FUND FOR THE DEVELOPMENT OF THE AFRICAN PHARMACEUTICAL MANUFACTURING SECTOR

1. 2nd SESSION OF THE SPECIALIZED TECHNICAL COMMITTEE ON HEALTH, POPULATION AND DRUG CONTROLADDIS ABABA, ETHIOPIA, 20-23 MARCH 2017 FUND FOR THE DEVELOPMENT OF THE AFRICAN PHARMACEUTICAL MANUFACTURING SECTOR Presented by Dr. Paul Lartey Federation of African Pharmaceutical Manufacturers Association (FAPMA)

2. OUTLINE • BACKGROUND • OBJECTIVES • BENEFITS • FEASIBILITY • PARTNERS AND STAKEHOLDERS • IMPLICATIONS • ROLE AND RESPONSIBILITIES OF MEMBER STATES • REQUEST TO THE STC

3. BACKGROUNDDirect Commitments to Pharmaceutical Sector Development Importance of developing the African pharmaceutical manufacturing sector AU commitments, strategies and declarations to support growth. The Pharmaceutical Manufacturing Plan for Africa and its business plan: AU Assembly IV (December 2005, Abuja, Nigeria) • Resolution to take all necessary measures to produce quality drugs in Africa and request to AUC, within NEPAD framework, to lead the development of the Pharmaceutical Manufacturing Plan for Africa (PMPA). • Endorsement of the PMPA-BP – 2012 Accelerated Industrial Development for Africa (AIDA): 19th Conference of the African Ministers of Industry (March 2011 Algiers, Algeria). • Recognition of role pharmaceutical sector in overall industrial growth of Africa • Identification of pharmaceutical manufacturing sector as priority area • Integration of PMPA into the plan of action for AIDA

4. BACKGROUNDIndirect Commitments to Pharmaceutical Sector Development • AU initiatives dependent on a robust African pharmaceutical manufacturing sector • Call for Accelerated Action towards Universal Access to HIV and AIDS, Tuberculosis and Malaria Services in Africa (Special Summit of the AU on HIV and AIDS, Tuberculosis and Malaria, May 2006, Abuja, Nigeria) • Decade of African Traditional Medicine 2000-2010 (AU Assembly V, July 2001, Lusaka, Zambia) • Renewed Decade of African Traditional Medicine 2011-2020 (Conference of African Ministers of Health, April 2011, Windhoek, Namibia) • AU Roadmap for Shared Responsibility and Global Solidarity for HIV, AIDS, TB and Malaria (AU Summit, Addis Ababa, 2012) • Catalytic Framework to End AIDS, TB and Eliminate Malaria in Africa by 2030 (27th AU Summit, July 2016, Kigali, Rwanda).

5. BACKGROUNDImportance to Transformative Economic Development Pharmaceutical sector: Knowledge-based, science, technology and innovation-driven industry Agenda 2063 asp. 1 - AU Agenda 2063 (AU Assembly, January 2015, Addis Ababa) • Economic transformation and inclusive growth of the continent. Call to action to actively promote science, technology, research and innovation Science, Technology and Innovation Strategy for Africa initiative (STISA-2024) Incremental (10 year) implementation Agenda 2063. • Moving Africa into innovation-led, knowledge-based economy, with ‘Prevention and Control of Disease’ as one of its six priority areas. To this end, STISA-2024 • Adoption of synergistic relationship with PMPA and AIDA. Youthful demographic transition • Science, Technology and Innovation as tools to harness demographic dividend • Pharmaceutical sector as a key enabler.

6. BACKGROUNDImplementation of PMPA Progress • African Medicines Regulatory Harmonization initiative, • Endorsement of African Medicines Agency proposal (1st Joint WHO and AU MOH, April 2014, Luanda, Angola) Constraints • GMP compliance lacking - most facilities require: • Structural modifications, new construction • GMP-compliant equipment • Human capacity development. • Inadequate installed manufacturing capacity • Capacity not meeting public health needs – Room for sub-standard medicines • Technology still lagging behind • Limitations in value chain • No pharmaceutical R&D • Limited capacity to develop traditional medicines

7. BACKGROUND • Root cause for slow progress: Lack of access to affordable funding for development of the industry • Proposal for Establishment of Fund for African Pharmaceutical Development (FAP-D) • Provide affordable financing for the African pharmaceutical manufacturing industry primarily in the form of low interest loans • Support growth and development of Africa’s pharmaceutical manufacturing industry • Enable full implementation of PMPA – Critical AU imperative

8. OBJECTIVES – PHARM-D • Create enabling environment for pharmaceutical companies to access capital • Attain compliance with international standards of GMP • Build needed capacity • Support development of African herbal and traditional medicines • Support involvement of the industry in development and manufacture of quality-assured medicines from herbal and African traditional medicines. • Provide technical advisory services to the industry to assist them in making informed decisions on the sourcing of products and services • Direct industry to vetted technical advisory services • Facilitating access to enabling technologies worldwide. • Provide supervision support for effective funds utilization • Mechanisms to monitor and ensure successful use of funds • Application of sound business principles to the use of funds

9. BENEFITSFull Implementation and Sustainability of PMPA Public health benefits • Healthy productive workforce – Support for GDP growth • Meet challenges of combatting infectious diseases • Confront emerging non-communicable diseases - diabetes, cancer and hypertension. • Develop African traditional medicines toward finding African solutions to Africa’s problems Scientific and technological development • Knowledge-based sector contributing to innovation and technology • Skills and expertise of the youth to meet the challenges of the industry   Economic and industrial development • Creating higher-wage jobs • Reduce dependence on imports - benefits from import substitution • Contribute to economic diversification – Global competitiveness

10. BENEFITSFull Implementation and Sustainability of PMPA National security • Preparedness to meet healthcare emergencies (e.g. Zika and Ebola) • Ability to mitigate threat of looming pandemics (Dengue or Lassa fever)   • Capacity to utilize initiatives such as the Medicines Patent Pool and TRIPS flexibilities Wealth creation • Need for support services leading to multiple job creation and poverty alleviation • Equipment installation and maintenance • Tooling, qualification and calibration • Emergence of associated industries leading to exponential technological growth • Raw material development and production • Packaging material manufacturing • Equipment fabrication Harnessing Africa’s demographic dividend: • Training of the youth in Science and Technology

11. FEASIBILITYIndian Pharmaceutical Manufacturing Sector • Indian Pharmaceutical Industry as Case History (1950 to 2017): • Global market share growth = 10% vs. worldwide sector growth of 7% • Fourth largest pharmaceutical sector in the world • Annual export growth of 30%. • Institution of Schedule M: Regulatory mandate to achieve international standards of GMP by 2005 supported by dedicated funding • Establishment of the Credit Linked Capital Subsidy Scheme to support Schedule M • Plant upgrading • Product promotion and marketing. • Agenda 2020: World leader in end-to-end pharmaceutical manufacturing by 2020 • Establishment of PPP for 50% of funding • Support start-ups of research in pharmaceuticals and biotechnology • Venture capital fund of USD149 million

12. FEASIBILITYInternational Fund for Agricultural Development • Multilateral fund (Since 1977) set up for development of a vital sector • Provides low-cost loans and grants for private sector agricultural development projects • Objective is to curb food insecurity through eradication of rural poverty • Provides supervision and implementation support to its funded projects

13. PROPOSED MODEL • Financing entity, designed to grow and be self-sustaining. • Interest rates and other forms of profit low to ensure affordability but at levels that sustain viability • Hosted within existing structures - Pan-African financial institution • Specific governance system • Appropriate stakeholder representation • Funding sources: • AU Member States • Development partners • Donor agencies • Private sector • Foundations • Special levies

14. PARTNERS AND STAKEHOLDERS

15. PARTNERS AND STAKEHOLDERS

16. IMPLICATIONS Potential legal implications • Establishment as a treaty based organ thereby committing all member states to contribute Potential institutional implications • Proposed hosting by existing pan-African institution • New institution may have to be established if no host found Potential financial implications • Launch objective is USD 60 million for ten projects • Member states to contribute between USD 0.5 million to 10 million as appropriate

17. ROLE AND RESPONSIBILITIES • Member States to adopt and ratify the establishment of FAP-D in an assembly decision • Concomitantly approve the establishment of a governance board for the fund. • Call to member states and partners to fund FAP-D

18. EXPECTATIONS FROM THE STCHPDC-2 • Reaffirm our commitment to promoting a secure and reliable supply of essential medicines, vaccines, diagnostics, technologies and health commodities as critical in strengthening and securing Africa’s health systems • Commit to increase and prioritize innovative procurement of medical products manufactured within Africa and to participate in the design and implementation of other forms of incentives to accelerate attainment of the PMPA objectives

19. EXPECTATIONS FROM THE STCHPDC-2 • Request the AU Commission and NEPAD agency to establish a technical working group to define the modalities, scope of work, legal and institutional implications of FAP-D; • Request AUC to seek support of the Specialized Technical Committee (STC) on Finance, Monetary Affairs, Economic planning and Integration; and the STC on Trade, Minerals and Industry for the establishment, funding and implementation of FAP-D.

20. MERCI THANK YOUOBRIGADASHUKRAN