Despite initiatives to strengthen manufacturing, further efforts needed to safeguard product availability

• Companies report limited strategies to improve the availability of their products.

• Among the strategies employed, leveraging local and regional manufacturing presence in low- and middle-income countries (LMICs) shows potential to ensure availability.

In LMICs, the supply of essential medicines encounters various challenges. There is a growing understanding of the need to strengthen local availability, which is increasingly urgent due to geopolitical uncertainties and challenges in global health. Upstream, dependence on few suppliers of critical components can lead to supply interruptions. Downstream, inadequate and expensive local distribution channels make it difficult for people to access essential medicines, and disproportionately impact countries heavily reliant on imports, such as those in sub-Saharan Africa. Addressing these obstacles requires a multistakeholder approach, with companies playing a crucial role. Establishing and expanding manufacturing sites in LMICs where gaps exist, and strengthening third-party local manufacturing capabilities are two ways in which companies can help safeguard product availability.

Embracing local manufacturing for improved product availability

One effective strategy for promoting product availability is establishing local manufacturing presence. When companies’ manufacturing sites are located within or near LMICs, product availability can be more easily assured. Hikma, for example, has leveraged its active pharmaceutical ingredient production for oncology products to supply these in the Middle East and North Africa, including Algeria and Egypt. This approach has helped address demand surges, ensuring a steady supply. Moreover, companies such as Sun Pharma and Cipla have well-established presence in African markets, covering countries such as Kenya, Nigeria and South Africa. Cipla is planning on leveraging its manufacturing presence in South Africa to manufacture an HIV prevention drug as part of a licensing agreement, providing the potential for increased availability. While Cipla has committed to strengthening its manufacturing presence in African countries, it recently decided to divest its stake in Quality Chemical Industries Limited (QCIL) in Uganda, which supplies medicines such as antiretrovirals in the region. This latest development raises uncertainty as to what extent the company will retain manufacturing capabilities for such products in the continent.

Investments in packaging and distribution facilities, along with the strategic use of regional manufacturing and distribution hubs, can help ensure local availability of medicines. Viatris, for instance, has invested in packaging and distribution facilities in sub-Saharan Africa, making medicines targeting diseases like HIV and malaria more available. Viatris has also established hubs in regions like Latin America to supply multiple LMICs. Regional hubs not only have the potential to facilitate access to products for neighbouring countries but offer advantages such as optimised distribution channels.

Additionally, some companies, including Cipla, Hikma and Sun Pharma, report that they implement local sourcing strategies, whereby they source components from local suppliers, including packaging materials. Such strategies have the potential of enhancing control over product availability at the end stage of production while introducing resilience to the supply chain.

Overall, some companies’ efforts show a general, but limited, move towards investing in strengthening their own manufacturing capacity, particularly in Africa. Examples of companies engaging in initiatives with local partners to build manufacturing capacity or transfer technical skills remain scarce, with only two companies reporting such activities.

What needs to happen next?

Companies can contribute to improving the local availability of their products through several strategies. They can extend their manufacturing presence within LMICs, decreasing reliance on imported finished goods. This includes expanding current manufacturing facilities, constructing new ones, and/or establishing regional distribution hubs. Companies can also enhance the capabilities of local third-party manufacturers through technology transfers, for instance as part of contract manufacturing or licensing agreements. Investments in local manufacturing can be integrated into company-wide approaches to increase access in LMICs, alongside activities in areas such as expanding registration and pricing strategies.

In tandem with companies’ actions, local authorities can also help incetivise local manufacturing and increase the availability of locally manufactured medicines. This involves prioritising procurement from locally based companies, collaborating with regional pharmaceutical associations to stimulate localised production, and implementing policies that encourage technology transfers.

Emphasis on multistakeholder strategies can lead to more resilient supply chains, ensuring people in LMICs have uninterrupted availability of essential medicines.