Govt works on $40m facility for drug firms

Source: Govt works on $40m facility for drug firms | The Herald November 7, 2016

Business Reporter

GOVERNMENT is working on a financial package of between $20 million and $40 million to revitalise production capacity of Zimbabwe’s distressed pharmaceutical industry to produce essential drugs.Zimbabwe Investment Authority chairman Mr Nigel Chanakira said the authority is in the process of putting together a report on the pharmaceutical industry’s needs, set to be complete by next month. Mr Chanakira said the Ministry of Industry and Commerce is leading the process of putting together the funding package after a United Nations Industrial Development Organisation (UNIDO) study into status of the sector, which highlighted issues that need to be addressed.

UNIDO completed the extensive study and report into the state of affairs in the country’s pharmaceutical industry and made recommendations on appropriate remedies, at policy, institutional and enterprise level to enhance the industry’s capacity.

Four companies — Caps Holdings, Varichem, Datlabs, Plus Five Pharmaceuticals — face funding challenges to increase production and were involved in gathering the data used in the report.

“We have finished work with UNIDO. We are working with the Ministry of Industry and Commerce. What is required is to get the pharmaceutical sector revamped, which requires an estimated $20 million to $40 million. We will finish the report in December,” he said.

The importance of pharmaceutical industry cannot be overemphasised given its contribution to the production of essential medicines (47 percent of items on the Essential Drug List for Zimbabwe).

Ongoing efforts are aimed at increasing production capacity and portfolio of medicines the industry can produce. The Zimbabwean pharmaceutical industry is characterised by a few manufacturers with a total of nine according to the most recent Register of Licensed Pharmaceutical Manufacturing Premises published by the Medicines Control Authority of Zimbabwe.

Of these nine companies, four are serious generic manufacturers while the rest are largely concentrating on trading and have narrow product portfolios. These four pharmaceutical companies could easily account for 90 percent of the secondary pharmaceutical manufacturing (formulation) business in the country.

According to UNIDO all stakeholders, including the Pharmaceutical Manufacturers Association, Ministries of Finance and Economic Development, Industry and Commerce and Health and Child Welfare need to form a pharmaceutical working group responsible for examining policy affecting the pharmaceutical industry.

Zimbabwean generic pharmaceutical manufacturing companies have thus been facing various serious challenges for the past 10 years, with the situation deteriorating at an even faster rate from around 2008.

Initially, UNIDO said, the major challenge was a marked lack of foreign currency to fund both working capital and capital expenditure. Despite the presence of acceptable levels of both domestic and export order books, the industry was failing to respond because of the non-availability of foreign currency to purchase inputs.

The funding challenges made it impossible for the companies to fund equipment and machinery maintenance, and replacement and this led to a huge stock of antiquated and dilapidated machinery.

Notwithstanding the constraints, the Zimbabwean pharmaceutical industry has managed to survive.