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MARKET SURVEY ON BULK DRUGS AND PHARMACEUTICAL PRODUCTS

(HS NO.30)

Production:

Ethiopia does not have a highly developed drug-manufacturing sector.  Domestic market is highly dependant on imports as the local manufacturing units cover only a small portion of the requirement for domestic needs.  The Ethiopian pharmaceutical manufacturing is the oldest and the only pharmaceutical manufacturing unit owned by the Government, the rest being in the private sector.

It is estimated that the Ethiopian market is around US$ 200 million, which can be divided as under:

(i)         Purchases/Imports through tenders by Ministry of

Health and NGOs (TB, HIV and malaria drugs) :   US$ 100 million

(ii)        Purchases/Imports through tenders by PHARMID,

Government owned company (general medicines):         US$ 30 million

(iii)       Purchases/Imports by Trade market

(general medicines)  :                                                           US$ 70 million

Pharmaceuticals and Medical Supplies Import and Wholesale Enterprises (PHARMID) imports and supplies medicines and medical equipment to government and private hospitals, clinics, health centers and pharmacies in Ethiopia. It procures its supplies through tenders.  With the opening up of the Ethiopian economy this quickly changed with the introduction of about 12 private pharmaceutical manufacturing companies and many private companies which are already actively engaged in importing pharmaceuticals to Ethiopia.

Most major international companies have presence in Ethiopian market. These include Glaxo, Pfizer, Ranbaxy, Cadila, Novartis, etc.

Market: 

The market is growing at about 8-10% per annum. Of this, 75-80% demand is met through imports and the balance by local manufacturers. There are no local manufacturers to produce TB and HIV medicines and these are totally imported. None of the local manufacturers presently comply with the cGMP practices.

Manufacturing units: 

Although 12 pharmaceutical manufacturing units were established in the country since 1994, local producers do not take up more than 15 per cent of the annual consumption of pharmaceutical products. They manufacture tablets, capsules and IV fluids. Private local manufacturing companies have had a rough time in the last years and four companies have so far faced foreclosure by banks due to their inability to remain in the market. Pharmacure, the proposed largest pharmaceutical manufacturing plant in Africa with a capital outlay of US$ 100 million, is under implementation in collaboration with GlaxoSmithKline (GSK) in phases. In the first phase, it has started manufacturing IV fluids and proposes to set up the facility for essential drugs like anti-TB, HIV and anti-malaria drugs.

The Ethiopian Pharmaceutical and Medical Supplies Manufacturers Association noted that at the moment the staggering and young industries in the sector are being hit hard by the extremely high tariff rates imposed on their import of raw materials making it hard for them to remain competitive in the market.  According to the President of Ethiopian Pharmaceutical and Medical Supplies Manufacturers Association, finished medical products that are imported to the country are taxed only five per cent rate while more than thirty percent taxation is levied on the imported raw materials.  So far four companies are temporarily out of production.  The Association is pursusing for zero tariffs on raw materials. 

v     East African Pharmaceuticals PLC is a joint venture company of nationals from Sudan and UK, which manufactures human, and veterinary medicines and drugs.

v     Sunshine Pharmaceuticals is a joint venture between Jianxi Corporation, a Chinese state company, and an Ethiopian investor.  The plant will manufacture 39 different types of medical products, with focus on third-generation medicines and anti-viral capsules and tablets.  A second plant will manufacture penicillin.  This would make it the second penicillin manufacturing company in Ethiopia after the state-owned Ethiopian Pharmaceutical manufacturing Company. 

Cadila Pharmaceuticals Ethiopia PLC

  A joint venture between India’s Cadila Pharmaceuticals, (the majority share holder) and an Ethiopian firm, Almeta IMPEX, started production at a new, Birr 100 million (US$11.4 million) facility in Akaki town, Ethiopia on September 22, 2007. The plant has the capacity to manufacture 390 million tablets, 165 million capsules and 1.44 million liters of liquid medicines annually.  Cadila Pharmaceuticals Ethiopia PLC (CPEL) mainly focuses on therapeutic areas such as Cardiovascular, Anti Diabetes, gastroenterology (anti-acids, anti-ulcerative), Anti-Infective, Anti-Depressants, Anti Fungal, Anti-TB, Anti Malarial, Anti Retroviral, Anti-Amoebic, Haematinics, Anti Allergic, Pain killers, Multi vitamins, etc. 

Ethiopian Imports:

Ethiopian imports include products falling under Chapter HS No.30; Antibiotics, vaccines, penicillin, medicaments of other hormones, anaesthetics medicament, medicaments of alkaloids or derivatives, vitamins, adhesive dressings for medical purposes, wadding, gauze, materials for surgical suture, absorbable haemostatic, blood-grouping reagents, dental cements and other dental fillings and first aid boxes and kits. 

Details of Ethiopian imports during the last three years are given below:-

The figures show that there has been considerable growth in import of pharmaceutical products and raw materials to Ethiopia in the last three years.  Ethiopian import increased by 13% per cent in 2006 and by 32% in 2007 over the figures for respective previous year.  Details of import from major countries are given below:

COMPETITORS WITH THEIR MARKET SHARE

Exports from India: 

India’s export in this sector mainly consists of finished products and raw materials.  Major drugs and pharmaceutical items exported by India to Ethiopia include vaccines, antibiotics, penicillin, medicaments of alkaloids or derivatives, medicaments of other hormones, vitamins, anesthetics medicaments of mixed/unmixed products, Adhesive dressings, wadding, gauze, first-aid kits, etc.

There is increasing trend in Indian export of pharmaceutical products to Ethiopia.  While in 2004, Indian export was US$16.4 million, it increased to US$37 million in 2007 showing an increase of 56%.  In the year 2007, India ranked at 1^st place in countries exporting pharmaceutical products to Ethiopia, which were worth more than US$37 million (CIF value) and accounted 17.2% of the total pharmaceutical imports into the country.

Source: Ethiopian Central Statistics Authority

According to information obtained from the Directorate General of Commercial Intelligence and Statistics, following are the figures of Indian exports of Drugs and pharmaceuticals to Ethiopia.

FOB VALUE IN LAKH RUPEES

Source: Directorate General of Commercial Intelligence & Statistics, Kolkata

Analyzing the above figures, it is noted that Indian exports of Drugs/Pharmaceuticals to Ethiopia have an increasing trend for the last four years. 

Besides India, the other major exporters of drugs and pharmaceuticals to Ethiopia are: USA, France, Belgium, Korea Republic, Denmark, Switzerland, Germany, UK, Netherlands, China and Cyprus.

Custom Duties:

Research and Development:  Since the drugs manufacturing industry is not developed, there are no R&D facilities available.

Industrial Association: The name, address with other details of the Industrial Association dealing with Pharmaceuticals and Medical Supplies is given below:-

Ms. Etenesh Abrha,

President,

Ethiopian Pharmaceuticals & Medical Supplies

Manufacturers Association,

P.O. Box 8384,

Addis Ababa (Ethiopia)

Telephone No. 00251-11-5512106/5523691

Fax No.00251-11-5511662

E-mail: etab.int.med@ethionet.et

Drugs Regulatory Authority:

All manufacturers intending to export drugs and pharmaceutical products to Ethiopia are required to register with the following government regulatory authority.  The registration is granted keeping in view the requirements of the Ethiopia’s Essential Drugs List.  

The Drug Administration and Control Authority (DACA),

Ministry of Health,

Government of the Federal Democratic Republic of Ethiopia,

P.O.Box 5681,

Addis Ababa (Ethiopia)

Telephone No.:          00-251-11-5524122

Fax No.           :           00-251-11-5521392

            E-mail               :         daca@ethionet.et

The Drug Administration and Control Authority (DACA) is preparing to give the country a new national medicine policy and a pharmaceutical sector master plan, both designed to regulate and guide the supply and distribution of medicine.  The policy will state that local manufacturers should be given special attention, especially in terms of relieving their fiscal burden.  In addition, the master plan states that PHARMID, the country’s biggest supplier, should focus only on providing medication for the public health system and should leave the importing and selling of pharmaceuticals to private companies. 

Drugs Registration:

For registration with DACA, a company should have a WHO-GMP certification.  It is required to locally appoint an exclusive importer or distributor, for which it should enter into an 'Agency Agreement' with a local importer/distributor.  Each product which is desired to be marketed in Ethiopia has to be separately registered.  The fee for the first time registration is US$ 500 (five hundred) for each product and for each strength.  This means that the same medicine but with different strengths will be treated differently for each of its strength and charged a separate registration-fee.  The registration is valid for three years and can be renewed every three years.  For renewal, the fee is US$ 250 per product per strength.  At present, it takes about 4-6 months for the registration process.  This is an improved state because earlier the registration process used to take about one year. The government is further looking into the possibility of further reducing the time taken for registration.   Recently, the National Drug Advisory Committee and DACA stated that 92 drugs for humans and animals have been included into the national drug list.  Some of the drugs incorporated into the list include anti-retroviral drugs, as well as drugs for treatment of malaria and cardiac problems.  The committee gives priority to enlist drugs that are used for ART, TB, hypertension, diabetics, cancer and cardiac diseases.    

Indian companies active in Ethiopia:  Some of the leading Indian companies like Cadila, Zydus Cadila, Cipla, Ranbaxy, Ipca Laboratories, Lupin Labs., Torrent Pharma, Alembic, Sarabhai Chemicals etc. are already actively engaged in exporting pharmaceuticals to Ethiopia. 

The companies from India who export their products to Ethiopia fall into two categories; (i) those which generally bid for tenders, and (ii) those which are in the private market but sometimes bid for tenders as well.  The Indian companies in the first category are: Cadila, Pharma, Ipca, Ranbaxy, Lupin Labs., Cipla, Ajanta Pharma, Macleods, Flamingo Pharmaceuticals.  These companies mostly bid for tenders relating to HIV drugs and anti-TB drugs.  The companies in the second category which supply for the private market are: Cadila, Ipca, Intas, Torrent Pharmaceuticals, Sarabhai Chemicals, Unique Pharma, Flamingo Pharmaceuticals and Lupin Labs. 

There is a major market for export of vaccines, dermatological preparations like ointments/creams in tubes, ophthalmological preparations (creams, eye-drop, etc.) and anti-psychotic drugs.  At present, only multi-national companies are importing anti-psychotic drugs in Ethiopia.  There is further scope for export of healthcare supplements like vitamins, calcium, iron and other minerals, etc.

Comments and Market Situation:

Ø      During the last three years, there has been considerable growth in import of pharmaceutical products and raw materials to Ethiopia. Ethiopia imports worth US$214.5 million of Pharmaceuticals and drugs.  About 17.2% of the total import into Ethiopia is made from India.

Ø      All the Indian drugs that are available in the Ethiopian market have fulfilled the strict quality parameters set by the WHO and have undergone the tough registration and testing procedure of DACA.  Only registered companies and products with DACA are eligible for exporting drugs to Ethiopia.  More than 50 Indian pharmaceutical and drug manufacturing companies are currently registered with DACA.

Ø      DACA is considering revising its regulation policy to check the inflow of spurious medicines to Ethiopia.  In this regard the DACA authorities visit India and other countries to see the pharmaceutical industries and inspect the quality of their products twice in a year.  Indian pharmaceutical companies have been fulfilling the qualitative and competitive parameters set by the Ethiopian Drug Administration and Control Authority and contributing to the development of Ethiopian health sector.

Ø      In the minds of the common men, products of multi-nationals are perceived to be better and preferred over a drug with the same formulation but manufactured by another company.  Some pharmacies also tend to keep alive this perception for their own motives.  This gives some advantage to the multi-national companies from USA, Europe etc.  However, the professionals like doctors etc. do not have this bias, which is a good sign for Indian companies. 

Ø      DACA has prohibited 62 of the 101 foreign drug manufacturing companies from exporting drugs to Ethiopia for failure to meet the Administration’s quality standards.

Ø      There is no doubt that there is tremendous potential for growth in the drugs and pharmaceutical sector in Ethiopia. There are major opportunities offering attractive potential benefits to prospective investors in manufacturing of pharmaceuticals, medicinal, chemical and botanical products in the form of tablets, capsules, syrups and injectables.  However, it will be very important for any Indian company entering into the Ethiopian market to maintain top quality and standards to gain and sustain confidence. 

ADDIS ABABA (Ethiopia): 1^st October, 2008

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