Cheap imports choke Zimbabwe pharmaceutical industry

Zimbabwe's pharmaceutical sector is facing collapse as a surge of low-cost generic drugs, mainly from China and India, floods the market - undercutting local manufacturers already struggling with high production costs and punitive import duties on raw materials.

Industry experts warn that the country's once-promising drug manufacturing base is being squeezed out of business by an uneven tax structure that favours imported finished medicines over locally produced ones.

Veteran surgeon and pastor Dr Matthew Wazara told The Independent on the sidelines of the ongoing In Conversation with Trevor Ideas Festival in Nyanga that while generic drugs have helped lower medicine prices globally, Zimbabwe's fiscal policies have unintentionally made domestic production uncompetitive.

"Finished medical products are largely exempt from import duty - but the raw materials needed to manufacture those same medicines inside Zimbabwe are still taxed," Wazara explained.

"If a local company wants to make something as basic as paracetamol, it must import the raw materials. Some of those materials, such as starch, attract duty. So by the time the company pays duty and manufactures the product, it ends up costing more than the imported one."

This, he said, has placed local producers at a severe disadvantage compared to Asian pharmaceutical giants that operate on massive economies of scale.

"But we have Indian companies that have emerged, Chinese companies, Dutch companies that are really good at making what are called generic drugs," Wazara noted. "There are drugs that do not carry a specific label for a company - for example, paracetamol - and these are being made efficiently and cheaply abroad."

Because imported finished medicines often enter Zimbabwe duty-free, while local producers face tariffs on inputs, several domestic firms have either shut down or moved parts of their operations to neighbouring countries where production costs are lower.

"The foreign manufacturer is not paying duty for their starch because they are making the raw material there. They bring in the finished products here duty-free. There is no competition," Wazara said.

Industry observers say this policy imbalance has created a dangerous dependency on foreign drug suppliers, undermining local manufacturing capacity and threatening medicine security.

Once self-sufficient in the production of basic drugs, Zimbabwe's pharmaceutical sector now struggles to meet even a fraction of national demand. Many local firms operate at minimal capacity, while others have collapsed altogether due to mounting operational costs, shortages of foreign currency, and limited access to affordable credit.

Analysts warn that unless government urgently reviews the duty structure on pharmaceutical raw materials, the country risks losing its remaining local drug production capacity altogether - leaving patients and the healthcare system at the mercy of fluctuating global supply chains.

Wazara and other health experts are calling for policies that level the playing field, arguing that supporting domestic production is essential for national health security and long-term affordability of essential medicines.