CONDOM AND LUBRICANT MANUFACTURERS SURVEY - JUNE 2018 - usaid
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
CONDOM AND LUBRICANT
MANUFACTURERS SURVEY
JUNE 2018CONDOM AND LUBRICANT
MANUFACTURERS SURVEY
JUNE 2018
This publication is made possible by the generous support of the American people through the U.S. President’s
Emergency Plan for AIDS Relief (PEPFAR) with the United States Agency for International Development (USAID) under the
Cooperative Agreement Strengthening High Impact Interventions for an AIDS-free Generation, number AID-OAA-A-14
00046. The information provided does not necessarily reflect the views of USAID, PEPFAR, or the U.S. Government.AIDSFree The Strengthening High Impact Interventions for an AIDS-free Generation (AIDSFree) Project is a five- year cooperative agreement funded by the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) with the United States Agency for International Development (USAID) under Cooperative Agreement AID-OAA-A-14-00046. AIDSFree is implemented by JSI Research & Training Institute, Inc. with partners Abt Associates Inc., Elizabeth Glaser Pediatric AIDS Foundation, EnCompass LLC, IMA World Health, the International HIV/AIDS Alliance, Jhpiego Corporation, and PATH. AIDSFree supports and advances implementation of the U.S. President’s Emergency Plan for AIDS Relief by providing capacity development and technical support to USAID missions, host-country governments, and HIV implementers at local, regional, and national levels. Recommended Citation Thior, Ibou. 2018. Condom and Lubricant Manufacturers Survey. Arlington, VA: Strengthening High Impact Interventions for an AIDS-free Generation (AIDSFree) Project. Acknowledgments Special appreciation to Ms. Bidia Deperthes from UNFPA, Frank Roijmans from i+solutions, Brian McKenna from the Reproductive Health Coalition, who contributed to the testing of the survey instrument, and to all participating companies. Ibou Thior, PATH, AIDSFree Prevention Advisor, conducted the survey. Contributing editors include Kuyosh Khadirov, USAID Senior Market Development Adviser; Ariel Berry, USAID Program Analyst; Chris Jones, Global Insights consultant; Elizabeth Connor, AIDSFree Managing Editor; JSI Research & Training Institute, Inc.; and Margot Harrington, AIDSFree Digital Publications Officer, John Snow, Inc. JSI Research & Training Institute, Inc. 1616 Fort Myer Drive, 16th Floor Arlington, VA 22209 USA Phone: 703-528-7474 Fax: 703-528-7480 Email: info@aids-free.org Web: aidsfree.usaid.gov
CONTENTS
Executive Summary ................................................................................................................................................ viii
Background ..................................................................................................................................................................1
Objectives .....................................................................................................................................................................2
Methodology ...............................................................................................................................................................3
Results ...........................................................................................................................................................................4
Company Profile and Products ......................................................................................................................................... 4
Biggest Barriers to Entering the African Market......................................................................................................... 4
Ways to Mitigate, Manage, or Share Risks of African Market Entry ................................................................... 9
Public-Private Partnership ................................................................................................................................................ 11
Study Limitations ..................................................................................................................................................... 12
Conclusions ............................................................................................................................................................... 13
Recommendations to Facilitate Market Entry ........................................................................................................... 13
Participating Companies ................................................................................................................................................... 13
Appendix 1. Supplementary Figures .................................................................................................................. 15
Appendix 2. Survey Instrument ........................................................................................................................... 17
Appendix 3. African Medicines Regulatory Harmonisation Programme Plan for Implementation of
Pharmaceutical Manufacturing Plan for Africa................................................................................................ 25
vivii
EXECUTIVE SUMMARY
Male and female condoms are the only devices that reduce the transmission of HIV and other sexually
transmitted infections and prevent unintended pregnancy. Yet, donor funding for condom procurement
has been reduced in recent years, and, to date, few condom manufacturers have entered the African
market.
In 2015, several condom manufacturers joined donor agencies to form a coalition whose main goal is to
provide 20 billion condoms to low- and middle-income countries by 2020. Between August and October
2017, AIDSFree conducted research on barriers that prevent condom manufacturers from entering the
African market. AIDSFree used a self-administered semi-structured questionnaire and in-depth interviews
to collect information.
Nineteen manufacturers—including the biggest male condom manufacturer in the world and all three
female condom-producing companies—from 12 countries participated in the research. They identified
high-risk of insufficient return on investment, inefficient distribution channels, low purchasing power of
targeted populations, lengthy and costly registration processes, free and subsidized condoms, and
difficulty to vet financially strong local partners as the biggest barriers to entering the African condom
market. Other barriers were macroeconomic and market-specific challenges related to government,
currency stability, and trade policies.
Research respondents and AIDSFree analysts had suggestions for how African governments might create
an enabling environment for market entry. These included harmonizing regulatory standards, providing
tax exemptions and incentives, reducing registration processing times and fees, facilitating adequate
financing of local condom distributors, and establishing a public-private partnership for a healthy
condom market. The authors recommended that donor agencies and governments limit free and
subsidized condoms to intended recipients (key and poor populations) exclusively and dedicate funds for
demand generation and promotion activities to expand the condom market and make it more attractive.
viiiix
BACKGROUND
In early 2015, several condom manufacturers joined the United States Agency for International
Development (USAID), the United Nations Population Fund (UNFPA), the World Bank, the Reproductive
Health Supplies Coalition, and the International Labour Organization (ILO) to form a coalition whose main
goal is to increase the number of condoms in low- and middle-income countries to 20 billion by 2020
(the 20 x 20 Initiative).
The second meeting of the coalition, held in October 2015 in Windhoek, Namibia, led to the commission
of a series of studies produced by USAID’s Strengthening High Impact Interventions for an AIDS-free
Generation (AIDSFree) Project 1 to develop a better understanding of condom markets in five selected
sub-Saharan African countries: Kenya, Nigeria, South Africa, Zambia, and Zimbabwe.
To complement the information collected by this series of studies and to better understand barriers to
entry into the African condom market, AIDSFree conducted a survey among commercial condom
manufacturers.
1
Assessment of the Retail Environment of Male Condoms in Kenya, Nigeria, South Africa, Zambia, and Zimbabwe. 2017 (available
at https://aidsfree.usaid.gov/sites/default/files/2017.10.25_af-retail-env-condoms-rep.pdf); Review of the History of Price Revisions
of Social-Marketed Brands of Male Condoms in Select Countries. (https://aidsfree.usaid.gov/sites/default/files/2017.11.7_af-soc
market-condoms_final.pdf). An additional study on willingness to pay for condoms is underway.
1OBJECTIVES
1. To assess barriers to entry into the African condom market from commercial condom manufacturers’
perspectives.
2. To assess macroeconomic, sector-, market-, and company-specific factors that commercial condom
manufacturers consider when entering a condom market.
3. To gather manufacturers’ recommendations on ways to mitigate, manage, or share risks associated
with entering the African condom market.
2METHODOLOGY
AIDSFree developed a self-administered, semi-structured questionnaire to collect data on company
profiles; International Organization for Standardization (ISO) quality certifications received; and types of
condoms produced, including size, flavor, texture, color, and lubricant used. The questionnaire also
gathered data on number of condoms sold; annual condom production capacity; commercial brands
owned; market presence; type of brand management; brand management challenges; source of market
intelligence used to inform market entry, macroeconomic, sector-specific, market-specific, and company-
related factors considered when entering a condom market, strengths and weaknesses considered when
entering a market; and largest anticipated barriers to entering the African market. The survey also
collected suggestions on ways to mitigate risks to market entry and market conditions necessary for
condom manufacturers to enter African markets, as well as major opportunities and challenges
associated with investing in African condom markets. Finally, the survey included the type of market
intelligence or data that would best inform condom manufacturers’ entry into a market or support their
brands already in the market.
The full survey instrument can be found in Appendix 1 of this document. Appendix 2 contains
supplementary figures displaying survey results not discussed in the body of the report. Appendix 3
contains the 2016–2020 African Medicines Regulatory Harmonisation Programme Plan for Implementation
of Pharmaceutical Manufacturing Plan for Africa.
AIDSFree also interviewed three manufacturers (two African-based condom manufacturers and one
company that manufactured only female condoms) who agreed to be contacted to collect additional
information according to answers they shared. To grade the importance of barriers to entry into the
African market, the project asked manufacturers to rank them using a scale of 1 to 5, with 1 denoting
"not a barrier" and 5 being "a very large barrier." The analysis used ranks 4 and 5 as important barriers.
3RESULTS
Company Profile and Products
AIDSFree conducted the survey from August 2017 to October 2017. Nineteen manufacturers out of 52,
from a composite list of manufacturers (derived from 20 x 20 meeting attendees, USAID/UNFPA condom
suppliers, and internet searches) who were invited to participate in the survey, completed the
questionnaire. Participating companies are from 12 countries, most of them located in Asia. All
companies have received ISO quality certifications, with ISO 4074 most frequently reported (15 out of 19
manufacturers, or 80%). The vast majority of companies surveyed (89%) produce male condoms; only
three produce both male and female condoms. Their main products are latex, lubricated, and flavored
male condoms. The most common sizes manufactured were 52±2mm (84%), 49±2 mm (79%) and
52±1mm (58%). The most frequently manufactured condom flavors are banana, mint, and vanilla (84%)
and cherry and chocolate (68% each). The most common textures are plain (94%), ribbed (78%), dotted
(78%), and both ribbed and dotted (67%). The most common colors are natural (97%), red (74%), yellow
(74%), and green and pink (69% each). The most commonly manufactured lubricants are silicone (47%),
water-based (42%), and hybrid (11%).
During the past 12 months, participating manufacturers produced between 1 million and 600 million
branded units; those under procurement contracts produced from 8 million to 580 million units. Annual
condom production capacity ranged from 70 million to 5 billion pieces.
Almost all companies (90%) have their own commercial brands marketed to consumers, and 84 percent
support their own brands. General markets, where their commercials brands are available, are mostly
located in Asia (94%), Africa (63%), and Europe (50%). Commercial brands are managed through non-
licensed sales to interested importers (63%) and/or licensed agreements with importers (56%). Only six
manufacturers have an in-country presence to manage their brands.
No specific country market was reported as the most profitable, but condom manufacturers seem to
prefer certain markets. Some respondents indicated domestic, regional, or international markets as the
most profitable, based on market share, reliable distribution channels, and better pricing (higher margin).
Biggest Barriers to Entering the African Market
Regulatory Requirements
About two-thirds of participants (68%) viewed regulatory requirements as a large barrier to entering the
African condom market. Forty-seven percent considered it a very large barrier even compared to other
barriers, such as free subsidized condoms and lack of purchasing power in targeted marketed segments.
(See Figure 1.) Trade policy and technical regulations, which include condom registration, testing, taxes
and tariffs, represent the greatest market entry barriers for condom manufacturers. They expressed
4concerns about lengthy and costly registration processes or requirements. One manufacturer mentioned
that it took her company five years to register a particular condom brand in one African country.
Lengthy regulatory processes are reportedly caused by corruption and a lack of expertise and
harmonized technical regulations and standards. Frequently, condom manufacturers have to determine
which department—the Ministry of Trade or Ministry of Health—will handle their application. Condoms
are registered as a medical device, and in the vast majority of African countries, most condom
procurements are either for donation or for the Ministry of Health. Regulatory oversight with regard to
donors’ procurements, or from pre-certified condom suppliers, is reportedly less restrictive than oversight
of commercial condoms. Once the manufacturer has identified the correct regulatory agency, the next
challenge is determining the right person to handle the application. In many cases, that officer does not
have sufficient training to handle condom registration, which leads to delays in processing registration
and potentially to corruption. Inadequate staffing and staff turnover was another reason cited for the
backlog of applications and lengthy delays. In addition, although condoms are part of the HIV prevention
package, decision-makers are not supportive of female condoms in some countries. Building the capacity
of regulatory officers, and changing decision-makers' attitudes toward female condoms could create an
enabling environment for condom market entry.
Figure 1. Regulatory Requirements*
100%
90%
80%
70%
60%
50%
40% 47%
30%
20%
21% 21%
10%
11% 0%
0%
Not a barrier Slight barrier Neutral A barrier A very large barrier
*Percentages may not equal 100 due to rounding.
Lack of Local Partners and Difficulty in Vetting Credibility of Potential Local Partners
Fifty-eight percent of manufacturers mentioned the lack of local partners as an important impediment to
market entry; about two-thirds said that ensuring the credibility of potential local partners is one of the
major challenges for their entry into the African condom market (see figures 2 and 3). In fact, a good
number of them (42%) reported both the lack and difficulty of vetting local partners as a very large
barrier. The availability of free and subsidized condoms compounds this challenge. Local financial
institutions are not convinced of the potential for a good return on investments in condom
5manufacturing in Africa because of the presence of low- or no-cost condoms. Reportedly, local
investment services providers are not very familiar with the condom manufacturing industry. Even Africa-
based condom manufacturers report major hurdles in securing financial support. Financially strong
potential partners would rather focus on business with bigger margins than condoms.
Figure 2. No Local Presence/Partner
100%
90%
80%
70%
60%
50%
40%
42%
30% 37%
20%
10% 5% 16%
0%
0%
Not a barrier Slight barrier Neutral A barrier A very large barrier
Figure 3. Difficulty of Vetting Credibility of Potential Local Partners
100%
90%
80%
70%
60%
50%
40%
42%
30%
20% 26% 26%
10% 5%
0%
0%
Not a barrier Slight barrier Neutral A barrier A very large barrier
6Lack of Purchasing Power of Targeted Segments
Sixty-nine percent of manufacturers reported that the lack of purchasing power within targeted market
segments was an important barrier to entering the African market (rated at a difficulty of 4 and 5). In fact,
half of the extreme poor live in sub-Saharan Africa with 389 million people living on less than US$1.90 a
day in 2013. 2
However, all the condom manufacturers interviewed recognized the opportunities the African market can
offer, including growing their market size and profits, and expanding awareness of their condoms and
lubricant brands.
Although sub-Saharan African countries are resource-limited, their economies are growing in several
regions, and an increasing segment of the population can afford priced condoms. Nigeria, South Africa,
and Angola, the continent’s largest economies, are reportedly experiencing a rebound from a sharp
slowdown in 2016. Available data also reveal that seven countries (Côte d’Ivoire, Ethiopia, Kenya, Mali,
Rwanda, Senegal, and Tanzania) continue to exhibit economic resilience, supported by domestic demand,
posting annual growth rates above 5.4 percent in 2015–2017. These countries house nearly 27 percent of
the region’s population and account for 13 percent of the region’s total gross domestic product. 3 In
addition to the growing economy in some sub-Saharan African countries, unwanted pregnancies and
sexually transmitted infections, including HIV, are highly prevalent, and there is a huge gap in condom
needs 4 despite the distribution of free and subsidized condoms. Participants also acknowledged that
Africa has an untapped market potential, a large population of young, educated customers, a flourishing
online payment system, and unrestricted manufacturing and sales of contraceptives.
Inefficient Distribution Channels
The majority of participants (74%) mentioned weak distribution channels as another important barrier to
market entry (Figure 4). Distribution channels are critical in marketing since they represent channels that
help consumers get their needed and wanted products. Inefficient distribution channels characterized by
unorganized retailers and wholesalers and poor road network represent a hurdle that can affect not only
a company’s market share but also its profit. Many sub-Saharan African countries are landlocked;
commercial products must be delivered by road. This can be very costly outside urban areas and in
conflict zones. In many African countries, commercial sector condoms are distributed through
wholesalers, retailers, pharmacies, supermarkets, convenience stores, hotels, bars, and street vendors.
Distribution channels can be either simple or, if multiple channels are needed to reach consumers,
complex and costly. Some local condom manufacturers have partnered with companies with wide
distribution networks (e.g., breweries) to reach their last-mile customers.
2
http://www.worldbank.org/en/topic/poverty/overview
3
World Bank Group. 2017. Africa's Pulse, No. 16, October 2017. World Bank, Washington, DC.
https://openknowledge.worldbank.org/handle/10986/28483
4
Yolande Coombes, Leigh Ann Evanson, Chris Jones, Yasmin Madan, Chastain Mann, Nora Miller, and Fred Rariewa. n.d. The
Condom Program Pathway. Available at http://marketbookshelf.com/wp-content/uploads/2017/09/MGH_Condom-Landscaping
Report_Final_091117.pdf
7Free or Subsidized Condoms Dominate the Market
Fifty-eight percent of manufacturers considered that free or subsidized condoms represent a significant
barrier to entering the African condom market. The availability of free and subsidized condoms creates
unfair direct competition and reduces potential commercial market size.
Free and subsidized condoms can lead to inefficiencies. Well-off consumers who could afford commercial
brands can overcrowd the market of subsidized and free condoms. Public sector or free condoms very
often are not adequately targeted to those in need (or key populations).
In many countries, free and subsidized condoms hold the vast majority of the market share, raising
concerns about sustainability of national condom programs. 5,6,7 Several condom landscaping and case
studies have suggested that better segmentation and coordination among the sectors, public, social
marketing, and commercial, would ensure that appropriately priced brands are reaching the right
consumers. A total market approach can help governments meet the health needs of poorest and key
populations while enabling the commercial sector to fulfill its role.
Lack of Market Intelligence
Forty-seven percent of participants mentioned a lack of market intelligence as a significant barrier to
entering the African condom market. Participants reported that they access condom market intelligence
using data from market research organizations (e.g., The Nielsen Corporation); condom distributors and
retailers; demographic health surveys; and country economic, trade, and financial reports.
Entering international markets can result in significant profits or losses; therefore, market intelligence is
critical in understanding a market, and determining current and future trends in the business
environment.
Reportedly, there are four classes of information companies should gather for each global market: 8
1. The factors shaping the political, legal and, business environment: Information used to assess general
conditions in a market and the risks associated with them.
2. The market infrastructure: This information can be used to evaluate the difficulties and costs that will
be associated with the physical distribution of a product or service.
3. The forces affecting the market: This information includes market size, consumer trends, and market
dynamics.
4. Product- or service-specific data: This information informs the suitability of the company’s product or
service to determine whether adaptation or positioning might be required.
When asked the type of market intelligence or data that would best inform market entry or support their
existing brands already in the market, the clear majority of manufacturers mentioned that this
information would include data on market size (volume and value), processes and timelines governing
policies, and regulatory requirements. Eighty-nine percent of participants also mentioned data on
5
https://aidsfree.usaid.gov/sites/default/files/mgh_condom_cs_zim.pdf
6
https://aidsfree.usaid.gov/sites/default/files/mgh_condom_cs_zambia.pdf
7
https://aidsfree.usaid.gov/sites/default/files/mgh_condom_cs_kenya.pdf
8
http://www.tradeready.ca/2014/fittskills-refresher/use-market-intelligence-make-better-trade-decisions/
8subsidies and consumer purchasing behavior. Additional important data to inform market entry included
analysis of market potential (83%), consumer segmentation analysis (78%), retail panels or surveys (67%),
and studies on willingness to pay (61%).
Insufficient Return on Investment
As shown in Figure 4, 74 percent of manufacturers reported that the risk of insufficient return on
investment is an important barrier to entering the African market. Forty-two percent identified it as a very
large barrier. The risk of insufficient return on investment is compounded by the big market share of free
and subsidized condoms in many African countries, target populations’ low purchasing power, weak
distribution systems, limited market intelligence, lengthy and costly registration processes, and potential
currency instability. For manufacturers of female condoms, the challenge is not free or subsidized
condoms but the small size of its customer base (the global female condom market is 6 million condoms
per year) which requires significant marketing costs.
Figure 4. Risk/Reward Outlay
100%
90%
80%
70%
60%
50%
40%
42%
30%
32%
20%
21%
10% 5%
0%
0%
Not a barrier Slight barrier Neutral A barrier A very large barrier
Ways to Mitigate, Manage, or Share Risks of African Market Entry
Condom manufacturers proposed several solutions to mitigate, manage, or share risks when entering the
African market. They included the provision of easier access to information on trade policies and
regulatory standards—a function that could be facilitated by a coalition group such as the 20 x 20
Initiative. Participants also suggested harmonizing regulatory requirements to make registration in
several countries much easier. It is worth mentioning that in 2009, a partnership including the New
Partnership for Africa’s Development, the Pan-African Parliament, the World Health Organization, the Bill
& Melinda Gates Foundation, the United Kingdom Department for International Development, and the
Clinton Health Access Initiative established the African Medicines Regulatory Harmonization (AMRH)
9Initiative. 9 Through the AMRH Initiative, the East African Community (Kenya, Uganda, Tanzania, and
Burundi) launched its Medicines Regulatory Harmonization Programme, which led to the approval of 12
products between 2011 and 2013. The Southern African Development Community (Angola, Botswana,
Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Seychelles, South
Africa, Swaziland, United Republic of Tanzania, Zambia, and Zimbabwe) created the Southern Africa
Regional Programmes on Access to Medicines and Diagnostics. Under this initiative, the Zanzibona
Collaborative Medicines Registration Process, a collaboration between national medicines regulatory
authorities (NMRAs) in Botswana, Namibia, Zambia, and Zimbabwe program was initiated, and an
estimated 105 products have been reviewed with subsequent registration of 28 products. The Southern
African Development Community guidelines for registration of medicines and common technical
document format are apparently aligned to the East African Community models. It is critical to find out if
these harmonization programs include, or could include, medical devices like condoms. Involvement and
support from local governments to facilitate import and export of goods, reduction of regulatory fees
and processing time, provision of import tax exemptions, and reduction or elimination of free and
subsidized condoms to allow fair competition were also
Box 1. Considerations for Market Entry
part of the list of solutions proposed by manufacturers to
mitigate risks associated with market entry. • Presence of other commercial condom
manufacturers
Some manufacturers suggested a public-private
• Their company‘s production capacity
partnership to create an enabling environment with • Their international and regional
attractive trade policies and regulatory standards, marketing experience
including product registration and tax exemptions that • Pricing
motivate commercial condom manufacturers and local • Quality of their product compared to
partners. Manufacturers of female condoms and existing products, packaging, and
lubricants also recommended more demand generation standards
and marketing support for their products from • Their flexibility in terms of production
nongovernmental organizations or associations (ability to produce small and large
promoting their use. quantities)
• Market size (including the possibility
Other Factors Considered for Market Entry of accepting a lower margin for bigger
volumes)
Even if all biggest barriers to entry were resolved or
• Brand credibility (track record for
eased, not all condom manufacturers would enter the quality, UNFPA pre-certification
African condom market. Participants mentioned that they procurements for big donors and
also considered macroeconomic factors such as a social marketing organizations)
country’s gross domestic product, government and • Product differentiation
currency stability, inflation rate and trade policies. Sector- • Financial resources and support
specific factors that could inform market entry include • Potential for job creation
pricing and brand positioning. Market-specific factors
that also inform market entry are government taxes and
9
New Partnership for Africa’s Development (NEPAD). 2016. African Medicines Regulatory Harmonisation Programme Plan for
Implementation of PMPA: Strategic Plan 2016–2020. Midrand, South Africa: NEPAD (see Appendix 3).
10subsidies, the retail environment, competition, and marketing cost. Company-related factors play an
important role for entering international trade. Participants considered their regional experience, financial
resources, product differentiation, and innovation before deciding to enter a new market. Box 1 contains
a more detailed list of reported considerations.
Manufacturers also take their own and other competitors' weaknesses for market entry. These
weaknesses could include uncompetitive pricing; inadequate distribution networks; insufficient brand
promotion; and limited financial resources, among others.
Public-Private Partnership
Forty-seven percent of condom manufacturers reported having participated in a public-private
partnership outside of procurement. Partnerships included providing donations to international and
national HIV organizations and supplies to governments through nongovernmental organizations. The
survey participants did not provide further details about the nature of their partnerships.
Public-private partnerships pool public and private resources and capitalize on the skills of the respective
sectors to improve the delivery of services. Both sectors can work together to support disease prevention
programs (e.g., HIV, sexually transmitted infections, and reproductive health services) if they acknowledge
that a partnership would be mutually beneficial. If one partner is not convinced of its benefits, the
partnership could fail.
11STUDY LIMITATIONS
The study had some limitations. Although AIDSFree made every effort to secure as many participants as
possible, the respondent pool remained small. AIDSFree also found numerous original equipment
manufacturers in the latex industry, but was unsuccessful in getting their participation despite numerous
attempts to contact them. Most of them did not manufacture condoms as their main products and were
not part of the list of pre-certified condom suppliers for UNFPA and USAID. However, participants are
representative of the condom manufacturing industry in that they are from 12 countries and include the
largest manufacturer in Asia (KAREX); major condom providers to USAID and UNFPA; two companies
from the African continent (RRT MEDCON and Gemi Rubber); and other large companies with
international brands that include female condoms and lubricants.
As expected, participants did not give detailed answers to questions potentially related to companies’
market entry strategies; however, they did provide a general overview of these matters. Although
AIDSFree had a limited number of participants available for in-depth interviews, the study team was able
to communicate with two Africa-based condom manufacturers to address concerns or challenges raised
by those participants who have not yet entered the African condom market.
12CONCLUSIONS
The condom manufacturer survey identified several critical barriers to entry into the African markets:
1. Lack of adequate product registration policy and regulations
2. Scarcity of financially strong local partners
3. Inefficient distribution channels
4. Availability of free and heavily subsidized condoms
5. Limited market condom data from African countries
6. Macroeconomic and market-specific challenges related to government and currency stability and
trade policies.
Recommendations to Facilitate Market Entry
1. Harmonization of regulatory standards for condom registration
2. Capacity building through training or technical assistance for condom-related regulatory processes,
including support to Ministries of Health for strong condom program stewardship
3. Creation of an enabling environment for market entry through easier access to policy and regulatory
information, exemptions and incentives, and reduced processing time and fees
4. Better allocation (to the right populations) of free and subsidized condoms by local government and
donor agencies
5. Facilitation for adequate financing of local distributors or condom manufacturers
6. Establishment of a public-private partnership for condom program to enable a healthy condom
market
7. Establishment of partnerships with local companies with wide distribution networks (e.g., the
beverage industry) to extend access to remote areas
8. Better collection and sharing of condom market analytics by local government and donor agencies
9. Sustained demand generation and promotion activities by local governments and/or donors (socio
behavioral change communication) to grow the condom market.
Participating Companies
1. Guangzhou Double One Latex Products Co., Ltd.
2. Suretex Ltd.
3. Guilin Zizhu Latex Co., Ltd.
4. RRT Medcon
5. NRS Ulinzi Latex FZE
6. Universal Prophylactic Pvt. Ltd.
7. Veru, Female Health Company
8. Medevice3s Joint Venture Co., Ltd.
139. Indus Medicare Ltd.
10. KAREX Industries Sdn Bhd (KAREX Berhad)
11. Unidus Corporation
12. Twin Catalyst Sdn Bhd
13. MHL Healthcare Ltd.
14. Reckitt Benckiser
15. Gemi Rubber
16. Thai Nippon Rubber industry
17. Gel Works PTY Ltd.
18. Dongkuk Techco Rubber
19. Vietnam Rubber Technology
14APPENDIX 1. SUPPLEMENTARY FIGURES
Figure A-1. Lack of Purchasing Power of Targeted Market Segments*
100%
90%
80%
70%
60%
50%
40%
30% 37%
32%
20%
21%
10%
11% 0%
0%
Not a barrier Slight barrier Neutral A barrier A very large barrier
Figure A-2. Inefficient Distribution Channels*
100%
90%
80%
70%
60%
50%
40%
30% 37% 37%
20%
5%
10%
11% 11%
0%
Not a barrier Slight barrier Neutral A barrier A very large barrier
*Percentages may not equal 100 due to rounding. 15Figure A-3. Free or Subsidized Condoms Dominate the Market
100%
90%
80%
70%
60%
50%
40%
30%
32%
20% 26%
21%
16% 5%
10%
0%
Not a barrier Slight barrier Neutral A barrier A very large barrier
Figure A-4. Lack of Market Intelligence
100%
90%
80%
70%
60%
50%
40%
30%
20% 26% 26%
21%
10% 16%
11%
0%
Not a barrier Slight barrier Neutral A barrier A very large barrier
16APPENDIX 2. SURVEY INSTRUMENT
1. Name: ___________________________________________________________________________________________________
2. Email: ____________________________________________________________________________________________________
3. Phone Number: __________________________________________________________________________________________
4. Participant's Title: ________________________________________________________________________________________
5. Could we contact you for a more in-depth telephone interview following this survey?
☐ Yes ☐ No
6. Company Name: ________________________________________________________________________________________ _
7. Company Address:________________________________________________________________________________________
8. Has your company received any ISO quality certifications? Please check all that apply.
☐ ISO 4074: Natural rubber latex male condoms
☐ ISO 23409: Male condoms made from synthetic materials
☐ ISO 25841: Female condoms
☐ Other
9. Which types of male condoms do you manufacture? Please check all that apply.
☐ Latex
☐ Non-latex
☐ Spermicidal
☐ Lambskin
☐ Lubricated
☐ Flavored
☐ Textured
☐ No male condom manufactured
10. Which types of female condoms do you manufacture? Please check all that apply.
17☐ Latex
☐ Non-latex
☐ Spermicidal
☐ Lambskin
☐ Lubricated
☐ No female condom manufactured
11. What sizes of condoms does your company manufacture? Please check all that apply.
☐ 49 ±2 mm
☐ 52 ± 1 mm
☐ 52 ± 2 mm
☐ Other:
12. What types of flavored condoms does your company manufacture? Please check all that apply.
☐ Apple
☐ Banana
☐ Cherry
☐ Chocolate
☐ Cola
☐ Lemon
☐ Marshmallow
☐ Mint
☐ Orange
18☐ Vanilla
☐ Other:
13. What types of textured condoms does your company manufacture? Check all that apply.
☐ Plain
☐ Ribbed
☐ Dotted
☐ Ribbed and dotted
☐ Other:
14. What types of colored condoms does your company manufacture? Check all that apply.
☐ Natural
☐ Black
☐ Blue
☐ Brown
☐ Green
☐ Orange
☐ Pink
☐ Purple
☐ Red
☐ Yellow
☐ Other:
15. What types of lubricants does your company manufacture? Check all that apply.
19☐ Water-based
☐ Silicone
☐ Hybrid
☐ Oil-based
☐ No lubricants manufactured
☐ Other:
16. How many branded condoms did you sell last year in the commercial market?
_______________________________________________________________________________________________________________
17. How many condoms have you sold over the past year under procurement contracts?
_______________________________________________________________________________________________________________
18. What is your annual condom production capacity?
_______________________________________________________________________________________________________________
19. Does your company have a commercial brand (that is, a condom brand marketed to end users)?
☐ Yes ☐ No
20. Does your company currently support commercial brands marketed to consumers? (Generic condoms
supporting government, donor, or social marketing procurement would not be categorized as
"brands.") If “no,” please continue to question 22.
☐ Yes ☐ No
21. Please list your commercial brands.
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
2022. In which general markets are your brands available? Check all that apply.
☐ Africa
☐ Asia
☐ Central America
☐ Europe
☐ South America
☐ United States and Canada
☐ Other: ____________________________________________________________________________________________________
23. Which country markets are most profitable, and why?
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
___________________________________________________________________________
24. How do you manage your brands in the markets you are present in? Please check all that apply.
☐ Licensed agreements with importers
☐ Non-licensed sales to interested importers
☐ In-country presence
☐ Other: ___________________________________________________________
25. What are some of the challenges you faced with regarding how your brand is managed?
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
2126. What type of market intelligence/data informs your entry and/or supports your brands in the condom
market?
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
27. What macroeconomic factors do you consider when entering a condom market (e.g., country GDP,
stability of currency, inflation, etc.)?
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
28. What sector-specific issues do you consider when entering a condom market (pricing, positioning,
competitive opening)?
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
29. What market-specific issues do you consider when entering a condom market (distribution systems,
local partners, etc.)?
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
30. What are the company-related factors that you consider when entering a market (e.g., financial
considerations, product differentiation, regional/international experience, etc.)?
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
___________________________________________________________________________________________________________
31. When entering a new market, which strengths/weaknesses (your own and your potential
competitors') do you consider?
Strengths
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
Weaknesses
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
32. What do you see as the biggest barriers to entering the African market? Please rank the following
from 1–5, with 1 being "not a barrier" and 5 being "a very large barrier."
22Lack of purchasing power of targeted market segments ☐1☐2☐3☐4☐5
Free or subsidized condoms dominate the market ☐1☐2☐3☐4☐5
Risk/reward outlay--insufficient return on investment to make brands work
☐1☐2☐3☐4☐5
Lack of market intelligence (market volume and value size, competition, etc.)
☐1☐2☐3☐4☐5
Regulatory requirements ☐ 1 ☐ 2 ☐ 3 ☐ 4 ☐ 5
Inefficient distribution channels ☐ 1 ☐ 2 ☐ 3 ☐ 4 ☐ 5
No local presence/partner ☐ 1 ☐ 2 ☐ 3 ☐ 4 ☐ 5
Difficulty to vet credibility of potential local partners ☐ 1 ☐ 2 ☐ 3 ☐ 4 ☐ 5
Other (please describe below) ☐ 1 ☐ 2 ☐ 3 ☐ 4 ☐ 5
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
33. How could risks to African market entry be mitigated, managed, or shared to support market entry?
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
34. What market conditions are necessary for condom manufacturers to enter African markets?
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
2335. Can you summarize the major opportunities and challenges associated with investing in African
condom markets?
Opportunities
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
Challenges
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
36. Outside of procurement, have you ever participated in a public-private partnership on condoms? If
"yes," please describe the partnership.
☐ Yes ☐ No
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
_______________________________________________________________________________________________________________
37. What type of market intelligence/data would best inform your entry into a market, or support existing
brands already in the market? Check all that apply.
☐ Consumer segmentation analysis
☐ Consumer purchase behaviors, preferences, etc.
☐ Willingness to pay studies
☐ Market size (volume, value)
☐ Role of subsidy in market (free, subsidized socially marketed condoms)
☐ Retail panels/surveys
☐ Market potential analysis
☐ Regulatory requirements process and timeline
☐ Other: ____________________________________________________________________________________________________
24APPENDIX 3. AFRICAN MEDICINES
REGULATORY HARMONISATION
PROGRAMME PLAN
FOR IMPLEMENTATION OF
PHARMACEUTICAL MANUFACTURING
PLAN FOR AFRICA
This is an excerpt; the full document is available here.
25ABBREVIATIONS AMRH African Medicines Regulatory Harmonization AMU Arab Maghreb Union AU African Union AUC African Union Commission BMGF The Bill and Melinda Gates Foundation CHAI Clinton Health Access Initiative CENSAD Community of Sahel-Saharan States COMESA Common Market for Eastern and Southern Africa DFID United Kingdom Department of International Development EAC East African Community ECCAS Economic Community of Central African States ECOWAS Economic Community of West African States EDCTP European and Developing Countries Clinical Trials Partnerships IGAD Inter-Governmental Organization for Development OCEAC Organization for the fight Against Endemic diseases in Central Africa MoU Memorandum of Understanding MRH Medicines Registration Harmonization NEPAD New Partnership for Africa’s Development NGO Non-Governmental Organization NMRA National Medicines Regulatory Authority NPCA NEPAD Planning and Coordinating Agency PDPs Product Development Partnerships PAP Pan African Parliament PMPA Pharmaceutical Manufacturing Plan for Africa RECs Regional Economic Communities SADC Southern African Development Community
SARPAM Southern Africa Regional Programme on Access to Medicines UNAIDS Joint United Nations Programme on HIV/AIDS UEMOA The West African Economic and Monetary Union WB The Wold Bank WHO World Health Organization
EXECUTIVE SUMMARY Since 2009, NEPAD Agency in collaboration with the African Medicines Regulatory (AMRH) Initiative Partners, has been coordinating the programme through the African Union (AU) regional economic communities (RECs) and Member States. Based on consensus reached in February 2009 among the AU RECs, Member States and partners, significant progress has been recorded in the development and subsequent implementation of the AMRH programme in the continent. We are now witnessing implementation of harmonized guidelines for registration of generic medicines, good manufacturing practice (GMP), quality management systems (QMS) and information management system (IMS) in the East African Community (EAC) and the Southern African Development Community (SADC). Replication of the East African Community Model in the Southern, Western, Central and North-Eastern African regions is key for cross-REC consistency and also serves as a foundation for establishment of the African Medicines Agency (AMA). The AMRH Implementation Tool Kit and Monitoring and Evaluation Framework will assist in standardizing and shaping implementation approaches and ensure consistencies across RECs and countries. The AU Model Law on Medical products Regulation will further complement and facilitate programme implementation and serve as a guide for countries to review their national laws and subsequent establishment of semi-autonomous national medicines regulatory agencies (NMRAs), to ensure effective regulation of medical products and technologies. All these efforts are aimed to ensure effective, efficient and transparent regulatory processes and services that will ultimately contribute to availability of quality, safe and effective medical products and technologies and improve the health outcomes of the African populations. NEPAD Agency will continue to exercise its mandate by improving and strengthening coordination of regional programmes, partners and stakeholders while facilitating policy and political advocacy through a robust monitoring, evaluation and knowledge management framework. The coordination of partners working in the medicines regulatory space is aimed to ensure streamlined efforts; reduce overlapping work programs; instil accountability; and sustain gains achieved thus far. This includes advocacy for alignment of the African Vaccines Regulatory Forum (AVAREF) with AMRH; domestication of the African Union (AU) Model Law for Medical products regulation; and utilization of the Regional Centers of Regulatory Excellence as a framework for standardized regulatory sciences training in Africa. The established governance structures will be transitioned into the African Medicines Agency based on the AU Executive Council Decision EX.CL/Dec.857(XXVI). The challenges faced during the first phase of implementation of the AMRH Programme; lessons learnt; continental and global policy frameworks, instruments and decisions will provide direction for the second phase of the programme. This includes Agenda 2063; Science, Technology, and Innovation Strategy for Africa (STISA) 2024; Africa Health Strategy (AHS) 2016-2030; and its corresponding Africa Research for Health Strategy; which set the socio-economic development vision for Africa. This will be done in alignment with Sustainable Development Goals (SDGs) and other global developmental frameworks. In undertaking its role, the Agency will continue to work with WHO as a lead technical agency and the World Bank, responsible for management of the Global Medicines Regulatory Harmonization Multi Donor Trust Fund (GMRH-MDTF).
1. INTRODUCTION Strengthening regulatory capacity, governance and accountability in the pharmaceutical sector is in every nation’s interest; it provides an opportunity to drive economic development and growth in the pharmaceutical sector. Even more importantly from a public health perspective, a functional regulatory environment is a prerequisite to increasing access to new medicines and to improving the quality of drugs in circulation, which ultimately should save lives and improve health outcomes. In realization of challenges posed by lack of good quality, safe and affordable medicines to the majority of African population, the African Union (AU) Assembly in January 2005 through decision 55 (Assembly/AU/Dec.55(IV)) mandated the African Union Commission (AUC) to develop a Pharmaceutical Manufacturing Plan for Africa (PMPA) within the framework of New Partnership for Africa’s Development (NEPAD). One of the critical components to advance the PMPA agenda is the provision of an enabling environment for development of the pharmaceutical industry hence the inception of the African Medicines Regulatory Harmonization Initiative. In addition, the AU approved the Roadmap for Shared Responsibility and Global Solidarity on HIV, TB and Malaria response in Africa which emphasizes the need for access to medicines and regulatory harmonization. In 2009, a consortium of partners including the NEPAD Agency, Pan African Parliament (PAP), the World Health Organization (WHO), Bill & Melinda Gates Foundation (BMGF), UK Department for International Development (DFID), and the Clinton Health Access Initiative (CHAI) came together to establish the African Medicines Regulatory Harmonization (AMRH) Initiative. In addition, the AMRH initiative received endorsement by the Pan African Parliament (PAP) committees on Health and S&T in 2007 & 2008; the African Ministerial Conference on Science and Technology decision in 2008, the NEPAD Agency and PAP joint consensus meeting with RECs and National Medicines Regulatory Authorities (NMRAs) in February, 2009. In 2011, NEPAD Agency developed a comprehensive five year strategic plan (2011-2015) that provided direction for the implementation of the AMRH Programme during this period. In addition, the funding from the Bill & Melinda Gates Foundation (BMGF) in 2011 enabled the World Bank to set up a Global Medicines Regulatory Harmonization (GMRH) multi-donor trust fund to implement AMRH and scale up activities elsewhere in the world. Using the NEPAD Agency model of intervention in the African continent, the AMRH Programme works with Regional Economic Communities (RECs) to improve public health by increasing access to good quality, safe and effective medicines through harmonizing medicines regulations, and expediting registration of essential medicines. The aim is to ensure that regulatory requirements and practice in Africa meet the internationally accepted standards by strengthening pharmaceutical sector governance and regulatory systems. The East African Community (EAC) successfully launched the Medicines Regulatory Harmonization (MRH) Programme in March 2012, in Arusha, Tanzania while the Economic Community of West African States/West African Economic and Monetary Union (ECOWAS/UEMOA) and the Southern Africa Development Community (SADC) launched their reginal MRH Projects in 2015. The Economic Community for Central African States (ECCAS) in collaboration with the Organization for Coordination of the Fight Against Endemic Diseases in Central Africa (OCEAC); and the Intergovernmental Authority on Development (IGAD) are at different levels of implementation.
You can also read
