Podcast transcript: Episode 7 - On Drugs and Research – Big Pharma in Nigeria

Transcript

On Drugs and Research – Big Pharma in Nigeria

Host: Hello, and welcome to the experience pod. The experience pod is a one-on-one interviewer-led podcast that discusses the adoption and utilisation of relevant emergent technologies and trends for impact-oriented professionals, researchers, developers, and students who demand realistic and thought-provoking perspectives on the opportunities and challenges presented by these phenomena in a unique environment. My name is Dr. Damola Oladosu. I work here at the PwC Experience Center on the disruption team.

Today, our discussions are focused on how players across the healthcare value chain are leveraging technology to improve this sector. We will be digging deeper into the environment, business and technology challenges faced by these players. We hope to understand the opportunities in this $16 billion market that can be exploited by startups, investors and other interested stakeholders. On this episode, we'll be speaking with Kingsley Udoakpan who is the head of English-speaking Sub-Saharan Africa, Global Research and Applied Solutions at Merck, which is a multinational pharmaceutical and life science company. We will be exploring the current state of Big Pharma, most participation within the healthcare value chain in Nigeria, and modern innovation in drug discovery. Welcome, Kingsley. 

Kingsley: Thank you. 

Host: Okay, so we'll get right into it.

Globally, pharma companies have spun off their consumer businesses, and are now increasing their investments and focus on life sciences. The question is, why was big pharma even interested in consumer businesses in the first place?

Kingsley: Okay. So we were interested in the consumer healthcare business to gain mileage and also to get that footprint in the pharmaceutical landscape. A lot of people consume vitamins. So we see pharmaceutical companies leveraging this to gain mileage on their brand and people getting to know what they do. But then, as the age evolved, we now discovered that this is really a low-margin business for most multinationals. So I believe that's the major reason why most of these pharmaceutical companies are spinning off their consumer healthcare innovation, to embrace more innovative portfolios, more blockbuster products like cancer therapies, and fertility products.

Host: So what I'm hearing is what really drove that interest in consumer businesses was really consumer demand and consumption patterns. So if we're to look at the future now from a Darwinian view, and really think about natural selection and evolution, and maybe survival of the fittest, the question is, how do you think Big Pharma will be redefined by I guess, like future trends, like cheap drug alternatives or patterns expirations, more consumer-led decision making, and tighter regulations on drug approvals?

Kingsley: So I believe cash is king and the age of competition is over, in my opinion. So when the value of a product falls below what you stand for, I think it's time to sell it or get emotionally detached from it. And competition, I believe, is a term created for those companies that have not been able to demonstrate value for what they do or represent. So in this case, you can see even Merck is collaborating with other pharmaceutical companies like Pfizer to innovate and develop new products to solve really the teething problems facing the healthcare sector. So having said this, companies like Merck will focus on more innovative portfolios.

Host: Okay, so you think that there'll be more collaboration, either with bigger guys or smaller guys, who do you think would win in this collaborative game, though, like, who wins at the end? 

Kingsley: The most innovative will win, right? 

Host: So isn't that still some form of competition? 

Kingsley: I see it as more of collaboration than the competition because companies have innovative products along certain value chains, so the other company completes the other value chain. For example, some companies have a more innovative R&D pipeline, some have more innovative and really experienced channels for marketing those products. So I see this as a collaboration.

Host: So, like a co-opetition, because would you be going to market as two different companies or would you go as like?

Kingsley: Yeah, same, same but two different companies. From what we see in the market, you still go to the market as two different firms. So it doesn't change, doesn't affect your individuality as a brand.

Host: Okay, so let's bring it back home. Right? So the Farmers' Market in Nigeria today is estimated at about $700 million. So in your view, how would you describe the current healthcare markets in Nigeria? And how is Merck adapting to this market? From your perspective, is there any hope for growth in the healthcare markets in Nigeria?

Kingsley: So the current market in the healthcare market is—we observed that it's really tough to play in this space. It's a big market only because we have 200 million people here. But we need to ask ourselves fundamental questions: what is the effective market? How much middle class do we have? Are we really serving 200 million? Or can we look at talking about the middle class alone, maybe 30 million people? This would be a defective market, in my opinion. This is still a challenge for us because not many people are buying classical pharma, and treating themselves the classical pharma way, right? Buying drugs to address their concerns or the issues they're having health-wise. Okay, some resort to different methods, including prayer, some go for herbs, using leaves, that they believe can cure certain ailments. So I'll talk about that later. We also observed that funding is a major issue because I'm speaking from a life science perspective. In a country where no single pharmaceutical company has an effective R&D lab for developing unique products that address unique African issues, then we have a problem. So if we don't have this R&D integrated into the farmer value chain in Nigeria, then it's not challenging enough.

Host: So from your perspective, is there any hope for growth in this market? What's your view on that? And what will drive growth? What kinds of things would need to be in place for there to be growth?

Kingsley: To drive growth, the spirit of innovation has to be there. That means we have to learn to manufacture our pharmaceutical products locally. We see the style of Abroad-made but marketed in Nigeria. So if we have to manufacture locally to really trigger that growth that we anticipate for the future.

Host: I have questions, I'm linking back to this idea of the effective market or total market size. Technically, all 200 million people in Nigeria can be sick, right? Technically, there can be a market of 200 million people. What are the biggest barriers? Would you say, in terms of converting people that are not in your effective market to users of pharma products? What will be the biggest barriers to that?

Kingsley: The biggest barrier is still regulation because we have to shape the healthcare landscape. And we depend on governments to shape the healthcare landscape, especially looking at health insurance, what's the coverage that we have today? Nigeria is still very weak. Not many people have a health care plan. When people do have healthcare plans for their families, then we can really talk about expanding the market size up to about 70%.

Host: So health insurance, anything else? 

Kingsley: Health insurance, local manufacturing, and thirdly, also having a robust infrastructure that will drive the costs of manufacturing lower. Okay.

Host: So you touched a bit on how there is limited R&D in Nigeria already. Can you talk a bit more about what you've observed in terms of research in this industry? And maybe some specific things that need to be in place if we're going to drive R&D in Nigeria?

Kingsley: Okay. Thank you very much for that question. If you look at global companies that are strong in the pharmaceutical or healthcare business, these guys are investing at least 10% of their turnover in R&D. Okay, so look at the companies we have in Nigeria, or those manufacturing in Nigeria, how much are they investing in R&D? So R&D is pivotal to create an innovative economy, especially with size and technology. So if we don't have these R&D activities in place, then we have a big problem. Secondly, there is a missing link and connection between pharma manufacturing and universities. So we have a lot of students churning out projects, scientific projects with a master's, Ph.D., and even at the undergraduate level, how many of these projects are implemented or scaled onto another level? So this is where we need to start to trigger the discussion. And of course, the big challenge always is funding. Funding because we always depend on the government budget to fund our activities. But with a single issue like the Coronavirus issue now, the government has to reprioritize immediately, so they have to reallocate the budget immediately to handle the healthcare issues. That means an additional maybe 1 or 2% lost funding of R&D activities in the universities and even the government sector.

Host: I think globally, funding for science is a major issue, right? What are some of the innovative things that people in other climes are doing that we don't seem to be getting? What kinds of innovative funding sources are being, I guess, utilised, outside Nigeria that maybe we can leverage here?

Kingsley: Okay. I mean, I still go back to the same topic. Economists have been able to launch innovative products that have been of value addition to the world at large. You see that strong link between the university and the industry. The University of Helsinki, in Finland, they have the Innovation Hub. Come to the university in Saudi Arabia, they have an innovation hub that clearly links what happens in the university to the private sector. So products are launched from the university, and it becomes a blockbuster selling products all over the world. So this is where we need to change the narrative in Africa, especially in Nigeria. So we need the University of Ibadan, University of Lagos, University of Benin, all the premier, top universities in Nigeria, they need to really connect with the industry. And you see, these guys also have a very robust innovation fund-innovation for an endowment fund, if you want to call it that way. Like King Abdullah University in Saudi Arabia, these guys have 20 billion as funds for research and development. How many universities in Nigeria can boast of $1 million as an innovation fund? 

Host: So endowment funds are lacking.

Kingsley: Exactly, we need to bring the Dangotes’ to invest in R&D, we need to bring Odetolas, the big guys in the industry to invest in R&D, in this downstream activity.

Host: Who should do the push? So should it be a push or pull? I’m just thinking in terms of like, who should be the person or the party driving this? So should it be Academia going to say listen, we need funding, or should it be the guys in the private sector coming to say, here's funding?

Kingsley: Okay. So I mean, if we depend on the private sector to call upon the public sector to initiate this partnership, then we'll wait for another 10 years. If we also depend on the public sector to call upon the private sector to initiate that handshake, we will also wait for another, maybe 25 years. So it's a matter of trust. We have to depend on the government as the middleman to facilitate this discussion and set a clear regulatory framework on how this partnership can work. I guess the Nigerian government takes 1% as education tax, as far as I know, maybe I'm wrong. But if we also can talk about how we can maybe locate a certain percentage of this, this will be a game changer for our economy.

Host: Hm, hm, interesting. So globally, we're seeing the rise of what's called frugal science where people are developing things like paper microscopes, the 20-cent centrifuge for sports or malaria, parasites, and blood. So in a low-income environment like Nigeria, should big pharma really be thinking about developing more frugal tools? Or will that change the incentives of your kind of business, which is obviously very profit driven?

Kingsley: Interesting question. Personally, I don't believe in frugal science.

Host: Oh, okay.

Kingsley: I don't also believe in ostentatious science. And the solution doesn't lie in the middle either. Okay. So I live in a suburban part of Lagos. And I did that intentionally to basically understand what people go through every day, to strike a balance between life and death, or between living and surviving. And, you see, people develop solutions to survive. For example, I don't know if you've heard of ‘agbo’. What people take.

Host: Yeah, the herbal drink.

Kingsley: Exactly. The herbal drink. So if you want to develop something, maybe frugal science, you go for something very basic. Let's say they just get them paracetamol, that is what they need, right? Or let's buy them something very expensive that can maybe stay in their body for a long time to help them resolve this issue. But then, as I said earlier, the solution doesn't lie in the middle, either in frugal or ostentation science. But then I think we have to develop a unique solution that is peculiar, that will address our problems or the issues that we have. Can’t we scientists look at this ‘agbo’ drink? Can’t we just set clear experimental methods on how we can even measure the APIs in this sample, the APIs being the active pharmaceutical ingredient? Because truth be told, these things work. That's why people patronise, right? So we have to check, what is the content of the science that people apply to solve their problems? Can we now set a clear tool that measures the contents of what people take so that we can adopt this as our innovative medicine? China has Chinese Pharmacopoeia, US Pharmacopoeia, we have European Pharmacopoeia, we have different pharmacopoeias of the world. Africa needs to have their own Pharmacopoeia based on our own traditional medicine, and traditional methods of administering drugs.

Host: So you're saying that the reason you don't really agree with frugal sciences is that it's not specific to the market? 

Kingsley: Yeah.

Host: Okay.

Kingsley: It's just an ad hoc tool that maybe someone develops because of maybe the infrastructure is weak, or the purchasing power is low. So you just develop a tool that addresses that concern. But does that solve the problem? No.

Host: But infrastructure is weak. So don't you see applications for things like these 20-cent centrifuges?

Kingsley: It should be there. I agree. But then this is not the long-term solution. 

Host: Okay.

Kingsley: This is not a long-term solution, because African science needs to evolve. If you take us back 30 years behind civilization, then it will not drive our development to the next level.

Host: So if we talk about counterfeit drugs and their prevalence in the Nigerian market, one of the reasons that they are supposedly so prevalent is because buying original medicines are kind of expensive, right? And so these counterfeit drugs are still quite prevalent in our market. So how has that affected your business today? And what are you doing to bring- what is Merck doing to bring consumer awareness on this issue of counterfeit drugs?

Kingsley: This is always on top of my heart because I know a number of lives that depend on what we do daily. Speaking for the Life Science model laboratory business of Merck, based on my market analysis, we lose close to 500,000 euros every year due to the activities of these counterfeiters. So if you go to Idumota market, if you go to Nisha Heybridge, you see different kinds of laboratory chemicals. In the name of Merck, in the name of sigma Aldrich, in the name of the top players in the market. People bring in industrial-grade chemicals, and we bottle them, but the impurity profile cannot be determined, nor even the purity profile itself. And they put them in 2.5 litre bottles and sell them to the laboratories to conduct their experiment. Or to even do quality control or quality assurance. This is a disaster, we are sitting on a ticking time bomb. And so what we do, what we're doing basically is that we are developing unique labels and we are also advising our customers. In the past, when I started in 2013, I used to make recommendations. But now I instruct. Because the lives we have are at stake, we have to instruct our customers to follow the channel, our channel to the market. And we also develop unique tools internally, that customers like the 2d barcode system, we call it the Msafety app, My Msafety app. So you can actually download My Msafety app, scan the product, and it would prompt and show you basically the statistical analysis, show you the Safety Data Sheets, and all the information about the product that you need to know. But then this guy is also smart. So they're also developing new labels. But then with this digital scanner, you can determine if the product is genuine or fake.

Host: How has the adoption of that worked? Is it easy for your customers to adopt the use of this app and the new barcodes and things like that?

Kingsley: Well, we just launched that last year. And I'm going to invest a lot of time in 2020 to spread the word and let customers download the app, scan it and use it. But then also remember that we also have a system whereby auditors will require customers to show a paper certificate of analysis. So we are also trying to see how we can talk to the regulators to accept electronic records or electronic certificates of analysis or safety data sheets.

Host: Oh wow, interesting. I think it's easier for your market because you are a life sciences and you kind of have an idea of exactly how many customers you have. You have more control over the channels through which they can get your products. On the pharma side however, where, you know, everybody's going to a chemist and it's difficult to tell who's legit, what kind of things is Merck doing on that side to help the customer know whether the products that they're buying are genuine or not?

Kingsley: Okay, so just to debunk the theory that it's easy on the life science side: we don't have absolute control of that supply chain. As I said earlier, people can import industrial-grade chemicals for other applications. And then we bottle them and sell them into the black market, we have limited control. This is the responsibility of the government. But then we can support government initiatives to control the counterfeiting of these products. On the pharma side, we are also working very closely with NAFDAC, the local FDA. We are supporting them with mini-labs that they could use to test the integrity of these drugs if they're counterfeit or not; if they have the actives in the drugs or not. Then we are also supporting them with the mask authentication system. So where you can simply scratch and send the code to a number and then you can get confirmation if the drug is genuine or fake.

Host: So, you touched a bit on collaboration earlier in our conversation. In Nigeria, we have quite a few local startups that are focusing on either collecting data or collecting longitudinal data that could improve discovery and maybe to an extent personalised medicine. So for example, we have 54 Gene—M das, M pharma, helium health. So is Merck currently in collaboration with any of these guys? And if not, should we expect to see any collaboration in the future? And what would the nature of these collaborations look like if you were to design them?

Kingsley: So from the life science part, I see, for example, 54 Gene as maybe a future partner for Merck. I mean, I like what these guys are doing, they are developing a really unique signature for checking or unravelling the DNA of an African or a Nigerian, whichever. So this is for me, a very unique starting point for us because we can support them with the right tools they need to accurately profile. They have the expertise, we have the experience, and we have the tools. So that we can collaborate and support them with the tools they need to further develop something unique for the world or even for Africa. So this would help us in drug discovery because we can now build our unique product for the African race. This would be a game-changer, I would say.

Host: Okay, I want to switch gears a bit and talk about technology. So in our last episode with Stears and Business Day, we discussed how technology is changing the way they work and who they hire for example. So now, in the future of work, we expect our team to consist not only of experts in our team, such as medical researchers but also of data science, machine learning engineers, etc. Are you seeing these changes within your organisation and what does that current talent acquisition model look like for you?

Kingsley: Globally, yes. We see fresh injectional talents within the Merck group. So we are seeing more experts in AI, Machine learning, data scientists, and people that can unbundle big data and make meaning out of it. We are seeing these talents in our organisation at least for the past three years, we see this new talent in the organisation. So I feel they are shaping a lot of what we do today at Merck. And they should be the way to go. 

Host: And in Nigeria, specifically, are we looking to incorporate any of these experts in our work in our talent, our model here?

Kingsley: Yeah, we take the support, we are still a very young team because we only are a scientific office, we only provide technical support to our customers at the moment. But then, I think this is the way to go. And we are also leveraging the expertise of these colleagues that are sitting all over the world.

Host: Interesting. So it's been said that it may take 12 to 18 months to obtain a viable vaccine for the new Coronavirus which has taken over the world. Arguably this is the fastest time it has taken to develop and approve a new vaccine. Is this selected just based on the urgency of the virus? Or are we going to expect faster discoveries in the future? And what types of technology advancements would you attribute these faster drug discoveries to? 

Kingsley: No one expected that COVID-19 would spread all over the world like wildfire. What we see today, I think the whole world is in panic mode. And so are the scientists. But then, I think I must commend the efforts of WHO and even top pharmaceutical companies that have taken the bull by the horns-they've already started some activities. Having said this, when the DNA sequence of the virus was shared with San Diego, LA, I think Inovio Pharmaceuticals, came up with the DNA for the virus that would act as a vaccine for virus within three hours. And this was only possible by AI or using their internal artificial intelligence and machine learning tools to build the DNA that would address the virus, the Coronavirus. This is the future I would say. So companies must constantly, consistently integrate AI into their activities, especially R&D. In the past, just like you said it will take sometimes five to six years to have a vaccine. 

Host: Yeah, we still haven't had a vaccine for HIV for many, many, many years.

Kingsley: I mean, most of the issues we have are regulatory. So you need approvals to launch your vaccines. So that's why now we have to see if it works on the models, on the guinea pigs. If it works, and if it doesn't work, then we will look for alternatives. But then I think technology has really shortened the time to discovery. 

Host: Yeah, okay. Well, we think of other technologies like virtual reality robotic process, and observation 5g, and we strongly believe that this could shape how research is being done. And we've kind of touched on that already. Is Merck leveraging any of these technologies currently? And could you name a few ways how you're leveraging these technologies?

Kingsley: Yeah, so we are currently leveraging technologies, especially artificial intelligence. We have developed a product called Chematica that is used for generating a synthesis pathway to discover drugs or even to check how experiments work. For example, you may decide to test run on the model if acid can go with water or if water can go with x, or if it's a sample y can go with sample z. So you can really see how it works. It really saves the tremendous cost of R&D. You don't need to buy a lot of chemicals, buy a lot of models in order to synthesise a product. 

Host: So artificial intelligence. Are there any other technologies that you’re leveraging? Maybe virtual reality or something like that now?

Kingsley: Not really in life, maybe in the pharma space; I can only talk about the life sciences. I know we are developing, or we have technologies for fertility.

Host: Okay.

Kingsley: To help fertility companies or to help couples who have children even in old age. So we have different technologies there. We also have different technologies in life science - thousands of technologies I would say, still embedded in AI, that drive our life science business. 

Host: Okay. So what's your perspective on software as a drug? Or what people are calling digital pills? So to what extent in your opinion, would we see software purely replace or supplement therapies for diseases like Type Two Diabetes, Depression, and PTSD? So these diseases are typically diseases that might be driven by behavioural changes. So to what extent do you see these digital pills replacing regular therapies?

Kingsley: Yeah. I mean, sometimes the evolution of technology in science and the healthcare industry, impacting the health industry can also be very scary. I would, on a personal note, caution, or ask the healthcare or pharmaceutical companies to tread cautiously with these digital pills. It's exciting. I would recommend people to use it only on, maybe, patients that have a long history of boycotting their drugs or not taking the medication seriously. I think we should really use this on these kinds of patients. 

Host: So use only as a last resort, why?

Kingsley: Yeah. Just for the concern of privacy, because, you know, these digital pills, depending on the nature of the system, it tracks you, it shows basically, how your body responds at every step in the dosing cycle. And many people don't like that. It seems like someone is following them. 

Host: Yeah. So it’s just this idea of privacy, and I don't want big pharma to know everything that I'm doing.

Kingsley: Exactly.

Host: Okay. So to cover other trends and technologies that we may not have talked about earlier. I'll draw on Max's slogan, which is ‘always curious’. And you're using curiosity to explore uncharted terrain in science and technology. When it comes to the African healthcare market. What are you curious about? And what terrain in science and technology remains uncharted within the African healthcare industry? In your opinion?

Kingsley: Yeah, thanks. Thanks for emphasising one of the biggest slogans I’ve come to live with. Curiosity is what we do and live every day and there are two major questions around curiosity. It's how and why. This is really the question that it stimulates. Also, it expands my empathy, because when I told you when I came to Lagos, I felt I could solve every problem. But then I discovered that I could only partner with people to help them solve their problems. So this has also shaped me into who I've become today. So the biggest question I ask myself is, how can we, from a curiosity perspective, integrate the e-citizen? Or how can we effectively drive the electronic citizen to support regulatory activities in Nigeria and in Africa?

I feel our market is still under-regulated. And I believe that instead of having more goods, and more FDA on the ground, we can empower the citizens to track, record and share products that they feel are unsafe. Whether they're safe or not, I believe it should be the responsibility of every citizen to each product you buy, scan, check, and report. And just as a lifestyle.

Host: So everyone is kind of a regulator? 

Kingsley: Exactly. So everyone becomes that e-regulator that can—So what NAFDAC does, or the local FDA is to look at the database, look at the scans, the number of scans per region, and see the performance of each of the products, and check if it deteriorates in quality. So you can actually implement a recall program faster if there are any issues. 

Host: Interesting. I like the idea of giving power to the citizens to be the ones to–I imagine that NASA can probably not hire enough people to go into every single local government area to find out if there are counterfeit drugs on the ground, especially in rural areas. So I like that idea. 

Kingsley: Then from a laboratory perspective, now talking about lives. Since 2014, I've visited over 300 labs in Nigeria. I still feel this- we could do a lot in terms of laboratory automation, and also deploy AI and cloud computing into laboratory management to better make sense of the results that you get in a laboratory daily. And also we kind of get results faster and more efficiently.

Host: So we're gonna move to the fun part, which is our compulsory Q&As. So speaking of predictions, what was the last prediction you got wrong?

Kingsley: Okay, so it is the Liverpool Whiteford game. So I predicted already- I thought we were going to win or in the worst-case scenario draw. But to see Whiteford give Liverpool 3-0. This was unbelievable. So I got it completely wrong.

Host: Wow. Okay. So football prediction.

Kingsley: Yeah, football prediction. 

Host: Well, okay, what's one view you seem to find very few people agree on?

Kingsley: A lot of people don't believe in the failure culture. So I'm a big fan of this culture because it raises a generation of people with a high tolerance and deep problem-solving abilities. And I believe this is something that would even shape our sciences, health science, and technologies in Nigeria. So the failure culture is something that I believe in. 

Host: So this idea of ‘test quickly fails quickly’? 

Kingsley: Exactly. Fail, test, fail, test, fail as much as you can until you find the right solution. 

Host: Why do you think people don't agree with that? 

Kingsley: Yeah, because we live in a performance-based world. People want to see quick returns on their investments, they miss a big part of the learning process.

Host: Interesting. So our previous interviewees, Vwoke from Business Day and Tokunbo from Stears, have a question for you. Would you still be doing your job in 30 years? Or would you be replaced? So to take that a step further? Would we still need a human CEO in life sciences, especially if we’re moving to this world where many decisions are AI-driven?

Kingsley: Hmm. Yes, we will still need a CEO in 30 years.

Host: Would he be human?

Kingsley: He would be human, of course. Because you need to understand that humans shape the activities of these robots or AI machines, right? So it's garbage in, garbage out. We can also trick the AI machine to predict the wrong things. So that's why we need humans to constantly, constantly shape the world that we live in. So humans are the supercomputers.

Host: Really? Do you really think so? 

Kingsley: Humans are there just by one single trait, empathy. We cannot teach the machine to empathise. The machine would only make an objective decision based on goods or the based on history or data that it has in its archive. But a human can make a more emotional decision, a more empathetic decision on deciding where to go when there's a crisis.

Host: I like that. We're supercomputers because we're empathetic.

Kingsley: That’s correct. 

Host: I like that. So disruption is interrelated. In that respect, what's one perspective you'd like to get from our next interviewee?

Kingsley: Maybe something around remote working, especially in a city like Lagos, maybe if your next interviewee is an indigenous CEO company based in Lagos I’d like to get his perspective on empowering Lagosians or employees in Lagos to work from home most days, especially on Mondays or Fridays, and then check the productivity. 

Host: Okay, so thank you very much, Kingsley. Thank you for coming. 

Kingsley: Thank you for having me.