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EF: Can you elaborate on the role Kiara Health had during the pandemic?
SN: We are a local pharmaceutical and healthcare services company operating in the pharmaceutical and MedTech space. We manufacture and market products, and during the pandemic, we focused on our key strengths. On the MedTech side, we have technology that is very relevant to Covid-19. Some were introduced to the market before the pandemic, for example, a device manufactured in San Antonio, Texas, proven for its utility in disinfecting hospitals and other spaces. It is a device that effectively kills bacteria, viruses, fungi and hard-to-kill anthrax spores and with Covid-19, there was a heightened interest in it in both the healthcare space and in the non-traditional healthcare spaces. We have supplied the device to healthcare, hotels and even to big mining companies as it has the capability to disinfect the offices. We have also signed up for other technologies, rapid antigen tests and devices that purify the air. On the pharma side we have many chronic medicines for a variety of conditions, cardiovascular, CNS, diabetes and pain medicines, which we continue to manufacture and supply the market ensuring patients do not run out of what they need. With my experience of working in Africa, we were brought on board to assist “the continental response”, dealing with organizations such as the African Union Commission, quantifying capabilities and capacities available on the continent but these are activities outside our traditional scope so primarily our role was in MedTech and keeping the supply chain going in the pharma side of things to meet the needs of the continent.
EF: What were the lessons learnt managing through a pandemic?
SN: The most important lesson Covid-19 taught us is the danger in the reliability on imported products. Some of us had been preaching for 10 or 15 years on the importance of developing local capacity and capabilities. I was involved at a personal level in developing the pharmaceutical manufacturing plan for Africa as well as the pharmaceutical strategies of countries such as Ethiopia, Ghana and Nigeria – all with emphasis on the importance of building local capacities. We have learnt the lesson that the often repeated mantra that we don’t have to worry about production because can rely totally on the supply from India is absolute nonsense because we saw with breakdown of global supply chains, restricted imports and exports, and even price gouging where products became unaffordable or unavailable. South Africa came very close to running out of Paracetamol so the first thing Covid taught us was the importance of health security and the need to build local capabilities in order to secure our future. The second thing Covid taught me personally on a broader and macro level is the significant innovation capability there is in South Africa and in the African continent. When Covid hit Africa there were less than six thousand ventilators and we couldn’t get access to more from anywhere in the world and a number of countries, South Africa, Nigeria and Kenya amongst others put out programs and challenged people to give innovative low cost solutions for ventilators, PCRs, antigen tests and PPE and if you look across the board no less than four countries were able to come up with a finished product of non-invasive ventilators within about two and a half months. I know for a fact in the South African ventilator which we have the rights of commercialization is as good as any you can buy anywhere in the world. Covid brought significant innovation capability to the continent, and from a company perspective it highlighted the need for agility, for flexibility and the need for diversified strategies. Companies had trouble accessing APIs or accessing them late so having diversified areas as we have pharma and MedTech makes it easier to weather the storm. At the beginning there was very limited information and for this reason agility, flexibility and the ability to make quick decisions was paramount for executives as we had to keep our people safe but also keep producing at the same level of quality. All through Covid those in positions of leadership had to make decisions quickly with limited information and stand by the decisions. Leaders also found quality in their employees, they found motivation and dedication. We had employees with Covid having to quarantine and even so they were all more than willing to do more than their share, coming in to work in the face of all the new protocols and safety measures knowing it could entail a certain risk. It is amazing to see what people will do when they work for companies they know care for and their personal safety. This gave us motivation to pull our business together and to be prudent but nobody could have foreseen the break down in supply chains and massive export restrictions. The lesson is to diversify the sources of supply; and even with the many challenges we faced, but at the end of the day we learnt the invaluable lesson of agility, flexibility and a willingness to very quickly change our tone if we were to survive and compete for the future. These are critical elements we need to embrace and take with us going forward.
EF: Can you elaborate on how you ensured continuity of supply?
SN: Being entirely dependent on imported APIs it is important to be sufficiently covered -no less than six months cover for critical APIs. It is not prudent to have one registered API supplier for raw materials nor is it prudent to have multiple suppliers coming from the same country (weeks on end nothing came from China and India had restrictions on exports). From a security perspective the key issues are i) have multiple sources for all critical ingredients ii) preferably from diverse geographical locations and iii) and as we work within a regulated industry, get the sources registered. We have learnt the most critical lesson of diversifying our sources of supply with local sources if possible –something not possible in South Africa. Tight contracts are also a good idea as is to de-risk of the portfolio which mitigates the inability of supply from one area to another. Options are limited when dependent on imported raw materials so having more inventory for key raw materials is key.
EF: Did you have a shift in your portfolio performance over the last period?
SN: We had a strategy to be a diversified company with MedTech and pharma. When Covid hit, we were in the process of the Novartis plant acquisition and the focus was naturally on pharma side of the business. At the time there was a clear shortage of PPE and testing equipment and a clear need for certain technology directly relating to all things Covid, such as the disinfection technology, and that did produce an interesting shift in our portfolio as we started getting non-healthcare clients. At one point our focus was to work with corporate South Africa outside of hospitals ensuring people are safe in their workplaces or schools and we signed up for a few technologies. It all veered towards a shift due to the pandemic and world crisis, we also felt we had the moral obligation and duty to bring in these technologies. Otherwise, we continued with our traditional healthcare business supplying both the private and public sectors while introducing promising MedTech devices.
EF: How can we increase awareness and interest on developing South Africa and pharma manufacturing?
SN: I don’t think awareness needs to be increased, some of us have been lobbying on this issue for more than ten years, from my days as chairman of the GBMSA and in my different consulting roles. I still believe that if we want security of supply we need to go down this route. If we look at the history of South Africa in pharma, going back 15 years they were 45-50 manufacturing facilities. Since then, we have gone from 70 thousand employed in the sector to less than 9 thousand, the economy took a hit and now pharma is the 5th largest contributor to the trade deficit and this situation is well known to most people. The challenge lies in the inherent conflict in government priorities - , the Minister of Trade & Industry or the Minister of Science and Innovation talk about developing local industry and industrialization, building the economy and creating jobs and the positive pressure on the educational system. The Health Minister is worried about diseases such as having 6 or 7 million people with HIV positive that must be treated and buying the cheapest product that will cover the biggest number of people. Neither can be blamed, but the challenge is double-sided and it needs to be addressed comprehensively. Other countries have been able to develop there pharma industry from scratch: India, Nigeria, Tunisia, Bangladesh and now Russia, all of them with direction from the highest office in the land. South Africa still does not have a clear strategy for the pharma sector and that has been a drawback. The idea that local companies cannot compete on price is not a fully tested argument, we discovered when we started making our own PPE locally (masks, suits and the same goes for ventilators) that we are manufacturing products of international quality which are cheaper and better than the products we had been importing for decades. The line that says local companies cannot compete with international ones has been based on a false or on an untested premise. Hopefully now post Covid things can change.
EF: Where does Kiara Healthcare come in to play in the South African map?
SN: We started out with a very simple vision of progress in African healthcare and to become a bridge between Western science and African need. For the future, we see ourselves as a serious and competitive player in the local market with a quality assured product at an affordable price, we see ourselves partnering with healthcare professionals to diagnose patients and get them into treatment and prevent disease through technology. Ultimately we see ourselves as a player that can play a small but meaningful role in advancing the agenda of localization and local innovation. We partnered with the people who developed ventilators, we have two partnerships with locally developed products and this is something we want to continue doing, we want to meet the need with quality and the demand with healthcare products in aid of the health of South Africans. In the future we may even have our own locally developed products.
EF: Did you introduce any new KPIs because of the pandemic?
SN: We operated as usual, looking at our manufacturing, our production matrix, financials, revenue, etc. We continue to follow the business fundamentals around the important parameters, pre- and post-Covid. From a MedTech perspective, we introduced new products and we kept performance indicators on the quality of, volumes, etc.
We created a new set of KPIs exclusively related to Covid-19, where we follow how many of our people get infected, we look at the shifts and implications etc.
EF: What is your personal definition of access?
SN: Access encompasses a number of key metrics, the most important being quality. I don’t consider it as ‘accessible’ if the product is substandard or falsified. The product must also be affordable, it must be acceptable and it must be available. I have 5 As for Access: Access must go hand in hand with Acceptability, Affordability, Availability, Appropriateness; but Quality in my opinion overrides all the aforementioned. Quality is of first importance because contrary to what many think there are a lot of drugs and clinics in the African continent but not all have quality and the same goes for pharmacies. In Angola and Swaziland, some pharmacies don’t have packaging nor instructions in local languages.
EF: When you look back to this period in your professional career, what would you like your tenure to be remembered for?
SN: Back in 2012 I co-authored “The Pharmaceutical Manufacturing Plan for Africa” and there was one section that warned about the possibility of pandemics and what it would mean for Africa (did not make the final Strategy) and in 2018 I worked with the United States developing a leadership paper where I mentioned that the threat to the security of supply in the future will lie in things like MERS, SARS and Ebola. Looking back I would like people to remember what we stood for and how we tried to make a difference. We are doing what we can –not pointing fingers but acting- I feel Kiara Health did its part, we moved out of our comfort zone and into new technologies and did things that are not in our history or business legacy. It was a huge challenge and we incurred extra costs in the plant to ensure the supply of medicines kept going and we were a voice of reason arguing toward the building of local capabilities and local capacities. I really hope when others look back at this time they will see we tried to assist, correct the course and choose a different path so that we are never caught again in this situation.
I would like to finish quoting an African proverb that says “Only a fool builds a shield in the middle of a battle” and that is what we are trying to do with Covid, we are trying to build a shield in battle which is like building a plane while flying it -shortages are coming it is only a matter of time. We need to start building local capacity in earnest NOW.