mPharma Expands Operations into Ethiopia

mPharma, a health technology company originating in Ghana, has announced its entry into the Ethiopian market. The startup specializes in the management of prescription drug inventories for pharmacies and their respective suppliers.

Company Background

Founded in 2013 by Daniel Shoukimas, Gregory Rockson, and James Finucane, mPharma provides services encompassing vendor-managed inventory, retail pharmacy operations, and crucial market intelligence. These services cater to hospitals, pharmacies, and individual patients alike.

Challenges in the African Pharmaceutical Market

The African pharmaceutical sector, valued at $50 billion, is characterized by significant hurdles. These include complex supply chains, limited order quantities, and inflated medication costs.

Consequently, many individuals across Africa struggle to access necessary treatments due to affordability issues, leading to preventable suffering and untreated illnesses.

mPharma’s Reach and Impact

Currently operating in Ghana, Kenya, Nigeria, Rwanda, and Zambia, alongside two additional undisclosed countries, mPharma aims to enhance medication accessibility at lower prices while upholding stringent quality standards. The company reports serving over 100,000 patients each month.

Furthermore, mPharma has facilitated the distribution of over a million drugs to African communities through its network of 300 partner pharmacies throughout the continent.

CEO Rockson’s Vision

CEO Gregory Rockson revealed that a key objective from the company’s inception eight years ago was to establish a pan-African brand with a strong presence in Ethiopia, Kenya, and Nigeria.

Expansion Journey and Challenges

mPharma initially launched operations in West Africa in 2018. In 2019, the health tech company acquired Haltons, Kenya’s second-largest pharmacy chain, gaining 85% ownership and effectively entering the Kenyan market.

Despite initial difficulties and setbacks, the expansion into East Africa was ultimately successful. Rockson attributes these challenges to the complexities of conducting business with foreign entities.

Ethiopia’s Unique Economic Landscape

“Ethiopia represents one of the most regulated economies on the continent,” Rockson explained. “This has presented obstacles for startups seeking to establish a foothold, as the government typically restricts foreign investment within the retail sector.”

Franchise Agreement for Ethiopian Entry

To navigate these restrictions, mPharma adopted a franchising model for its expansion into Ethiopia, Africa’s second most populous nation. The company entered into a franchise agreement with Belayab Pharmaceuticals, a subsidiary of the Belayab Group.

The Belayab Group is a prominent conglomerate also holding franchise rights for well-known brands such as Pizza Hut and Kia Motors within Ethiopia.

Future Plans in Ethiopia

Rockson anticipates the opening of two pharmacies in Addis Ababa this year through this partnership. These pharmacies will offer mPharma’s Mutti consumer loyalty program, providing members with discounts and financing options for medication access.

“Pharmacy-in-a-Box” Solution

This franchising strategy is part of mPharma’s broader plan to facilitate market entry for companies in the pharmacy retail sector. The company aims to provide a comprehensive “pharmacy-in-a-box” solution.

This includes handling all infrastructural aspects, allowing pharmacies to focus solely on customer service.

“We equip these pharmacies with our software and manage the backend physical infrastructure and warehousing,” Rockson stated. “Pharmacies can then rely on mPharma for product delivery and software support, enabling them to concentrate on clinical care.”

Funding and Industry Expertise

mPharma is a well-funded healthtech startup in Africa, having raised over $50 million in investment. Last year, a $17 million Series C funding round led to the appointment of Helena Foulkes, former president of CVS, to its board of directors.

She joined Daniel Vasella, ex-CEO and Chairman of Novartis, bringing decades of pharmaceutical industry experience to the company.

Dominating African Healthcare

Rockson confidently asserts that mPharma’s goal is to become a dominant force in African healthcare, with Ethiopia representing a crucial, albeit challenging, market to secure.

“Fragmented pharmacy retailing, substandard practices, and high prices remain unresolved issues,” he noted. “The African market presents a significant opportunity, and we are still in the early stages of healthcare privatization across the continent.”

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