HEALTH: Drug makers need shot in the arm

31 May, 2015 - 00:05 0 Views
HEALTH: Drug makers need shot in the arm Information from the Ministry of Health and Child welfare shows there is a huge shortage of essential drugs at most of the country’s public health institutions

The Sunday Mail

Information from the Ministry of Health and Child welfare shows there is a huge shortage of essential drugs at most of the country’s public health institutions

Information from the Ministry of Health and Child welfare shows there is a huge shortage of essential drugs at most of the country’s public health institutions

Edwin Mwase and Sharon Kavhu

Data from the Ministry of Health and Child Care shows there is a huge shortage of essential drugs at most of the country’s public health institutions.

The country’s drug bank, NatPharm, is virtually operating at half of its capacity, with Zimbabwe relying on donors for most of its medicinal needs.

However, experts say the country’s pharmaceutical industry has potential to supply the bulk of the market’s needs.

And according to a report by Business Monitor International on Zimbabwe’s pharmaceutical industry, the value of pharmaceutical products consumed in Zimbabwe increased 7,5 percent from US$233 million in 2013 to US$251 million in 2014.

The Pharmaceutical Manufacturers Association 2014 position paper also buttress the notion that the sector has scope to grow exponentially, with locals supplying at least 70 percent of Zimbabwe’s medicinal needs.

Today manufacturers supply less than 46 percent of requirements.

Datlabs, Ecomed, Graniteside Chemicals, Gulf Drug Company, Pharmanova, Plus Five Pharmaceuticals, Varichem and Zimpharm are barely keeping their heads above the water, while CAPS Holdings is in the ICU.

Market analysts point out that capacity utilisation in pharmaceuticals has seen the largest decline of any economic sector in Zimbabwe in the past decade.

At least 98 percent of essential drugs are coming via donor-funded programmes, creating both a health and a security risk for the country.

PMA chairman Mr Emmanuel Mujuru said, “A reduction in capacity utilisation is a result of an increase in production costs, and the pharmaceutical industry has one of the highest overhead structures in the manufacturing sector, because it is capital and skills intensive.

“Duty and VAT are being levied on imported raw materials when finished drugs are imported duty and VAT-free. This has created an uneven playing field which makes it cheaper to import medicines as opposed to producing them locally.

“On the other hand we have had cheap drugs being dumped in the country, thus reducing the market for pharmaceutical products manufactured locally.”

Local companies export almost 20 percent of their product to the Sadc region, where South Africa is the largest pharmaceutical market.

Information shows that drugs exported to South Africa are being air freighted while drugs being imported from South Africa to Zimbabwe are coming by road through Beitbridge. That means it is cheaper to bring drugs from South Africa than to send them in that direction.

Further, imported pharmaceutical raw materials are taxed when imported finished pharmaceutical products are tax-free.

As such, it is easier and cheaper to import than to manufacture, a scenario that flies in the face of Government beneficiation intentions under Zim-Asset.

Mr Mujuru said the industry urgently needed massive plant upgrades, re-tooling and product development to retain past glories.

“The situation is being worsened by expensive short-term borrowings and liquidity constraints which increases the cost of getting credit and capitalisation.”

Outgoing Confederation of Zimbabwe Industries president Mr Charles Msipa said the country needed to copy and learn from other countries’ experiences.

“We understand that policy-makers are making policy changes to ensure that the issue of unfair import tariffs on pharmaceutical products is solved,” said Mr Msipa.

“However, as a country there is a need to listen to the foreign investors’ interests, so that we partner them in the recapitalisation process of our pharmaceutical industry.

“It is also important to urgently remove duty and VAT on raw materials of packaging which is meant for the local production of medicines by local pharmaceutical companies.

“All drugs which are necessary for importation should be imported by the local manufacturers instead of wholesalers for easy monitoring and accountability of the necessity to import required drugs.”

He said imported drugs that could be locally manufactured should attract a minimum 30 percent tax.

Pharmaceutical manufacturers have pleaded with Government to press donors to buy drugs locally.

“The country has the capacity to supply IV fluids but two of such facilities at Datlabs and CAPS are lying idle,” said part of the PMA report.

The report also says during the 2008 cholera outbreak, IV fluids were air-freighted into Zimbabwe by humanitarian organisations instead of being procured locally.

That initiative ended up costing three times more than local procurement.

To its credit, the local industry was the first in Africa outside of South Africa to start manufacturing generic ARVs, showing that Zimbabwean innovation is simply lacking financial backing.

The African pharmaceutical market is worth US$45 billion annually, and local manufacturers require about US$80 million to re-establish a competitive industry.

Share This:

Survey


We value your opinion! Take a moment to complete our survey

This will close in 20 seconds