What's Big Pharma's latest frontier? Africa. Yes, drugmakers have been active on the continent for years, primarily in fighting infectious diseases. But like other markets with an emerging middle class, Africa is seeing an increase in chronic disease--and that puts more Africans in line for prescription drugs.
As Reuters reports, the African pharma market is expected to grow to $45 billion by 2020. Its growth rate--10.6% annually--matches up with Latin America's. As growth in the more established emerging markets slows down, Africa's could still be going strong.
"We're thinking hard about what happens when those emerging starts start to slow because they are not going to continue growing at the rate that they're growing forever--and a place where we're putting a lot of our attention is Africa," Novartis ($NVS) CEO Joe Jimenez told Reuters.
European drugmakers--including GlaxoSmithKline ($GSK), Sanofi ($SNY) and Novartis--are investing in Africa to capture their share of the larger market. Sanofi is spending €70 million ($94.15 million) on a new plant in Algeria, while Glaxo just spent $98 million to raise its stake in its Nigerian consumer products unit. GSK is also working to boost its market penetration in other countries, with the goal of increasing volumes fivefold within 5 years, partly by keeping prices very low.
- read the Reuters article