Interview with Stavros Nicolaou

March 21, 2024
Health Education Interview Cards - 5

Stavros Nicolaou

Group Senior Executive of Aspen Pharmacare Holdings Limited, Gauteng, South Africa 

Achieving true health security in Africa — and elsewhere — requires ongoing investments in people, in research and development, and in the bricks and mortar for manufacturing, says Stavros Nicolaou, Group Senior Executive of Aspen Pharmacare. In an interview with IFC, he explains the importance of being able to create viable markets for vaccine procurement, the need for partnerships for the right regulatory reform, and what Aspen is planning for expanding vaccine security on the continent.

The COVID-19 pandemic exposed Africa’s underdeveloped vaccine supply chain. What are the primary challenges around strengthening local capacity?

There are several challenges; however, I’ll focus on three of the biggest ones. The first challenge is that the present procurement mechanisms don’t lend themselves to predictable, consistent demand. You can only establish competitive manufacturing regionally or domestically if you’ve got a strong demand pipeline. Without offtake agreements or pre-orders, it can be difficult to anticipate demand, and as a result, many factories shut down until demand resumes or close permanently.

I will preface the second challenge by saying that product integrity is at the heart of everything we do at Aspen. That said, we need a regulatory system that supports local or regional manufacturing. We need mutual recognition and harmonization of regulation at the World Health Organization (WHO) prequalification level and in the individual markets selling these products. For instance, let’s say we want to sell a vaccine product in Botswana. The process now requires pharmaceutical companies to register the vaccine in South Africa before applying to the WHO for prequalification with a different data set. The process is cumbersome, and speed to market matters when you have a public health emergency like COVID-19 or are trying to achieve first mover advantage against importers.

The third challenge is around building economies of scale to sustain local capacities. Africa is a continent of 54 individual, fragmented markets. If you begin to aggregate these markets, you suddenly start getting better volumes and scale, which leads to greater efficiency, productivity, and sustainable supply. However, as with the Pan American Health Organization serving Latin America, the mechanism of getting African governments, health departments, and advisory committees to buy from African producers isn’t well developed. Having said this, we are starting to see traction in some of these areas through the Global Alliance for Vaccines and Immunizations (GAVI), and we are also beginning to see a focus on African pooled procurement methods.

What steps is Aspen taking to help predict demand for vaccines and other pharmaceuticals?

We know the continent consumes around 1.2 to 1.3 billion vaccines annually through GAVI or non-GAVI channels, excluding COVID-19 vaccines because there is no current demand. So, we have a fairly good handle on the demand at a high level and the type of vaccines procured. How do you translate this large number into regular and predictable demand? The answer to that lies in working closely with the procurement agencies. UNICEF is important in our lives, as are the health departments and procurement agencies of the different governments on the continent, particularly the bigger markets, which constitute about 70 percent of demand. The Africa CDC is also looking to coordinate demand. It recently met with the African Union heads of state to discuss building up demand and supply capacity. Progress is being made on the continent.

During the COVID-19 pandemic, there was a scramble to boost vaccine capacity. Since the worst of the pandemic seems to be over, has it been difficult to maintain momentum around regional vaccine manufacturing?

On many levels, it has been difficult. People have short memories and forget how difficult things were in 2020 and 2021, which makes it challenging to maintain a sense of urgency to get things done. We’ve also got other geopolitical events, like climate change, global warming, and food insecurity, at the forefront, as well as two global conflicts. But I think the African Union has done a good job keeping vaccine insecurity top of mind. President Macron hosted the Paris Climate Change meeting in June 2023, and as much as it was about climate change issues, African heads of state also talked about vaccine inequality. GAVI has also been very responsive and has risen to the occasion that we are now in the final draft of the African Vaccine Manufacturing Accelerator, which will make up to US$1 billion available to support African manufacturers over the next 10 years.

How can pharmaceutical companies in low- and middle-income countries innovate and prepare for the future if they lack enough resources for research and development (R&D)?

Wherever you are, you’ve got to play to your strengths. At this time, R&D is not a particular strength of Africa. On the other hand, Aspen’s manufacturing facilities are as advanced as you’d find anywhere in the world. But to stay cutting-edge and competitive, R&D is necessary. Our solution has been to engage in collaborations that lend themselves to licensing technology transfer, which enables us to develop new medicines and vaccines. A good public health and commercial rationale exists for these types of partnerships, and they work. Aspen did this 22 years ago at the peak of the HIV/AIDS epidemic when hundreds of thousands of mainly young South Africans were dying. We secured licensing technology transfer arrangements and pioneered generic antivirals, which made these medicines accessible to a broader population.

Regulatory reform is important in strengthening Africa’s pharmaceutical supply chain. How can a regulatory system meet high-quality standards while being flexible enough to meet the needs of a developing continent?

There is a disparity in resources and capacity across the continent. You can’t have one regulatory agency with higher standards than another. The best way to close these gaps is through partnerships, where a proficient regulatory authority can share technology experience, skills, systems, and processes with a regulator in a different country, which the WHO refers to as a reliance model. These arrangements enable regulators without the financing and resources to expedite the approval of new medicines and vaccines with the support of a well-established regulator in a different country. These are relatively cost-effective ways of achieving higher standards and establishing mutual respect between jurisdictions.

How does Aspen retain enough skilled workers for new contracts, like the recent human insulin collaboration with Novo Nordisk?

In 1999, when Aspen was just two years old, we acquired our first company: a large, underperforming manufacturing and distribution company. That got us thinking about using manufacturing to globalize our businesses. You have to remember that 20 years ago, South Africa was not on the pharmaceutical map. Most companies were in Asia, Europe, North America, , and a few in Japan. We have spent over two decades building up our manufacturing expertise, including skilling and upskilling the people working in our factories. The first thing we do to retain our workers is focus on our demand pipeline. Nothing is worse than training people and having them leave because there isn’t enough business to keep a facility open. Second, we believe in developing our workforce. The people working on our factory floors often come from resource-constrained communities and may start with very few skills, so we continuously offer upskilling opportunities. We also take seriously our corporate social responsibilities to improve the lives of our employees and their families, including making the medicines and vaccines we make in our factories available to our communities. Lastly, I mentioned that we remain cutting-edge by licensing technology transfer partnerships. If you are several steps ahead of the competition because of the technology you expose to your people, that is an excellent way to retain them.

This interview has been edited for length and clarity.

Published in March 2024

Stavros Nicolaou is a member of Aspen Pharmacare Holdings Limited Group Executive Committee and is the Group Senior Executive responsible for Strategic Trade Development. Previously he was CEO of Aspen’s Export Business. Aspen is one of South Africa’s most globalized multinational companies with a presence in over 50 geographies globally, with 26 manufacturing facilities across six continents. Nicolaou was instrumental in introducing the first generic ARV’s on the African Continent developed by Aspen, which has gone on to save hundreds of thousands of lives in South Africa and on the African Continent.

Nicolaou holds a BPharm MPS (SA), FPS (SA) and a PhD (Medicine) (Wits) Honoris Causa from University of Witwatersrand.

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