Africa imports 90% of its drugs. A new foundation wants to change that

The African continent cannot depend on health products from the rest of the world, as was made clear during the COVID-19 pandemic when export restrictions, lockdowns, and hoarding left supply chains in disarray. Up to 90% of drugs consumed and 99% of vaccines administered in most countries in Africa are imported. African health leadership is working to remedy this by increasing the quantity of vaccines, diagnostics, personal protective gear, and therapeutics manufactured locally. With limited research and development on the continent, much of the technical innovation happens abroad, meaning intellectual property is also held overseas, making licensing and technology transfer key. But commercial manufacturers have in many cases declined to transfer the knowledge on how to create these products to African manufacturers — which would ultimately give the continent more ownership over ensuring the health security of its populations. "Technology transfer partnerships are the best mechanisms we have to drive accelerated capacity building," Patrick Tippoo, executive director and co-founder of the African Vaccine Manufacturing Initiative, said in an interview in December. "They get the ball rolling in the right direction and can help build product development capacity." One thing standing in the way is the continent’s lack of a pharmaceutical technology intermediating agency to bring firms to the table. To fill that gap, the African Development Bank launched the African Pharmaceutical Technology Foundation, or APTF, in June. Rwanda will host it. APTF expects to create framework conditions for technology absorption in Africa and facilitate deal-making. It plans to “handhold” negotiations in areas such as royalties, lump sum payments, and the geographical scope in which licenses are valid, professor Padmashree Gehl Sampath told Devex on the sidelines of the International Conference on Public Health in Africa in Kigali in December. Sampath is the special adviser for pharmaceuticals and health infrastructure to AfDB president and leads the technical work of setting up the foundation. “If you can set aside a space for organized negotiations then this might actually facilitate better conversations around technology licensing than have been had,” she said. Although launched by the bank, and in partnership with the African Union, APTF is independent. But its work is intended to complement AfDB’s commitment to spend at least $3 billion of the bank’s finance over the next decade to support the pharmaceutical and vaccine manufacturing sector. The foundation will aim to “synergize technology options with the financing investments the bank is going to make,” Sampath said. “Without sustainable financing, nothing really works. That's really critical with the establishment of the foundation and with technology transfer.” --— Frederick Abbott, Edward Ball Eminent Scholar professor of international law, Florida State University A variety of pharmaceutical manufacturing initiatives have been launched in Africa in recent years, such as the Partnership for Africa Vaccine Manufacturing, which aims to ensure 60% of vaccines administered on the continent are locally manufactured by 2040 — the continent currently produces about 1%. There have been successes. Aspen Pharmacare in South Africa recently signed a tech transfer agreement with the Serum Institute of India for the manufacture of routine vaccines. But there have also been disappointments. The World Health Organization launched an mRNA vaccine technology transfer hub in South Africa, of which mRNA vaccine commercial manufacturers, such as Moderna, have declined to participate in the effort to transfer technology — pushing the hub to develop its own vaccine candidate. This lengthens the amount of time before the hub has a commercially viable vaccine. Separately, BioNTech made a deal with Rwanda and Senegal to build an mRNA vaccine facility, but the company received criticism for “bypassing” the hub and not including an initial tech transfer. Bringing the foundation to life In the first quarter of this year, the foundation plans to host its inaugural meeting in Kigali of its advisory council — a body of eight global experts, chaired by Rwandan President Paul Kagame. The council includes WHO Director-General Dr. Tedros Adhanom Ghebreyesus, Director-General of the World Trade Organization Ngozi Okonjo-Iweala, AU chairperson Moussa Faki Mahamat, founder of Bharat Biotech Krishna Ella, and Nísia Trindade Lima, president of the Oswaldo Cruz Foundation. “They will serve as goodwill champions for us but also give strategic guidance,” Sampath said. Sampath expects the foundation to be operational in the first half of the year. In its first year, the foundation will embark on flagship projects but she couldn’t provide more information on what those would entail at this point. The foundation will have four arms, she said, including technological search and matching; an impact-driven technology management unit; a pan-African ecosystem development platform, and technology strategic services and advice. Sampath said the foundation is already in high demand, with companies and national governments reaching out for partnerships. Incentivizing, shaping markets, and licensing The foundation plans to craft the right incentives to encourage global companies to participate in ways such as sharing their technologies, as well as working closely with African governments to strengthen the research and development ecosystems, among other partnerships. “We're confronting difficult political choices about who gets what, and how, and what different groups can expect from whatever it is they're providing,” said professor Frederick Abbott, an Edward Ball Eminent Scholar at Florida State University during an event focused on the foundation in Kigali. “It's very difficult to bring people together to cooperate.” He said when African companies, or their governments, approach firms for technology transfer, they can argue the continent has a large, young population with increasing demand for pharmaceutical products. Bolstering technological capacity can serve as the “price of admission” to these markets. But there can also be unpredictable demand for products, as well as limited ability to pay for them due to resource constraints which poses challenges for global pharmaceutical companies, Karrar Karrar, interim head of health policy at Save the Children UK told Devex. “I think operating in these kinds of jurisdictions requires an innovative business model,” he said. While companies might want to license products to a local manufacturer if they can’t justify the financial investment of boots on the ground, that can come with risks in quality assurance, he said. But the continent is creating the African Medicines Agency, or AMA, which aims to harmonize regulations and standards. Like the foundation, Rwanda will host AMA. Having both of these institutions in Kigali will make it easier for companies seeking engagement with legislators, manufacturers, and policymakers on the continent, Karrar said. The foundation aims to also engage in market shaping when needed. This is not to be confused with demand forecasting, Sampath said, which examines demand that might materialize in the coming decades. Market shaping includes considering how pooled procurement can generate long-term demand. Sampath said she’s seen vaccine-producing firms face difficulties in remaining competitive. A dozen firms might initially provide a certain vaccine to Gavi, the Vaccine Alliance and UNICEF but “over time it tapers down to two or three firms” supplying the tenders. The foundation plans to “support licensing in the widest possible manner” to include both exclusive and nonexclusive licensing, Sampath said. “In instances where a technology licensee in Africa has to make substantive investments into production, a non-exclusive license might not be the best option for African companies because it can reduce the investment incentives for individual companies. Also, if the product markets are not really large, and non-exclusive licenses are issued, it can unnecessarily lead to downward price competition that the companies cannot ultimately sustain. At the same time, non-exclusive licensing is important for a wide variety of reasons, which the foundation will also focus on,” she said. Diversifying, lowering costs, and linking funding to access It’s risky for firms to bank on single products so the foundation aims to help with product diversification — which is also dependent on access to technologies. If product demand isn’t high enough after investments are sunk into a facility, it's often not easy to repurpose a facility to quickly pivot to a product with a different type of technology. “Successful pharmaceutical firms, not just in vaccines, but across the board, have different kinds of products they produce. They can use that to overcome the ups-and-downs in demand and other shocks to the system,” Sampath said. The foundation plans to also aid in lowering the cost of goods and supply chain development, Sampath said. Local production has often been expensive because of the costs of importing raw products. Abbott said he’s optimistic the operationalization of the African Continental Free Trade Agreement could ease some of these tensions, because many barriers are trade-related, such as tariffs. Experts said firms globally have reached success in vaccine development in part due to sustained public sector engagement, such as publicly-funded research, long-term funding collaborations, and landing large procurement tenders. “Without sustainable financing, nothing really works. That's really critical with the establishment of the foundation and with technology transfer,” Abbott said. “Nobody developed a sophisticated vaccine or technology product on their own.” For example, U.S. government agencies contributed some $2.5 billion in the development of Moderna’s COVID-19 vaccine. Because of this, Karrar said, it's critical to underwrite access conditionalities into public research funding early on. This could include participation in platforms such as the Medicines Patent Pool or this new foundation. Companies begin laying out plans for products early, such as in the second phase of clinical trials when they consider where to register, how to price, and whether to license. “This stresses the need to push these access conditions at the stage of early funding and not when the product reaches the market. At that stage, it is too late and leads to inevitable delays in access,” Karrar said. Update, Jan. 18, 2023: This article's headline has been amended.