Private Sector participation in the regional pharmaceutical and medical value chains in the Southern African Development Community (SADC) is expected to improve under the Support to Industrialisation and the Productive Sectors (SIPS) joint action.
SIPS is a SADC Programme supported by the European Union (EU) and the German Federal Ministry for Economic Cooperation and Development (BMZ) to facilitate expansion of regional value chains and promote dialogue between the private and public sectors. The German development agency, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), will oversee Result Area 2 and 3 which have been allocated €10 million from the EU and €2.83 million from BMZ. Result Area 1, to be administered by SADC, is funded to the tune of €8 million.
Result Area 1 deals with enhanced policy, regulatory and operational business environment on national and regional levels for the development and sustainable operation of regional value chains (for selected products) in the agro-processing and pharmaceutical sectors.
Result 2 ensures that private sector participation in regional pharmaceutical and medical value chains is enhanced, while Result Area 3 ensures that private sector participation in regional leather value chains is enhanced.
SADC will implement enhanced policy, regulatory and the business environment on national and regional levels for development and sustainable operation of the regional value chains for selected products in the agro-processing and pharmaceutical sectors, while GIZ, a key implementer of SIPS, will enhance participation of the private sector in the ARV, COVID-19 relevant Medical and Pharmaceutical Products (CMPP) and leather value chains.
The anti-retroviral value chain offers both a public health and an economic opportunity for the SADC Region due to the significant disease burden of HIV and AIDS. The United Nations Aids Organisation (UNAIDS) estimates that 15.6 million people are living with HIV in the SADC Region, and that almost 9 million people are on antiretroviral therapy.
On the other hand, the COVID-19- pandemic has ushered in a new challenge and with it an associated socio-economic negative impact to the Region. In response, the SADC Secretariat, the EU, and the Government of the Federal Republic of Germany launched the CMPP Project in August 2020 as part of the overall SIPS joint action. In this line of work, SIPS is currently supporting local companies to manufacture medical masks, disinfectants, face shields, ventilator parts and other COVID-19 relevant products.
In his presentation during a virtual SIPS Project Management Committee meeting on 4th of March 2021, Dr. Jan Peter Böttcher of GIZ, an implementing partner of the SIPS joint action, said the regional pharmaceutical and medical value chains have significant challenges, namely high dependency on imports, high inputs costs, and markets which are highly dependent on global donor procurement to the detriment of the regional market.
Under SIPS, the development of the regional pharmaceutical and medical value chains includes exploring the possibility to extend the value chains in the Region beyond "packaging" and to explore the possibility of investing in research and development and eventually production in the SADC Region. This includes the possibility of exploring the potential of excipients and packaging materials. Pharmaceutical excipients are everything other than the active pharmaceutical ingredient.
Dr Böttcher said as part of the inception phase, a detailed mapping and profiling analysis of the antiretroviral pharmaceutical value chain will be undertaken at both national and regional level with a view to understanding the performance of the value chain inclusive of the bottlenecks and other challenges, as well as identification of opportunities along the regional value chain for sustainable production systems and value addition. This will be facilitated through research and reviews of available literature, data collection and analysis as well as key stakeholder interviews and engagements at both regional and national levels.
Main topics contemplated by the intervention after and based on the inception phase will include working on enhancing business, entrepreneurial and subject matter knowledge skills as well as improving capacity for business operating systems and procedures.
The topics will also include enhancing knowledge of technologically driven high quality, modern and environmentally sustainable pharmaceutical production systems; enhancing access to efficient input and output markets; and facilitating access to affordable, flexible and innovative financing arrangements.
SIPS is implemented in all SADC Member States, targeting the private sector, and in particular but not limited to Small and Medium Enterprises (SMEs); other Non-State Actors (NSAs) or Intermediary Organisations (IOs); and SME clusters involved in the selected value chains.
The focus on the private sector is in line with the strategic interventions of the SADC Industrialisation Strategy and Roadmap (2015-2063) which calls for support towards capacitating the private sector to enhance entrepreneurial and managerial skills, thereby boosting productivity and competitiveness.
