The pharmaceutical landscape in Kenya constitutes a number of multinational companies that are present through locally incorporated affiliates, technical representative offices and local technical agents. The presence of these companies has made the industry more competitive, with an emphasis on maintaining both quality and affordability. HealthyKenya Magazine has mapped the leading 25 players working across manufacturing, distribution and retail of pharmaceuticals and medical equipment. The industry is dominated by private companies, with 14 of the leading players being private companies. Among the rest, seven are multinationals and four are family owned.
Growth market: Kenya has a significant, and growing, domestic pharmaceutical market valued at $750 million at the end of 2018, up from $417 million in 2010. The distribution of pharmaceutical products has been increasing due to the rising disease burden in the country. Prescription drugs constitute 70% of the drugs in the market, largely treating non-communicable diseases such as diabetes, hypertension and cancer. The majority of these drugs are imported, and are distributed by the multinationals present in the market and large domestic distributors.
Manufacturing: Within the sector’s overall expansion, there has been little growth in the manufacturing space in terms of innovation and backward integration. Of the nine top-earning companies in this map with revenues of over $25 million, three are manufacturers, with the other six being distributors, illustrating the relative lack of manufacturing capacity in the market. Although this is unusual for an industry of this size, it is common across the region.
As is the case across East Africa, leading manufacturing companies continue to import active pharmaceutical ingredients (APIs) and other inputs despite domestic access to the raw materials necessary to process these compounds. The most common example of the lack of backward integration capability is the importation of processed artemisinin, a compound derived from plants in the artemisia family which is used in malaria treatments. Kenya exports raw artemisinin and then re-imports it in its processed form to be used by pharmaceutical manufacturers to make anti-malarial drugs.
Regional exporter: Kenya is the largest producer of pharmaceutical products in the COMESA region. Tanzania, Uganda and Rwanda have traditionally been the main export markets, comprising 53% of total exports in 2017. However, their prominence has been declining over recent years as their domestic markets have grown. In their place, Somalia and South Sudan have become more prominent export destinations with an increase in the value exported of 43% and 53%, respectively, between 2016 and 2017. The growth of these markets highlights the sustainability of Kenya’s pharma market in the face of changing regional dynamics.
Revenue details: Nine of the leading companies report revenues of between $25 million and $100 million, the top bracket for the sector. Another nine firms sit in the next revenue band of $10 million-$25 million. The remaining seven players earn between $1 million and $10 million annually. Distributors comprise 11 of the 18 companies in these revenue brackets, pointing to opportunities to expand the manufacturing space.
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