pakistan and nigeria pharma relations
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Pakistan NigeriaTRANSCRIPT
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Investment Opportunities in thePharmaceutical Sector -Nigeria/Pakistan
June 2014
Advisory
A keynote address delivered by Farouk Gumel- Partner, PwC Nigeria
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PwC
The Global Pharmaceuticalsector in 2020
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Pw CJune 2014
The pharmaceutical market is anticipated to more than double toUS$1.3 trillion by 2020
The growth markets include, in descending order of size, China, Brazil, Russia, India, Mexico,Turkey, Poland, Venezuela, Argentina, Indonesia, South Africa, Thailand, Romania, Egypt, Ukraine,Pakistan and Vietnam.
337
27
205
127
205183
425
31
194
149
499
273
0
100
200
300
400
500
600
United States Canada EU-Big 5 Japan Growth markets ROW
$B
illi
on
s
Growth forecast of global pharmaceutical market
Sales in 2011
Sales in 2020
S ource: PwC Pharma 2020 report
3Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
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Pw CJune 2014
Our Pharma 2020 series has identified the forces of change and theresponse required of the industry
S ource: PwC Pharma 2020 report
4Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
Required Response
Chronic disease is soaring
Healthcare policy makers andpayers are increasinglymandating what doctors canprescribe
The boundaries betweendifferent forms of healthcare areblurring
Emerging economies are drivingdemand for medicines
Governments are beginning tofocus on prevention rather thantreatment
Regulators are more cautious
Forces of Change
Improve Research andDevelopmentproductivity
Reduce costs
Tap the potential ofemerging economies
Switch from sellingmedicines to managing
outcomes
Collaborations withplayers inside andoutside the sector
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PwC
Why Africa
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Pw CJune 2014Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
Africa, the emerging market of the future
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Is now the time for multi-nationals tobe investing in Africa?
Africas investment potential is about more than just
resources, as it evolves and climbs the
consumption, urbanisation and
industrialisation curves, that the BRICs have
climbed.
Agricultureand food production in central Africa
could see Africa becoming the worlds food
basket.
Africas success would ensuresupply of scarce
resources to the rest of the world.
The growing demand for consumer goods is
largely unmet, as consumer spending increases with
the growing population and middle class.
Africa could have the worlds largest workforceby the middle of this century.
Africas urbanisation is circa 40%, which isgreater than India, but lagging China at circa 50%.
Wealth is being generated and distributedless unevenly than before.
2000 2011
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Pw CJune 2014
9.5%
8.2%
7.2%
8.1%
7.7%
7.2%
7.0%
7.0%
6.9%
6.8%
China
India
Vietnam
Ethiopia
Mozambique
Tanzania
Congo
Ghana
Zambia
Nigeria
Top Growers 2011 2015 :GDP Growth (%)
A region with worlds second fastest growth
7Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
In 2013, Africa maintained an average
growth rate of about 4%. This compares
positively to 3% for the global economy and
underscores again the continent's resilience
to global and regional headwinds.
4.3
5.7
5.25.6
5.96.2
6.4
5.6
3.1
5.0
3.5
6.4
3.9
4.8
5.7
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1
2
3
4
5
6
7
Africa Economic Growth (%)
Africa Africa excluding Libya
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Pw CJune 2014
Resources, key investment focus for emerging economies
8Inv estment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
Ghana:
Mining sector development spurred thecou ntry through much of last decade.
Oil now set to takeoff.
Su ccess of the Jubileeoil field.
Ni geria:
Growth not only from oil and gas, butalso infrastructure, solid minerals,
agricultural, industrial andmanufacturingindustries.
Growing regional tradeand investmentrole as Nigerian companies expand intoA frica.
Angola:
A ttractiveportfolio of resources,including oil, gold, copper anddiamonds.
Increased investment in agriculture andinfrastructure.
Gabon :
Strong oil reserves and highlyliterateyou ng population.
Uganda:
Oil is spurringdevelopment, bothdirectlyand in allied sectors growth of+10% expected for next few years.
Regional hub for energy products Sou thern Sudan, Rwanda gas, EasternCongo oi l.
Kenya:
Growing sophistication inagriculture.
Increased investment in rail, road andpipeline infrastructure for the transportof oi l and gas resources from Ugandaand DRC.
Tanzania/Mozambique:
Discoveryof gas resources in borderbasin area, with potential reserves thesize of Saudi Arabia (300 trillion cubicfeet).
Mozambique:
Coal is spurring developments aroundTete.
Developing coal corridor from Botswana
S ource: Whitehouse and Associates
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PwC
The Nigerian HealthCare System
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Pw CJune 2014
Summary of Nigeria HealthSystem (per 1,000 persons)
Physician 0.4
Nursing andmidwiferypersonnel
1.605
Pharmaceuticalpersonnel
0.105
Pharmacists 0.095
Laboratory HealthWorkers
0.168
0
5
10
15
20
25
30
35
Nigeria SouthAfrica
Algeria Egypt World(median)
Number of Beds per 100,000 People
Nigeria has critically low levels of human and infrastructureresources for health care
S ource: World Health Organisation, OECD (2013), Kaiser Family Foundation
10Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
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Pw CJune 2014
Top medical tourist destinationsinclude India, Europe, the UnitedStates and the Persian Gulf
The Indian High Commission
estimated that 47% (est. 18,000) ofNigerians who visited India in 2012did so to seek medical attentionspending $260m on treatment
about $15,000 per medical tourist
Opportunities exist for investorsto take advantage of the gap inAfricas largest economy.
While no reliable data exists, various estimates have put theamounts spent on medical tourism at between $500 million and$800 million
MajorAilments
Brainsurgery
Open heartsurgery
Eyetreatment
Renaltransplants
Cancer
Cosmeticsurgery
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S ource:SNH research, The International Medical Travel Journal
Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
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Pw CJune 2014
Although there are over 130 pharmaceutical companies in Nigeria,only 9 are listed on the stock exchange. There is little visibility onthe size of the other players.
S ource: Business Monitor International
12Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
Anti-malaria
Vaccines and antiretroviral
(ARV)
Antibiotics
Anti-helminthics
Oncology drugs
Diabetic drugs
Common Drugs Produced
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Pw CJune 2014
Forecast
0
100
200
300
400
500
600
700
800
900
2012 2013 2014 2015 2016 2017 2018
Nigerias Pharmaceutical Imports Data andForecast($Mn)
Imports will remain key to meeting growing local demand formedicines in the country
S ource: Business Monitor International
Pharmaceuticalimports reached avalue of $481mn in2013 and areexpected to gain10.4% to reach$789mn by 2018,widening thecountry'spharmaceutical tradedeficit from 475mnin 2013 to $778mnin 2018.
13Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
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Pw CJune 2014
NAFDAC must inspect factories anywhere in the world before it registers or renews the
registration of their products
Mandates all pharmaceutical companies to imprint unique numbers on drugs
Requires compulsory pre-shipment information from all importers before the arrival of their
products.
Collaborating with NHIS (National Health Insurance Scheme) to combat drugs counterfeiting
and the illegal sale of prescription drugs
Collaborating with the Pharmacist Council of Nigeria to close pharmaceutical companies
involved with illegal and fake drugs
Launched a Mobile Authentication Service (MAS) to check the authenticity of Pharmaceutical
products
There have been many laudable efforts by NAFDAC the mainregulatory body in Nigeria - to standardise the pharmaceuticalindustry
14Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
S ource: Business Monitor International
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PwC
Nigeria Pakistan Relations
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Pw CJune 2014
GDP (2012) $225.1 billion
Total Population(2013)
180.4 million
Population growthrate
1.8%
Health expenditure(as a % of GDP)
3.1
Number of beds per100,000 people
0.6
Ease of doing businessindex (2013)
110
Size ofpharmaceuticalindustry (2013)
$2.10 billion
Number ofpharmaceuticalcompanies
562+
GDP (2013) $509.9 billion
Total Population(2013)
174 million
Population growthrate
2.8%
Health expenditure(as a % of GDP)
6.1
Number of beds per100,000 people
5
Ease of doing businessindex (2013)
147
Size ofpharmaceuticalindustry (2013)
$1.28billion
Number ofpharmaceuticalcompanies
130+
Nigeria and Pakistan have some superficial features in common
NIGERIA PAKISTAN
16Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan S ource: World Bank, Business Monitor International
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Pw CJune 2014
5%
12%
4%
3%2%
7 %
67%
Proportional mortality - Nigeria
Injuries
Cardiovasculardiseases
Cancers
Respiratorydiseases
Diabetes
Other NCDs
Communicableand maternalconditions
Nigeria and Pakistan has similar disease burden with a significantproportion of deaths attributable to communicable diseases
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S ource: World Health Organisation - NCD Country Profiles
Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
8%
25%
7 %
5%1%8%
46%
Proportional mortality - Pakistan
Injuries
Cardiovasculardiseases
Cancers
Respiratorydiseases
Diabetes
Other NCDs
Communicableand maternalconditions
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Pw CJune 2014
with Malaria, Diarrhea and Dysentry being common amongstPakistanis and Nigerians
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S ource: World Health Organisation - NCD Country Profiles
Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
55%
18%
8%
5%
3%
3%
3%2%
2%1%
Main sources of Mortality(infectious diseases) - Nigeria
Malaria
Diarrhea
Pneumonia
Dysentry
AIDS
CSM
Cholera
Measles
Neonataltetanus
Tuberculosis
51%
16%
15%
8%
8%2%
Main sources of Mortality(infectious diseases) - Pakistan
AcuteRespiratoryInfection
Malaria
Diarrhea
Dysentry
Hepatitis
Others
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Pw CJune 2014
Nigeria-Pakistan relations dates back to the 1960s
S ource: Public Information
Bilateral trade between Nigerianand Pakistan peaked, reaching$56 million.
Pakistan supported Nigeriascandidature at the 37th session ofthe International Civil AviationOrganisation
1960s 1984 2004 2014
The Nigeria-Pakistan JointCommission (NPJC)was established
Bilateral relationsbetween Nigeriaand Pakistan wereestablished
Bilateral agreementbetween Nigerian andPakistan to cooperate onlaw enforcement,particularly narcoticsshipping
The Nigeria-PakistanJoint Commission(NPJC) was resuscitatedand began discussions onimproving trade andeconomic relationsensued
2010
19Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
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Pw CJune 2014
Forecast
The Pakistan Pharmaceutical Industry is expected to post steadygrowth into the near future
1 0.4
11 .3 11 .3 11 .3
1 2.413.2
13.91 4.5
15.1 15.1 15.1
0
2
4
6
8
10
12
14
16
0
1
2
3
4
5
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Pharmaceutical Sales, Historical Data and Forecast (Pakistan)
Total Pharmaceutical sales ($ bn) Pharmaceutical Sales Per Capita ($)
CAGR:6%
S ource: Business Monitor International
23Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
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Pw CJune 2014
Forecast
5 .2
5 .8
6 .5
7 .4
8 .1
8 .89 .4
1 0.11 0.7
11 .9
13.2
0
2
4
6
8
10
12
14
-0.5
0.5
1.5
2.5
3.5
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Pharmaceutical Sales, Historical Data and Forecast (Nigeria)
Total Pharmaceutical sales ($ bn) Pharmaceutical Sales Per Capita ($)
While Nigeria Pharmaceutical Industry is expected to grow at afaster rate until 2020
S ource: Business Monitor International
CAGR:11%
24Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
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Pw CJune 2014
A myriad issues and challenges continue to impact thepharmaceutical sector of both countries
Nigeria
Counterfeit drugs
Lack of meaningful patentlegislation or pricing andreimbursement
High registration fees forimports
Chronically under-fundedhealthcare sector, reliant onforeign aid
KeyChallenges
Pakistan
High cost of raw materialsimport
Domestic patent lawnotably below internationalstandards, with illegal andwidespread counterfeiting
Poor drug approval process
Low R&D expenditure 1%of sales
Increasing competitionfrom neighbouring Asiancountries
Increasing costs ofManpower and energy
S ource: Business Monitor International
25Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
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Pw CJune 2014
But in spite of these issues, pharmaceutical industries in bothcountries can leverage identified strengths
Large market size in Nigeria
Strong demand/need forimproved management ofinfectious disease
Increased efforts to improve drugdistribution in other to reduceopportunities for counterfeiting.
Assistance from WHOPrequalification team (PQT) todemonstrate compliance withGood Manufacturing Practice(GMP)
NIGERIA
S ource: Business Monitor International
26Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
Strong pharmaceutical base.Pakistans pharmaceutical marketis the 10th largest in Asia Pacific.
Significant local pharmaceuticalmanufacturing industry/strongmanufacturing capacity
Presence of over 525pharmaceuticals manufacturingwith 17 of them in Nigeria
Strong financial position withability to scale up
PAKISTAN
STRENGTHS
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PwC
Emerging Opportunities
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Pw CJune 2014
There has been many speculations of the future direction and plansto foster Nigeria-Pakistan pharmaceutical relations
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The resuscitated Nigeria-
Pakistan Joint Commission to
review moribund agreements
in the agriculture, textile and
pharmaceutical sectors
Punch Newspaper/01-04-14
Nigeria targets $3b Pharma
import from Pakistan by the
end of 2015
The Nation Newspaper/27-04-13
Pakistani Pharmaceutical
companies have been urged to
export their products to Nigeria
The Nation Newspaper/27-04-13
Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
S ource: Public Information
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Pw CJune 2014
Information exchange through
Research and Development (R&D)
Student Exchange Programmes
Strategic outsourcing (including contract manufacturing, informationtechnology (IT))
Patent licensing of local manufacturers
Innovative and cost-effective repackaging and drug enhancement
Appropriate Government incentives to encourage partnerships with localdrug manufacturers
In order to make the most of these future growth opportunities,Nigeria and Pakistan can collaborate in the areas of
29Investment Opportunities in the Pharmaceutical Sector - Nigeria/Pakistan
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This presentation has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specificprofessional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopersIncorporated, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained inthis publication or for any decision based on it.
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