Changes forecasted for Middle Eastern and African pharma markets, notes CPhI report

A new report from CPhI has forecasted changes for the Middle Eastern and African pharmaceutical markets over the next few years, highlighting recent changes in the regulatory space coupled with increasing geopolitical stability and rising generics consumption as the key drivers.

The CPhI Middle East and Africa report has been released in advance of the CPhI MEA show, set to take place between 3–5 September in Abu Dhabi. In the report significant opportunities for the region have been identified.

“Our report shows that there two types of market in the region, and both are likely to grow extremely quickly in the near term,” explained Cara Turner, brand manager — CPhI Middle East & Africa at UBM. “The high-income economies offer excellent opportunities for innovative and branded medicines, whilst the free trade agreement between the GCC (Gulf Cooperation Council) nations will undoubtedly increase generics consumption. Additionally, high growth economies in Africa (notably Nigeria, Ghana and South Africa) also look a good bet for rapid generics growth over the next five-years [with compound annual growth rates of around 10% each].”

After the recent free trade deal with the GCC, manufacturers based in India are set to be well placed to capitalise on the reduced trade barriers. Additionally, the GCC has put a drug price harmonisation strategy in place to standardise drug pricing in the region. Overall, these factors have led to a decrease in pricing across the region with a rise in generics consumption. However, in the report, it is stated that Indian and other APU manufacturers will be the most likely beneficiary of these changes as there is a cultural distrust of cheaper foreign products in the short term.

Furthermore, the report notes that with a stabilised political situation and gentrifying populations, there are vast opportunities for manufacturers and CMOs in North Africa to potentially become licensed manufacturers of products. With this, international companies will be able to penetrate the regional market whilst also reducing risk. Stringent registration and packaging requirements also increase the likelihood of local international partnerships rather than the direct import of generics.

In Saudia Arabia, there is an active attempt by the government to try to increase generic consumption by regulating imported branded drugs and promoting the production of local generics. As a result of this, the report notes that it may be beneficial for local generic manufacturers, along with international firms, to either look towards mergers and acquisitions in order to protect their brands or partnerships with branded internationals to diversify their products.

Finally, the report highlights a trend in foreign direct investments happening by large pharma and generics companies in light of the new opportunities, which have the ultimate goal of acquiring local manufacturing facilities. As an example, Sanofi’s recent entry into Saudia Arabia.

“International companies looking at the opportunities that abound in this region must appreciate cultural business norms,” continued Turner. “Our feedback from the market says that no matter how large a company or positive its international repute, there is definitely a great deal of importance placed in building personal relationships with potential business partners. It’s also one of the reasons we have introduced Live Pharma Connect, a Match & Meet service, as well as a new Hosted Buyer Programme at the event to help build these new networks.”

In conclusion, the report authors emphasized however, that those seeking to enter the MENA market can encounter various challenges. These are a result of numerous ‘drag factors’, such as vastly differing spending powers amongst its constituent nations, the lack of a centralised pharmaceutical regulator and varying preferences for branded products versus generics.

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