Supporting the decision for new pharma manufacturing facility location: the African case

COVID19 emphasized the already existing vulnerability of Africa's pharmaceutical industry, mainly due to the limited local production of health products. The pharmaceutical industry is a priority sector under different global frameworks and initiatives. Besides, the free trade area within the African continent recently took effect; hence there is a need to accelerate and sustain local production. One of the main objectives being promoted is to leverage the private sector, attract investment and support SMEs in local production. A fundamental factor in encouraging companies to settle the production in the continent is providing them with recommendations on the location choice to seize opportunities and limit risks. This research aims to identify critical criteria that pharmaceutical companies need to assess to start local production in developing countries, focusing on African ones. Specifically, the identified criteria can be integrated into a previously developed Multi-Criteria Decision-Making (MCDM) model and applied to a leading pharmaceutical company. To identify the criteria, a literature review on the African pharmaceutical sector was carried out first, followed by a questionnaire and interviews with pharmaceutical industry representatives. The results lead to adding one new macro-criterion, i.e., the market access, and 14 additional sub-criteria to the existing model. Furthermore, model application results show South Africa as the ideal African country for pharmaceutical manufacturing settlement, finding a congruent correspondence in reality. This paper gives recommendations on key elements on which the African government should focus to advance Africa's pharmaceutical and health industries investments and proposes an effective model boosting local production investments giving companies more confidence in setting pharmaceutical industry in Africa.