The AU plans to pool resources to unify $50B pharma market

African heads of state met over the weekend at the African Union headquarters in Addis Ababa, Ethiopia, for their annual AU summit — where a raft of decisions were debated and put up for a vote, including some focused on improving the health security of the continent’s population. A key decision to come out of this is the agreement to create a pooled procurement mechanism for medical commodities which was approved late Sunday night. “The decision means the creation of a robust market for manufacturers and ensures the health security of all Africans,” wrote Africa Centres for Disease Control and Prevention Director General Dr. Jean Kaseya in a press release. The African medicines and vaccines market is estimated to be about $50 billion per year. But the continent is a net importer of these crucial commodities — which can be a deadly problem during a pandemic when supply chains become dysfunctional and African nations are cut off from receiving supplies or made to pay marked-up prices. Because of this, in the wake of the pandemic, African leaders have prioritized local manufacturing of medical commodities as a top priority. For example, the AU aims to increase the amount of locally produced vaccines from less than 1% to up to 60% by 2040. But this hasn’t been easy. Disjointed regulatory systems make it difficult for local manufacturers to access the population’s market. Manufacturers in other countries like China and India can also often sell products for cheaper because they have economies of scale. Due to this, many local manufacturing efforts across the continent face challenges in securing enough demand for their products to ensure that the large investments that go into their manufacturing operations are paid off with an adequate amount of long-term sales. An African-led pooled procurement mechanism can ensure that an increasing quantity of health commodities are procured from African manufacturers and that these manufacturers can access a continentwide market rather than just a few countries. Additionally, when countries buy health commodities on their own, they may face higher prices if they negotiate a price directly with a manufacturer as opposed to the increased leverage they have when they are negotiating as a group of countries. This mechanism will help “ensure that all African countries, despite their economic status, social status, and political status, can have access to quality products,” Kaseya said during a press conference on Sunday. This new pooled procurement mechanism will be an expansion of the Africa Medical Supplies Platform, which was launched during the COVID-19 pandemic and served as a forum to connect medical suppliers with governments, NGOs, and donor organizations. It was created in partnership with Africa CDC, the African Export-Import Bank, and the United Nations Economic Commission for Africa, among others. The AU and the World Bank also launched the COVID-19 African Vaccine Acquisition Task Team during the pandemic which pooled the procurement of vaccines. But the details around how this new expanded pooled procurement mechanism will operate are still to be determined. During the AU summits, contributions are made by delegations of African nations, and following the summit, drafting teams work to integrate this feedback into documents while technical teams hammer out the details. At this year’s summit, African leaders decided to expand the Partnership for African Vaccines Manufacturing — also launched during the pandemic as an effort to support countries in scaling up their manufacturing — to also include other health commodities, such as medicines and diagnostics. Kenya’s President William Ruto was also appointed as the AU champion for local manufacturing over the weekend. His country hosts some leading health manufacturers, such as Universal Corporation Limited, which produces over 100 formulations of human medicines, and Revital Healthcare, which is the only African company to produce early activation auto-disable syringes. During the summit, African leaders also gave their blessing to a common African position on the global pandemic treaty — an international agreement that is currently amid negotiations in Geneva, Switzerland, that will work to ensure the world is better prepared to respond to future health emergencies and prevent them from becoming pandemics. Countries set a deadline for the World Health Assembly this May to consider a draft of the agreement — but there are concerns this deadline won't be met. This common position is a confidential document that the AU’s negotiating team will use to speak with one pan-African voice when hammering out the treaty’s draft with other countries — but Devex has been told it includes language around equitable access to health countermeasures and the sharing of intellectual property. “The adoption of a strong Common Africa Position on Pandemic Preparedness and Response (CAP PPPR) is non-negotiable. It will define our roadmap to safeguarding our people, with a keen focus on critical issues,” said South African President Cyril Ramaphosa in a press release on Sunday. Additionally, Africa CDC is working to develop a new pool of finance to assist countries in preparation and response to disease threats on the continent. At a previous AU summit in 2022, African leaders gave the go-ahead for the creation of a new Africa Epidemics Fund. Over the weekend, heads of state called for the acceleration of the operationalization of this new fund. Following this, technical teams will continue working through the details of the fund's new structure. AU leaders also signaled their support for the reauthorization of the U.S. President's Emergency Plan for AIDS Relief program — which has invested billions of dollars into the continent’s health systems since 2003. The program has received re-authorizations from the U.S. Congress every five years in the past with nearly universal bipartisan support. But an increasingly polarized political climate in the U.S. has put its reauthorization into question. Another major health initiative of the AU is the creation of the African Medicines Agency, or AMA, which Rwanda will host. It aims to streamline regulatory processes on the continent and combat fake medicines, among other efforts. The treaty to create this new agency was adopted in 2019 but it still doesn’t have the continent’s full support. Last week, the African Medicines Agency Treaty Alliance urged the remaining 28 of the AU’s 55 member countries to ratify it, so that it can truly serve to unify the continent. They also called on AMA’s governing board to create a way for others to engage in deciding how this new agency will function, such as academic experts, the private sector, and patient groups.