Production of Pharmaceuticals
Production of Pharmaceuticals
Business Model Description
Set up a plant to manufacture a range of pharmaceuticals covering drug design, extraction, packaging and storage for critical disease burden and personal health care for patients and clients in Lesotho as well as exporting to the Southern African Development Community (SADC) region and the global market.
Expected Impact
Provide access to medical drugs to help protect lives and improve health outcomes that contribute to productivity and economic growth.
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
- Lesotho: Maseru District
- Lesotho: Leribe District
- Lesotho: Mafeteng Dstrict
- Lesotho: Qacha's Nek District
Sector Classification
Health Care
Development need
National Health Strategic Plan 2017 – 2022 indicates that there are challenges with stock-outs at health facilities for health commodities procured and supplied by the National Drug Services Organization (NDSO), which undermines availability and sustainable access to health care. It takes an average of 67 days for NDSO to complete tenders of health supplies (2).
Policy priority
National Health Strategic Plan 2017 – 2022 prioritizes efficient delivery of health services through strengthening of supervision and quality assurance, as well as the health outreach services for an inclusive national health care (2). The Medicines Regulatory Authority is yet to be established following enactment of the relevant law (3).
Gender inequalities and marginalization issues
National Health Strategic Plan (2017 - 2022) illustrates marginalization in oral health, which continues to suffer shortages of personnel and infrastructure and currently being provided at national and district levels only. There are no services at the health centre level where majority of the people in need of oral health services reside, including women (2).
Investment opportunities introduction
The Ministry of Health has a Public-Private Partnership (PPP) arrangement that covers service delivery, supply chain and hospitality services, but the coverage is still limited and provides an opportunity for further PPPs and direct private investment in the sector (2).
Key bottlenecks introduction
Low numbers of nurses and doctors per capita, the third-highest HIV/AIDS rates worldwide, a short life expectancy and lack of facilities for all needed treatments in Lesotho (4).
Biotechnology and Pharmaceuticals
Development need
Lesotho imports most of its pharmaceutical requirements from India and South Africa estimated at over M1 billion (USD 50 million), annually, which negatively impact the balance of payments and compromise reliable supply to the health establishments (2, 18).
Policy priority
Medicines and Medical Devices Control Authority Act 2023 has been enacted and should pave way for establishment of the Medicines Regulatory Authority that will set standards and quality of medicines and facilitate production of medicines in Lesotho (3).
Gender inequalities and marginalization issues
Poorer households spend higher % of their net income on hospitalization and on non-prescription medicines (52.1%) than non-poor households (3.9%). Catastrophic payments of 40% net of food income threshold is in households of members over 65 years, female headed households, households headed by an unemployed person or a person with a lower level of education (19).
Investment opportunities introduction
Lesotho imports substantial pharmaceuticals, which provide an investment opportunity for local production. The newly enacted Medicines and Medical Devices Control Authority Act 2023 provides an opportunity for local pharmaceutical production.
Key bottlenecks introduction
Lesotho has had no independent body for quality assurance of medical products and following recent enactment of the relevant law, it is yet to have the Medicines Regulatory Authority to monitor compliance with Good Manufacturing Practices (GMP).
Biotechnology and Pharmaceuticals
Pipeline Opportunity
Production of Pharmaceuticals
Set up a plant to manufacture a range of pharmaceuticals covering drug design, extraction, packaging and storage for critical disease burden and personal health care for patients and clients in Lesotho as well as exporting to the Southern African Development Community (SADC) region and the global market.
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
National Drug Services Organization (NDSO) reported it procured and distributed medical supplies and equipment worth M 2.3 billion (USD 127 million) in 2020/21, M1 billion (USD 55 million) in 2021/22 and M 740 million (USD 41 million) in 2022/23, respectively (18).
Lesotho imports an estimated 90% of its medical requirements, and local pharmaceutical production can substitute these imports (or a proportion) (18). This is an average of USD 74 million, annually (19).
Indicative Return
20% - 25%
Tripharm Manufacturing (Pty) Ltd, which was registered in 1999 and produces more than 60 topical and cosmetic pharmaceutical products and pack sizes, achieved 20% - 25% ROI over 6 years (6).
Investment Timeframe
Medium Term (5–10 years)
Tripharm Manufacturing (Pty) expanded its market into South Africa, Botswana and Eswatini and achieved returns in 6 years. The company has a new growth plan (2023 - 2028) that seeks to grow its market share (6).
Ticket Size
USD 500,000 - USD 1 million
Market Risks & Scale Obstacles
Market - Highly Regulated
Impact Case
Sustainable Development Need
Lesotho has the third highest HIV prevalence rate in the world and high tuberculosis prevalence of 611 / 100,000 as well as increasing cancer and diabetes cases, and depends on drug imports for treatment of the infected people, which compromises the effectiveness of managing diseases (4, 9).
Gender & Marginalisation
There are more women (30%) with HIV infections than men (23%), including tuberculosis and breast cancer, but access to health services is also skewed towards urban areas because of disparities in health facilities and complementary infrastructure between the urban and rural areas (2).
Expected Development Outcome
Production of pharmaceuticals has the potential to improve access to critical drugs by HIV/AIDS patients and help prolong their lives, including treatment and cure of tuberculosis, cancer and diabetes.
Gender & Marginalisation
Production of pharmaceuticals will largely benefit women given their higher HIV prevalence rate than men, including tuberculosis and breast cancer. The production also has the potential to narrow the health services access gap between the urban and rural areas.
Primary SDGs addressed
3.8.1 Coverage of essential health services
3.3.2 Tuberculosis incidence per 100,000 population
Universal Health Coverage (UHC) Index in 2019 was 48 (0-100) (7).
Incidence of tuberculosis (per 100,000 population) was 614.0 as at 2021 (20).
By 2030, achieve universal health coverage (10).
Reduce by 25% to (460/100,00) in 2024 (21).
9.5.1 Research and development expenditure as a proportion of GDP
SDR 2023 show expenditure on research and development of 0.1% as a share of GDP (20).
According to the Rapid Private Sector Assessment Report (2022) recommendation, the expenditure should reach the regional average of 0.3% of research and development expenditure as a proportion of GDP, in the medium-term, if Lesotho is to address its health care challenges and be competitive (22).
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Planet
Corporates
Public sector
Outcome Risks
Lesotho is yet to establish a Medicines Regulatory Authority and nascent exposure could have teething problems to effectively manage the Good Manufacturing Practices with safety implications (15).
Manufacturers of counterfeit drugs have the potential to take advantage of nascent industry and cause health hazards, particularly if not properly regulated and monitored.
Impact Risks
Pharmaceutical production may still not reach the rural and poor households who do not have income due to current national unemployment rate.
If health care distribution is not improved and strengthened, stock shortages of pharmaceutical products may still happen and cut short access to the products by the broader population.
Impact Classification
What
Production of pharmaceuticals increases supply of drugs and improves access of health care across the country.
Who
All patients requiring drugs benefit through increased availability of pharmaceuticals, particularly those with chronic diseases.
Risk
High unemployment rates and poor health care distribution can negatively impact access to pharmaceutical products.
Contribution
Pharmaceuticals contribute to the health supplies required by patients and to the effectiveness of public health policy.
How Much
Given that health affects everyone, the impact of pharmaceuticals cuts across the entire population.
Impact Thesis
Provide access to medical drugs to help protect lives and improve health outcomes that contribute to productivity and economic growth.
Enabling Environment
Policy Environment
National Health Strategic Plan 2017 – 2022 prioritizes efficient delivery of health services through strengthening of supervision and quality assurance, as well as the outreach services, which have positive spinoffs for sustainable investment (2).
Budget Speech 2023/24 proposes a forward looking and dynamic and futuristic development of industries that are driven by innovation and technology development, such as, health care predictive analytics, digital education, fintech, nanotechnology and others (13).
National Health Policy 2011 notes the most urgent services are the clinical, diagnostic and nursing services in the health sector, and plans to provide quality, effective and efficient clinical, diagnostic and nursing services for prevention, and treatment of diseases (14).
Financial Environment
Development partner support on drugs provides critical funding for the market of pharmaceuticals and investment opportunities. Examples are US President’s Emergency Plan for AIDS Relief (PEPFAR), UNFPA, Maternal and Child Health and Tuberculosis under Partners in Health (25, 26).
Fiscal incentives: Subsidy involves patients paying registration fee at health centers and government covering the difference. Budget allocation of close to 10% of GDP (close to Abuja declaration of 15%) increases health care spending and provides an incentive for investment in pharmaceuticals (13).
Although Lesotho is yet to develop a policy and strategy guiding the PPPs in its health system, there is a PPP Unit in the Ministry of Health, coordinating PPP activities, including an arrangement of case-by-case negotiations resulting in an MOU, where there is agreement on specific incentives (2, 3, 24).
Regulatory Environment
Under the Medical, Dental and Pharmacy Order No. 13 of 1970, Lesotho Medical, Dental and Pharmacy Council (LMDPC) promotes the health of the population, determines standards of professional education and training, and sets and maintains fair standards of professional practice (12).
Under the Ministry of Health's Pharmaceutical Department, a regulatory unit has been established which oversees import and export of pharmaceuticals, inspection, and licensing (14).
Lesotho Medicines and Medical Devices Control Authority Act 2023 regulates the manufacture, import and export, storage, distribution, sale and use of medicines and medical devices (15).
Pharmaceutical Country Profile 2011 provides data on existing socio-economic and health-related conditions, resources, regulatory structures, processes and outcomes relating to the pharmaceutical sector of Lesotho (16).
Marketplace Participants
Private Sector
Pharmaceutical Association of Lesotho, Tripharm, Husteds Pharmacy, Christian Health Association of Lesotho, Organica.
Government
Ministry of Health, National University of Lesotho, Lesotho Medical, Dental and Pharmacy Council.
Multilaterals
World Health Organization, African Development Bank, World Bank, World Bank, United Nations Development Programme.
Non-Profit
Lesotho Council of Non-Governmental Organizations, Partners in Health, World Vision.
Public-Private Partnership
The Ministry of Health has a Public-Private Partnership (PPP) arrangement with Christian Health Association of Lesotho (CHAL) that covers service delivery, supply chain and hospitality services (2).
Target Locations
Lesotho: Maseru District
Lesotho: Leribe District
Lesotho: Mafeteng Dstrict
Lesotho: Qacha's Nek District
References
- (1) United Nations, Sustainable Development Report, 2022
- (2) Government of Lesotho, National Health Strategic Plan 2017 – 2022
- (3) SDG Investor Map Stakeholder Consultation with the Ministry of Health, July and November 2023
- (4) World Bank, Lesotho - Health sector reform program phase
- (5) Organica Global Brands. https://organicaglobal.co.ls/our-values/
- (6) Tripharm Manufacturing. http://www.tripharm.co.ls/?page_id=8
- (7) United Nations, Sustainable Development Report, 2022
- (8) Annual Foreign Trade Statistics Report 2022 - Bureau of Statistics
- (9) World Bank, Systematic Country Diagnostic Update: Bridging Implementation Gaps to Accelerated Development, 2021
- (10) United Nations, Global indicator framework for the Sustainable Development Goals and targets of the 2030 Agenda for Sustainable Development. https://unstats.un.org/sdgs/indicators/Global%20Indicator%20Framework%20after%202023%20refinement_Eng.pdf
- (11) European Environmental Bureau
- (12) Government of Lesotho, Medical, Dental and Pharmacy Order No. 13 of 1970
- (13) Government of Lesotho, Budget Speech 2023/24
- (14) National Health Policy 2011
- (15) Lesotho Medicines and Medical Devices Control Authority 2022
- (16) Pharmaceutical Country Profile 2011
- (17) SDG Investor Map Investment Opportunity Areas Shortlist Report, 2023
- (18) National Drug Services Organization SDG Investor Map Stakeholder Consultation October 2023
- (19) Assessing Lesotho's Financial Burden of Household Payments and Access to Healthcare, 2022. https://assets.researchsquare.com/files/rs-2043986/v1/ded957c2-cc76-49a5-a85d-148d87797001.pdf?c=1665400474
- (20) United Nations, Sustainable Development Report 2023 - Lesotho Score Card
- (21) Center for Diseas Control and Prevention, Lesotho Country Profile, 2021. https://www.cdc.gov/globalhivtb/where-we-work/lesotho/lesotho.html
- (22) Government of Lesotho, Rapid Private Sector Assessment Report 2022
- (23) Government of Lesotho, 2022 Health Statistics, 2022
- (24) Governmet of Lesotho, National Multi-Sectoral Integrated Strategic Plan for the Prevention and Control of Non-Communicable Diseases (2014-2020)
- (25) Partners in Health Lesotho, 2023. https://www.pih.org/country/lesotho
- (26) US Embassy in Lesotho, President’s Emergency Plan for AIDS Relief Priorities, 2020. https://ls.usembassy.gov/pepfar/
- (27) Government of Lesotho, 2016 Lesotho Population and Housing Census: Volume VI: Population Projections, 2019