Africa: Health for the greatest number
Bertrand Talbotier is CEO of Piex Group, a leader in pharmaceutical distribution in Africa. An expert in healthcare on the continent, he answers here a few questions about Piex and its values, ambitions, challenges as well as the future of health in Africa.
Bertrand Talbotier, what do you think of the #blacklivesmatter movement?
“Everywhere: in the US, Europe, black people have been regarded on the basis of stereotypes. That is why there is a lack of integration and recognition of these populations into the mechanics of our world, our societies and economies nowadays.
#blacklivesmatter is a powerful backlash that has its roots in the enslavement and exploitation of a population that never was recognised or even seen in the light of full human dignity.
When you look at life expectancy in Africa, even today it is lower than 62 years. Compare with 80 years in North America and Europe. In some countries such as Somalia, Lesotho, Zambia, Uganda… life expectancy can be lower than 50 years. This also directly touches upon #blacklivesmatter. On a historical scale, we just barely started seriously caring about the African continent. This means that for centuries, we ignored the realities of nutrition and healthcare, never mind making them priorities.”
Is there a connection with Piex’s positioning?
“For a very long time, African communities have had very little, if any, access to quality medications. Part of Piex’s mission, our DNA, is to solve this problem.
Our “Life Provider” positioning is to be a driver of change that will bring to the continent an increasing share of quality medication and healthcare products and make them physically accessible and affordable to the greatest number, including the least developed communities.”
Does that involve reaching a certain critical mass? Is Piex Group growing?
“When the company was acquired in 2017 as a project I was leading and with the financial participation of LBO France, it had a turnover of about 80 million euros. Year-end 2020, it will be approximately 120 million euros. We experienced rapid organic growth and we did our first acquisition: PharmaCDI, which was also a distributor in Western Africa.
We are currently discussing another merger that we hope to conclude beginning of 2021. We will be acquiring an Eastern Africa distributor with whom we already have a commercial partnership that allows us to share pharmaceutical producers and extend our coverage.
It allows us to double our footprint and have one continuous East-West market across the continent, except for the Maghreb and South African regions. The strategy is to provide pharmaceutical and healthcare/cosmetics producers with a one-stop shop for their distribution needs across several tens of countries of various sizes over a very large geography.”
How much change do you anticipate at Piex with this merger?
“After this acquisition, our operations will still include distribution abut we will be adding wholesale and in some countries, medical representation, especially in English-speaking Eastern Africa. Our human resources will increase. For example, we will be adding 300 staff members in Kenya alone.
For Piex, the challenge is to adapt very quickly so we can fulfil the needs of our pharmaceutical producers as well as wholesalers, hospitals, drugstores, and private clinics. We are already doing all of this in French-speaking Western Africa and we will do it at least as well in Eastern Africa where we will leverage human resources who have the competence, the market knowledge, and a fine-grained understanding of their clients. The more we decentralise, the better we will serve the markets. This critically depends on having local personnel who make the best operational decisions while being fully part of Piex Group.”
Speaking of operational decisions, what are the daily challenges?
“Firstly, there is the physical difficulty of moving medications from production to seaport and, from there, inland. For 90% of our volume, we depend on maritime transit; only 10% shipped by air. Obviously, maritime hubs cannot cover all countries. In the interior of the continent, we use roadways or railways when they exist. We overcome massive logistics challenges that never cease evolving with the changes in maintenance or additions to infrastructures.
With the COVID-19 crisis, the logistics chain almost broke. It broke completely for air transport. Maritime transportation managed to keep functioning but experienced very serious strains. Production, exports, distribution… everything was disrupted. We need to learn the lessons from this crisis as it demonstrates how unstable and fragile the current system is.
There will be consequences this year and blatant social injustice. For example, the death toll of malaria, which is on average 400 000 persons per year, could increase to 700 000 victims this year according to experts, because of late deliveries of antimalarial drugs. This is a real tragedy and we cannot turn a blind eye. It is a direct result of systemic weaknesses, confinement, and closing of borders. The same will happen with other deadly conditions such as AIDS and tuberculosis. The paradox is that COVID-19 “spared” the African continent, relatively speaking, but has had and will continue to have a number of indirect victims orders of magnitude higher than anywhere else does. Not to mention the dramatic impact on food supplies and consequent famines.
Another major challenge is dealing with and managing corruption across the value chain that starts from distribution and ends with pick up by the final patient at the drugstore. Vigilance is imperative every step of the way to ensure that our original, quality products do get into the hands of the final patient without leaving any room for a porous area where counterfeit drugs could be inserted.
The WHO’s official number is 300 000 victims per year and I consider it conservative. Other sources estimate the death told of counterfeit medication at 600 000 to a million annually on the African continent. This is an obscenity.
Since I first started working in Africa fifteen years ago as a consultant to States on matters of health, I have always been very involved in the fight against counterfeit medications. With Piex, I found another, more powerful, lever I can press to end this abomination. Now, I am on the first lines of this fight, as I became a medication distributor.
Piex’s mission is to integrate the value chain vertically by merging several aspects of it into our operations or through synergies with our partners. For example, we might add eventually an innovative and modern retail operation.
A large part of the population lives in dire poverty. There needs to be a solution for them as they are price-sensitive and often simply cannot afford authentic medications. They are the most vulnerable to counterfeiters; Africa has the largest share of counterfeit drugs in the world. This, to me, is also a component of #blacklivesmatter as letting this situation go on is inacceptable and we must act collectively against these criminal activities.”
To what extent is it possible to integrate the value chain?
“All the way to the final patient. We have a retail project that could be high on the Group’s agenda. It would be a chain branded stores where we plan to have medications, healthcare products as well as cosmetics and a full spectrum of services.
It would be very innovative and disruptive, as we will move from a model that is a copy-paste of the western retail outlet to a truly African model that will be adapted, integrated into the environment, and will give the patient a much more affordable access to a large palette of services, medications, healthcare and beauty products, all in one place.
By “large palette of services”, I mean for example rapid diagnostics. Today, we have the systems to diagnose HIV, COVID-19, diabetes, heart conditions… in a few minutes. All these tests done and processed in the Life Stores. Patients will be able to access remote medicine, care information, local support communities on either a given condition or particularly important problems at the local level. In other words, a complete service and holistic access to primary care in a single location.”
Besides LBO France, your main financial partner, are investors interested in Africa?
“For the past five years, there has been a growing momentum behind interest in the Africa-Health investment projects. It became massive with the COVID-19 crisis. A lot of investors observed that companies that were resistant and resilient, that could “deal with it”, were precisely in the health sector and not in major economies, such as Europe or the US, but in countries where there is still a lot to do, to structure, to develop. Thereby, especially on the African continent.
Growing healthcare needs and the youngest demographics of any continent drove investors to change their outlook and look at the sector as a major opportunity.
Investment funds approach me regularly to tell me they heard of Piex, looked at what we do and would like to be part of it, give us a hand. They are interested because it can provide growth and almost without limits.
The truth is that a pharmaceutical distributor of Piex’s size, with annual sales of approximately 150 million euros could become a key player in Africa with a turnover of 1 to 2 billion euros. It is now possible to say, “Yes, we can do the right thing while generating growth and returns on the African continent.” Then it snowballs: more investors are attracted, more financing becomes available and we will finally be able to improve significantly the health and life expectancy of African populations. When the African continent catches up with the rest of the world, then we can talk about equality and social justice.”