Analysts forecast the health sector to grow in the next few years, with the branded generic pharmaceutical sector projected to grow at double digits and faster than the overall market over the next decade

September 2016

Growth markets private equity firm, Actis said it has picked up a “significant investment” in Tunisian-based generic pharmaceutical company Medis Group from Africinvest and Boujbel Group.

The deal, which will allow Actis to built a major pan-African Middle East pharmaceutical business through a “buy-and-build finance strategy”, comes at a time when the private and public sectors are joining hands to retool Africa’s healthcare sector to better serve the population on the continent.

Hichem Omezzine, Director at Actis, said Medis’ remarkable business operation and offerings in Africa makes it the ideal partner to a develop cutting edge portfolio of medicines, which will “accelerate the entry into complex therapeutic areas like biosimilars and oncology and enhance the company’s footprint across Africa and the Middle East.”

Africa’s health sector is undergoing a major reboot, thanks in part to the recent Ebola crisis which exposed fundamental deficiencies in national and local healthcare infrastructures as well as lack of governmental fundings for the health sector across the continent.

According to the World Health Organization, access to medicines and vaccines is one of the basis to achieving universal health coverage as well as health-related UN-SDGs. However, stock-out and shortages of medicines and vaccines, including antibiotics such as Benzathine penicillin-an antibiotic used to treat congenital syphilis and rheumatic heart disease, anesthetics, chemotherapy drugs and other essential medicines, yellow fever vaccines have increased in severity in recent years in most parts of the world, leaving many patients in developing countries susceptible and vulnerable to diseases.

Utilizing their knowledge of the region, the private sector actors, including but not limited to private equity firms, are capitalizing on opportunities to reboot and transform the Africa’s health sector affordability care and medicine.

Analysts forecast the health sector to grow in the next few years, with the branded generic pharmaceutical sector projected to grow at double digits and faster than the overall market over the next decade, which experts attributed to improvements to health and prevention care. It is a part of the reasons for investors’ increased interests in the pharmaceutical markets, especially in developing countries where off-patent, low demand and short shelf-life, low-volume medicines and difficult to formulate vaccines contribute to shortages.

According to the UN High-Level Commission on Health Employment and Economic Growth, growing evidence shows that investments in the health sector pay handsome dividends. The returns on investment in health are estimated to be 9 to 1, and around one quarter of growth between 2000 and 2011 in low-income and middle-income countries is estimated to have resulted from improvements to health.

Experts say private equity firms and investors have the opportunities, given their proven shrewd business acumen and agility in using research and developments measures to quickly grow and turnaround depilated businesses on the continent into successful companies to help achieve the development and delivery of health products in many of the major market mechanisms fail to provide incentives.

Once dominated by multinationals, the emergence of local players entering the market with affordable generic medicines in recent years, in addition to major shift in demographic and lifestyle changes across the continent and in the Middle-East, such as the rising emerging middle class and the aging population, are also factors driving some of the changes in the healthcare sector as well as the pharmaceuticals sector.

Analysts say one of the advantages of such domestic brands is that they have a strong recognition and is trusted among doctors and patients.

New drug makers such as Tunisian-based Medis Group, a domestic branded generic pharmaceuticals company serving Tunisia and Algeria, provide the alternatives to help avert and reduce shortages, and improve affordability through price negotiations and voluntary or compulsory licensing of high-priced medicines.

Established by Lassaad Boujbel, Medis provides a broad portfolio of quality, affordable medicines, ranging from oral solid pharmaceuticals targeting chronic diseases such as diabetes and high blood pressure to sterile injectable pharmaceuticals, as well as branded medicines in therapy areas including pain, allergies and gastric reflux.

The company, having built one of the first oncology research centers on the continent, plans to expand its products to include medicines that treat diseases such as infertility, multiple sclerosis and asthma.

Dr. Boujbel said Actis’s has “deep sector expertise with impressive technical knowledge,” which “offers broad geographic coverage and an unparalleled track record in building multi-country businesses” will help develop “Medis into a leading Middle East and African business with a cutting edge portfolio of medicines that will help patients across our region.“


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