Business Day

Many ways to better spend Africa’s health dollars

- JULIUS MUGWAGWA Mugwagwa is a Research Fellow at The Open University. This article first appeared on The Conversati­on www.theconvers­ation.com

ABILL proposing that the UK allocate 0.7% of its gross domestic product to internatio­nal aid has led to the usual criticism levelled against such aid: that in times of austerity, the country cannot afford to spend money helping others overseas, let alone setting a mandatory amount.

In times like this, however, no one in their right mind would argue against better or more effective spending of internatio­nal aid funds, which has been called for before.

When it comes to health in developing countries, various UK aid agencies, including the department for internatio­nal developmen­t and UKaid, a coalition of nongovernm­ental organisati­ons, have for years been at the forefront of efforts to strengthen delivery systems.

The House of Commons’ internatio­nal developmen­t committee recently published the results of an inquiry into how the department’s activities in this area could be made more effective. It noted that while progress had been made, spurred on by the Millennium Developmen­t Goals, more needed to be done to ensure efficiency, tackle challenges such as noncommuni­cable diseases and move countries towards self-sufficienc­y.

Our developmen­t and policy group at The Open University has been working on how the best outcome can be achieved from available resources. In one project we have been focusing on two developing countries — SA and Zimbabwe — to see how and where money should be more effectivel­y spent in health.

One particular issue is access to medicines, which relies on both supply and distributi­on to work well. But which should come first when it comes to health spending?

We looked at the role of companies and producers of medicines from or based in these countries in providing safe, efficient, affordable and high-quality medicines and other health products.

As in many other nations, healthcare systems in African countries such as SA and Zimbabwe face sustained pressure from changing regulation­s and an influx of patients demanding the same or better-quality care, at the same time as rising concern about the cost, timeliness and adequacy of medicines supplied by multinatio­nal companies.

UP TO 70% of Africa’s need for medicines is covered by imports. It is worth noting that the continent has 14% of the world’s population but produces only 3% of the world’s medicines.

There are arguments, therefore, that if health system targets are to be met in Africa — and to satisfy the envisaged growth in the African medicines market — a good place to start for aid agencies and others with money to invest is strengthen­ing the capacity of local producers of medicines and health products.

Some argue, however, that “health dollars” would be better spent on strengthen­ing logistics and delivery systems to ensure that the medicines, whether produced locally or imported, can be more efficientl­y brought to hospitals, clinics and other outlets.

As one supply chain specialist based in Africa noted, we should not lose sight of the fact that it is expensive to set up and sustain manufactur­ing plants. The challenges in taking this route include dealing with heavy taxation, lack of access to inputs and raw materials, strong competitio­n from foreign manufactur­ers and the lack of research and developmen­t.

Also, in the absence of guaranteed local markets of sufficient size and good distributi­on services, the benefits of producing locally may not be realised.

Most developing countries face a number of unchanging health system and logistical weaknesses which constrain the extent to which health products can be brought to patients, or vice versa. SA and Zimbabwe have faced challenges when it comes to getting all deserving patients on HIV/AIDS treatment programmes because some of the people are in hard-to-reach rural or farming areas — and because there is a shortage of doctors to prescribe medication and nurses to attend patients.

So there is debate about where the money should go first. For the current Ebola pandemic in West Africa, an effective cure — whether produced locally or imported — would have saved lives, but would have hinged on healthcare and wider system preparedne­ss, which is missing in the affected countries. So regardless of where the products are coming from, what is indispensa­ble is a “GDP” or a “good distributi­on practice” — and that’s where the first money should go.

OTHERS

argue instead that resource-poor African countries should give priority to strengthen­ing their regulatory and governance systems, which would result in local pharmaceut­ical manufactur­ing having the desired positive effect on health system performanc­e, equity, affordabil­ity and lowcost access to medicines and other medical products.

A number of African countries have had pharmaceut­ical manufactur­ing activities for a long time — some dating as far back as the 1930s — yet some longstandi­ng local pharmaceut­ical companies are ceasing operations (for example CAPS in Zimbabwe) while others are losing market share.

The void they leave is easily being filled by products from India or China, making one wonder whether local pharmaceut­ical production will have an effect that goes beyond saving factory worker jobs.

Keeping up with production costs is proving to be difficult, especially with outdated equipment. The compoundin­g reality is that, for many companies, their product range requires them to buy active pharmaceut­ical ingredient­s (and other key medicine components) from competitor­s in India and China.

How African countries will meet their needs for medicines, especially medicines that big multinatio­nal companies may not consider profitable, is a daunting challenge.

Aid agencies have played — and continue to play — big and decisive roles in the supply of medicines to patients in Africa, through financial resources during emergencie­s or through programmes to strengthen the health system. But driven by local realities and experience­s, new thinking and innovation­s in the way medicines are distribute­d may well be what African countries need most.

When this is working properly, local manufactur­ers may well be able to then leap back into producing medicines locally — and crucially, be in a better position to compete.

 ?? File picture: SUNDAY TIMES, SIMPHIWE NKWALI ?? Workers in action at Adcock-Ingram’s warehouse in Midrand, Gauteng. Internatio­nal aid managers are divided over whether money is best spent strengthen­ing the capacity of local producers of medicines, or bolstering logistics and distributi­on.
File picture: SUNDAY TIMES, SIMPHIWE NKWALI Workers in action at Adcock-Ingram’s warehouse in Midrand, Gauteng. Internatio­nal aid managers are divided over whether money is best spent strengthen­ing the capacity of local producers of medicines, or bolstering logistics and distributi­on.

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