Read the Conversation

EF: How is DP World’s business strategically facilitating market access to healthcare in the region? Could you provide insights into your current priorities in this regard? 

DP: Our main priorities currently revolve around two key areas. First, we aim to expand our geographic presence in Africa, either through direct operations or strategic partnerships. We want to establish a strong network across countries to become an integrated end-to-end supply chain solutions provider and play a leading role in the global healthcare supply chain, helping to make access to affordable, quality healthcare a reality. 

Secondly, we are focused on developing a compelling and efficient service offering. This includes promoting our clients' products through various means, such as demand generation and fulfillment. We aim to deliver high-quality services that meet pharmaceutical standards and compliance requirements. Our simplified solutions reduce risk, complexity, and management responsibilities. 

These priorities stem from the observation that while South Africa is a significant healthcare market in sub-Saharan Africa, there is limited direct presence from major principals outside of South Africa. We see an increasing interest in partnering with organisations like ours that have a better understanding of the local economy and healthcare system. Our goal is to meet the demand for medicines and support the de-risking efforts of our partners. In summary, our objectives are to expand our geographic footprint and offer comprehensive services to meet the needs of our clients and ensure patients have access to essential medication. We leverage our extensive network and healthcare supply chain channel expertise to offer confidence and reach. 

EF: Could you provide insights into the operational differences and growth trends among various African countries such as Kenya, Nigeria, Namibia, and South Africa? 

DP: The African continent faces a significant disease burden, with a notable rise in non-infectious diseases in line with increasing urbanisation and growing incomes. However, healthcare funding, primarily outside of diseases like TB, HIV, and malaria, is predominantly out-of-pocket, posing affordability challenges, particularly for chronic diseases. 

Population growth itself presents ample opportunities, given Africa’s large and growing population, which is expected to reach 1.4 billion in due course. However, funding levels remain relatively low, creating challenges when assessing these markets from an innovation index perspective. New and research-driven products from major pharmaceutical companies often face limited market access and impact due to affordability constraints. Consequently, many of these companies predominantly sell their older, more affordable products, which are still relevant but may not encompass the latest innovations. 

South Africa deviates slightly from this pattern, as its well-developed private market allows for greater access to innovative products. However, expanding market access beyond South Africa poses a challenge. Our objective is to navigate this landscape by supporting a high-volume mature business through effective distribution while seeking avenues to enhance the availability of innovative products. Our unique market knowledge and proven tools help manage the ever-increasing complexity, risk, and speed of modern-day health distribution. 

Patient-centric supply chain models are necessary to support innovative medicines on a lower volume basis. It is concerning that people have to travel abroad for healthcare due to limited availability of services and the latest medicines in many parts of Africa. This situation should change over time, although challenges exist, such as trade harmonization and slow regulatory progress. Fragmentation makes it difficult for pharmaceutical companies to invest in registering newer medicines.  

Our challenge is to find an efficient distribution model to bring medicines to the market, communicate with prescribers and healthcare influencers, and address the demand for both newer and older trusted brands. Unlike the US or Europe, Africa lacks mechanisms to ensure rapid genericization when medicines go off-patent. Consumer preferences heavily influence purchasing decisions due to out-of-pocket funding and limited digitization. 

Our aim is to fulfill demand and support sales of significant brands through retail pharmacies and other channels. Our distribution businesses play a crucial role in fulfilling demand. The primary difference lies in the funding model, particularly in South Africa with its well-developed private market funded through medical insurance schemes. This enables the sale of innovative medicines, albeit not on the same scale as government-funded markets or the US. In the rest of sub-Saharan Africa, companies often establish their presence in South Africa and then face challenges when expanding to other regions. Returns on investment can be relatively low, making it a challenging environment. As a key partner in the healthcare sector, our challenge is to help create a more efficient model for both innovative and established medicines. This involves addressing generic competition, ensuring availability at pharmacy levels, and maximizing the benefit for patients. Our role in the healthcare supply chain is integral and helps make access to affordable and quality healthcare a reality.   

EF: How does your organization manage to develop customized solutions for different customers to ensure comprehensive coverage and meet their specific needs throughout the entire healthcare process? 

DP: When acquiring businesses, our focus has been on distribution businesses that hold a leading position in their respective markets. This ensures extensive market reach, enabling us to establish channels to retail pharmacies, hospitals, and wholesalers. Our goal is to bring products as close to patients as possible across the market. We build complex route-to-market solutions that connect communities to healthcare provisions and safeguard healthcare products on their journey from factory to patient. However, the challenge lies in reaching patients in rural areas, as many people travel long distances to access even standard medicines. We either acquire distributors with the best reach in specific markets or form partnerships to achieve broad coverage.  

Building appropriate services around our distribution network is crucial. We offer a flexible range of services, from pure distribution to promoting medicines and increasing knowledge among healthcare professionals such as doctors, nurses, and pharmacists. Through our diversified portfolio, we can tailor our strategies to target specific customer segments, maximizing efficiency and delivering value for our principals. While maintaining clear boundaries between portfolios to prevent competition, we continuously strive to enhance the effectiveness and efficiency of our salesforce, ensuring both coverage and volume against target customers. Our aim is to generate tangible benefits for our clients over time. 

EF: What advice would you give to investors who are entering the South African healthcare market and looking to invest?  

DP: Investing in healthcare in South Africa presents an interesting opportunity as the funding model is likely to change. The current system does not effectively serve most of the population. Partnerships, whether public or private, are needed to utilise local expertise and address healthcare needs.  

While access to innovative medicines is important, ensuring the availability of affordable, standard medications close to patients' homes is crucial. Primary care should be prioritized to alleviate the burden on hospitals. Any help in overcoming these challenges will have a significant impact on healthcare in South Africa.  

EF: Is there any final message or key point that you would like to highlight?  

DP: I think I would say that we must maintain our enthusiasm and remain resilient in the face of challenges. The opportunity to make a significant difference in healthcare is immense. We need to work together constructively to improve outcomes for patients by utilising existing resources more efficiently. 

The costs and complexity associated with moving healthcare supplies and pharmaceutical products are rising, and businesses need logistics partners who can mitigate the impacts of this on their operations and, ultimately, patients. As DP World, we are helping to build more resilient health supplies for all by leveraging our relationships, network, experience, and skills to connect the global healthcare supply chain and ensure equitable access to affordable, quality health and pharmaceutical products. 

July 2023
South Africa