Pharmaceutical Production
Pharmaceutical Production
Business Model Description
Manufacture pharmaceutical products in solid, semi-solid, liquid and other dosage forms as well as powders, aerosols and ophthalmic eye / ear / nasal drops to serve national and regional markets, leveraging on the country's access to African Continental Free Trade Area (AfCFTA) and preferential trade areas in the region, including Southern African Development Community (SADC) and Common Market for Eastern and Southern Africa (COMESA).
Expected Impact
Enhance affordability of and access to pharmaceutical products, and increase competitiveness and innovation of Mauritius' healthcare industry through technological developments.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Mauritius: Grand Port
- Mauritius: Plaines Wilhems
- Mauritius: Port Louis
- Mauritius: Rivière du Rempart
Sector Classification
Health Care
Development need
Prevalence of noncommunicable diseases (NCDs), aging population with increasing needs and ensuring well-being of non-nationals living, working or visiting Mauritius urge improvements in country's well-developed healthcare system. Cost and supply chain vulnerabilities arise from dependency on medical equipment and pharmaceutical imports and specific treatments abroad (1, 2).
Policy priority
Mauritius aims to sustain provision of free healthcare services to an aging population with higher specialized treatment needs and quality expectations, through Five-Year Health Sector Strategic Plan 2020-2024 (3). Government agenda foresees positioning Mauritius as a medical hub, improving the independence of the sector and enhancing local production to serve wider Africa market.
Gender inequalities and marginalization issues
Serving Rodrigues and Agaléga and enhancing the well-being of the population in remote islands are strategic actions for the government (3). Self-perceived health is higher among men as only 67% of women rated their health status as ‘good or very good’ compared to 76% of men (4).
Investment opportunities introduction
Economic Development Board (EDB) Mauritius directs the efforts in situating the country as a medical hub (5). Government offers free healthcare services and allocate some MUR 14.5 billion (USD 300 million) to health budget (6). Various incentives, Extensive Exclusive Economic Zone (EEZ) and untapped marine resources stand as prospects for the sector (7).
Key bottlenecks introduction
Growing burden of noncommunicable diseases (NCDs) and high reliance on medical equipment and pharmaceutical imports are the key challenges. Certain specialized treatment cannot be undertaken in Mauritius and patients must be sent abroad. Absence of a central computerized data repository for health and lack of strong regulation limit the development of the sector (3).
Biotechnology and Pharmaceuticals
Development need
In Sub-Saharan Africa, imports represent 70-90% of drug consumption in most countries, and more than 90% in import-dependent Mauritius. Diversification and innovation of economy around high-value products such as pharmaceuticals is critical for fragile economies of Small Island Developing States (SIDS), including Mauritius, as demonstrated by the COVID-19 crisis (9).
Policy priority
In Mauritius, value of pharmaceutical imports constitutes around 20% of the total healthcare expenditure (10). In order to develop local production capacity and target the entire Sub-Saharan Africa region, pharmaceutical production is incentivized, and Mauritius Institute of Biotechnology and a dedicated Pharmaceutical and Life Sciences Business Park have been established (11).
Gender inequalities and marginalization issues
Local pharmaceutical production will increase decent job opportunities for women and sustain access to medicines, lack of which is mostly detrimental to well-being of the poor, women and especially children (12).
Investment opportunities introduction
Land availability in Pharmaceutical and Life Sciences Business Park in Rose Belle, fiscal and financial incentives including refund on air and basic freight costs, and preferential access to Southern African Development Community (SADC) and Common Market for Eastern and Southern Africa (COMESA) support the development of pharmaceutical production (13, 14).
Key bottlenecks introduction
Strong regulation and expertise around certification, licensing schemes and abiding by guidelines and inspection are exigencies of operational success. Raw materials, bulk chemicals for production, packaging materials, machinery, and active pharmaceutical ingredients (API) should be imported. Curriculum shall be adapted to industry needs in relevant professions (15).
Biotechnology and Pharmaceuticals
Pipeline Opportunity
Pharmaceutical Production
Manufacture pharmaceutical products in solid, semi-solid, liquid and other dosage forms as well as powders, aerosols and ophthalmic eye / ear / nasal drops to serve national and regional markets, leveraging on the country's access to African Continental Free Trade Area (AfCFTA) and preferential trade areas in the region, including Southern African Development Community (SADC) and Common Market for Eastern and Southern Africa (COMESA).
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
USD 150 million import value of pharmaceuticals in 2020
Mauritius' pharmaceuticals market size increased from USD 147 million in 2020 to USD 155 million in 2021, according to estimates. Total local production is only USD 3 million in the same year (13).
In 2020, the import value for pharmaceuticals in Mauritius was around USD 150 million, whereas re-exports and local production were around USD 24 million and USD 3 million, respectively (11, 13).
Indicative Return
5% - 10%
According to consultation with the investment promotion agency, an IRR of 8-9% is expected for pharmaceutical production investments (22).
The consolidated financial statements of Ajanta Pharma (Mauritius) Ltd., and its subsidiary Ajanta Pharma Mauritius (International) Ltd., for the financial year 2020-2021 give a total income of MUR 1.5 billion (USD 38 million) and a gross profit margin of 35% (16).
Investment Timeframe
Medium Term (5–10 years)
A pharmaceutical production unit project is expected to materialize within two years, while the business will generate returns in five to seven years provided that final products are ready to be sold in the export market, meeting the international requirements for manufacturing units (15).
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Capital - CapEx Intensive
Market - Highly Regulated
Impact Case
Sustainable Development Need
Ageing population and high prevalence of non-communicable diseases (NCDs), including cardiovascular diseases, diabetes, hypertension and cancer increase the need for specialized and quality treatment as well as medication (1).
Mauritius' high reliance on medical equipment and pharmaceutical imports lead to high costs and vulnerabilities in case of a supply chain disruptions, as observed during the COVID-19 pandemic (12).
Mauritius has a skills gap in certain professions that the pharmaceutical production industry and linked sectors require, including industrial pharmacist, toxicologist, microbiologist, nurse, which makes the country dependent on the foreign workforce (15).
Gender & Marginalisation
In case of a supply chain disruption, leading to higher prices, vulnerable and isolated groups in the society are exposed to higher risks of failing to access medication.
Expected Development Outcome
Pharmaceutical production decreases the dependency on imports, lowers drug costs and streamline the pharmaceutical value chain, ultimately benefitting the population's access to affordable medication.
The development of pharmaceutical production contributes to high margin goods exports as well as advances the innovation and research and development (R&D) ecosystem in Mauritius.
Pharmaceutical production creates a conducive environment to support industry-academy collaboration in provision of quality technical, vocational and tertiary education in relevant fields where country lacks skilled personnel and depends on foreign labor force.
Gender & Marginalisation
Pharmaceutical production in Mauritius, targeting the export and wider Sub-Saharan African market, benefits the poor, women and children who lack access to medicine due to acute shortages in the region.
Primary SDGs addressed
3.4.1 Mortality rate attributed to cardiovascular disease, cancer, diabetes or chronic respiratory disease
3.8.2 Proportion of population with large household expenditures on health as a share of total household expenditure or income
In 2019, 23.2% for both sexes (18.1% for female and 28.3% for male), with Diabetes Mellitus being the main cause (22%) of mortality due to noncommunicable diseases (NCDs), which account for 80% of the disease burden and 85% of mortality in the country (3, 17).
Estimated at 1.7% in 2012; in 2014, per capita out-of-pocket spending on health was around MUR 8,568.540 (USD 275) in Mauritius (17, 19).
National 2024 targets address risk factors of noncommunicable diseases (NCDs) that include increasing prevalence of physical activity among the population from 23.7% in 2019 to 35.1%, to achieve the global target, 9.3% rate of probability of dying between the ages of 30 and 70 years from cardiovascular diseases, cancer, diabetes or chronic respiratory diseases, in the long term (3, 18).
Mauritius government targets, by 2024, less than 3% of the population will have endured catastrophic health expenditures (3).
9.b.1 Proportion of medium and high-tech industry value added in total value added
9.2.1 Manufacturing value added as a proportion of GDP and per capita
4.65% in 2018, according to modelled data (17).
Manufacturing value added as a proportion of GDP is 10.4% and per capita is USD 927 in 2020, according to modelled data (17).
Manufacturing sector is expected to grow at a CAGR of 6.79 % between 2018 and 2030, including pharmaceuticals productions and medical device manufacturing as subsectors (20).
Voluntary National Review (VNR) Report of Mauritius 2019 indicates the target of an annual growth rate of at least 3% in the manufacturing sector over the following three years. Ministry of Industrial Development, SMEs and Cooperatives and United Nations Conference on Trade and Development (UNCTAD) published a document targeting industrial policy and key sectors between 2020-2025 (1, 20).
17.3.1 Foreign direct investment, official development assistance and South-South cooperation as a proportion of gross national income
Total foreign direct investment as a proportion of gross national income (proxy indicator) is 4.2% in 2019 (28).
N/A
Secondary SDGs addressed
Directly impacted stakeholders
People
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Outcome Risks
The increasing medical and clinical waste from pharmaceutical production, if not managed and treated sufficiently, may negatively impact people and the planet.
Impact Risks
Dependency on raw materials and active pharmaceutical ingredients (APIs) imports may limit the impact in case of failing to achieve the production capacity required to be cost competitive (8).
Although total job creation by pharmaceutical production will be low, it requires a highly-skilled workforce, which may be chosen from foreign candidates and hence limiting the positive impact in the country.
Impact Classification
What
Pharmaceutical production ensures availability of affordable medication, improves the pharmaceutical value chain to benefit innovation and industry, and generates few but high skilled jobs.
Risk
The affordability of pharmaceuticals and a potential influx of foreign employees due to a skills mismatch between the domestic labor market and the pharmaceutical sector may affect impact.
Contribution
Pharmaceutical production contributes to development of a sizeable local industry and will pioneer other high value industries, including vaccine production and biotechnology.
Impact Thesis
Enhance affordability of and access to pharmaceutical products, and increase competitiveness and innovation of Mauritius' healthcare industry through technological developments.
Enabling Environment
Policy Environment
Health Sector Strategic Plan 2020-2024, 2020: Provides a coherent framework that unveils concrete strategies and interventions to address major health challenges in the country and peoples’ expectations for an enhanced quality of services across their lifespan (3).
SADC Pharmaceutical Business Plan, 2007-2013: Targets to guarantee the availability of vital medications, including traditional African medicines, to minimize illness burden in the member nations, including Mauritius (23).
Financial Environment
Financial incentives: Export Credit Guarantee Insurance Scheme provides an Economic Development Board (EDB) subsidy on the cost of Credit Guarantee Insurance Premium to eligible companies subscribing for Credit Insurance Cover for their direct exports worldwide, including for pharmaceuticals.
Fiscal incentives: More than ten incentives are applicable to pharmaceutical production, including 8-year corporate tax holiday, full tax credit on the costs of acquisition of patents, no registration duty or land transfer tax on purchase or lease of land or building (11).
Other incentives: Premium investor certificate is granted to all companies engaged in the manufacture of pharmaceuticals. 60% of air freight cost for export to Africa (including Madagascar), Australia, Canada, Europe, Japan, Middle East Countries and USA is subject to refund (until June 2022) (11).
Regulatory Environment
Pharmacy Act, 1983: Regulates all aspects of the pharmaceutical manufacturing value chain (11).
Clinical Trials Act, 2011: Regulates the conduct of clinical trials for the purpose of discovering or verifying the effects of investigational medicinal products (11).
Animal Welfare Act (Experiment on Animals), 2017: Regulates animal testing in Mauritius and is modelled as per international guidelines (11).
Environment Protection Act, 2002: Addresses environmental protection and management issues and enforces environmental norms, with regard to waste discharge and emissions within pharmaceutical manufacturing facilities (11).
Dangerous Chemicals Control Act, 2004 : Regulates the classification, labelling and sale of dangerous chemicals, among others, and establishes the Dangerous Chemicals Advisory Council and the Dangerous Chemicals Control Board (21).
Marketplace Participants
Private Sector
Ajanta Pharma (Mauritius) Ltd., Xylomed Pharmaceuticals, Aegle Pharma, Cap Research Ltd., Centre International de Développement Pharmaceutique (CIDP), Clinear Research Ltd., Centre d’Etudes Cliniques Ltee., Insight Research, Axonova Ltd., Delonix Laboratories.
Government
Ministry of Health and Wellness, Pharmacy Board, Ministry of Agro Industry and Food Security, Ministry of Environment Solid Waste Management and Climate Change, Landscope (Mauritius) Ltd.
Multilaterals
World Health Organization (WHO), United Nations Development Programme (UNDP), Southern African Development Community (SADC), Common Market for Eastern and Southern Africa (COMESA).
Non-Profit
University of Mauritius, JSS Academy, Sir Seewoosagur Ramgoolam Medical College.
Target Locations
Mauritius: Grand Port
Mauritius: Plaines Wilhems
Mauritius: Port Louis
Mauritius: Rivière du Rempart
References
- (1) Ministry of Foreign Affairs, Regional Integration and International Trade. 2019. Voluntary National Review Report of Mauritius. https://foreign.govmu.org/Documents/2020%20-%20migrated%20data/VNR%20REPORT/Mauritius%20VNR%20Report%202019(2).pdf.
- (2) International Trade Administration. 2018. Healthcare Resource Guide: Mauritius. https://2016.export.gov/industry/health/healthcareresourceguide/eg_main_116239.asp.
- (3) Republic of Mauritius - Ministry of Health and Wellness. 2020. Health Sector Strategic Plan 2020-2024. https://health.govmu.org/Documents/Main%20Page/Communique/HSSP%20Final%2004%20March%202021.pdf.
- (4) Republic of Mauritius Ministry of Finance, Economic Planning and Development - Statistics Mauritius. 2020. How Do Mauritians Feel About Their Health? https://statsmauritius.govmu.org/Documents/Census_and_Surveys/LCS/How%20do%20Mauritians%20feel%20about%20their%20health.pdf.
- (5) Economic Development Board Mauritius. 2021. Healthcare. https://www.edbmauritius.org/healthcare.
- (6) Government of Mauritius. 2021. Budget Speech 2021 – 2022 Better Together. https://budgetmof.govmu.org/Documents/2021_22budgetspeech_english.pdf.
- (7) International Trade Administration. 2021. Mauritius - Country Commercial Guide Biotechnology. https://www.trade.gov/country-commercial-guides/mauritius-biotechnology.
- (8) Michael Conway, Tania Holt, Adam Sabow, and Irene Yuan Sun in Mckinsey&Company. 2019. Should sub-Saharan Africa make its own drugs? https://www.mckinsey.com/industries/public-and-social-sector/our-insights/should-sub-saharan-africa-make-its-own-drugs.
- (9) OECD. 2021. COVID-19 pandemic: Towards a blue recovery in small island developing states. https://read.oecd-ilibrary.org/view/?ref=1060_1060174-tnkmsj15ap&title=COVID-19-pandemic-Towards-a-blue-recovery-in-small-island-developing-states.
- (10) Competition Commission. 2020. Pharmaceutical Industry in Mauritius. https://competitioncommission.mu/wp-content/uploads/2020/09/MS004-Report-for-consultation.pdf.
- (11) 2021. Vaccine and Pharmaceutical Industry in Mauritius.
- (12) International Finance Corporation (IFC). 2021. Inside Africa’s Push to Make its Own Medicines. https://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate_site/news+and+events/news/cm-stories/africa-pharma-manufacturing-hubs-en.
- (13) International Trade Administration. 2021. Mauritius - Country Commercial Guide Pharmaceuticals. https://www.trade.gov/country-commercial-guides/mauritius-pharmaceuticals.
- (14) Economic Development Board Mauritius. 2021. Guidelines - Setting Up a Pharmaceutical Manufacturing Unit. https://www.edbmauritius.org/newsroom/guidelines-setting-pharmaceutical-manufacturing-unit.
- (15) UNDP stakeholder consultation with a prominent private medical equipment supplier in Mauritius, conducted on November 30, 2021.
- (16) G.R. Modi & Co Chartered Accountants. 2021. Independent Auditor's Report to the Members of Ajanta Pharma (Mauritius) Ltd. (Consolidated). http://www.ajantapharma.com/AdminData/SubsidiaryAccounts/SubsidiaryAccountsFY2021.pdf.
- (17) UN Department of Economic and Social Affairs. SDG Indicators (Global) Database. https://unstats.un.org/sdgs/unsdg.
- (18) Cambridge University Press. 2021. Sustainable Development Report 2021. https://dashboards.sdgindex.org/map/indicators/age-standardized-death-rate-due-to-cardiovascular-disease-cancer-diabetes-or-chronic-respiratory-disease-in-adults-aged-30-70-years.
- (19) Ministry of Health and Quality of Life. 2015. Survey Report 2015 Household Out-of-Pocket Expenditure on Health. https://www.lexpress.mu/sites/lexpress/files/attachments/article/2016/2016-05/2016-05-05/microsoft_word_-_twelth_edition_28_april_oop_report_-_manshir.pdf.
- (20) Ministry of Industrial Development, SMEs and Cooperatives & United Nations Conference on Trade and Development (UNCTAD). Industrial Policy and Strategic Plan 2020-2025. https://unctad.org/system/files/official-document/gdsinf2020d5_en.pdf.
- (21) International Labour Organization. 2004. NATLEX Database of national labor, social security and related human rights legislation Mauritius. https://www.ilo.org/dyn/natlex/natlex4.detail?p_lang=en&p_isn=70209.
- (22) UNDP stakeholder consultation with the Mauritian investment promotion agency, conducted in January 31, 2022.
- (23) UNIDO. 2016. SADC Pharmaceutical Business Plan 2007-2013. https://www.unido.org/sites/default/files/2016-01/SADC_PHARMACEUTICAL_BUSINESS_PLAN_-APPROVED_PLAN_0.pdf.
- (24) Economic Development Board (EDB). 2021. Guidelines - Setting Up a Pharmaceutical Manufacturing Unit. https://www.edbmauritius.org/newsroom/guidelines-setting-pharmaceutical-manufacturing-unit.
- (25) CIDP. Our Location, Mauritius. https://www.cidp-cro.com/our-locations.
- (26) Ajanta Pharma Limited. Contact Us, Ajanta Pharma (Mauritius) Limited. http://www.ajantapharma.com/ContactUs_India.aspx.
- (27) IBL Group. MedActivity. https://www.iblgroup.com/products/medactiv.
- (28) Statistics Mauritius. August, 2021. Sustainable Development Goals (SDGs) Data/Historical Series. https://statsmauritius.govmu.org/Documents/Statistics/By_Subject/SDGs/UN_SDG_database%20(2010-2020).xls.