Assessment of some factors that influence the productiveness and competitive performance of local pharmaceutical manufacturing companies in a low-income country setting: The case of Ethiopia

Local pharmaceutical production reduces dependency on imports. It also strengthens country-based medicine supply. In Ethiopia, there are government policies in place that aim to support local manufacturers. However, most of them operate below capacity, supplying only 15-20% of national pharmaceutical needs. This study assessed internal, external, and production-related factors that influence the productivity and competitive performance of local pharmaceutical manufacturing companies. A mixed concurrent triangulation design was conducted from October 2021 to February 2022. Quantitative data were collected from 40 employees across ten local manufacturers, while qualitative data were obtained through 29 key informant interviews with representatives from manufacturers, the Ethiopian Food and Drug Authority (EFDA), the Food, Beverage, Pharmaceuticals Industry Development Institute (FBPIDI), and the Ethiopian Pharmaceuticals and Medical Supplies Manufacturing Association (EPMSMA). Quantitative data were analyzed using SPSS version 25, and qualitative data were analyzed thematically. Internal factors, including material handling (β = 0.57, P < 0.036) and production planning and machine maintenance (β = 0.16, P < 0.047), were significantly associated with manufacturing performance. Among external factors, policy and economic conditions (β = -0.07, P < 0.042) significantly affected performance. Only three manufacturers fully complied with cGMP standards. Most government policies designed to support local production were not yet implemented, resulting in underutilization of capacity (<50%). The major challenges are limited foreign currency, technology transfer hurdles, shortage of qualified personnel, raw materials inadequacy and tax policies favoring imports. Both internal and external factors significantly influence the performance of local pharmaceutical manufacturers. Although government policy directions exist to support them, incomplete implementation limits their impact.