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1 CLICK TO ADD TITLE [SPEAKERS NAMES] [DATE]

2 Thanks to our generous sponsors 10th Global Health Supply Chain Summit, Accra (Ghana); Nov 15-17, 2017

3 Pharmaceutical Manufacturing in Ghana Challenges and Potential for Growth Kwasi Poku Boateng, FGCPharm, MBA, ASQ-CPGP, CQA United States Pharmacopeia (USP) -Ghana Country Manager 10th Global Health Supply Chain Summit, Accra (Ghana); Nov 15-17, 2017

4 Outline References Overview of USP Background of Pharmaceutical Industry in Ghana Challenges Strategy for growth Areas for potential growth Conclusion

5 References Quality assurance of pharmaceuticals. A compendium of guidelines and related materials. Volume 2, 2 nd updated edition. Good manufacturing practices and inspection. World Health Organization, Geneva, 2007 WHO Technical report series (TRS) Nos. 929, 937, 961 Working document QAS/ Okekola, K., Pharmaceutical Business in West Africa (2008), West African Pharmaceutical Manufacturers Association pg. 38, Ghana Pharmaceuticals & Healthcare Report, Q2, 2012, Business Monitor International Strengthening the local production of essential medicines. UNIDO Pharmaceutical Sector development programme. Implementation in Ghana of the African Union Commission s Business Plan for the Pharmaceutical Manufacturing Plan for Africa Ghana s pharmaceutical industry outperforms regional markets Report( PQM Evaluation Briefing Book, October 2017.

6 USP s Commitment to Quality Assurance Globally 6

7 USP laboratories and offices More than 1,000 employees worldwide 7

8 USP s Global Public Health Division PQM 25 year USAID collaborative agreement TA to NMRA s, OMCLs and Manufacturers USP-Ghana Capacity building for NMRA s, OMCLs and Manufacturers in Africa NOMCoL Building capacity of OMCL s GHS Development of new global public health standards CSP Donation of reference standards to NMRA s in LMIC 8

9 Pharma Manufacturing in Ghana, background 1957 Ghana s independence: industrialization programme to stimulate economic development. Policies - Import Substitution Result Secondary production of pharmaceuticals generally Changes.. The decline in the economy of Ghana from the mid-1970s to the early 1980s affected domestic production.

10 Pharma Manufacturing in Ghana, background In the 1990s a number of interventions aimed at sustaining the pharmaceutical industry were made Restriction of a number of products to local production VAT exemptions for limited number of raw materials used for local pharmaceutical manufacturing Formation of the Pharmaceutical Manufacturers Association of Ghana [PMAG] to serve as a platform for advocacy and also provide selfauditing

11 Pharma Manufacturing in Ghana, current state Ghana s pharmaceutical manufacturing sector About 40 registered manufacturers 22 are currently active The sector directly employs ~ 5,000 people. 10 manufacturers account for 80% of the total industry output The production activities of local manufacturers cover mainly: Secondary manufacture of Oral Solid Dosage forms Orals liquids Topical preparations Large volume parenteral preparations.

12 Pharma Manufacturing in Ghana, current state Ghana s pharmaceutical sector approximately 30% locally produced and 70% imported products US$300 million consumer/retail sales. Export of products to other west African countries

13 Pharma Manufacturing in Ghana, Challenges

14 Regulatory oversight The Ghana FDA is a relatively strong regulator, within the Region, but not considered a stringent MRA, hence its Marketing Authorizations not Recognized Internationally. No locally manufactured pharmaceutical product is prequalified by WHO. 2 Manufacturers Certified to ISO 9001

15 Regulatory oversight BE Challenges Inability for local pharmaceutical manufacturers to conduct bioequivalence testing of their products due to the absence of a testing facilities.

16 Regulatory oversight GMP Compliance o The Ghana FDA GMP assessments indicates that quality standards adhered to by the industry has a broad range of variation. o Ghana FDA requires support in industry targeted initiatives as well as capacity enhancement to ensure improvements in local production.

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18 HR Challenges Limited opportunities for human resource development Training support largely ad hoc Lack of adequate skilled/ trained HR in: - Manufacturing - Regulatory Affairs - Management/marketing - design and construction of GMP compliant manufacturing facilities

19 HR Challenges Only 2-3% of Pharmacists in manufacturing Insufficient trained HR to lead to WHO PQ Short and long term strategies required to address this

20 Raw material sourcing

21 Raw material sourcing challenges high imported raw materials costs lengthy delivery times potential raw material quality problems contractual supply arrangements monitoring international material prices handling price and supply negotiations obtaining documentary assurance of quality

22 Financial Challenges

23 Financial Challenges Local bank short and long term lending interest rates are prohibitive Very few banks are willing to consider financing a pharmaceutical production venture

24 Financial Challenges Difficulties in accessing needed capital Paucity of market information on the domestic market/on the regional market Difficulty in assuring investors of the quality of products being (or to be) manufactured Insufficient capacity within the companies in making the financial case to investors of transparency / good corporate governance

25 Other Challenges No detailed diagnosis of the different policies that impact the pharmaceutical industry = little alignment of actions across ministries There is currently very limited market data available which hampers planning by manufacturers and limits the appetite of investors. Barriers to entry to regional markets, including delays in marketing authorization, language challenges, and the fragmented nature of the small markets and lack of WHO prequalification

26 Pharma Manufacturing in Ghana, strategy for growth

27 Pharma Manufacturing in Ghana, strategy for growth Multi stakeholder consultative process led by the Ministry of Trade and Industry with support from UNIDO has developed a national strategy for developing the industry. Identification of 7 key components: GMP road map Access to affordabl e financing Bldg the NMRA GoG Suppor t Human Resources Accessing know-how for product developme nt Policy coherence

28 GMP Roadmap

29 GMP Roadmap FDA s GMP classification of Ghanaian pharmaceutical companies shows that domestic manufacturers are operating at different levels of GMP compliance, i.e. at varying quality standards. UNIDO also undertook GMP assessments of a representative sample of local medicine producers. 7 companies were assessed on all 17 key Quality Elements of WHO-GMP. The ratings criteria for each element was as follows: Acceptable: No, or only minor, deficiencies Requires improvement ( Improve, in short): Few major deficiencies (< 5) Inadequate: Critical and/or considerable number (> 5) of major deficiencies, or system completely not available

30 GMP Roadmap The figure below shows the results of the assessments in terms of these ratings:

31 GMP Roadmap The UNIDO GMP assessment revealed that the key Quality Elements least well implemented (and therefore, the most problematic) for local companies were the following: Materials handling Premises Utilities Good practices in production Quality assurance Qualification and validation Good practices in quality control

32 GMP Roadmap UNIDO s GMP assessment of the companies highlighted the following: - Site issues such as premises, utilities, plant layout, product separation and process flow on the production floor, etc. are critical quality concerns. - Given the realities of the existing plants relative to GMP compliance, a GMP road map outlining a transition will have to proceed in steps that are economically practical and allowing sufficient time for these changes in the industry to occur. -Certain steps that can be envisioned along this road are: 1. Control of licensing of new plants so that they are, at a minimum, upgradable to WHO GMP 2. WHO GMP standards enforced for the most critical Quality Element violations 3. WHO GMP standards stringently enforced for high-risk products Appropriate time frames for rigid enforcement of these steps could be established through exchanges between the FDA and industry

33 Access to Affordable Financing Capital Need and Availability Funding from development finance institutions (DFIs) Government of Ghana credit guaranty scheme through Eximguaranty for lending to SMEs up to a limit of GHC 4.5 million or its US$ equivalent. Ghana Government s Export Development and Agricultural Investment Fund (EDAIF) Ghana s venture capital community Foreign direct investment in the form of equity partnerships with international companies

34 Building NMRA capacity

35 Enhancing Capacity of Ghana FDA Upgrading quality standards leads to an increase operating costs of the company in the short term This will impact the company s market position relative to competitors negatively, unless its competition in the market is also held to comparable quality standards. Important role of regulator The need for capacity building within FDA in the following areas: -Licensing of manufacturers -Marketing authorization (registration) -GMP inspections and enforcement -Post-marketing surveillance activities Need for a comprehensive assessment of FDA in medicines regulation

36 Enhancing Capacity of Ghana FDA Attained ISO accreditation in 2014 Done with Technical and financial assistance from PQM funded by USAID with support from USP This positions FDA Ghana among Africa s elite laboratories in the area of pharmaceutical QC Attained ISO 9001 Certification in June 2017

37 Role of GoG Use of Public Procurement to boost the local pharmaceutical industry: - Public procurement of medicines in Ghana is done through two channels: * centrally, through the Ministry of Health (MoH) * regionally, through 10 regional Medical Stores and 3 teaching hospitals - Public procurement can be a potent tool to promote Local Pharmaceutical Production (LPP). *through off-take agreements: to motivate companies to achieve higher quality standards and a mechanism by which market risk can be reduced. - Implementation of 15% price preference for local medicines in public procurement in accordance with existing law.

38 Role of GoG Expansion of the list of VAT-exempted pharmaceutical raw materials and inputs to about 400 [LI 2218 of 2015] Expansion of list of restricted Medicines for Local Production to 49 [EI 181, May 2017]. Removal of VAT / import tariffs on equipment for plant upgrades.

39 Manufacturing in Ghana, human resources

40 Human resources capacity building In the short-term Access to external knowhow and requisite skills / expertise Capacity building to improve understanding of the principles of GMP and other aspects of QA In the longer term Training of industrial pharmacists for the sector Initiatives include offering a new Masters program in industrial pharmacy, as well as internships within the industry

41 Improving product dev. Presently, a combination of technical and financial barriers hamper new product development in domestic companies. There is the need to determine the gaps in the range of essential medicines where local companies have no or few products A first approach in looking for solutions could be to focus on products that are relatively easy to develop, with no requirement to generate in vivo BE data. Considering initiatives where individual companies, or even the industry as a whole through PMAG, can work with research centers like the Noguchi Memorial Institute for Medical Research or the KNUST to develop needed formulations which could be shared among companies. Additional approaches could include licensing of new formulations from international partners.

42 Policy coherence

43 Policy coherence Strong political will prerequisite for putting into effect the necessary changes attraction of the investment financing required. Political will needs to be expressed in a clear policy structure that addresses key aspects, and is internally consistent. Assurance of policy coherence and completeness is key to the support of the development of the pharmaceutical industry All policies that impact the pharmaceutical sector should be in consonance with the over-arching Development Strategy for the sector.

44 Potential for growth

45 Potential for growth Potential areas for growth Increased share of the domestic nondonor funded market, by competing more effectively against imports: Increased penetration and exports into the regional or West African market HUGE POTENTIAL!!! Accessing the donor-funded market, both domestically, in the region and beyond.

46 Potential for growth Quality considerations: Needed for increase its penetration into markets technical challenge to attain WHO GMP standards Schematic of needed transition in Manufacturing Quality Standards of Industry

47 Potential for growth Technical Assistance to help address Quality Considerations In 2012 USP through the PQM program funded by USAID provided TA to 3 local manufacturers of pediatric zinc treatment products. To increase access to quality assured antimalarials PQM working in collaboration with Ghana FDA with funding from USAID published in August 2017 an expression of interest to provide TA to local manufacturers

48 Potential for growth Pharmaceutical Manufacturing focus must expand Need for manufactures of Active Pharmaceutical Ingredients (API). Manufacture of other inputs such as packaging materials, excipients and engineering expertise required to maintain and service equipment

49 Potential for growth Potential of Int Mergers & Acquisitions The takeover from Aryton by Adcock Ingram signaled a beginning of potential Internation al mergers. Acquisition of majority stake in Aryton drugs by Ghanaian pharmace utical company Dannex. Acquisition of majority stake in Starwin by Dannex Merger between KAMA Industries and ASPEN Pharmaca re Holdings Limited, a South African multinatio nal drug manufactu ring company. Such mergers can help place local manufactur ing companies (share holders) quite easily on the stock exchange.

50 Conclusions 10th Global Health Supply Chain Summit, Accra (Ghana); Nov 15-17, 2017

51 Thanks to our generous sponsors 10th Global Health Supply Chain Summit, Accra (Ghana); Nov 15-17, 2017