Analysts forecast boom for heart disease drugs in Kenya

By Michael Omondi

Dr Karethi Githinji says more patients are being placed on hypertension drugs programmes

Middle class Kenyans have in recent years been fretting over which diseases will bring them and their loved ones down. But with heavy advertising spending to promote the awareness of HIV/Aids and Malaria, there was no shortage of diseases to point at, as virtually all the major killers have been kept in the background.

This is, however, expected to change with Kenyans adopting unhealthy eating habits and sedentary urban lifestyles with no regular body workouts.

Market research reveals that a large number of the middle class in Kenya will over the next five years be spending heavily on healthcare as they live with the complications from lifestyle diseases such a hypertension, obesity and Diabetes.

Already, the pharmaceutical industry has noticed this and they are expected to increase the level of investment to cope with the demand for drugs to cure these diseases.

While governments in Africa, the UN health agencies and wealthy philanthropists such as Bill Gates, Bill Clinton and many others are expected to continue spending billions of shillings on fighting tropical diseases and HIV/Aids, lifestyle-related ailments are poised to become cash cows for pharmaceutical firms in countries such as Kenya.

The sale of HIV and malaria drugs has remained the pharmaceuticals industry’s money minting machine, but lately a shift is unfolding in the market.
Driven by the ongoing economic recovery and the emergence of a growing middle class, a deadly blend of lifestyle diseases led by hypertension is quietly taking the lead as the industry’s money-spinner.

Kenyans are currently spending about Sh1.9 billion on hypertension medicine, which represents about 13 per cent of the Sh15 billion pharmaceutical market and one of the largest by disease type.

The growing spend on the disease, having grown from below one billion shillings a decade back, has ignited competition as new entrants set up shop  in Kenya to a get a slice of this lucrative market.

Previously, the market was a preserve of a few multinational firms that were content with their market shares, but the entry of low-cost producers is slowly tilting the market in balance in favour of the new entrants, most of who are makers of generic drugs and have roots in India where they benefit from government subsidies, low production costs and economies of scale, a move that gives them space to offer low prices.

The big pharmaceutical companies, however, have their origin in Europe, where the cost of doing business is higher compared to Asia and Far East.
“Manufacturers of original drugs (mainly multinationals) are losing market share to generics manufacturers,” says Dr Kareithi Githinji of Dove Chemist along Ngong’ Road.  “Generics seem to be growing market share faster due to their lower prices.”

Though the industry has scant data on the market shares, Kenya Pharmaceutical Distributors Association (KPDA) say that new entrants control about 60 per cent of the market up from below 20 per cent a decade ago.

The sharp market growth of generic drugs is mainly attributed to their low pricing compared to the branded types, a move that has seen the generics strike a chord with a huge fraction of the price sensitive Kenyan market.

With inflation in the double digits and the disease slowly spreading away from the rich to the middle and low class Kenyans, pricing is emerging as the best weapon for market growth.

This has seen the price of medicine for treating hypertension drop by as much as 50 per cent over the past decade, says Dr Mary Kisung’u, the pharmacy manager at the Nairobi Hospital.

“The cutthroat competition is mainly among the generics brands, but their intensity is now eating the market share of original brands,” says Dr Kisung’u.
A Business Daily survey looking at the difference in pricing between generic and branded drugs shows that branded medicines are nearly 10 times more expensive than the generic look a likes.

Ciprobay 500mg tablet, for one, retails at Sh347 per tablet, a price that looks like theft in comparison to its near generic version Cifran 500mg that goes for Sh33 per tablet.

On the low end of the market, Adalat 20mg is going for Sh47.20 in comparison to its generic look alike Nifedipin 20mg, which is retailing at Sh7.45.
The price undercutting is the result of the increased number of drug firms that are opening shop in Kenya as the firms position themselves to grow their market share in this lucrative albeit competitive market.

Some of the recent entrants into the market include: Sun Pharmaceuticals, Cipla Limited and Torrent Limited, all from India. Others are Alpharma Limited and Cox Pharma, both from England and Intas Limited from India.

Previously, a number of these firms had preferred local agents over opening shop in the country, but with the market having grown bigger and competition getting stiffer, a huge chunk of these firms have launched their own local outfits.

“They are setting bases in Kenya so that they can easily distribute drugs in Kenya and neighbouring countries,” notes Frost & Sullivan, in a research report based on the East African market.

Many Kenyans rarely go for regular heart check-ups like this one because they cannot afford. Healthcare costs for chronic illness is rising and will become a major concern.

Experts link the increased interest in the Kenyan market to the growing number of patients and as a result pushing demand for hypertensive medicine to record levels.

With the number of hypertension patients expected to rise in coming years as more Kenyans adopt unhealthier diet and lack of exercise, Frost & Sullivan estimates that hypertension drugs market will hit Sh2.3 billion by 2012.

Doctors are in agreement that the country is facing a ticking time bomb as the ranks of hypertensive patients continues to rise.

“If we don’t do act, we will in the next decade be losing more people to lifestyle diseases such hypertension compared to all other diseases,” warns Dr Paul Ngugi, one of the country’s leading hypertension experts.

Dr Ngungi remembers that more than a decade ago he could handle about five hypertension patients in a month.

Today, at his Hazina Towers Clinic in Nairobi and Kenyatta National Hospital, Dr Ngungi sees at least three new patients suffering from hypertension every week.
He says that most of his patients are in their 30s or early 40s a departure from the past when the disease confined itself to the elderly.

Still, another emerging trend that could pose headaches to health policy experts is that the disease is no longer a rich man’s syndrome, but it’s spreading first among the poor who have little capacity to manage the disease.

A move that is likely to pile more burdens on the country’s public health facilities, which currently lack drugs, as the poor are likely to turn to public hospitals for treatment.

With Kenya’s facing rapid urbanization and the economy expected to maintain its recovery, hypertension is expected to be more entrenched in the population.

This has two implications: More Kenyans will contract the disease due to lifestyle changes and with better economic prospects, many more are likely to turn to hypertension medicines due to better access to health care services.

The net effect is that demand for hypertension medicines is expected to grow substantially over the next decade, setting the stage for a battle for market share as more firm enter the market place as the existing firms offer defence for the market share.

Frost & Sullivan insist that most of the new firms to enter the Kenyan market are likely to be makers of generic medicine offering high volume drugs at low prices, which is a clear sign that the dominance of the big pharmaceutical companies will be at a greater risk.

GlaxoSmithKline (GSK), the second biggest firm by sales, is one of the big players in this market and has its eyes trained on this segment of the industry.

With competition from low cost generic getting stiffer in the US and the European markets coupled with difficulties launching new products, top multinational firms are turning to emerging markets like Africa, China and Russia to offsets the flats sales growth in their traditional markets.

Though GSK lacks hypertensive drugs on its line up, the global giant has increased research spending as it races to discover a blockbuster drug to cure heart diseases.

The local subsidiary of GSK is betting on the drug to grow its share of the local market,

“We will soon enter Kenya’s hypertensive market,” John Musunga, GSK’s managing director and general manager of Pharmaceutical Operations East Africa told the Business Daily.

He added that time frame for its entry into the market will depend on how fast researchers put the drug on the stores.

GSK will join a long list of top multinational drug firms that maintain a presence in the hypertensive drugs market. This includes Sweden’s Astra Zeneca, French firm Sanofi-Aventis, Bayer Schering Pharma from Germany, Switzerland’s Roche Products and Pfizer Laboratories of South Africa.

These are some of the firms that are falling victim to the price cutting by generic firms, who are benefiting from the insufficient patent protection for original drug manufacturers, a move that has seen generics enter the market soon after the ethical drug has gained acceptance. But the makers of branded drugs are fighting back as they are become more aggressive in the marketplace by raising their marketing budgets.

Top of their market growth strategy includes boosting their visibility in the market place and endearing themselves to doctors to recommend their brand names to patients through sponsorship of doctors’ conferences both locally and abroad. //Business Daily