Source: Business Daily
By Mugambi Mutegi
Posted Monday, September 26 2011 at 00:00
A Kenyan firm has applied for certification of one of its drugs by the World Health Organisation (WHO) that would give it a break into the lucrative anti-retroviral drugs export market.
Universal Corporation Limited in Kikuyu, Kiambu, has applied for the medicine — Lamozid — to be included in the list of 255 drugs approved so far for the Sh2 trillion Global Fund, which is managed by the UN agency.
“Since the funding for these international orders will be from the global kitty, accredited firms enjoy guaranteed payments besides expanding their export markets,” said Palu Dhanani the firm’s managing director.
A successful endorsement would make it the first local manufacturer to tap into the fund which provides medication for malaria, Aids, diarrhoea, reproductive health and tuberculosis. It is supported through partnerships between governments and non-governmental organisations.
The strict safety, processing and efficacy checks that entail the accreditation helps medical procurement agencies worldwide to make purchasing decisions without necessarily visiting the manufacturer. WHO pre-qualification is a voluntary process.
If Universal’s bid is accepted, Kenya would join South Africa, Uganda and Zimbabwe as the only countries in Africa with pre-qualified drugs.
The five-year old pharmaceutical company — which recorded an annual turnover of Sh1 billion last year — has set its eye on a listing at the Nairobi Stock Exchange by 2014. Mr Dhanani who is also the chairman of the Federation of Kenya Pharmaceutical Manufacturers said the high cost of certification meant that the firm could only pursue one drug at a time. Researching and developing the medicine, he said, cost $2 million (Sh190 million) whereas the construction of a new high standard laboratory — a prerequisite for inspection — cost a further $4 million (Sh380 million).
Lembit Rägo, the coordinator of WHO’s quality assurance and safety department in Geneva confirmed that a Kenyan company had applied for prequalification. “For the time being we do not have any products prequalified from Kenya but we are working with some Kenyan manufacturers and they are making progress,” Dr Rägo said.
Although certification is usually rigorous, Mr Dhanani said he expects to have a feedback from WHO by the end of the year. The company manufactures generic drugs that offer a lifeline to millions of people in poor countries infected by the human immunodeficiency virus (HIV).
Generics have helped drop the cost of first-generation HIV treatment to less than $86 (Sh8,600) per patient annually from $10,000 (approximately Sh1 million) in 2000.
The use of generic drugs — the cheaper but equally effective variants of patented drugs — is estimated to account for 75 per cent of all medicines sold in Kenya, according to the Kenya Pharmaceutical Distributors Association. This has intensified competition between pharmaceutical firms, spawning new investments in the sector and a search for new markets.
Pharmaceutical firm Laboratory & Allied recently announced plans to invest Sh1 billion in expanding its production line as it seeks to increase the supply of generic drugs in Africa.
“Initially, we will participate in tenders that are majorly within Africa. Experience from this would give us the muscle to pursue tenders from around the world,” Mr Dhanani said.
UCL exports its medicines to countries such as Sierra Leone, Malawi and Mozambique. The Kenya Medical Supplies Agency is its major local customer.
The drugs company, which also produces veterinary medicines, is also eyeing a bigger share of the healthcare market dominated by GlaxoSmithKline, Beta Healthcare, and Cosmos Limited. Mr Dhanani, his brother Rajen and Pentti Keskitalo (a Finnish citizen) each own a 20 per cent stake in the company while Finnfund — a Finnish development company — owns 30 per cent. The remaining ten per cent belongs to Rummee Investments, a UK-based firm.In 2009, pharmaceutical sales in Kenya reached a value of Sh27.12 billion, representing a growth of 15.4 per cent year-on-year. Business Monitor International (BMI) said the Kenyan drug market will reach a value of Sh56.2 billion by 2014 and Sh95.44 billion by 2019.