Rising pharma waste opens new business opportunities

From the newsletter

A new report by the United Nations Environment Programme warns that unused medicines are creating a fast-growing but largely unregulated waste stream. As pharmaceutical waste rises globally, it is also opening up a largely untapped circular economy market, particularly in Africa, where disposal systems remain fragmented or absent.

• Pharmaceutical spending across Africa is projected to grow by more than 30% over the next five years, driven by population growth and higher-cost medicines. Without systems to manage unused drugs, this growth is set to drive a corresponding increase in unmanaged pharmaceutical waste.

• While mature markets are scaling pharmaceutical waste management into a high-value sector, Africa’s systems remain underdeveloped, creating an opportunity to build a circular value chain.

More details

• In Africa, rising medicine consumption, low adherence and weak disposal systems mean a significant share of medicines goes unused, with limited infrastructure to safely collect or treat it. The result is an expanding waste stream that poses environmental and public health risks, particularly antimicrobial resistance.

• Yet within this challenge lies a clear circular economy opportunity. Globally, the management of unused medicines is evolving into a high-value market, but in Africa structured solutions remain scarce. What is emerging is not a single opportunity, but an interconnected circular value chain spanning collection, transport, treatment and data. This is laying the foundation for a new circular value chain, with space for first movers across its different segments, from reverse logistics linking households, pharmacies and hospitals, to digital platforms that track consumption and disposal.

• From a commercial perspective, several distinct business models are beginning to emerge across the pharmaceutical waste value chain and are highly relevant to African markets. Reverse logistics systems, which handle the collection and aggregation of unused medicines from households, pharmacies and hospitals, are likely to generate revenue through service and compliance contracts with municipalities, healthcare providers and, potentially, pharmaceutical companies as regulation evolves. Most African markets currently lack formal collection systems, meaning early entrants can establish critical infrastructure and secure long-term service agreements as regulatory demand for safe disposal grows.

• Alongside this, digital tracking and compliance platforms offer a complementary, scalable layer of value. By monitoring medicine distribution, usage and disposal, these systems can support regulatory reporting, improve inventory management and reduce upstream waste. Their appeal lies in their scalability and relatively low capital requirements, allowing providers to expand across markets while generating recurring revenue through subscriptions or service-based models.

• Another emerging model is the redistribution of unused, unexpired medicines through regulated platforms, allowing surplus stock from hospitals and pharmacies to be redirected to areas of need. This creates a commercial opportunity through transaction fees, logistics services and cost-sharing arrangements with healthcare providers, who benefit from reduced procurement costs and lower wastage.

• Further downstream, waste treatment infrastructure remains one of the most critical and underserved segments, with limited facilities across the continent and rising pressure to manage hazardous waste safely. Facilities such as high-temperature incineration and alternative treatment technologies are essential for destroying pharmaceutical waste. While capital intensive, they have the potential to offer more stable, long-term returns in markets where safe disposal becomes a regulatory requirement.

• These models are already being implemented in other markets. In countries such as the United Kingdom and Australia, national take-back systems are integrated into pharmacy networks, while the United States operates a mix of permanent collection sites and nationwide campaigns. In the Netherlands, voluntary pharmacy-based collection is supported by municipal systems, and middle-income countries such as Mexico have introduced Extended Producer Responsibility schemes to fund and manage disposal.

• However, realising this potential will depend on policy and coordination. Given the highly regulated nature of pharmaceuticals, clear policy frameworks will be essential in converting this gap into a functioning market. Governments will play a central role in enabling take-back systems, introducing Extended Producer Responsibility frameworks and supporting awareness campaigns. Effective systems will also require coordination across health authorities, industry and waste management firms to ensure that collection, treatment and compliance mechanisms operate as an integrated system.

Our take

• As pressure for a circular transition grows, demand for pharmaceutical waste solutions is likely to rise, creating a first-mover advantage in underdeveloped markets where systems are still emerging and early entrants can shape infrastructure, standards and long-term market dynamics.

• However, the pace at which this opportunity materialises will depend on how quickly policy translates into enforceable systems. In many markets, weak implementation and funding constraints mean demand may remain uneven, limiting the speed at which a scalable market can develop.