Pooling pharmaceutical demand in Africa: the African Pooled Procurement Mechanism
Pooled medicine procurement can strengthen Africa’s bargaining power. Its industrial impact nevertheless depends on local production, regulation and sustainable funding.
The first tender run by the African Pooled Procurement Mechanism (APPM) secured prices 30–90% below national reference prices for essential reproductive, maternal, newborn and child health (RMNCH) medicines. This result illustrates the mechanism’s central premise: fragmented demand, not resource scarcity alone, accounts for part of the additional costs and supply insecurity weighing on African health systems.
The strategic stakes nevertheless extend beyond price. Led by Africa CDC and endorsed at the 37th African Union Assembly in February 2024, APPM aims to turn purchasing power dispersed across 55 markets into continental bargaining leverage, then direct that leverage towards local production. This brief examines that conversion: can a procurement instrument simultaneously reduce prices in the short term and build long-term industrial sovereignty? Or do these goals conflict when African suppliers remain a minority, continental regulation is incomplete and financing depends on external funders?
Strategic context
The problem is a market failure. Africa imports more than 70% of its medicines and produces less than 1% of the vaccines it administers; dependence on imports for rapid diagnostic tests exceeds 80%. The structure of demand compounds this dependence: spread across fifty-five states in small, poorly anticipated orders, it neither secures competitive prices nor gives manufacturers the visibility needed to invest. Africa CDC identifies precisely these fragmented markets, small volumes and weak demand forecasting as the barriers aggregation is intended to address.
The response forms part of a broader institutional architecture. APPM draws on the pharmaceutical initiative anchored in the African Continental Free Trade Area (AfCFTA), supported by Afreximbank and the Economic Commission for Africa, and uses the Africa Medical Supplies Platform (AMSP), tested during the pandemic. Africa CDC Director-General Dr Jean Kaseya describes the objective as creating a medical market worth around USD 50 billion capable of supporting the continental ambition to produce 60% of vaccines, diagnostics and therapeutics locally by 2040. Demand aggregation is thus conceived less as a central purchasing body than as a market-shaping instrument.
This approach has a precedent. During the COVID-19 pandemic, the African Vaccine Acquisition Trust (AVAT), established in 2020 under the African Union and backed by a USD 2 billion Afreximbank guarantee, negotiated directly with manufacturers and secured up to 400 million doses of the Johnson & Johnson vaccine. This demonstrated that pooled demand could secure discounts and fairer distribution. APPM is its institutional successor, extending an approach initially tested on vaccines to all health products. The experience also offers a warning: AVAT suffered from uncertain demand and order cancellations as donations and COVAX supplies arrived, showing that pooling works only when states make firm commitments.
Case analysis: the African Pooled Procurement Mechanism
Among its achievements, the mechanism moved from political decision to implementation in less than two years. Officially launched across 55 member states at the pharmaceutical suppliers’ meeting in Addis Ababa in October 2025, it delivered its first tangible result in May 2026: a tender for ten priority products in ten member states, awarded after thirteen bids and concluded through non-exclusive framework agreements with several qualified suppliers. The non-exclusive nature of these agreements matters: it secures supply through diversification rather than concentration on one supplier. Industrially, assured markets and long-term purchase commitments reduce investment risk for local producers, as Africa CDC emphasises.
Several systemic constraints nevertheless limit its reach. The first is the still marginal participation of African manufacturers: Africa CDC acknowledges a ‘growing but limited’ presence of the continent’s producers in its first tender. This creates a structural tension: optimising short-term prices can favour non-African suppliers and thereby postpone the goal of bringing production closer to home. The second constraint is regulatory: demand aggregation requires consistent quality assurance, which only an operational continental authority can guarantee; yet the African Medicines Agency, whose treaty entered into force in 2021, is still being operationalised. The third is financing: the mechanism relies on external commitments—a USD 2 billion Afreximbank facility and USD 1.2 billion mobilised by Gavi for the vaccine manufacturing accelerator—raising questions of sustainability and exchange-rate risk for states with limited fiscal space.
Policy pillars and recommendations
Pillar 1 — Link procurement to the expansion of African manufacturing
Demand aggregation will advance sovereignty only if it is linked to the development of local supply. Preference mechanisms with progressively increasing local-content targets—and strictly conditional on quality—could prevent the mechanism from reinforcing the import dependence it seeks to reduce. Price cannot be the sole award criterion.
Pillar 2 — Anchor APPM in continental regulation
Credible pooled procurement requires a single guarantor of quality. Accelerating the operationalisation of the African Medicines Agency and mutual recognition of authorisations between states are prerequisites for expanding the mechanism, not optional additions.
Pillar 3 — Secure sustainable funding and manage exchange-rate risk
Financing and credit should be treated as levers governed by transparent rules, not as solutions in themselves. Working capital backed by Afreximbank, pooled payment guarantees and a path towards reduced donor dependence would improve predictability without placing risk solely on national budgets.
Pillar 4 — Reconcile pooling with sovereignty
Participation requires states to delegate part of their procurement autonomy. Voluntary but incentivised membership, aligned with regional economic communities and their existing purchasing bodies, and supported by transparent governance, is essential to trust.
Pillar 5 — Scale up on the basis of evidence
Expansion should remain sequenced: first, high-impact essential products—maternal health, noncommunicable diseases and diagnostics; then rigorous measurement of savings and supply security; finally, expansion guided by results.
Institutional challenges and conclusion
Three institutional challenges will shape the mechanism’s trajectory. The first is political: pooling encounters the sovereign prerogative of public health procurement, and its voluntary nature makes it dependent on participation. The second is ecosystem coherence: APPM, the African Medicines Agency, the manufacturing accelerator and AfCFTA will be effective only if coordinated; otherwise, demand aggregation will encounter a lack of qualified supply. The third is financial sustainability, as the withdrawal of international funding weakens health programmes across the continent.
Ultimately, the African Pooled Procurement Mechanism is a credible market-shaping instrument, and its first tender demonstrated the price effect of aggregated demand. The difficulty lies in converting this purchasing power into industrial capacity. Without greater participation by African manufacturers, operational continental regulation and sustainable financing, it risks being merely an efficient purchasing body rather than the sovereignty lever it aspires to become. APPM’s impact will be measured less by the volume of its next contracts than by the share eventually won by the continent’s producers.