Espicom’s “The Outlook for Pharmaceuticals in the Middle East and North Africa” is now available at ReportsnReports.com.

1. The Outlook for Pharmaceuticals in the Middle East and
North Africa
Report Summary
Attractive macro-environmental conditions
In spite of recent political unrest, economic, social and demographic changes are making the
pharmaceutical markets in the Middle East & North Africa (MENA) region more attractive.
The Economist Intelligence Unit (EIU) forecasts that the five MENA markets covered in this
collection will represent a combined GDP of US$2.5 trillion in 2016, led by Turkey and Saudi
Arabia. Economic development is changing the epidemiological health profile in the region,
with the increasing prevalence of communicable diseases. In demographic terms, the
population in these five MENA pharmaceuticals market is still young and is expected to
reach 246.2 million in 2016, headed by Egypt and Turkey. Nevertheless, there is a sizeable
elderly population that will increase demand for healthcare services.
Healthcare development towards privatisation
The population has different levels of expectations in each national healthcare system. The
healthcare system in Egypt, for instance, is in a transitory phase, characterised by progress
towards privatisation. While access to free healthcare exists, private services are appearing as a
result of the decline in the standard of public sector care. There is a need for considerable
investment in order to continue the modernisation of programmes and maintain the existing
facilities. There are two main areas of reform: primary healthcare and the provision of a
national health insurance scheme. In Morocco, the health insurance system is in a transitional
phase. Overall, opportunities exist, particularly in Turkey and Egypt, as combined health
expenditure in these five markets is projected at US$153.2 billion in 2016.
Increasing pharmaceutical demand
International companies recognise the value and potential of these five MENA pharmaceutical
markets. Sanofi, for instance, is the largest pharmaceutical operation in Morocco, whilst
GlaxoSmithKline is the leader in Saudi Arabia. Some local producers, such as Hikma from
Jordan and SPIMACO from Saudi Arabia, aim to become regional leaders. The projected
CAGR for the region is very attractive compared to mature markets or other emerging markets.
In fact, pharmaceutical sales in these five MENA markets are expected to amount to a
combined value of US$35.8 billion at retail prices in 2016, including pharmacy and hospital
sales. The region is headed by Turkey, followed by Egypt and Saudi Arabia. Local
manufacturing production is fragmented and geared towards branded generics, but reliance on
imports remains. Biotechnology is still in its infancy.

2. HIGHLIGHTS FROM THE REGION
EGYPT
Egypt is expected to be the second leading pharmaceutical market in the MEA region in 2016.
Providing the political situation stabilises and the economy continues to perform well, the
Egyptian pharmaceutical market at retail prices is expected to rise by a high CAGR in US dollar
terms between 2011 and 2016. Espicom estimates that the market increased by nearly five
times between 1995 and 2010. Nevertheless, per capita consumption is still low. In spite of
recent production problems, production is expected to rise as the healthcare system continues
its transition towards modernisation. Considering opportunities beyond BRIC pharmaceutical
markets, Egypt is becoming a very attractive market for multinational pharmaceutical
companies focused on emerging markets.
JORDAN
Jordan has a relatively strong level of domestic production; however, the majority is exported,
resulting in a market still dependent on imports. Most imported pharmaceuticals are retail
medicaments from countries located in Western Europe, such as Switzerland and Germany,
while exports are primarily semi-finished and retail medicaments destined for other countries
in the MENA region. The largest pharmaceutical company in Jordan is Hikma
Pharmaceuticals, with a market share of over 10%. The company has a number of
manufacturing facilities in Jordan, as well as R&D facilities. In October 2010, Hikma
announced it was to acquire an injectables business from a US company, which will
significantly enhance the scope of the company’s injectables business worldwide. Previously,
Hikma acquired an Algerian company in April 2010 and a Tunisian company in March 2010,
strengthening its presence in the MENA region.
MOROCCO
Although the Moroccan pharmaceutical market is small in global terms, per capita spending on
pharmaceutical products is comparatively high for an African country. The pharmaceutical
market, which was stagnating prior to the launch of the universal health insurance scheme in
2006, is expected to grow by a moderate CAGR between 2011 and 2016. Over 50% of the
pharmaceutical companies operating in the country are owned by foreign interests, and these
companies are responsible for more than half of industry turnover. Multinationals with a
strong presence in the Moroccan pharmaceutical market include Sanofi, GlaxoSmithKline and
Pfizer. Hikma is also expected to increase its market penetration, following its acquisition of
63.9% of Promopharm, announced in October 2011. Independent local manufacturers
primarily manufacture under licence or produce generics. Leading indigenous producers
include Cooper Pharma, Laprophan and Sothéma.
SAUDI ARABIA
The Saudi pharmaceutical market is the richest in the Gulf region and is expected to rise by a
CAGR in the high single digits during the 2011-2016 period. The private pharmacy sector tends
to favour branded pharmaceuticals but is marked by tight price controls. The leading
companies operating in the sector are GlaxoSmithKline and SPIMACO. The public sector,
more generic-led, is dependent on oil revenues and is characterised by cost-containment and
late payments for tenders. There is little domestic production in Saudi Arabia, therefore the
vast majority of the market is provided by imports. There are only a few major domestic
manufacturers in the country. Locally made pharmaceuticals supply only around 15% of the
market, and the rest of the output is mainly exported to other Gulf Cooperation Council (GCC)

3. countries.
TURKEY
Turkey is the largest MENA pharmaceutical market, due to the size of its population and GDP.
The Turkish pharmaceutical market is expected to grow by a high single digit CAGR in US
dollar terms between 2011 and 2016. While the overall pharmaceutical market size is amongst
the top 30 largest in the world, per capita spending on pharmaceuticals in Turkey remains low,
especially when compared with a European country. Given the possible accession to the EU,
though this is still at least a few years away, the potential for growth is very promising,
compared to more established and mature markets in Western Europe. There is a strong
generics industry; according to the Pharmaceutical Manufacturers’ Association of Turkey
(IEIS), generics account for over a third of the market in value terms and just over half in
volume terms. There is room for this sector to expand as physicians are not actively
encouraged to prescribe generic drugs and there are no incentives for pharmacists to dispense
them.
THESE REPORTS ANALYSE THE ISSUES
The Outlook for Pharmaceuticals in the Middle East and North Africa is a unique collection of
management reports from Espicom Business Intelligence. Each report provides individual and
highly-detailed analysis of each market, looking at the key regulatory, political, economic and
corporate developments in the wider context of market structure, service and access. The
reports are available individually, or as a discounted collection, and prices include 4 completely
updated reports sent quarterly, together with a comprehensive statistical appendix. There are
over 60 markets covered in the worldwide series.
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