Pharmaceutical Sector in Uganda: An Overview of Rene Industries by Rishi Vadodaria

Interview with Rishi Vadodaria, Managing Director of Rene Industries Limited

What is your assessment of the sector in Uganda and Africa? Is the environment competitive?

Uganda has evolved over the last 20 years in the manufacturing of pharmaceutical products. In the past, we had 2 to 3 manufacturers. Currently, we have 7 to 8 manufacturers doing various dosage forms. This change is due to government interventions which have boosted investments in the pharmaceutical sector. The market in Uganda is estimated at 270 million dollars. Out of that, 80% is imported and 20% is the local manufacturing market share. Due to the recent “Buy Uganda, Build Uganda” or “BUBU” initiative instituted by the government, 37 products were listed whereby the local manufacturers have capacity to manufacture. They levied the 12% verification fee by the National Drug Authority. The government procuring bodies supported the local industries by first giving us an opportunity to supply to government hospitals and health centers.

What is the situation regarding imports from China and India?

We are members of the Uganda Pharmaceutical Manufacturers Association. At the regional level, we are also members of the FEAPM, the Federation of East African Pharmaceutical Manufacturers.

China and India are both economies of scale and therefore the governments give a lot of subsidies to their manufacturers. Uganda and Africa in general is a dumping ground of medicines manufactured in China and India. There is a need for serious interventions by the respective governments to ensure that we have a fully viable pharmaceutical manufacturing sector. Uganda needs to be self-sufficient.

What is the situation in other neighboring countries? Are the governments doing the same thing there?

At the moment, we are waiting on the EAC integration. Through the EAC integration, 8 molecules have been identified for CET which is the Common External Tarif. They are proposing to put a 25% duty on those 8 molecules being imported from outside the EAC region. This will give a big boost to the local manufacturers.

When will this happen?

It is currently at the verification stage so we hope it will happen within a year.

What are the constraints?

They want to first start with 8 molecules and see if we have enough capacity to supply the demand. Then they will gradually add more and more products.

Do the local producers and manufacturers have the capacity?

They do. Kenya has more than 30 factories, Uganda has 8, and Tanzania has 5. There is a lot of capacity.

Where does the name Rene come from?

Rene was a French scientist who invented the stethoscope. That is where the revolution of medical research really started.

Among this very competitive environment, how does Rene Industries stand out?

Uganda is landlocked which poses many challenges. We must import everything through the Port of Mombasa then there is inland transportation, clearing, etc. We find ourselves in a very difficult situation compared to the Kenyan manufacturers. We have a very motivated marketing team and we are sensitizing the local Ugandan market to have faith in the quality and the affordability of our medicines. We have a sales and marketing force and we also have a very good product mix of generic and branded products. The branded products are sold ethically through prescriptions and doctors.

Do you choose them or do they choose you? What is the process?

It is the health pattern which is driving us to select our products. Previously, we were producing more drugs for infectious diseases like common antibiotics, antibacterial drugs, antiprotozoals, antifungals, painkillers, and cough and cold medicines. But now, as the population is growing in most urban areas and due to lifestyle changes, there is a big demand coming up for antidiabetic drugs, antihypertensives, cardiovascular drugs, etc.

How do you choose your raw material suppliers?

We ensure that the supplies meet the right specifications in terms of quality.

With the change in the population and the standards, is this something that is easy to access or an easy process to select these brands? Is the power coming from the manufacturers or from you?

It is very price driven. Africa is behind compared to developed and developing countries. The trends in those developed and developing countries are now coming to Africa. Lifestyle diseases are becoming very common among the population now. We can choose the brands we want because most of these drugs are off patent. When we want to choose a drug for blood pressure, for example, there are many available such as amlodipine and nifedipine. We have the expertise to manufacture these drugs.

Are you looking for technological partnerships internationally?

We are open to such partnerships if they share the same vision that we have. We are ready to collaborate with foreign companies who can bring in new technologies in manufacturing, new dosages, new formulations. Sometimes there is tech transfer of drugs which are under patent which can be manufactured in Africa.

What are the challenges in this area?

At the moment, many multinational companies do not want to invest in this part of the world. They see the African market as very small. The mindpower of the people is seen as minimal.

Where do you see the potential here?

There is a growth opportunity in new dosage forms. There are hardly any injectable plants in this part of the world because it is still not viable. Therefore, we still depend on imported injectables. It may take a while for the investors to come at this point.

What is your international reach?

We are exporting to Rwanda, Burundi, South Sudan, and DR Congo. We have opened 2 depots in Rwanda and Burundi with our own offices there.

What is your strategy for these external markets?

When the EAC integration happens, this will be a very large block. We want to have our footprint already in those markets. We find ourselves to be strong in this region because those countries are also landlocked. We can easily compete with Kenya for those markets.

What are some of your success stories that you are proud of?

We received the Investor of the Year Award in 1999 from the Uganda Investment Authority. We started as an importation and distribution company in 1998. But in 1996, we saw a gap where at that point in time there were a lot of shortages of essential affordable medicines and there was a lot of dumping from economies of scale including Kenya, India, and China. At that point, we saw the need to set up a plant here. It was a backward integration for us. We used to import those medicines so we already had that market knowledge.

How do you lobby to the government?

We are members of the Uganda Pharmaceutical Manufacturers Association. At the regional level, we are also members of the FEAPM, the Federation of East African Pharmaceutical Manufacturers.

What are your current projects?

We make amoxycillin capsules which is a beta-lactam product and a lot of resistance is being developed. We are now moving into second generation antibiotics like cephalosporins. We are adding more lines to our manufacturing to increase our capacity. We are getting more into lifestyle disease products.

What is your role in CSR?

We do a lot of drug donations to various organizations such as clinics and Rotary International. We also participate in sports activities and we have a football team. Every year we train graduates of pharmacy, chemistry, and engineering at our plant to give them in-depth, practical knowledge on the manufacturing of pharmaceutical products.

What is your vision for the company in the future?

Our vision now is to manufacture quality, affordable drugs. That has been our vision from the first inception of this company and we will continue. We are increasing our product portfolio and we want to be a market leader. We are the largest generic manufacturer in Uganda and we want to be an active player in the region.

Do you have a final message?

We have four pillars of excellence. One is trust. We have a lot of trust amongst our customers and our medical fraternity members of doctors and pharmacists. We ensure that quality is the heart and success of our industry. We have a responsibility to our community.

 

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