Case study draws attention to innovator brand preferences in Kenya

Some of the stronger performing brands in Kenya’s pharmaceutical market have been highlighted in a recent analysis undertaken by the health care unit at Frost & Sullivan Africa.

Within the anti-infective therapeutic segment analyzed, products licensed by UK pharma giant GlaxoSmithKline (LSE: GSK) were particularly strong across various active ingredient classes.

The Kenyan pharmaceutical market was valued at around $423.2 million in 2012 at ex-manufacturer prices and today is heavily dependent on the private patient clientele. Affordability remains a primary restraint in the domestic market, along with low reimbursement levels. Increasingly, urban consumers constitute the primary market segment for the Kenyan pharmaceutical market, while private hospital pharmacies remain the principal pharmaceutical vendors within Kenya’s urban pharmaceutical market.

11.8% CAGR forecast for Kenyan market

“The Kenyan prescription pharmaceutical market is forecast to grow at a CAGR of 11.8%,” notes Frost & Sullivan health care team leader Ryan Lobban. “Prescription market segments account for approximately 78% of the pharmaceutical market. The fastest growth will occur within the over-the-counter (OTC) market segment at approximately 14.3% over the forecast period; while the largest and fastest-growing prescription market segments within Kenya comprise of the cardiovascular, diabetes, and anti-infective therapeutic segments,” he noted.

Within the Kenyan pharmaceutical market, GSK is regarded as the market share leader with about 12% market share, primarily as a result of previous strategies pursued in 2009, which reduces the price of key products by around 40%. Approximately 41% of all anti-infectives sold in pharmacy were licensed to GSK.

“GSK’s dominance in the overall market is largely attributable to its success in the anti-infectives market segment, a therapeutic segment which accounts for approximately 42% of all revenues generated in the Kenyan prescription market segment,” states Mr Lobban, noting that “the prices of Amoxil 500mg, Suprapen 500mg, and Floxapen 500mg are particularly competitive within the respective active ingredient classes.”

Fast-growing cardiovascular and diabetes sectors

Kenya’s cardiovascular market is the most dominant and fastest growing prescription market segment. The market was valued at about $36.0 million in 2012 and is expected to grow at a CAGR of 15.4% between 2012 and 2019. The diabetes market was valued at around $33.1 million in 2012 and is expected to grow at a CAGR of 13.5% between 2012 and 2019.

“Based on revenue segmentation, Nebilit (nebivolol) 5mg, licensed to Italy’s Menarini, was the top-selling cardiovascular product and accounted for about 7% of the revenues for prescription products sold. Within the diabetes therapeutic segment analysed, Merck Serono’s Glucophage (metformin) 500mg was the most popular product based on volume segmentation, accounting for about 19.8% of all oral hypoglycemic tablets sold.”

Despite the high penetration of generic manufacturers within the overall industry, a key highlight of the study is the preference of private consumers for innovator-branded products. “A critical success factor within the Kenyan market is the use of distributors with established networks with key vendor outlets,” Mr Lobban concludes.