Faced with various challenges such as volatile economies, fluctuating markets conditions, new products and changing demographics, the life sciences and healthcare industry is in the midst of fast and far-reaching changes.
The industry is also currently experiencing a demand growth, shifting from the mature markets of Europe and North America to more dynamic emerging markets, such as sub-Saharan Africa.
This is according Darryl Zietsman, regional customer manager: Life Sciences & Healthcare at DHL Sub-Saharan Africa (SSA), who says that South Africa has seen tremendous growth in the life sciences and healthcare sector in the country over the past years, as well as investment into the development of healthcare, especially in the logistic sector, as a result of this shift.
“Companies are increasingly turning to Africa due to the opportunities that the continent offers as it is one of the few locations that can still obtain double digit economic growth, and as a result South Africa is playing a key role as the hub for the Southern African Development Community (SADC) countries.”
Referencing DHL’s recent report on key logistics trends in the life sciences and healthcare sector for 2020 and beyond, entitled Key Logistics Trends in Life Sciences 2020+, Zietsman says that this growth can be attributed to sub-Saharan Africa’s increased life expectancy, rate of urbanisation and rise of the middle class.
“While sub-Saharan Africa comprises of 12% of the global population, the region comprises of 24% of the global healthcare burden.”
Zietsman says that another future opportunity is the shift to ecommerce growth in the pharmaceutical industry.
“The healthcare sector will ultimately follow the technology sector as where there is communication, there is ability. Therefore, as technology capabilities roll out in the country, so will healthcare capabilities.
“With technology continuingly evolving, consumers will likely soon be able to self-medicate and order over the counter drugs via their cell phones or the Internet. These sorts of developments have the potential to drastically change both the healthcare, and logistics, sector.”
However with the current shift in the sector, Zietsman explains that there are key challenges that need to be met based on the current developments.
“Increasing differentiation of supply chains and the need for companies to keep their supply chain flexible to adapt to requirements of innovative products is a key challenge.
“As innovation in the pharmaceutical industry shifts towards specialties and biotech products, so does the need for temperature controlled, and monitored, cold chain transport and storage, historically only required for shipments of vaccines and blood fractions.”
He says that due to the combination of increasing regulatory demands, the focus on emerging markets, and new product requirements, notably around temperature management, and cost pressures, the life sciences and healthcare sector is accelerating its emphasis on driving supply chain transformation and differentiation.
Hennie Heymans, MD of DHL Express South Africa, adds that lately there has been a trend of select countries in East and West Africa emerging as hubs too, threatening South Africa’s dominant position.
“The life sciences logistics model in Africa has changed gradually over the last past few years. Due to the high labour and transport costs in South Africa, customers and suppliers are now choosing to do direct shipments into Africa, as the capabilities grow within these regions.”
He explains that cost containment is another challenge. “As costs charged for medicines affect the end consumer, being able to provide ethical drug movement at reduced costs is a constraint.
“The roll out of the National Health Insurance (NHI) will also significantly impact on costs as government will dictate what logistics costs can be charged. This will force companies to relook at supply chain costs.”
Zietsman adds that security is another concern and not only affects logistics costs in South Africa, but also the way the country does business.
“Armed guards are needed to protect shipments of schedule five and six medicines along the road to ensure the integrity and protection of these medicines, as there is a risk these will be leaked onto the black market.
This poses a unique challenge as much effort and planning is required for these shipments.
“Despite these hurdles, we are confident that the life sciences and healthcare sector will continue to flourish in upcoming years due to the on-going investment and development on the African continent,” Zietsman says.