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Production:
Ethiopia does not have a highly developed drug-manufacturing sector. Domestic market is
highly dependant on imports as the local manufacturing units cover only a small portion of the
requirement for domestic needs. The Ethiopian pharmaceutical manufacturing is the oldest
and the only pharmaceutical manufacturing unit owned by the Government, the rest being in
the private sector.
It is estimated that the Ethiopian market is around US$ 200 million, which can be divided as
under:
Pharmaceuticals and Medical Supplies Import and Wholesale Enterprises (PHARMID) imports
and supplies medicines and medical equipment to government and private hospitals, clinics,
health centers and pharmacies in Ethiopia. It procures its supplies through tenders. With the
opening up of the Ethiopian economy this quickly changed with the introduction of about 12
private pharmaceutical manufacturing companies and many private companies which are
already actively engaged in importing pharmaceuticals to Ethiopia.
Most major international companies have presence in Ethiopian market. These include Glaxo, Pfizer,
Ranbaxy, Cadila, Novartis, etc.
Market:
The market is growing at about 8-10% per annum. Of this, 75-80% demand is met through
imports and the balance by local manufacturers. There are no local manufacturers to produce
TB and HIV medicines and these are totally imported. None of the local manufacturers
presently comply with the cGMP practices.
Manufacturing units:
Although 12 pharmaceutical manufacturing units were established in the country since 1994,
local producers do not take up more than 15 per cent of the annual consumption of
pharmaceutical products. They manufacture tablets, capsules and IV fluids. Private local
manufacturing companies have had a rough time in the last years and four companies have so
far faced foreclosure by banks due to their inability to remain in the market. Pharmacure, the
proposed largest pharmaceutical manufacturing plant in Africa with a capital outlay of US$ 100
million, is under implementation in collaboration with GlaxoSmithKline (GSK) in phases. In the
first phase, it has started manufacturing IV fluids and proposes to set up the facility for
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The Ethiopian Pharmaceutical and Medical Supplies Manufacturers Association noted that at
the moment the staggering and young industries in the sector are being hit hard by the
extremely high tariff rates imposed on their import of raw materials making it hard for them to
remain competitive in the market. According to the President of Ethiopian Pharmaceutical and
Medical Supplies Manufacturers Association, finished medical products that are imported to
the country are taxed only five per cent rate while more than thirty percent taxation is levied on
the imported raw materials. So far four companies are temporarily out of production. The
Association is pursusing for zero tariffs on raw materials.
East African Pharmaceuticals PLC is a joint venture company of nationals from Sudan and UK,
which manufactures human, and veterinary medicines and drugs.
A joint venture between India’s Cadila Pharmaceuticals, (the majority share holder)
and an Ethiopian firm, Almeta IMPEX, started production at a new, Birr 100 million (US$11.4
million) facility in Akaki town, Ethiopia on September 22, 2007. The plant has the capacity to
manufacture 390 million tablets, 165 million capsules and 1.44 million liters of liquid medicines
annually. Cadila Pharmaceuticals Ethiopia PLC (CPEL) mainly focuses on therapeutic areas
such as Cardiovascular, Anti Diabetes, gastroenterology (anti-acids, anti-ulcerative), Anti-
Infective, Anti-Depressants, Anti Fungal, Anti-TB, Anti Malarial, Anti Retroviral, Anti-Amoebic,
Haematinics, Anti Allergic, Pain killers, Multi vitamins, etc.
Ethiopian Imports:
Ethiopian imports include products falling under Chapter HS No.30; Antibiotics, vaccines, penicillin,
medicaments of other hormones, anaesthetics medicament, medicaments of alkaloids or derivatives,
vitamins, adhesive dressings for medical purposes, wadding, gauze, materials for surgical suture,
absorbable haemostatic, blood-grouping reagents, dental cements and other dental fillings and first aid
boxes and kits.
Details of Ethiopian imports during the last three years are given below:-
The figures show that there has been considerable growth in import of pharmaceutical
products and raw materials to Ethiopia in the last three years. Ethiopian import increased by
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13% per cent in 2006 and by 32% in 2007 over the figures for respective previous year.
Details of import from major countries are given below:
India’s export in this sector mainly consists of finished products and raw materials. Major
drugs and pharmaceutical items exported by India to Ethiopia include vaccines, antibiotics,
penicillin, medicaments of alkaloids or derivatives, medicaments of other hormones, vitamins,
anesthetics medicaments of mixed/unmixed products, Adhesive dressings, wadding, gauze,
first-aid kits, etc.
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36
Value in US$ million
18.3
16.4
14.7
2005 2006
2003 2004
Year
According to information obtained from the Directorate General of Commercial Intelligence and
Statistics, following are the figures of Indian exports of Drugs and pharmaceuticals to Ethiopia.
FOB VALUE IN LAKH RUPEES
ITEMS April April 2003- April April 2005- April 2006 April 2007
2002- March’04 2004- March ‘06 March ‘07 March’08
March ‘03 March ‘05
Drugs/Pharmaceuticals 4117.97 7447.60 6559.41 11,481.01 13,272.50 15,253.86
Source: Directorate General of Commercial Intelligence & Statistics, Kolkata
Besides India, the other major exporters of drugs and pharmaceuticals to Ethiopia are: USA,
France, Belgium, Korea Republic, Denmark, Switzerland, Germany, UK, Netherlands, China
and Cyprus.
Custom Duties:
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3004.9010 – Anaesthetics 5%
3004.9090 - Other medicaments of mixed/unmixed products 10%
3005.1000 - Adhesive dressings for medical purpose 10%
3005.9000 - Wadding, gauze, etc 10%
3006.1000 - Materials for surgical sutures, laminaria, etc. 10%
3006.2000 – Blood-grouping reagents 5%
3006.4000 - Dental cements and other dental fillings 10%
3006.5000 - First-aid boxes and kits 10%
Research and Development: Since the drugs manufacturing industry is not developed, there
are no R&D facilities available.
Industrial Association: The name, address with other details of the Industrial Association dealing with
Pharmaceuticals and Medical Supplies is given below:-
All manufacturers intending to export drugs and pharmaceutical products to Ethiopia are
required to register with the following government regulatory authority. The registration is
granted keeping in view the requirements of the Ethiopia’s Essential Drugs List.
The Drug Administration and Control Authority (DACA) is preparing to give the country a new
national medicine policy and a pharmaceutical sector master plan, both designed to regulate
and guide the supply and distribution of medicine. The policy will state that local
manufacturers should be given special attention, especially in terms of relieving their fiscal
burden. In addition, the master plan states that PHARMID, the country’s biggest supplier,
should focus only on providing medication for the public health system and should leave the
importing and selling of pharmaceuticals to private companies.
Drugs Registration:
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For registration with DACA, a company should have a WHO-GMP certification. It is required to
locally appoint an exclusive importer or distributor, for which it should enter into an 'Agency
Agreement' with a local importer/distributor. Each product which is desired to be marketed in
Ethiopia has to be separately registered. The fee for the first time registration is US$ 500 (five
hundred) for each product and for each strength. This means that the same medicine but with
different strengths will be treated differently for each of its strength and charged a separate
registration-fee. The registration is valid for three years and can be renewed every three
years. For renewal, the fee is US$ 250 per product per strength. At present, it takes about 4-6
months for the registration process. This is an improved state because earlier the registration
process used to take about one year. The government is further looking into the possibility of
further reducing the time taken for registration. Recently, the National Drug Advisory
Committee and DACA stated that 92 drugs for humans and animals have been included into
the national drug list. Some of the drugs incorporated into the list include anti-retroviral drugs,
as well as drugs for treatment of malaria and cardiac problems. The committee gives priority
to enlist drugs that are used for ART, TB, hypertension, diabetics, cancer and cardiac
diseases.
Indian companies active in Ethiopia: Some of the leading Indian companies like Cadila,
Zydus Cadila, Cipla, Ranbaxy, Ipca Laboratories, Lupin Labs., Torrent Pharma, Alembic,
Sarabhai Chemicals etc. are already actively engaged in exporting pharmaceuticals to
Ethiopia.
The companies from India who export their products to Ethiopia fall into two categories; (i)
those which generally bid for tenders, and (ii) those which are in the private market but
sometimes bid for tenders as well. The Indian companies in the first category are: Cadila,
Pharma, Ipca, Ranbaxy, Lupin Labs., Cipla, Ajanta Pharma, Macleods, Flamingo
Pharmaceuticals. These companies mostly bid for tenders relating to HIV drugs and anti-TB
drugs. The companies in the second category which supply for the private market are: Cadila,
Ipca, Intas, Torrent Pharmaceuticals, Sarabhai Chemicals, Unique Pharma, Flamingo
Pharmaceuticals and Lupin Labs.
¾ During the last three years, there has been considerable growth in import of
pharmaceutical products and raw materials to Ethiopia. Ethiopia imports worth
US$214.5 million of Pharmaceuticals and drugs. About 17.2% of the total import into
Ethiopia is made from India.
¾ All the Indian drugs that are available in the Ethiopian market have fulfilled the strict
quality parameters set by the WHO and have undergone the tough registration and
testing procedure of DACA. Only registered companies and products with DACA are
eligible for exporting drugs to Ethiopia. More than 50 Indian pharmaceutical and drug
manufacturing companies are currently registered with DACA.
¾ DACA is considering revising its regulation policy to check the inflow of spurious
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medicines to Ethiopia. In this regard the DACA authorities visit India and other countries to
see the pharmaceutical industries and inspect the quality of their products twice in a
year. Indian pharmaceutical companies have been fulfilling the qualitative and
competitive parameters set by the Ethiopian Drug Administration and Control Authority
and contributing to the development of Ethiopian health sector.
¾ In the minds of the common men, products of multi-nationals are perceived to be better
and preferred over a drug with the same formulation but manufactured by another
company. Some pharmacies also tend to keep alive this perception for their own
motives. This gives some advantage to the multi-national companies from USA, Europe
etc. However, the professionals like doctors etc. do not have this bias, which is a good
sign for Indian companies.
¾ DACA has prohibited 62 of the 101 foreign drug manufacturing companies from
exporting drugs to Ethiopia for failure to meet the Administration’s quality standards.
¾ There is no doubt that there is tremendous potential for growth in the drugs and
pharmaceutical sector in Ethiopia. There are major opportunities offering attractive
potential benefits to prospective investors in manufacturing of pharmaceuticals,
medicinal, chemical and botanical products in the form of tablets, capsules, syrups and
injectables. However, it will be very important for any Indian company entering into the
Ethiopian market to maintain top quality and standards to gain and sustain confidence.
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