What Square Pharmaceuticals’ New USD 25m Drug Plant Means For Kenyans

Drug factory Kenya

Barely less than a month after the President revealed the government’s four key areas of focus under his second term, Bangladesh based Square Pharmaceuticals announced that construction of its new manufacturing plant had started.

For Kenyans who have had to bear the high cost of prescription drugs, the biggest question on their minds is probably whether the plant will help push down this cost after its completion by 2019.

To better illustrate the plight of patients, this article details how Kenyans have been paying a premium for selected drugs while other countries enjoy substantially lower prices. For instance, a packet of 30 tablets of Dilatrend, a drug used to treat heart failure and high blood pressure retails for Sh. 335 in Italy and Turkey while in Kenya, it is sold for at least Sh. 1,760 indicating a 425 percent markup.

A cursory glance at Square Pharmaceuticals’ website shows that it produces a number of proprietary and generic cardiovascular drugs which could offer a much more viable alternative to patients living with a variety of heart conditions.

Considering that cardiovascular is Kenya’s most dominant and fastest-growing prescription market segment, worth around $40 million in 2017 and expected to show a compounded annual growth rate (CAGR) of 15.4 percent to 2019 this would also be a sizeable opportunity for the drug maker.

While Kenya is reported to be the biggest supplier of pharmaceutical products in the Common Market for Eastern and Southern Africa (COMESA) region, it is important to note that local manufacturers can only satisfy about 30 percent of the country’s demand with the remaining amount being satisfied by imports.

According to the drug maker, the new Athi River facility will have the capability of producing two billion tablets and 60 million bottles of liquid medicine which could prove instrumental in meeting the country’s shortfall and enhancing affordability.

Square managing director Tapan Chowdhury explains: “We believe that local pharmaceutical production has potential to reduce cost of drugs by 40 percent and bring about greater access to essential drugs, while at the same time promoting the agenda of universal healthcare (by the government).”

In Kenya, the budgetary allocation to the health sector currently stands at seven percent, much of which goes to health insurance with the government expected to increase it to 10 percent by 2022.

However, even with this increase, the allocation will fall short of the government’s commitment to the ‘Abuja target’ which requires that member countries should set aside 15 percent of budgetary allocations to the health sector.

Finally, apart from the price factor, Kenyans should be optimistic that the scourge of counterfeit drugs can finally be reined in once the plant begins operations by mid next year.

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