, South Africa, in June 2021. In February 2022, WHO said that Nigeria, Kenya, Senegal, Tunisia, and South Africa will be among the first African countries to get the necessary technical expertise and training from the technology transfer hub to make mRNA vaccines in Africa.

Afrigen Biologics, a South Africa-based biotech firm, is leading this initiative. As Moderna did not enforce patents on its mRNA COVID-19 vaccine, Afrigen Biologics could successfully reproduce the former company’s vaccine, capitalizing on the data available in the public domain. As per an article published in October 2023, Afrigen Biologics reached a stage where its vaccine production capabilities are appropriate for “phase 1/2 clinical trial material production”. Additionally, in collaboration with a Denmark-based biotech firm, Evaxion, Afrigen is developing a new mRNA gonorrhea vaccine.

Besides setting up a technology transfer hub in South Africa, academic institutions are partnering with non-profits as well as companies to reinforce the development of necessary technical know-how and training required for vaccine manufacturing. One such example is the development of vaccines in Africa under the partnership of Dakar, Senegal-based Pasteur Institute (IPD), and Mastercard Foundation. Approved in June 2023, the goal of MADIBA (Manufacturing in Africa for Disease Immunization and Building Autonomy) includes improving biomanufacturing in the continent by training a dedicated staff for MADIBA and other vaccine producers from Africa, partnering with African universities, and fostering science education amongst African students.


Read our related Perspective:
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Although significant initiatives are underway, challenges exist

With 13 vaccine manufacturing companies and academic organizations across eight African countries, the continent’s vaccine industry is in its infancy. However, the current vaccine manufacturing landscape includes a mix of facilities with capabilities in F&F (10 facilities), R&D (3 facilities), and drug substance (DS) or active pharmaceutical ingredients (API) development (5 facilities).

One of the challenges African vaccine producers face is not being able to become profitable in the long run. In 2023, a global consulting firm, BCG, in collaboration with BioVac, a South Africa-based biopharmaceutical company, and Wellcome, a UK-based charitable trust that focuses on research in the healthcare sector, conducted a detailed survey exploring stakeholder perspectives on challenges and feasible solutions. The respondent pool consisted of a diverse set of stakeholders spanning across Africa (43%), LMICs (11%), and global (46%). A total of 63 respondents from various backgrounds, such as manufacturers, industry associations, health organizations, regulators, and academic organizations, were interviewed across the regions above. According to this research, most vaccine producers in Africa who were interviewed said that profitability is one of their key concerns. This leads to a lack of foreign investments required for scaling up, which in turn creates insufficient production capacity, thereby increasing the prices of vaccines. Therefore, these producers are unable to meet considerable demand for their products, and their business model becomes unsustainable.

Continued commitment and support from all stakeholders are necessary for achieving a sustainable business model for vaccine producers in Africa and, consequently, for the industry at large. However, it has been observed that the support from global, continental, and national levels of governments and other non-government stakeholders, such as investors, donors, partners, etc., tend to diminish with the declining rampage caused by epidemics in Africa. Therefore, this poses a severe challenge to strengthening the vaccine production industry in Africa.

In another 2023 study, by a collaboration between the African CDC, the Clinton Health Access Initiative (CHAI), a global non-profit health organization, and PATH, formerly known as the Program for Appropriate Technology in Health, involving 19 vaccine manufacturers in Africa, it was suggested that the current vaccine production capacity including current orders to form/fill/ finish using imported antigens is nearly 2 billion doses. In contrast, the current average vaccine demand is 1.3 billion doses annually. In addition, there is a proposed F&F capacity of over 2 billion doses. Thus, if Africa can materialize both current and proposed plans of producing F&F capacity vaccines from imported antigens, the study concludes that the continent will reach a capacity of more than double the forecasted vaccine demand in 2030. Overcapacity will lead to losses due to wastage. Thus, not all vaccine producers will be profitable in the long term. This may challenge the African vaccine manufacturing industry to be profitable.

Moreover, Africa’s current domestic antigen production capacity is lower than what is required to meet PAVM’s vaccine production target of 60% by 2040. In addition, a large part of the existing antigen capacity is being utilized to make non-vaccine products. Although antigen production plans are underway, these will not suffice to narrow the gap between demand and production of antigens domestically in Africa.

EOS Perspective

To create a local, financially sustainable vaccine manufacturing industry with output adequate to support the continent’s needs, it is necessary to create an environment in which producers can achieve profitability.

Initiatives such as technology transfers and funding will only be fruitful when their on-the-ground implementation is successful. This will require the involvement of all stakeholders, from the state governments to bodies that approve the market entry of vaccines. All stakeholders need to be steadfast in their actions to achieve the ambitious target of 60% of vaccine needs to be met from local production by 2040 without compromising on the accuracy and quality of the vaccines.

One of the most vital aspects of the necessary planning is for stakeholders to ensure that even after the pandemic and its aftermath are entirely gone, the effort towards establishing facilities, creating know-how, and training a workforce skilled in vaccine development and production does not stop.

The focus should extend beyond COVID-19, as there are many other preventable diseases in Africa, such as malaria, pneumonia, tuberculosis, and STDs, against which vaccines are not yet produced locally. These areas provide a great opportunity for vaccine producers and associated stakeholders to continue being interested and involved in vaccine production and development in Africa.

by EOS Intelligence EOS Intelligence No Comments

South Africa: an Arduous but Necessary Journey to Ease the Energy Crisis

South Africa is struggling with an unprecedented energy crisis resulting in daily load shedding for prolonged hours. Corruption, mismanagement of resources, and political conflicts are the root causes of the energy crisis. Lack of investment in energy infrastructure development, regulatory challenges, and outdated integrated resource plans further exacerbate the situation. Load shedding has been hampering business operations across sectors, increasing operational costs and negatively impacting GDP growth. While renewable energy can help combat the energy crisis, political resistance, and insufficient government support hinder the transition from fossil fuels to renewable energy sources. However, recent government initiatives are likely to expedite a shift towards renewable sources.

South Africa’s power supply marred by a range of deep-rooted issues

South Africa has been grappling with a significant energy crisis for the past several years, since 2007, leading to daily load shedding to prevent the collapse of the electric grid. Corruption, inability to cope with growing demand, political infighting, poor maintenance practices, limited investment in the energy sector for developing new infrastructure and maintaining running plants, and inefficient operations at Eskom (government-owned national power utility) have driven the energy crisis in the country.

Corruption is considered the major cause of this energy crisis. It is alleged that Eskom executives, through bribery and theft, made Eskom lose about US$55 million per month for the past several years. Also, the supply of low-grade coal to Eskom by a coalition in control of the coal supply has led to the regular collapse of Eskom’s power plants.

Additionally, the absence of an updated Integrated Resource Plan (IRP) further exacerbates the energy crisis. IRP (first launched in 2011) aims to project and address the electricity demand in the country. The government last updated its IRP in 2019, when it outlined annual auction and decommissioning plans until 2030. IRP must be updated regularly to include new advancements in the development of power generation technologies to align with the most effective scenarios for generating electricity.

Setbacks in renewable energy construction projects due to escalating costs have further spiked the energy crisis in South Africa. Around half of the projects awarded under the re-launch of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) in 2021 failed due to increasing energy costs. REIPPPP is a government initiative to increase electricity capacity through private sector investment in renewable energy projects by allowing independent power producers (IPPs) to bid for and develop renewable energy capacity. Some projects have also been sidelined due to a lack of connections to the national grid.

South Africa an Arduous but Necessary Journey to Ease the Energy Crisis by EOS Intelligence

South Africa an Arduous but Necessary Journey to Ease the Energy Crisis by EOS Intelligence

GDP growth and sectors’ outputs affected by the ongoing electricity shortage

Rolling power cuts have negatively impacted the country’s economic growth, businesses, and households. It significantly affected the day-to-day operations across sectors. The economic costs associated with load shedding have negatively impacted the country’s GDP growth since 2007. It decelerated from 4.7% in 2021 to 1.9% in 2022 due to various factors, including power cuts and volatile commodity prices, among others. It further declined to 0.9% in the first half of 2023, mainly due to the energy crisis. Lowering GDP growth is likely to limit tax revenue and, thus, limit government spending.

Energy-intensive industries, particularly mining, have been severely impacted by power outages. Mining production fell by 3.7% in Q4 2022 compared to Q3 2022. Overall, the mining sector contracted by over 7% in 2022, in contrast to 2021. In 2023, mining production contracted by a further 1.5% in Q3 compared to Q2.

Other industries also continue to be affected. Agricultural output declined by 3.3% in Q4 2022 compared to Q3 2022. Manufacturing production fell by 1.2% in Q3 2023 in contrast to Q2 2023. The trade sector saw a decline of 2.1% in trading activities in Q4 2022 compared to Q3 2022. The food and beverage industry has also faced the consequences of power outages. Although the food and beverages industry is less electricity-intensive than other manufacturing industries, daily power outages have still led to increased operational costs and reduced output. Extensive load shedding also caused disruptions across retail operations and supply chains, negatively impacting food and beverage manufacturers’ pricing and profit margins.

The financial toll on businesses increased significantly, especially regarding the expenses associated with diesel purchases to run generators in the absence of power from the grid.

Transition to renewable energy hindered by political resistance and policy gaps

South Africa is blessed with abundant sunshine and wind, but the transition to renewable energy from coal power plants is not going to be a quick fix for the energy crisis in the near future. This is mainly due to political resistance by people with a vested interest in the fossil fuel industry and a lack of clear policies/regulations to promote renewable energy deployment.

Inconsistencies and a lack of coordination between energy companies and the government hinder existing policies aimed at encouraging the deployment of renewable energy. Additionally, the dominance of Eskom managing R&D investments related to power generation and market control hampers the deployment of renewable energy.

Despite the establishment of REIPPPP, renewable energy generation has not increased sufficiently to address the crisis. According to the Council for Scientific and Industrial Research (CSIR), only 7.3% of energy was generated from renewable sources in 2022. Concerns about job loss and insufficient grid infrastructure further hamper the transition to a more sustainable energy landscape.

Renewable energy growth driven by international collaborations

However, the government has begun to understand the importance of renewable energy in tackling energy shortages and has been promoting the sector. This has resulted in increasing foreign investment in renewable energy projects in South Africa. The increase in renewable projects due to retiring coal power plants is also likely to help combat the ongoing energy crisis.

For instance, in mid-2022, Scatec, a Norway-based renewable energy company, signed a 20-year contract with Eskom to supply 150MW to the national grid through various projects with a capacity of 50MW each.

Similar to this, in April 2023, Lions Head Global Partners (a UK-based investment banking and asset management firm), Power Africa (a US government-led presidential partnership initiative aimed at increasing access to electricity in Africa) in collaboration with the US Agency for International Development, Flyt Property Investment (a South Africa-based property development company), and Anuva Investments (a South Africa-based real estate and renewable energy investment firm) announced investment of US$12.1 million in Decentral Energy Managers, an independent power producer that focuses on renewable energy in South Africa.

Also, in September 2023, the USA proposed to invest US$4.8 million in partnership with the US African Development Foundation and the US Departments of Energy, Commerce, and State through Power Africa to support initiatives aligned with South Africa’s ‘Just Energy Transition Partnership’ (JETP) investment plan. JETP is an agreement forged among the governments of South Africa, the USA, France, the UK, Germany, and the EU, aimed at expediting the phased shutdown of South Africa’s coal-fired power plants and speeding up the transition from fossil fuels to renewable energy. The USA has been the largest source of foreign direct investment (FDI) in the renewables space in tenders issued by the South African Department of Energy under REIPPPP.

In addition, in August 2023, South Africa signed several agreements with China to strengthen energy security and transition. China, being the leading installer of hydro, wind, and solar power and having close diplomatic and economic relations with South Africa, is expected to help the country with solar equipment while providing technical expertise.

Moreover, the REIPPPP launched the sixth round of the bid window in April 2022 to incorporate an additional capacity of 5.2GW into the energy mix. Still, only five bidders were chosen in Q4 2022 and are expected to generate around 17% of the total anticipated capacity.

Power crunch partially eased by soaring rooftop solar installations

An increase in the installation of rooftop solar systems by individuals and businesses to prevent disruptions to their operations caused by prolonged load shedding is also likely to help tackle the energy crisis. South Africa’s installed rooftop solar PV capacity increased by about 349% from 983MW in March 2022 to 4,412MW in June 2023.

The introduction of tax rebates for households and businesses for rooftop solar system installation is anticipated to stimulate increased adoption of rooftop solar systems across the country. For instance, in March 2023, the government proposed a tax rebate of 25% of the rooftop solar installation cost, up to a maximum of US$817.74 from March 2023, and a tax rebate of 125% of the businesses’ cost of investment in renewable energy sources such as solar, wind, hydropower, and biomass. This is expected to expand electricity generation and help ease the ongoing energy supply crisis.

Hope for improved power management brought by government activities 

The government is slowly doubling up its efforts to encourage more participation of IPPs in renewable energy generation. This is expected to help boost power generation and, thus, play a crucial role in addressing the energy crisis in the near future. The National Energy Regulator of South Africa (NERSA) approved over 15 IPPs between May 2022 and June 2022. As of June 2023, the country has an extensive pipeline of wind and solar projects, amounting to 66GW of capacity. Projects amounting to a capacity of over 5.5GW are expected to be operational by 2026.

The state has taken various initiatives to improve energy security, ease renewable energy project licensing requirements, and encourage participation from the private sector to generate renewable energy in the country. In October 2023, the World Bank approved a US$1 billion Development Policy Loan (DPL) to support the government’s initiatives to enhance long-term energy security and facilitate a low-carbon transition.

In July 2023, the South African Department of Trade, Industry, and Competition (DTIC) launched an initiative called ‘Energy One-Stop Shop’ (EOSS), aimed at accelerating the issuance of regulatory approvals and permits required before initiating the development of a project. As a result of this initiative, over 100 projects amounting to a capacity of over 10GW worth US$11 billion are being developed.

Along with this, in July 2023, the National Energy Regulator of South Africa (NERSA) finally decided to proceed with splitting Eskom into three different identities: generation, transmission, and distribution. NERSA authorized the National Transmission Company of South Africa to operate independently of Eskom, for which the Independent System and Market Operator (ISMO) Bill was passed in 2012 and implemented in 2013. The company will have non-discriminatory access to the transmission system, authority to buy and sell power, and will be responsible for grid stability. This is expected to improve electricity supply security, stabilize Eskom’s finances, and establish a foundation for long-term sustainability.

Moreover, in May 2023, two new ministers were appointed: a Minister in the Presidency responsible for Electricity to focus specifically on addressing the power outages, and a Minister in the Presidency responsible for Planning, Monitoring, and Evaluation, with the specific responsibility of overseeing the government’s performance.

Furthermore, South Africa’s JETP initiative implemented in 2021, supported by funding worth US$8.5 billion, is expected to integrate efficient energy production methods, reduce the adverse impact of power generation on the external environment, and improve energy security.

EOS Perspective

Endemic corruption within the government-owned national power utility and primary power generator, Eskom, has exacerbated the load shedding in South Africa. A deteriorating grid also significantly threatens the country’s economic stability. There is a great need for energy storage initiatives to optimize grid efficiency, improve power transmission across regions, and combat load shedding. With the split of Eskom, grid efficiency is expected to improve, and it is also anticipated to foster involvement from IPPs.

Alongside promoting the increased participation of IPPs, the newly appointed Minister for Electricity also stresses extending the life of coal-fired powered stations. Coal continues to be the predominant source of energy mix, constituting 80% of the total system load. While this approach might help the country with the immediate pressures of power supply requirements, more emphasis should be placed on reducing South Africa’s dependency on coal and the transition to green energy to stabilize energy distribution as well.

While various initiatives and programs have been implemented to encourage participation from IPPs to generate energy, it all comes down to execution, which the government currently lacks. Not enough funding support is being offered by the government to the participants. For instance, of the total power generation capacity anticipated from the participants in the fifth bidding round of REIPPPP, only half of the anticipated capacity, amounting to 2.58GW, is expected to come online. Most projects did not reach a financial close, or for many projects, legal agreements were not signed due to high interest rates, slow production of equipment post-pandemic, and increased cost of energy and other commodities. These issues led to increased construction costs beyond the budget initially set for the projects by the bidding companies. With soaring costs, the projects require greater financial support from the government to reach financial closure.

Also, the endless blame game between Eskom and the Department of Mineral Resources and Energy makes it difficult for IPPs to enter the market and provide clean energy to the country. Eskom’s dominance in the electricity sector is likely to continue to influence initiatives implemented to encourage participation from IPPs.

However, with increasing government efforts to encourage IPPs to generate energy in the long run, the private sector is expected to play a crucial role in pioneering the shift from fossil fuel to renewable energy sources and tackling the energy crisis.

by EOS Intelligence EOS Intelligence No Comments

Inflated COVID-19 Test Prices in Africa: Why and What Now?

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With the subsidence of COVID-19 and the announcement of the ending of the Global Health Emergency by WHO in May 2023, the world has started to move on and embark on its path back to pre-COVID normalcy. However, some of the lessons the pandemic has brought are hard to forget. One such lesson, and more importantly, an issue that demands attention and action, is the prevalent price disparity of COVID-19 tests in low-income regions of the world, such as Africa, compared to some more affluent countries, such as the USA.

High test prices across Africa, in comparison with prices in more developed parts of the world, such as the USA, have become evident after the onslaught of COVID-19 on the African continent. To illustrate this with an example, the average selling price of SD Biosensor’s STANDARD M nCoV Real-Time Detection kit comprising 96 tests per kit in the USA is US$576 compared to US$950 in African countries. This translates to a unit price of US$6 in the USA compared to US$9.9 in African countries, amounting to a 65% difference between the price points in the two regions. The price disparity in Africa vis-à-vis the USA ranges from +30% to over +60% in the case of PCR-based COVID-19 tests in our sample when compared to the prices of the same products that are being sold in the USA. This leads to the crucial question of why these tests are so costly in a place where they should be sold at a lower price, if not donated, owing to the continent’s less fortunate economic standing.

The Why: Reasons for inflated price in Africa

Several factors, such as Africa’s heavy dependence on medical goods imports, a limited number of source countries exporting medical goods to the continent, paucity of local pharma producers, higher bargaining power of foreign producers enabling them to set extortionate prices, shipping and storage costs, and bureaucratic factors drive the inflated prices of COVID-19 test kits in African countries.

Africa is heavily dependent on imports for its diagnostic, medicinal, and pharma products. To elucidate this, all African countries are net importers of pharma products. Additionally, the imports of medicines and medical goods, such as medical equipment, increased by around 19% average annual growth rate during the span of 20 years, from US$4.2 billion in 1998 to US$20 billion in 2018.

In 2019, medical goods accounted for 6.8% of total imports in Sub-Saharan Africa (SSA), whereas they accounted for only 1.1% of exports. The SSA region experiences a varied dependence on the imports of medical goods. This is evident from the fact that Togo and Liberia’s share of imports of medical goods was around 2%, while that of Burundi was about 18% in 2019.

The 2020 UNECA (United Nations Economic Commission of Africa) estimates suggest that around 94% of the continent’s pharma supplies are imported from outside of Africa, and the annual cost is around US$16 billion, with EU-27 accounting for around 51% of the imports, followed by India (19%), and Switzerland (8%). This means that only 6% of the medicinal and pharma products are produced locally in the African continent, creating a situation where foreign producers and suppliers have drastically higher bargaining power.

This became particularly evident during the 2020-2022 COVID-19 pandemic, when the demand for COVID-19 tests was extremely high compared to the supply of these tests, making it easier for foreign suppliers to set an exploitative price for their products in the African continent.

The lack of competition and differentiation in the region aggravated the situation further. There are only a handful of suppliers and producers in the continent that provide COVID-19 tests. To elucidate this further, there were only 375 pharmaceutical producers in the continent as of 2019 for a population of over 1.4 billion people. When compared with countries with similar populations, such as India and China, which have around 10,500 and 5,000 pharmaceutical companies, respectively, the scarcity in the African continent starts to manifest itself more conspicuously. To illustrate this further, only 37 countries in Africa were capable of producing medicines as of 2017, with only South Africa among these 37 nations able to produce active pharmaceutical ingredients (APIs) to some extent, whereas the rest of the countries had to depend on API imports.

Furthermore, the SSA region gets medical goods supplies from a small number of regions, such as the EU, China, India, the USA, and the UK. As of 2019, over 85% of the medical goods that were exported to SSA were sourced from these five regions. It is interesting to note that the source countries slightly differ for the SSA region and the African continent as a whole, with the EU and India being the common source regions for both. With a 36% share in all medical goods imports to the African continent in 2019, the EU is the top exporting region of medical goods to SSA, albeit with a declining share over the last few years. India and China share the second spot with a 17-18% share each in all medical goods imports supplied to SSA in 2019. Considerable concentration is observed in the import of COVID-19 test kits to SSA, with a 55% share in all medical goods imports supplied by the EU and a 10% share by the USA in 2019.

To provide a gist of how the above-mentioned factors attributed to the inflated prices of COVID-19 tests in the region, Africa’s medical goods industry, being import-driven, is heavily dependent on five regions that supply the majority of the medical goods needs of SSA. In addition to this, the scarcity of local pharma producers across the continent aggravated the situation further. This, in turn, gave an opportunity for foreign producers to charge a higher price for these COVID-19 tests in Africa.

Additionally, storage and shipping costs of COVID-19 tests also play a significant role in the pricing of these tests. The actual share of shipping and storage costs is difficult to gauge owing to the fact that there is not enough transparency in disclosing such pieces of information by test producers and suppliers.

Another aspect contributing to the inflated prices of these tests in African countries is bureaucratic factors. According to Folakunmi Pinheiro, a competition law writer based in Cambridge, UK, some African state governments (such as in Lagos) take exorbitantly high cuts on the sale of COVID-19 tests, allowing labs to keep no more than 19-20% of the profits per test after covering their overhead costs such as electricity, IT, logistics, internet, salary, and consumables costs including PPE, gloves, face masks, etc.

Since labs in Africa must purchase these tests from foreign producers, they have limited room for maneuvering with their profit margin, given the high test price and the cuts imposed by the local governments. Pinheiro further simplifies the profits in absolute terms. The cost of a PCR-based COVID-19 test, analyzed in laboratories (not at-home tests), in Lagos in February 2022 was around NGN45,250 (~US$57.38), and the labs selling and performing these tests on patients would make a profit of around NGN9000 (~US$11.41) per test which translates to 19.89% of the total cost of the single test. It is believed that this profit is after the overhead costs are covered, implying that the majority of the profits go to the state government of Lagos.

Inflated COVID-19 Tests Prices in Africa Why and What Now by EOS Intelligence

Inflated COVID-19 Tests Prices in Africa Why and What Now by EOS Intelligence

The What Now: Reactions

To combat the inflated prices of COVID-19 tests developed by foreign producers, many African price and competition regulatory organizations undertook efforts to reduce the prices of these tests to a significantly lower level in their respective countries. While R&D was ongoing for the making of groundbreaking low-priced alternative testing technologies that were ideal for African climate and economic conditions, many academic institutes tied up with foreign companies to launch these tests in the African markets. Additionally, the African Union (AU) and Africa CDC had set new goals to meet 60% of the vaccine needs of the continent domestically by fostering local production by 2040. Lastly, many African countries were able to eliminate or reduce import tariffs on medical goods during the pandemic for a considerable amount of time.

  • From price or competition regulatory bodies

As a response to the high PCR-based COVID-19 test prices in South Africa, the country’s Competition Commission (CCSA) was successful in reducing the prices for COVID-19 testing in three private laboratories, namely Pathcare, Ampath, and Lancet by around 41%, from R850 (~US$54.43) to R500 (~US$31.97) in January 2022. The CCSA asked these private clinical laboratory companies for financial statements and costs of COVID-19 testing as part of the investigation that started in October 2021. CCSA further insisted on removing the potential cost padding (an additional cost included in an estimated cost due to lack of sufficient information) and unrelated costs and thus arrived at the R500 (~US$31.97) price. Furthermore, the CCSA could significantly reduce the price of rapid antigen tests by around 57% from R350 (~US$18.96) to R150 (~US$8.12). However, it is believed that there was still room for further reduction in rapid antigen test price because the cost of rapid antigen tests in South Africa was around R50 (US$2.71). Although the magnitude to which this price reduction was possible is hard to analyze owing to the fact that there was not enough transparency in revealing the cost elements by these test producers.

  • From local producers, labs, and academia-corporate consortia

The fact that Africa is a low-income region with lower disposable income compared with affluent countries, in addition to its unfavorable climate, has driven local scientists to develop alternative, low-cost testing solutions with faster TAT and minimal storage needs.

African scientists were believed to have the potential to develop such cheaper COVID-19 tests, having had the necessary know-how gained through the development of tests for diseases such as Ebola and Marburg before. The high prices of COVID-19 tests in the African markets have compelled local universities to tie up with some foreign in-vitro diagnostic (IVD) producers to develop new, innovative, low-cost, alternative technologies.

To cite an example, the Senegal-based Pasteur Institute developed a US$1 finger-prick at-home antigen test for COVID-19 in partnership with Mologic, a UK-based biotech company. This test does not require laboratory analysis or electricity and produces results in around 10 minutes. This test was launched in Senegal as per a December 2022 publication in the Journal of Global Health. Although this test’s accuracy cannot match the high-throughput tests developed by foreign producers, the low-cost COVID-19 tests proved to be useful in African conditions where large-scale testing was the need of the hour and high-temperature climate was not conducive to cold storage of other types of tests.

Countries such as Nigeria, Senegal, and Uganda tried to increase their testing capacity with their homegrown low-cost alternatives as the prices of the tests developed by foreign manufacturers were exorbitantly high. Senegal and Uganda stepped up to produce their own rapid tests, while in remote areas of Nigeria, field labs with home-grown tests were set up to address the need for COVID testing that remained unaddressed because of the high prices of the foreign tests.

Dr. Misaki Wayengera, the pioneer behind the revolutionary, low-cost paper strip test for rapid detection of filoviruses including Ebola and Marburg with a TAT of five minutes, believes that a low-cost, easy-to-use, point-of-care (POC) diagnostic test for detecting COVID-19 is ideal for equatorial settings in Africa providing test results within a shorter time span while the patient waits. He spearheaded the development of a low-cost COVID-19 testing kit with a TAT of one to two minutes, along with other Ugandan researchers and scientists.

  • From the African Union and CDC Africa

As an aftermath of the adversities caused by the COVID-19 pandemic, the African Union (AU) and African Centers for Disease Control and Prevention (CDC Africa) put forth a goal of producing 60% of Africa’s vaccine needs locally by 2040. A US$ 45 million worth of investment was approved in June 2023 for the development of vaccines in Africa under the partnership of Dakar, Senegal-based Pasteur Institute (IPD), and Mastercard Foundation. The goal of MADIBA (Manufacturing in Africa for Disease Immunization and Building Autonomy) includes improving biomanufacturing in the continent by training a dedicated staff for MADIBA and other vaccine producers from Africa, partnering with African universities, and fostering science education amongst students in Africa.

Additionally, the US International Development Finance Corporation (DFC), in partnership with the World Bank Group, Germany, and France, announced in June 2021 a joint investment to scale up vaccine production capacity in Africa. The investment was expected to empower an undisclosed South African vaccine producer to ramp up production of the Johnson & Johnson vaccine to over 500 million doses (planned by the end of 2022).

  • From FTAs such as the Africa Continental Free Trade Agreement

Intra-regional trade within Africa (as opposed to overseas trade) from 2015 to 2017 was only 15.2% of total trade, compared to 67% within Europe, 61% within Asia, and 47% within the Americas. While supply chain disruptions hampered the availability of COVID-19 testing kits, many African nations could develop home-grown solutions locally to address the issue. Africa Continental Free Trade Agreement (AfCFTA) was set up on January 1, 2021, with the intention of improving intra-regional trade of goods, including medical supplies. AfCFTA, the largest FTA after WTO, impacts 55 countries constituting a 1.3 billion population in an economy of US$3.4 trillion. Inadequate intercontinental collaboration is one of the primary restraints for medical supply chains. In order for health systems to fully capitalize on AfCFTA, partnerships with the African Union’s (AU) five Regional Collaborating Centers and current global healthcare organizations need to be increased.

  • From state governments

Sub-Saharan African countries have the highest MFN (most favored nation) tariff rate (9.2%) on medical goods, compared to developed nations’ tariffs (1.9%) as well as emerging economies’ tariffs (6.6%). However, out of 45 countries in Sub-Saharan Africa, only eight countries could remove or decrease import tariffs and value-added taxes on medical goods on a temporary basis to aid the public health situation during the pandemic in 2020, as per Global Trade Alert. These eight countries include Angola, Chad, Malawi, Mauritius, Niger, Nigeria, South Africa, and Zambia. In three of these eight countries, these measures had already expired as of April 2021. Furthermore, to promote intra-regional trade, 33 Sub-Saharan African countries provide preferential tariff rates of around 0.2% on average on some medical products. At the same time, the average MFN tariff rate for the same medical goods is around 15% for these Sub-Saharan African countries.

EOS Perspective

Since the demand for COVID-19 test kits was significantly higher compared to their supply, producers and suppliers had a higher bargaining power, because of which they set an extortionate price. However, that being said, African competition authorities did their best to curb the prices, although there was still room for more.

Secondly, policy changes need to be brought about at the state level to allow increased competition in the African markets, which in turn would lower the price of the tests. African governments need to consider a more patient-centric and consumer-protective approach wherein competition is likely to facilitate the launch and consequent market uptake of better-quality products available at lower prices.

Additionally, prices and costs of COVID-19 tests should be monitored on a regular basis. The underlying problem of inflated COVID-19 test prices is likely to cease only when competition in the PCR testing sector is encouraged, and government policies of pricing the tests are more patient-oriented.

Moreover, robust intra-regional trade coupled with strong local manufacturing and lower trade barriers is expected to help build Africa’s more sustainable health system.

by EOS Intelligence EOS Intelligence No Comments

Scarcity Breeds Innovation – The Rising Adoption of Health Tech in Africa

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Africa carries the world’s highest burden of disease and experiences a severe shortage of healthcare workers. Across the continent, accessibility to primary healthcare remains to be a major challenge. During the COVID-19 pandemic, several health tech companies emerged and offered new possibilities for improving healthcare access. Among these, telemedicine and drug distribution services were able to address the shortage of health workers and healthcare facilities across many countries. New health tech solutions such as remote health monitoring, hospital automation, and virtual health assistance that are backed by AI, IoT, and predictive analytics are proving to further improve health systems in terms of costs, access, and workload on health workers. Given the diversity in per capita income, infrastructure, and policies among African countries, it remains to be seen if health tech companies can overcome these challenges and expand their reach across the continent.

Africa is the second most populated continent with a population of 1.4 billion, growing three times faster than the global average. Amid the high population growth, Africa suffers from a high prevalence of diseases. Infectious diseases such as malaria and respiratory infections contribute to 80% of the total infectious disease burden, which indicates the sum of morbidity and mortality in the world. Non-communicable diseases such as cancer and diabetes accounted for about 50% of total deaths in 2022. High rates of urbanization also pose the threat of spreading communicable diseases such as COVID-19, Ebola, and monkey fever.

A region where healthcare must be well-accessible is indeed ill-equipped due to limited healthcare infrastructure and the shortage of healthcare workers. According to WHO, the average doctor-to-population ratio in Africa is about two doctors to 10,000 people, compared with 35.5 doctors to 10,000 people in the USA.

Poor infrastructure and lack of investments worsen the health systems. Healthcare expenditure (aggregate public healthcare spending) in African countries is 20-25 times lower than the healthcare expenditure in European countries. Governments here typically spend about 5% of GDP on healthcare, compared with 10% of GDP spent by European countries. Private investment in Africa is less than 25% of the total healthcare investments.

Further, healthcare infrastructure is unevenly distributed. Professional healthcare services are concentrated in urban areas, leaving 56% of the rural population unable to access proper healthcare. There are severe gaps in the number of healthcare units, diagnostic centers, and the supply of medical devices and drugs. Countries such as Zambia, Malawi, and Angola are placed below the rank of 180 among 190 countries ranked by the WHO in terms of health systems. Low spending power and poor national health insurance schemes discourage people from using healthcare services.

Health tech solutions’ potential to fill the healthcare system gaps

As the prevailing health systems are inadequate, there is a strong need for digital solutions to address these gaps. Health tech solutions can significantly improve the access to healthcare services (consultation, diagnosis, and treatment) and supply of medical devices and drugs.

Health tech solutions can significantly improve the access to healthcare services (consultation, diagnosis, and treatment) and supply of medical devices and drugs.

For instance, Mobihealth, a UK-based digital health platform founded in 2017, is revolutionizing access to healthcare across Africa through its telemedicine app, which connects patients to over 100,000 physicians from various parts of the world for video consultations. The app has significantly (by over 60%) reduced hospital congestion.

Another example is the use of drones in Malawi to monitor mosquito breeding grounds and deliver urgent medical supplies. This project, which was introduced by UNICEF in 2017, has helped to curb the spread of malaria, which typically affects the people living in such areas at least 2-3 times a year.

MomConnect, a platform launched in 2014 by the Department of Health in South Africa, is helping millions of expectant mothers by providing essential information through a digital health desk.

While these are some of the pioneers in the health-tech industry, new companies such as Zuri Health, a telemedicine company founded in Kenya in 2020, and Ingress Healthcare, a doctor appointment booking platform launched in South Africa in 2019, are also strengthening the healthcare sector. A study published by WHO in 2020 indicated that telemedicine could reduce mortality rates by about 30% in Africa.

The rapid rise of health tech transforming the African healthcare landscape

Digital health solutions started to emerge during the late 2000’s in Africa. Wisepill, a South African smart pill box manufacturing company established in 2007, is one of the earliest African health tech success stories. The company developed smart storage containers that alert users on their mobile devices when they forget to take their medication. The product is widely used in South Africa and Uganda.

The industry gained momentum during the COVID-19 pandemic, with the emergence of several health tech companies offering remote health services. The market experienced about 300% increase in demand for remote healthcare services such as telemedicine, health monitoring, and medicine distribution.

According to WHO, the COVID pandemic resulted in the development of over 120 health tech innovations in Africa. Some of the health tech start-ups that emerged during the pandemic include Zuri Health (Kenya), Waspito (Cameroon), and Ilara Health (Kenya). Several established companies also developed specific solutions to tackle the spread of COVID-19 and increase their user base. For instance, Redbird, a Ghanaian health monitoring company founded in 2018, gained user attention by launching a COVID-19 symptom tracker during the pandemic. The company continues to provide remote health monitoring services for other ailments, such as diabetes and hypertension, which require regular health check-ups. Patients can visit the nearest pharmacy instead of a far-away hospital to conduct tests, and results will be regularly updated on their platform to track changes.

Scarcity Breeds Innovation – The Rising Adoption of Health Tech in Africa by EOS Intelligence

Start-ups offering advanced solutions based on AI and IoT have been also emerging successfully in recent years. For instance, Ilara Health, a Kenya-based company, founded during the COVID-19 pandemic, is providing affordable diagnostic services to rural population using AI-powered diagnostic devices.

With growing internet penetration (40% across Africa as of 2022) and a rise in investments, tech entrepreneurs are now able to develop solutions and expand their reach. For instance, mPharma, a Ghana-based pharmacy stock management company founded in 2013, is improving medicine supply by making prescription drugs easily accessible and affordable across nine countries in Africa. The company raised a US$35 million investment in January 2022 and is building a network of pharmacies and virtual clinics across the continent.

Currently, 42 out of 54 African countries have national eHealth strategies to support digital health initiatives. However, the maximum number of health tech companies are concentrated in countries such as South Africa, Nigeria, Egypt, and Kenya, which have the highest per capita pharma spending in the continent. Nigeria and South Africa jointly account for 46% of health tech start-ups in Africa. Telemedicine is the most offered service by start-ups founded in the past five years, especially during the COVID-19 pandemic. Some of the most popular telemedicine start-ups include Babylon Health (Rwanda), Vezeeta (Egypt), DRO Health (Nigeria), and Zuri Health (Kenya).

Other most offered services include medicine distribution, hospital/pharmacy management, and online booking and appointments. Medicine distribution start-ups have an immense impact on minimizing the prevalence of counterfeit medication by offering tech-enabled alternatives to sourcing medication from open drug markets. Many physical retail pharmacy chains, such as Goodlife Pharmacy (Kenya), HealthPlus (Nigeria), and MedPlus (Nigeria), are launching online pharmacy operations leveraging their established logistics infrastructure. Hospitals are increasingly adopting automation tools to streamline their operations. Electronic Medical Record (EMR) management tools offered by Helium Health, a provider of hospital automation tools based in Nigeria are widely adopted in six African countries.

Medicine distribution start-ups have an immense impact on minimizing the prevalence of counterfeit medication by offering tech-enabled alternatives to sourcing medication from open drug markets.

For any start-up in Africa, the key to success is to provide scalable, affordable, and accessible digital health solutions. Low-cost subscription plans offered by Mobihealth (a UK-based telehealth company founded in 2018) and Cardo Health (a Sweden-based telehealth company founded in 2021) are at least 50% more affordable than the average doctor consultation fee of US$25 in Africa. Telemedicine platforms such as Reliance HMO (Nigeria) and Rocket Health (Uganda) offer affordable health insurance that covers all medical expenses. Some governments have also taken initiatives in partnering with health tech companies to provide affordable healthcare to their people. For instance, the Rwandan government partnered with a digital health platform called Babylon Health in 2018 to deliver low-cost healthcare to the population of Rwanda. Babylon Health is able to reach the majority of the population through simple SMS codes.

Government support and Public-Private Partnerships (PPPs)

With a mission to have a digital-first universal primary care (a nationwide program that provides primary care through digital tools), the Rwandan government is setting an example by collaborating with Babylon Health, a telemedicine service that offers online consultations, appointments, and treatments.

As part of nationwide digitization efforts, the government has established broadband infrastructure that reaches 90% population of the country. Apart from this, the country has a robust health insurance named Mutuelle de Santé, which reaches more than 90% of the population. In December 2022, the government of Ghana launched a nationwide e-pharmacy platform to regulate and support digital pharmacies. Similarly, in Uganda, the government implemented a national e-health policy that recognizes the potential of technology in the healthcare sector.

MomConnect, a mobile initiative launched by the South African government with the support of Johnson and Johnson in 2014 for educating expectant and new mothers, is another example of a successful PPP. However, apart from a few countries in the region, there are not enough initiatives undertaken by the governments to improve health systems.

Private and foreign investments

In 2021, health tech start-ups in Africa raised US$392 million. The sustainability of investments became a concern when the investments dropped to US$189 million in 2022 amid the global decline in start-up funding.

However, experts predict that the investment flow will improve in 2023. Recently, in March 2023, South African e-health startup Envisionit Deep AI raised US$1.65 million from New GX Ventures SA, a South African-based venture capital company. Nigerian e-health company, Famasi, is also amongst the start-ups that raised investments during the first quarter of 2023. The company offers doorstep delivery of medicines and flexible payment plans for medicine bills.

The companies that have raised investments in recent years offer mostly telemedicine and distribution services and are based in South Africa, Nigeria, Egypt, and Kenya. That being said, start-ups in the space of wearable devices, AI, and IoT are also gaining the attention of investors. Vitls, a South African-based wearable device developer, raised US$1.3 million in funding in November 2022.

Africa-based incubators and accelerators, such as Villgro, The Baobab Network, and GrowthAfrica Accelerator, are also supporting e-health start-ups with funding and technical guidance. Villgro has launched a US$30 million fund for health tech start-ups in March 2023. Google has also committed US$4 million to fund health tech start-ups in Africa in 2023.

Digital future for healthcare in Africa

There were over 1,700 health tech start-ups in Africa as of January 2023, compared with about 1,200 start-ups in 2020. The rapid emergence of health tech companies is addressing long-running challenges of health systems and are offering tailored solutions to meet the specific needs of the African market.

Mobile penetration is higher than internet penetration, and health tech companies are encouraged to use SMS messaging to promote healthcare access. However, Africa is expected to have at least 65% internet penetration by 2025. With growing awareness of the benefits of health tech solutions, tech companies would be able to address new markets, especially in rural areas.

Companies that offer new technologies such as AI chatbots, drones, wearable devices for remote patient monitoring, hospital automation systems, e-learning platforms for health workers, the Internet of Medical Things (IoMT), and predictive analytics are expected to gain more attention in the coming years. Digitally enabled, locally-led innovations will have a huge impact on tackling the availability, affordability, and quality of health products and services.

Digitally enabled, locally-led innovations will have a huge impact on tackling the availability, affordability, and quality of health products and services.

Challenges faced by the health tech sector  

While the African health tech industry has significantly evolved over the last few years, there are still significant challenges with regard to infrastructure, computer literacy, costs, and adaptability.

For instance, in Africa, only private hospitals have switched to digital records. Many hospitals still operate without computer systems or internet connections. About 40% of the population are internet users, with countries such as Nigeria, Egypt, South Africa, Morocco, Ghana, Kenya, and Algeria being the ones with the highest number of internet users (60-80% of the population). However, 23 countries in Africa still have low internet penetration (less than 25%). This is the major reason why tech companies concentrate in the continent’s largest tech hubs.

On the other hand, the majority of the rural population prefers face-to-face contact due to the lack of digital literacy. Electricity and internet connectivity are yet to reach all parts of the region and the cost of the internet is a burden for many people. Low-spending power is a challenge, as people refuse to undergo medical treatment due to a lack of insurance schemes to cover their medical expenses. Insurance schemes provided in Africa only cover 60% of their healthcare expenses. Even though health tech solutions bring medical costs down, these services still remain unaffordable for people in low-income countries. Therefore, start-ups do not prefer to establish or expand their services in such regions.

Another hurdle tech companies face is the diversity of languages in Africa. Africa is home to one-third of the world’s languages and has over 1,000 languages. This makes it difficult for companies to customize content to reach all populations.

Amidst all these challenges, there is very little support from the governments. The companies face unfavorable policies and regulations that hinder the implementation of digital solutions. Only 8% of African countries have online pharmacy regulations. In Nigeria, regulatory guidelines for online pharmacies only came into effect in January 2022, and there are still unresolved concerns around its implementation.

Lack of public investment and comprehensive government support also discourage the local players. Public initiatives are rare in providing funding, research support, and regulatory approval for technology innovations in the health sector. Private investment flow is low for start-ups in this sector compared to other industries. Health tech start-ups raised a total investment of US$189 million in 2022, which is not even 10% of the total investments raised by start-ups in other sectors in Africa. Also, funding is favored towards the ones established in high-income countries. Founders who don’t have ties to high-income countries struggle to raise funds.

EOS Perspective

The emergence of tech health can be referred to as a necessary rise to deal with perennial gaps in the African healthcare system. Undoubtedly, many of these successful companies could transform the health sector, making quality health services available to the mass population. The pandemic has spurred the adoption of digital health, and the trend experienced during the pandemic continues to grow with the developments in the use of advanced technologies such as AI and IoT. Telemedicine and distribution have been the fastest-growing sectors driven by the demand for remote healthcare services during the pandemic. Home-based care is likely to keep gaining momentum with the development of advanced solutions for remote health monitoring and diagnostic services.

Home-based care is likely to keep gaining momentum with the development of advanced solutions for remote health monitoring and diagnostic services.

With the increasing internet penetration and acceptance of digital healthcare, health tech companies are likely to be able to expand their reach to rural areas. Right policies, PPPs, and infrastructure development are expected to catalyze the health tech adoption in Africa. Companies that offer advanced technologies such as IoT-enabled integrated medical devices, AI chatbots, drones, wearable devices for remote patient monitoring, hospital automation systems, e-learning platforms for health workers, and predictive analytics for health monitoring are expected to emerge successfully in the coming years.

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