Essential Medicine and Drugs Manufacturing

An industrial plant at Aris near Windhoek, the capital city of Namibia
Photo by Grobler du Preez / Shutterstock
Essential Medicine and Drugs Manufacturing
SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Health Care
Biotechnology and Pharmaceuticals
Business Model Description

Establish and operate manufacturing facilities producing essential medicine and drugs with a specific focus on intravenous fluids products.

Expected Impact

Produce affordable pharmaceuticals, especially intravenous fluids products, to meet local market needs and offer medication at affordable prices.

Indicative ReturnDescribes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
20% - 25% (in IRR)
Investment TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Long Term (10+ years)
Market SizeDescribes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
USD 100 million - USD 1 billion
Direct ImpactDescribes the primary SDG(s) the IOA addresses.
Good health and well-being (SDG 3)
Indirect ImpactDescribes the secondary SDG(s) the IOA addresses.
Industry, Innovation and Infrastructure (SDG 9) Decent Work and Economic Growth (SDG 8)
Country
Regions
  • Namibia: Otjozondjupa Region
  • Namibia: Zambezi Region
  • Namibia: Ohangwena Region
  • Namibia: Oshikoto Region
SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Health Care
HC

Development need: While Namibia's spending levels on healthcare are high, estimated at 9% of GDP in recent years, and consistent with the Abuja target of 15%, the country's healthcare system is held back by substantial inefficiencies and inequalities and poor health outcomes; key challenges being the lack of human resources and limited productivity (IV).

Policy priority: In Namibia’s 5th National Development Plan (NDP5), the Government pledged to improve the country's health sector and aims to ensure that by 2022 all of Namibia's citizens will have access to quality health care (II).

Gender inequalities and marginalization issues: Health care, among others, generates significant multipliers on output, GDP and income. An increase in final demand for among others health care generates the highest impact on low-income households, and leads to the largest income multipliers for unskilled labourers (VI).

SubsectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Biotechnology and Pharmaceuticals
HC.1

Policy priority: To achieve SDG 3 on Good Health and Wellbeing, the Government seeks to ensure the wellbeing of all Namibians, among others (V). In the Harambee Prosperity Plan, enhanced access to treatment facilities for non-communicable diseases and universal health coverage are priority areas for social progression (III).

IndustriesMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Biotechnology and Pharmaceuticals
HC-BP
Investment Opportunity Area

Essential Medicine and Drugs Manufacturing

Business Model

Establish and operate manufacturing facilities producing essential medicine and drugs with a specific focus on intravenous fluids products.

Market Size (USD)Describes the value in USD of a potential addressable market of the IOA.
USD 100 million - USD 1 billion

The public pharmaceutical market in Namibia is worth NAD 2.6 billion (USD 175 million), as of 2017. It encompasses the essential medicines market and the antiretroviral drugs (ARVs) market, which are roughly at a 2:1 ratio (2).

IRRDescribes an expected annual rate of growth of the IOA investment.
20% - 25%

Benchmark projects, namely Windhoek Pharmaceuticals and MediPack Pharmaceuticals, achieved IRRs of 25% (9).

Another benchmark project, Bio Solve (Pty), is expecting an IRR of 18-25.36% depending on the size and scale of the facility (14).

TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Long Term (10+ years)

Based on a business plan of a benchmark project, a 10-year investment timeframe is expected (14).

Market - Highly Regulated
The Ministry of Health tightly controls the health sector, making private sector involvement challanging especially for medicines, which is regulated by the Namibian Medicines Regulatory Council (NMRC).
Sustainable Development Need

Namibia is largely dependent on imports of essential drugs, exposing the country to supply risks and increasing costs for Namibia's population. For intravenous fluids, no local production exists and all products are imported mainly from South Africa (3).

The management of pharmaceuticals has been strained by procurement delays caused by small local procurements at higher prices, logistics and supply-management constraints to deliver medicines to facilities, and lack of communication on stock-management between facilities and central management (15).

Gender & Marginalisation

Marginalised groups, such as users of antiretroviral drugs (ARVs), suffer particularly from the unavailability and high costs of essential medication.

Expected Development Outcome

Improved essential drugs and pharmaceuticals security, and reduced dependency on imports of medicine.

Reduced dependency of public and private hospitals on imports of hospital supplies.

Greater efficiency and sustainability of Namibia's health care services, furthering the industrial development of the country (6).

Gender & Marginalisation

With the secure of essential medicine, basic healthcare provision is improved especially for marginalised communities.

Primary SDGs addressed
3 - Good Health and Well-Being
Good health and well-being (SDG 3)

3.b.3 Proportion of health facilities that have a core set of relevant essential medicines available and affordable on a sustainable basis

3.8.1 Coverage of essential health services

Secondary SDGs addressed
9 - Industry, Innovation and Infrastructure
Industry, Innovation and Infrastructure (SDG 9)
8 - Decent Work and Economic Growth
Decent Work and Economic Growth (SDG 8)
Directly impacted stakeholders
People
Patients with access to affordable essential medication to treat and remedy their illnesses, helping them to live fulfilling and productive lives.
Gender inequality and/or marginalization
Low income communities who cannot afford or do not have physical access to imported medicine.
Corporates
Pharmaceutical companies benefitting from local providers of medicines once the infrastructure is set up.
Public sector
Health system thanks to reduced costs, and the Namibian economy due to greater economic productivity in the country.
Indirectly impacted stakeholders
People
Medical professionals benefitting from employment opportunities in manufacturing, distribution and application of essential medication.
Planet
Environment thanks to reduced transportation needs given local manufacturing.
Corporates
Suppliers of inputs for medicine and drugs manufacturing.
Outcome Risks

Local manufacturing of medicine and drugs results in pharmaceutical waste, which can cause danger to people and the environment if not disposed responsibly.

Impact Risks

Uptake of locally manufactured pharmaceuticals may be limited at the beginning as health facilities and end consumers get used to medicine and drugs produced in Namibia and trust in their quality.

What

The outcome is likely to be positive, important and intended because local manufacturing of essential medicine and drugs makes pharmaceuticals more accessible and affordable.

Who

Namibians benefit from locally manufactured essential medicine and drugs, and public health care facilities obtain required pharmaceuticals in the country.

Risk

While medication manufacturing is established internationally, it is a new model for Namibia, which competes with international markets and operates under Government imposed health care regulations.

Impact Thesis

Produce affordable pharmaceuticals, especially intravenous fluids products, to meet local market needs and offer medication at affordable prices.

Policy Environment

Harambee Prosperity Plan 2, 2021: Outlines that the Government aims to improve and maintain a service level of 90% at the Central Medical Stores, by ensuring timely delivery and availability of pharmaceuticals and clinical supplies at health facilities (7).

Namibia National Drug Policy, 1998: States the need to establish medicines information adverse reaction monitoring services in the country (8).

Financial Environment

Financial incentives: The newly established Namibia Investment Promotion and Development Board (NIPDB) targets support towards a national pharmaceutical industry (13).

Fiscal incentives: Pharmaceutical manufacturers pay only 18% taxes for 10 years, after which it reverts to the standard 35%. Exporters of manufactured goods receive 80% income tax allowance on income derived from exporting manufactured goods (4).

Regulatory Environment

Medicines and Related Substances Control Act, 2003: Provides for the establishment of a Namibia Medicines Regulatory Council, for the registration of medicines intended for human and for animal use, and for the control of medicines and scheduled substances (10).

Namibia Medicines Regulatory Council (NMRC): A statutory body established based on the Medicines and Related Substances Control Act to regulate the use of medicines in Namibia (11).

Therapeutics Information and Pharmacovigilance Center (TIPC): Has the mandate to improve the rational and safer use of medicines in Namibia (12).

Private Sector

Investors such as EOS Capital running the Namibia Infrastructure Development and Investment Fund (1). Businesses such as Fabupharm, which has grown to a fully-fledged pharmaceutical manufacturer.

Government

Ministry of Health and Social Services, Medical Council, Namibia Medicines Regulatory Council (NMRC), Therapeutics Information and Pharmacovigilance Center (TIPC), Namibia Industrial Development Agency (NIDA).

Public-Private Partnership

The Namibia Investment Promotion and Development Board (NIPDB) seeks to promote investments specifically into the pharmaceutical industry (13).

country static map
semi-urban
Namibia: Otjozondjupa Region
The Namibia Industrial Development Agency (NIDA) targets the Otjozondjupa region to develop the infrastructure required to manufacture essential medication (16).
semi-urban
Namibia: Zambezi Region
Using the prevalence of HIV/AIDS, a leading cause of death in Namibia, as a proxy to understand the populations' need for essential medication leads to the identification of Zambezi, Ohangwena and Oshikoto as further priority regions (17).
semi-urban
Namibia: Ohangwena Region
Using the prevalence of HIV/AIDS, a leading cause of death in Namibia, as a proxy to understand the populations' need for essential medication leads to the identification of Zambezi, Ohangwena and Oshikoto as further priority regions (17).
semi-urban
Namibia: Oshikoto Region
Using the prevalence of HIV/AIDS, a leading cause of death in Namibia, as a proxy to understand the populations' need for essential medication leads to the identification of Zambezi, Ohangwena and Oshikoto as further priority regions (17).
Sector Sources
  • I) SDG Center for Africa and Sustainable Development Solutions Network, 2019, Africa SDG Index and Dashboards Report 2019, Kigali and New York: SDG Center for Africa and Sustainable Development Solutions Network, https://sdgcafrica.org. II) Republic of Namibia, National Planning Commission, 2017, Namibia's 5th National Development Plan (NDP5), https://www.npc.gov.na/?wpfb_dl=294. III) Harambee Prosperity Plan II, 2021-2025, 2021, Republic of Namibia, https://www.met.gov.na/files/downloads/f0b_Harambee%20Prosperity%20Plan%20II.pdf. IV) Namibia - Health Sector Public Expenditure Review, 2019, Washington, D.C, World Bank Group, https://elibrary.worldbank.org/doi/pdf/10.1596/32111. V) Republic of Namibia, National Planning Commission, 2018, Implementation of Sustainable Development Goals, Voluntary National Review, https://sustainabledevelopment.un.org/content/documents/19880New_Version_Full_Voluntary_National_Review_2018_single_1_Report.pdf. VI) DNA Economics, 2021, SAM Multiplier Analysis for the SDG study in Namibia, Six Capitals.
IOA Sources
  • 1) EOS Capital Website, About NIDIF, https://www.eoscapital.com.na/nidif. 2) Doré Pharmaceuticals, 2017, Doré Pharmaceuticals Prospectus, https://www.unido.org/sites/default/files/files/2018-03/Dore%20Pharmaceuticals%20Pty%20Ltd.%2C%20Namibia_Company%20Presentation_01032018%20Bonn.pdf. 3) Namibian Industrial Development Agency (NIDA)., 2021, Potential Bankable projects, available upon request from NIDA. 4) PWC, 2021, Republic of Namibia Corporate - Tax credits and incentives, https://taxsummaries.pwc.com/republic-of-namibia/corporate/tax-credits-and-incentives. 5) World Bank, 2019, Namibia Public Expenditure Review Health Sector Public Expenditure Review, https://documents1.worldbank.org/curated/en/268141563376806867/pdf/Namibia-Health-Sector-Public-Expenditure-Review.pdf. 6) Monasa / UNDP interview with EOS Capital, conducted on 14 December 2020. 7) National Planning Commission (NPC), 2021, Harambee Prosperity Plan 2, available upon request from NPC. 8) Ministry of Health and Social Services, 2011, National Guidelines for Medicines Safety Surveillance, https://www.who-umc.org/media/1088/namibia.pdf. 9) Study on behalf of Windhoek Pharmaceuticals by Dr. Loneson Mondo (MBA, DBA), 2011, Available on request from Loneson Mondo (lonesonmondo@gmail.com). 10) Medicines and Related Substances Control Act, 2003, Republic of Namibia, https://laws.parliament.na/annotated-laws-regulations/law-regulation.php?id=146. 11) Namibia Medicines Regulatory Council (NMRC), Ministry of Health & Social Services, https://nmrc.gov.na. 12) Therapeutics Information and Pharmacovigilance Center (TIPC), Ministry of Health & Social Services, https://nmrc.gov.na/tipc1. 13) Namibia Investment Promotion and Development Board (NIPDB), 2021, https://nipdb.com. 14) Bio Solve (Pty) Ltd, 2021, Manufacturing of Intravenous Fluids in Namibia Business plan, Available upon request from the Namibia Industrial Development agency (NIDA). 15) World Bank, 2019, Namibia Public Expenditure Review: Health Sector Public Expenditure Review, https://documents1.worldbank.org/curated/en/268141563376806867/pdf/Namibia-Health-Sector-Public-Expenditure-Review.pdf. 16) Namibia Industrial Development Agency (NIDA), 2020, NIDA’s Project Profiles, Available upon request from NIDA. 17) PEPFAR, 2020. Namibia Country Operational Plan (COP) 2020: Strategic Direction Summary. US State Department, https://www.state.gov/wp-content/uploads/2020/07/COP-2020-Namibia-SDS-FINAL.pdf.