3 ways outsourcing can unlock Africa’s pharmaceutical industry

Pharmaceutical outsourcing is a key strategy that could drive Africa's pharmaceutical growth and performance.

Outsourcing is a long-standing business strategy aimed at enhancing performance and growth. Although it has gained substantial traction in the pharmaceutical industry over the past three decades, it has proved to be a powerful catalyst for multinational companies which have been off-shoring non-core and some core operations to drive growth.

Pharmaceutical companies are now partnering with Contracted Research Organizations (CROs), Contracted Manufacturing Organizations (CMOs), Contracted Development and Manufacturing organizations (CDMOs) predominantly based in India, China as well as Eastern Europe. These collaborations have contributed significantly to exponential growth in the sector.

The size of the outsourcing market underscores its importance.

According to Statista, as of 2023, the global CRO market is valued at approximately $77 billion while the CDMO market is estimated to be $140 billion.1

This raises a critical question; can Africa’s pharmaceutical industry leverage the same strategy to foster growth enhance performance?

I believe it can.

Despite recent growth in Africa’s pharmaceutical sector, the continent faces significant challenges in ensuring medical products are of good quality, safe and efficacious while remaining accessible and affordable to the masses.

A 2019 McKinsey report indicated that Africa has around 375 pharmaceutical manufacturers, primarily based in North Africa, serving nearly 1.5 billion people.

In sub-Saharan Africa manufacturers are concentrated in just nine of 46 nations, are mostly small-scale, and operate below global standards.2

The fragmented landscape and high costs of medicines have created opportunities for substandard and counterfeit medical products. According to the World Health Organization (WHO), approximately 1 in 10 medical products in low- and middle-income countries is either substandard or falsified.3

Africa’s heavy relies on imports for its pharmaceutical needs has been highlighted by supply chain disruptions such as the Suez Canal blockade and the COVID-19 pandemic. In addition, the lack of access to cutting-edge technology as hindered its ability to develop and manufacture advanced medical products

To mitigate these challenges Africa must adopt innovative strategies to unlock its pharmaceutical potential.

And outsourcing could be the key.

Why Outsource?

African pharmaceutical companies can capitalize on the significant benefits derived from outsourcing:

  • Cost-efficiencies
  • Operational efficiencies
  • Reduced time to market
  • Access to cutting edge technology
  • Access to unique expertise
  • Allows parent company to focus on its core competencies

READ ALSO: Win for Africa as new Sanofi-Biovac partnership set to ramp up local manufacturing (africanpharmaceuticalreview.com)

How pharmaceutical outsourcing can reshape Africa’s pharma landscape

Enhance drug discovery and development

Despite bearing a disproportionately high disease burden compared to the rest of the world, Africa still lags behind in drug discovery and development.

And its easy to understand why.

The amount of time and costs involved in developing a drug are major roadblocks, particularly in Africa.

Studies have shown that, depending on the therapeutic area, data, and modeling assumptions, the R&D cost for a new medicine can range from $314 million to $4.46 billion. Moreover, drug development can take between 10-15 years or even longer depending on various factors.

These high costs and prolonged development periods result in expensive drugs that are often unaffordable and inaccessible for many patients.

African pharmaceutical companies could benefit from outsourcing their R&D function to Contract Research Organizations (CROs). Services that can be outsourced include drug discovery services, preclinical testing, clinical trial management, quality assurance/quality control testing, biostatistical analysis, clinical packaging, regulatory compliance, genomics and combinatorial chemistry.

By outsourcing these functions, African pharmaceutical companies can avoid the heavy investments required for in-house R&D departments including infrastructure and payroll, thereby helping save on both capital and operational costs.

Additionally, outsourcing can reduce time-to-market and development costs due to immediate access to the best expertise and technology while also protecting companies from significant losses through risk-sharing outsourcing partnerships.

Access manufacturing that meets global standards

The growth of Africa’s pharmaceutical industry has been hindered by a lack of access to both local and international markets, making overall production unfeasible and unsustainable.

Very few local pharmaceutical manufacturing companies in Africa have been achieved international Good Manufacturing Practice (GMP) compliance with WHO standards.

This failure is largely driven by a lack of requisite personnel, technology, significant regulatory compliance costs and technical know-how.

This has translated to substandard medicines in the market and limited market expansion.

Contracted Development and Manufacturing Organizations (CDMOs) can address these issues.

With access to the latest technology and cost efficiencies, these organizations can be catalysts for growth.

African pharmaceutical and biotechnology companies can follow the example of its USA counterparts by engaging with CDMOs that offer method, formulation and drug development as well as commercial production, pre-formulation and registration batches.

Well-chosen CDMOs can help African pharma companies meet global standards opening new market frontiers and ensuring production of high-quality drugs.

Increased intra-continental trade

Various initiatives aim to enhance intra-continental trade such as the African Continental Free Trade Area (AfCFTA) whose objective is to create a single market for goods, services, facilitated by movement of persons in order to deepen the economic integration of the African continent.4

To fully leverage such agreements, pharmaceutical companies can contract third party logistics providers (3PLs) as well as Contracted Sales Organizations (CSOs) to ensure seamless product distribution.

This strategy allows companies to avoid the need for large warehouses across Africa or procuring vast fleets of vehicles. By contracting 3PL providers products can be distributed throughout the continent at an affordable cost.

Recently, companies like GSK and Bayer have exited the African market and adopted third-party models to continue distributing their products within the region. African pharma companies can adopt the same strategy to gain access to the various markets within the continent.

Partnering with CSOs can further ensure efficient market penetration for their products.


Outsourcing is not a panacea for all the challenges facing Africa’s pharmaceutical industry, but it could be a crucial element in transforming the sector.

By engaging with CROs, CDMOs, CMOs, CSOs as well as 3PLs, African pharmaceutical companies can leverage cost and operational efficiencies, access to new technology and expertise, achieve price flexibilities, and focus on core competencies.

These partnerships can enhance drug discovery and development capabilities, mitigate the issue of substandard medicines, expand its local and global market shares and support initiatives such as the AfCFTA in scaling pharmaceutical trade within the region.

Did you find this informative? Subscribe for more.


1.       Topic: Outsourcing in the pharmaceutical industry. Statista. Accessed July 4, 2024. https://www.statista.com/topics/11575/outsourcing-in-the-pharmaceutical-industry/

2.       Evaluating the sub-Saharan African pharmaceutical market | McKinsey. Accessed March 28, 2024. https://www.mckinsey.com/industries/public-sector/our-insights/should-sub-saharan-africa-make-its-own-drugs

3.       Substandard and falsified medical products. Accessed July 4, 2024. https://www.who.int/news-room/fact-sheets/detail/substandard-and-falsified-medical-products

4.       Agreement Establishing the African Continental Free Trade Area | African Union. Accessed July 4, 2024. https://au.int/en/treaties/agreement-establishing-african-continental-free-trade-area

Bevin Likuyani is a Pharmacist with a MPharm (Pharmacoepidemiology & Pharmacovigilance) and MBA (Strategic Management) from School of Business, University of Nairobi). He is a Certified Supply Chain Pharmacist. (American Association of Supply Chain Management) and Editor at African Pharmaceutical Review. Email: bevin@africanpharmaceuticalreview.com LinkedIn

Translate »