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Globalization of markets and production networks has made it progressively harder for low income countries to industrialize. This article addresses a conundrum facing industrial firms and industrial policy in a low-income African country: how to achieve upgrading necessary for sustained competitiveness. Using data from a study of manufacturers of health products in Tanzania, we document the double ‘squeeze’ on firms’ profits exerted by sharp price competition alongside competitive pressure for rising product quality within globalized markets. Drawing on Sutton’s model of competing on capabilities, and the sectoral systems of innovation and production framework, we argue that ‘dynamic industrial deepening’, strengthening domestic inter-firm linkages, is a key requirement for sustainable development of these health industries. We present evidence that sectoral industrial support for the health industries can promote sustainable technological upgrading, and reflect on the challenge of building developmental linkages where external investment to support upgrading is transforming existing business structures.

As Chapter 1 briefly outlined, Kenya has a strong and long-standing pharmaceutical industry. A 2015 Business Monitor report on pharmaceutical manufacturing in Kenya states that the country hosts the largest pharmaceutical industrial base in East Africa. The report also sees a bright future as a ‘potential base for export across East Africa’ (BMI Research, 2015). This chapter locates the Kenyan pharmaceutical industry within the country’s historical context of industrial development and growth.

Health sectors are social and economic institutions. They reflect the broader political economy of their country, and contain within them the economic characteristics, power relations and hierarchies of the broader society – while also, strikingly, providing a location for redistributing resources, responding to need, and contesting disadvantage and exclusion. This chapter addresses the challenges facing Tanzanian health planners in seeking to move to universal health coverage from the current state of Tanzanian health care. It aims to contribute to building understandings of the scope for developmental planning for better health that is context- and place-specific in strategy while focused on practical problem-solving.

This chapter discusses standards, an elusive term and concept. For the African pharmaceutical sector especially, the term is used by the manufacturing sector, regulators, technical experts, procurement agencies, health system actors and policy makers to mean different things. There is a dearth of systematic studies that address what standards are, their classification and the logic behind their set-up and operation, and this has contributed to a huge asymmetry in understanding. The socioeconomic, technical and political issues and how they have an impact on local production and industry development, including their effects on access to markets, have also not been systematically explored. Our discussion of standards is informed by extensive literature searches, fieldwork in India, Kenya, Zimbabwe and South Africa where we interviewed technical experts in 2014, and interaction with regulatory and compliance experts in the UK.

The role of industry associations in shaping policy and regulatory environments through various lobbying activities is well established in the academic literature. In most cases, while such activities are deemed essential and effective from an industry perspective, they also carry negative connotations connected to narrow rent seeking and the pursuit of industrial elites’ interests which run counter to the public good and which often bypass democratic processes. This chapter argues, however, that in South Africa, particular historical trajectories and a lack of institutional capacities is gradually shifting biopharmaceutical industry associations away from ineffective lobbying activities to a new political approach that emphasises partnering with government and civil society organisations in the pursuit of not only narrow industry objectives, but also broader economic and development aims.

Maternal mortality is very high in Tanzania. Competent hospital care is key to improving maternal outcomes, but there is a crisis of availability and performance of health workers in maternal care. This article uses interviews with managers, nurse-midwives, and women who had given birth in two hospitals providing virtually all the emergency maternal care in one Tanzania city. It contrasts women's experience in the two hospitals, and analyses interconnections with nurse-midwives' and managers' experiences of working conditions. The conceptual literature on nurse empowerment identifies some key explanatory variables for these contrasts. Staff experienced less frustration and constraint in one of the hospitals; had more access to structurally empowering resources; and experienced greater congruence between job commitment and working culture, resulting in better work engagement. Conversely, nurse-midwives in the other hospital were constrained by supply shortages and recurrent lack of support. Contrasting management styles and their impacts demonstrate that even in severely resource-constrained environments, there is room for management to empower staff to improve maternal care. Empowering management practices include participatory management, supportive supervision, better incentives, and clear leadership concerning ward culture. Structural constraints beyond the capacity of health facility managers must however also be addressed

Health care forms a large economic sector in all countries, and procurement of medicines and other essential commodities necessarily creates economic linkages between a country's health sector and local and international industrial development. These procurement processes may be positive or negative in their effects on populations' access to appropriate treatment and on local industrial development, yet procurement in low and middle income countries (LMICs) remains under-studied: generally analysed, when addressed at all, as a public sector technical and organisational challenge rather than a social and economic element of health system governance shaping its links to the wider economy. This article uses fieldwork in Tanzania and Kenya in 2012–15 to analyse procurement of essential medicines and supplies as a governance process for the health system and its industrial links, drawing on aspects of global value chain theory. We describe procurement work processes as experienced by front line staff in public, faith-based and private sectors, linking these experiences to wholesale funding sources and purchasing practices, and examining their implications for medicines access and for local industrial development within these East African countries. We show that in a context of poor access to reliable medicines, extensive reliance on private medicines purchase, and increasing globalisation of procurement systems, domestic linkages between health and industrial sectors have been weakened, especially in Tanzania. We argue in consequence for a more developmental perspective on health sector procurement design, including closer policy attention to strengthening vertical and horizontal relational working within local health-industry value chains, in the interests of both wider access to treatment and improved industrial development in Africa.

Health care is often represented as a purely “social” sector, implying that health care expenditure is a burden on the economy. We argue in this paper that on the contrary, health care is economically productive, and that health care in Tanzania could be much more economically and socially productive if health policy and industrial policy were more closely integrated. Increasing the depth and breadth of domestic economic linkages between the health services and industrial and commercial suppliers within the Tanzanian economy can strengthen economic development while improving health care. The paper begins by defining what we mean in this paper by “health services”, “health care” and “health sector”. It then examines the economic size of health care (production and financing), the employment it generates, and its linkages to the wider economy through procurement and wholesaling. It demonstrates that the health sector, broadly defined, is economically important as a major service sector, a location of investment, a generator of employment and income, a sector of skilled training and employment, and a location for industrial growth. The health of the health sector is very important for the health of the wider economy. The rest of the paper analyses the linkages between health care and manufacturing in Tanzania in more detail. It traces the declining share of local manufacturers of medicines and other health supplies in the expanding Tanzanian domestic market, quantifies the scale of this missed opportunity for industrial development to supply the needs of health care, and examines its causes. Finally, the paper looks at the scope for integrating health and industrial policy, arguing that reconstruction of these domestic economic linkages is both possible and desirable. Health policy strongly influences industrial development. Furthermore, the Tanzanian public health services suffer severely from shortages of essential supplies. We argue that it is possible for economic

The importance of the pharmaceutical industry in Sub-Saharan Africa, its claim to policy priority, is rooted in the vast unmet health needs of the sub-continent. The book is a collective endeavour, by a group of contributors with a strong African and more broadly Southern presence, to find ways to link technological development, investment and industrial growth in pharmaceuticals to improving access to essential good quality medicines, as part of moving towards universal access to competent health care in Africa. We aim to shift the emphasis in international debate and initiatives towards sustained Africa-based and African-led initiatives to tackle this huge challenge. Without the technological, industrial, intellectual, organisational and research-related capabilities associated with competent pharmaceutical production, and without policies that pull the industrial sectors towards serving local health needs, the African sub-continent cannot generate the resources to tackle its populations’ needs and demands.

International health policy proposals increasingly emphasise health system strengthening and innovation. In a context of liberalised provision, the scope for innovative health system rebuilding depends on the viability, effectiveness and capabilities of the non-governmental providers. Yet the research literature examining the market behaviour of private health care firms in developing countries, and the incentive structures and constraints they face, remains limited. We demonstrate here the extent of perverse health care market dynamics found in Tanzania in the late 1990s, in relation to patients’ need for reliable health care, and show that the financial and operating fragility of the firms constrained investment and innovation. We aim to focus attention on the challenge for innovative approaches to poverty reduction represented by the current market and business structure of health care in low income countries and to discuss some policy implications.

The importance of the pharmaceutical industry in Sub-Saharan Africa, its claim to policy priority, is rooted in the vast unmet health needs of the sub-continent. The book is a collective endeavour, by a group of contributors with a strong African and more broadly Southern presence, to find ways to link technological development, investment and industrial growth in pharmaceuticals to improving access to essential good quality medicines, as part of moving towards universal access to competent health care in Africa. We aim to shift the emphasis in international debate and initiatives towards sustained Africa-based and African-led initiatives to tackle this huge challenge. Without the technological, industrial, intellectual, organisational and research-related capabilities associated with competent pharmaceutical production, and without policies that pull the industrial sectors towards serving local health needs, the African sub-continent cannot generate the resources to tackle its populations’ needs and demands.

Health care forms a large economic sector in all countries, and procurement of medicines and other essential commodities necessarily creates economic linkages between a country's health sector and local and international industrial development. These procurement processes may be positive or negative in their effects on populations' access to appropriate treatment and on local industrial development, yet procurement in low and middle income countries (LMICs) remains under-studied: generally analysed, when addressed at all, as a public sector technical and organisational challenge rather than a social and economic element of health system governance shaping its links to the wider economy. This article uses fieldwork in Tanzania and Kenya in 2012–15 to analyse procurement of essential medicines and supplies as a governance process for the health system and its industrial links, drawing on aspects of global value chain theory. We describe procurement work processes as experienced by front line staff in public, faith-based and private sectors, linking these experiences to wholesale funding sources and purchasing practices, and examining their implications for medicines access and for local industrial development within these East African countries. We show that in a context of poor access to reliable medicines, extensive reliance on private medicines purchase, and increasing globalisation of procurement systems, domestic linkages between health and industrial sectors have been weakened, especially in Tanzania. We argue in consequence for a more developmental perspective on health sector procurement design, including closer policy attention to strengthening vertical and horizontal relational working within local health-industry value chains, in the interests of both wider access to treatment and improved industrial development in Africa.

Health sectors are social and economic institutions. They reflect the broader political economy of their country, and contain within them the economic characteristics, power relations and hierarchies of the broader society – while also, strikingly, providing a location for redistributing resources, responding to need, and contesting disadvantage and exclusion. This chapter addresses the challenges facing Tanzanian health planners in seeking to move to universal health coverage from the current state of Tanzanian health care. It aims to contribute to building understandings of the scope for developmental planning for better health that is context- and place-specific in strategy while focused on practical problem-solving.

This chapter discusses standards, an elusive term and concept. For the African pharmaceutical sector especially, the term is used by the manufacturing sector, regulators, technical experts, procurement agencies, health system actors and policy makers to mean different things. There is a dearth of systematic studies that address what standards are, their classification and the logic behind their set-up and operation, and this has contributed to a huge asymmetry in understanding. The socioeconomic, technical and political issues and how they have an impact on local production and industry development, including their effects on access to markets, have also not been systematically explored. Our discussion of standards is informed by extensive literature searches, fieldwork in India, Kenya, Zimbabwe and South Africa where we interviewed technical experts in 2014, and interaction with regulatory and compliance experts in the UK.

The role of industry associations in shaping policy and regulatory environments through various lobbying activities is well established in the academic literature. In most cases, while such activities are deemed essential and effective from an industry perspective, they also carry negative connotations connected to narrow rent seeking and the pursuit of industrial elites’ interests which run counter to the public good and which often bypass democratic processes. This chapter argues, however, that in South Africa, particular historical trajectories and a lack of institutional capacities is gradually shifting biopharmaceutical industry associations away from ineffective lobbying activities to a new political approach that emphasises partnering with government and civil society organisations in the pursuit of not only narrow industry objectives, but also broader economic and development aims.

Maternal mortality is very high in Tanzania. Competent hospital care is key to improving maternal outcomes, but there is a crisis of availability and performance of health workers in maternal care. This article uses interviews with managers, nurse-midwives, and women who had given birth in two hospitals providing virtually all the emergency maternal care in one Tanzania city. It contrasts women's experience in the two hospitals, and analyses interconnections with nurse-midwives' and managers' experiences of working conditions. The conceptual literature on nurse empowerment identifies some key explanatory variables for these contrasts. Staff experienced less frustration and constraint in one of the hospitals; had more access to structurally empowering resources; and experienced greater congruence between job commitment and working culture, resulting in better work engagement. Conversely, nurse-midwives in the other hospital were constrained by supply shortages and recurrent lack of support. Contrasting management styles and their impacts demonstrate that even in severely resource-constrained environments, there is room for management to empower staff to improve maternal care. Empowering management practices include participatory management, supportive supervision, better incentives, and clear leadership concerning ward culture. Structural constraints beyond the capacity of health facility managers must however also be addressed

International health policy proposals increasingly emphasise health system strengthening and innovation. In a context of liberalised provision, the scope for innovative health system rebuilding depends on the viability, effectiveness and capabilities of the non-governmental providers. Yet the research literature examining the market behaviour of private health care firms in developing countries, and the incentive structures and constraints they face, remains limited. We demonstrate here the extent of perverse health care market dynamics found in Tanzania in the late 1990s, in relation to patients’ need for reliable health care, and show that the financial and operating fragility of the firms constrained investment and innovation. We aim to focus attention on the challenge for innovative approaches to poverty reduction represented by the current market and business structure of health care in low income countries and to discuss some policy implications.

Health care is often represented as a purely “social” sector, implying that health care expenditure is a burden on the economy. We argue in this paper that on the contrary, health care is economically productive, and that health care in Tanzania could be much more economically and socially productive if health policy and industrial policy were more closely integrated. Increasing the depth and breadth of domestic economic linkages between the health services and industrial and commercial suppliers within the Tanzanian economy can strengthen economic development while improving health care. The paper begins by defining what we mean in this paper by “health services”, “health care” and “health sector”. It then examines the economic size of health care (production and financing), the employment it generates, and its linkages to the wider economy through procurement and wholesaling. It demonstrates that the health sector, broadly defined, is economically important as a major service sector, a location of investment, a generator of employment and income, a sector of skilled training and employment, and a location for industrial growth. The health of the health sector is very important for the health of the wider economy. The rest of the paper analyses the linkages between health care and manufacturing in Tanzania in more detail. It traces the declining share of local manufacturers of medicines and other health supplies in the expanding Tanzanian domestic market, quantifies the scale of this missed opportunity for industrial development to supply the needs of health care, and examines its causes. Finally, the paper looks at the scope for integrating health and industrial policy, arguing that reconstruction of these domestic economic linkages is both possible and desirable. Health policy strongly influences industrial development. Furthermore, the Tanzanian public health services suffer severely from shortages of essential supplies. We argue that it is possible for economic

As Chapter 1 briefly outlined, Kenya has a strong and long-standing pharmaceutical industry. A 2015 Business Monitor report on pharmaceutical manufacturing in Kenya states that the country hosts the largest pharmaceutical industrial base in East Africa. The report also sees a bright future as a ‘potential base for export across East Africa’ (BMI Research, 2015). This chapter locates the Kenyan pharmaceutical industry within the country’s historical context of industrial development and growth.

Globalization of markets and production networks has made it progressively harder for low income countries to industrialize. This article addresses a conundrum facing industrial firms and industrial policy in a low-income African country: how to achieve upgrading necessary for sustained competitiveness. Using data from a study of manufacturers of health products in Tanzania, we document the double ‘squeeze’ on firms’ profits exerted by sharp price competition alongside competitive pressure for rising product quality within globalized markets. Drawing on Sutton’s model of competing on capabilities, and the sectoral systems of innovation and production framework, we argue that ‘dynamic industrial deepening’, strengthening domestic inter-firm linkages, is a key requirement for sustainable development of these health industries. We present evidence that sectoral industrial support for the health industries can promote sustainable technological upgrading, and reflect on the challenge of building developmental linkages where external investment to support upgrading is transforming existing business structures.

The benefits of local production of pharmaceuticals in Africa for local access to medicines and to effective treatment remain contested. There is scepticism among health systems experts internationally that production of pharmaceuticals in sub-Saharan Africa (SSA) can provide competitive prices, quality and reliability of supply. Meanwhile low-income African populations continue to suffer poor access to a broad range of medicines, despite major international funding efforts. A current wave of pharmaceutical industry investment in SSA is associated with active African government promotion of pharmaceuticals as a key sector in industrialization strategies. We present evidence from interviews in 2013–15 and 2017 in East Africa that health system actors perceive these investments in local production as an opportunity to improve access to medicines and supplies. We then identify key policies that can ensure that local health systems benefit from the investments. We argue for a ‘local health’ policy perspective, framed by concepts of proximity and positionality, which works with local priorities and distinct policy time scales and identifies scope for incentive alignment to generate mutually beneficial health–industry linkages and strengthening of both sectors. We argue that this local health perspective represents a distinctive shift in policy framing: it is not necessarily in conflict with ‘global health’ frameworks but poses a challenge to some of its underlying assumptions.