GSK building up R&D, manufacturing and goodwill in Africa

GlaxoSmithKline CEO Sir Andrew Witty

Lots of drugmakers see Africa as a market that over time can produce some substantial business. But GlaxoSmithKline ($GSK) is not just manufacturing and selling drugs there. It is going one better with a new "open lab" R&D facility to let African researchers work on the drugs needed by Africans for noncommunicable diseases.

"Our long-term goal is to equip Africa to discover, develop and produce the medicines required for Africa," CEO Andrew Witty told the 5th EU-Africa Business Forum in Belgium today.

The drugmaker will put up £130 million ($216.4 million) over the next 5 years on projects there, including £25 million ($41.6 million) for what it calls the first "R&D Open Lab for non-communicable diseases (NCDs) in Africa." The facility, like one it has in Spain, will provide independent researchers a place to work on their own projects and resources to help them "improve understanding of NCD variations." That might include conditions like treatment-resistant hypertension and aggressive breast cancers in younger women.

New manufacturing also is in the mix. GSK intends to partner with countries and will invest £100 million ($166.5 million) in as many as 5 new manufacturing facilities in different countries to produce medicines needed in Africa like antibiotics and HIV meds. The idea is to transfer technology and build a manufacturing network that will provide African countries with the abilities to make the medicines they need at costs they can afford. It is looking at sites in Rwanda, Ghana and Ethiopia. GSK already has manufacturing plants in Nigeria, Kenya and South Africa. It also is looking at its supply chain to find ways to get more medicines to rural areas that can be difficult to reach.

To help countries train workers for the facilities, the drugmaker said it will finance 25 academic chairs in African universities to boost education in everything from engineering to public health. Then to expand the reach of healthcare further, GSK has committed to help train up to 10,000 community health workers across Sub-Saharan Africa. GSK said it believes it will add 500 jobs over 5 years. "Today, we are setting out further steps to tackle Africa's dual health burden of infectious and emerging non-communicable diseases and help build crucial capacity to underpin the development of the healthcare sector in the region," Witty said. 

The African pharma market is expected to grow to $45 billion by 2020. Its growth rate--10.6% annually--matches up with Latin America's. It is also a market that should continue to grow for a long time. U.K.-based GlaxoSmithKline has made a particular commitment there. It has a pricing plan where it caps prices of branded medicines at no more than 25% of developed world prices. But GSK certainly isn't the only one to expand there and use goodwill to help do that.

Sanofi ($SNY) last year opened a new distribution operation in Morocco and started up three new government collaborations to train doctors. It said it would develop new treatment facilities in Type 1 diabetes, mental disorders and epilepsy, and also also hatched plans to train regulatory technicians and managers. Other companies have set out their own plans there.

- here's the release