Zimbabwe Drug Market Nearing Collapse

Amid continued economic and political strife, Zimbabwe's drug market has all but collapsed, declining from US$50mn in 2001 to less than US$5mn in 2004. Domestic pharmaceutical producers have warned that they will relocate their operations abroad because of what they see as a tariff regime that discriminates in favour of low-cost imports.

Zimbabwe's market regulation was previously almost non-existent, but it now appears that a number of abortive measures have actually worsened market conditions. In January, industry representatives complained that the tariff structure gave foreign firms an unfair advantage. Tariffs of between 5% and 15% on the materials are applied to local companies, but finished drugs supplied by foreign producers are exempt.

Attempts to control prices have also worsened conditions for Zimbabwe's tiny manufacturing sector. Government controls imposed in 2002 were abandoned in May 2003, in the wake of soaring inflation. As a result, much of the already hard-pressed population is having to manage without access to medicines.