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How the pharmaceutical industry is an unsung contributor to our country’s prosperity

Bada Pharasi, CEO for IPASA states that over 90% of multinational pharmaceutical companies list South Africa as their regional headquarters.

Bada Pharasi, CEO for IPASA states that over 90% of multinational pharmaceutical companies list South Africa as their regional headquarters.

Published Jan 12, 2022

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Perhaps like never before, ‘Big Pharma’ has been brought under scrutiny following the onset of the Covid-19 pandemic and the subsequent race to develop a vaccine.

Despite the spike in interest, the sector has continued to diligently work along, and deliver innovations that make a notable impact on the livelihood of countless citizens, explains Bada Pharasi of the Innovative Pharmaceutical Association of South Africa (IPASA).

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2021 has been a seminal year for the pharmaceutical industry. Its responses to one of the greatest challenges of our times, the Covid-19 pandemic, encapsulates the essence of what pharmaceutical companies seek to do, and that is to make meaningful contributions to human welfare.

As a voluntary association that represents the R&D companies responsible for the supply of innovative medicines, medical devices, and vaccines in South Africa, IPASA and its member companies share a vested interest in the future prosperity of the country. Research and development, human capital and knowledge building, manufacturing and investment, and ultimately positioning South Africa as a regional hub, are among the areas in which the most significant strides have been made in recent times.

Since 2016, innovative multinational pharmaceutical companies (IMNPCs) invested close to R3bn in research and developmental activities in the country. Sponsoring and facilitating at least 382 clinical trials that have positively impacted the more than 100 000 patients who participated in them. IPASA continues to support numerous product development partnerships, which are an effective vehicle to ensure that people in lower and middle-income countries have access to essential medicines. In fact, Sub-Saharan Africa leads the world in innovative public-private partnerships.

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The collaboration between South Africa’s Biovac Institute and multinational pharmaceutical company Pfizer, is a prime example. In July, it was announced that the Biovac Institute would become the first company in Africa to produce the Pfizer-BioNTech mRNA vaccine for distribution within the African Union.

South Africa’s Head of State, President Ramaphosa, described the landmark collaboration as, “a breakthrough in our efforts to overcome global vaccine inequity, [demonstrating] what we can achieve when the state sector and the private sector craft a shared vision and pool resources for the greater good of society”.

The contribution that the industry makes extends beyond the realms of innovation, research and development. Another important way is through direct and indirect employment and a commitment to growing local capabilities.

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At present, IPASAs research reflects that the pharmaceutical sector employs over 14 000 people, with IMNPCs specifically accounting for over 4 700 direct jobs in the country, 70% of which are highly specialised, requiring a PhD or Master’s degree. The difference, roughly 9 400 jobs, are derived indirectly from the various business operations of these multinationals, such as sales, manufacturing and distribution activities.

Corporate Social Responsibility (CSR) remains a priority area and the number of CSR activities conducted by IPASA member companies has steadily increased - between 2016 and 2021, more than R5.5bn has been invested into knowledge diffusion and skills growth. For example, global healthcare company MSD recently partnered with the University of Pretoria to execute its CLEVER programme, which is focused on reducing the rate of maternal mortality. Over the next three years, MSD will provide funding to the value of R11.6m to establish a clinical training programme, labour ward management, and emergency obstetric simulation training in the district.

Since 2016, IMNPCs invested over R1.3bn to boost manufacturing, distribution and other capital deployment areas. Impressively, this year, on the manufacturing and investment front, the value of the locally produced drugs by these IMNPCs will reach R17.9bn. This has positive fiscal implications and, according to our estimations, the fiscal contribution to the State’s budget will total R5.4bn by year-end.

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It is a combination of these efforts, the country’s infrastructure and business environment that have led to South Africa being profiled as the ideal regional hub through which IMNPCs seek to manage and centralise their commercial operations and business functions.

IPASA research found that over 90% of multinational pharmaceutical companies list South Africa as their regional headquarters, with as many as 50% indicating that their operations in other markets across the continent are managed from South Africa. The advantages of being the preferred regional location for a high-value-adding sector such as Big Pharma is considerable, and the socio-economic benefits of this cannot be overstated.

Conscientising the broader public about the true nature of the pharmaceutical industry’s contributions is crucial to its future long-term success. It is important that society is made aware of the role the industry plays beyond simply providing health-promoting medicines, which is holistically improving human welfare.

It is only through fostering effective collaborations and partnerships with all stakeholders, such as the media, academia, the government, and patient organisations, that the industry can continue to deliver on the shared goal of bringing innovation and quality to the South African market.

For more information please contact Eclipse Communications:

Tennille Taylor [email protected]

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