DHL identifies Africa as the next frontier for healthcare sector
Over the past decade the global life sciences sector has experienced healthy growth. The world market for pharmaceuticals, for example, has doubled within a decade, reaching a value of about USD 1 trillion, and is expected to grow by another 3 to 6 per cent per annum until 2016 (IMS 2012a). This huge demand, which has been particularly strong in the mature markets of Europe and North America, is now infiltrating the more dynamic emerging markets including China, Russia and India, but is particularly relevant in Africa, which is positioned as the next frontier for the healthcare sector.
This is according to Sumesh Rahavendra, Head of Marketing for DHL Express Sub-Saharan Africa, who says that Africa has seen tremendous growth in the life sciences and healthcare sector over the past years, as well as investment into the development of healthcare, especially in the logistics sector, as a result of this shift.
“Companies are increasingly turning to Africa due to the opportunities that the continent offers as it is one of the few locations that can still obtain double digit economic growth. The life sciences logistics model in Africa is therefore changing drastically as, in the last two and a half years, we have seen major growth in hubs like Kenya, servicing East Africa, and South Africa, which plays a key role for the Southern African Development Community (SADC) countries; in addition to direct shipments into specific countries, as the capabilities grow within the region.”
Referencing DHL’s recent report on key logistics developments in the healthcare sector for 2020 and beyond, entitled Key Logistics Trends in Life Sciences 2020+, Rahavendra says that this growth in Africa can be attributed to Sub Saharan Africa’s increased life expectancy, rate of urbanisation and rise of the middle class. “While Sub-Saharan Africa comprises of 12% of the global population, the region comprises of 24% of the global healthcare burden.”
Rahavendra says that another contributor to this shift is ecommerce growth in the pharmaceutical industry. “The healthcare sector will ultimately follow the technology sector as where there is communication, there is ability. Therefore, as technology capabilities roll out in the country, so will healthcare capabilities.
“With technology continuously evolving, there is talk that consumers will likely soon be able to self-medicate and order over the counter drugs via their cellphones or the internet. These sorts of developments have the potential to drastically change both the healthcare, and logistics, sector.”
However with the current shift in the sector, Rahavendra explains that there are key challenges that need to be met based on the current developments. “Increasing differentiation of supply chains and the need for companies to keep their supply chain flexible to adapt to requirements of innovative products is a key challenge.
“As innovation in the pharmaceutical industry shifts towards specialties and biotech products, so does the need for temperature controlled, and monitored, cold chain transport and storage, historically only required for shipments of vaccines and blood fractions.”
He says that due to the combination of increasing regulatory demands, the focus on emerging markets, and new product requirements, notably around temperature management, and cost pressures, the life sciences and healthcare sector is accelerating its emphasis on driving supply chain transformation and differentiation.
“Despite these hurdles, we are confident that the life sciences and healthcare sector will continue to flourish in upcoming years due to the on-going investment and development on the African continent,” concludes Rahavendra. “The future is bright for Africa, and the healthcare sector will be one of its star performers.”
Abibatu D Kamara
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