The pharmaceuticals market in the Middle East and North Africa offers a promising opportunity to pharmaceutical companies, in both the innovative and generics sectors. The biopharma market throughout the region exceeds $20 billion and is growing at a rate of about 8% a year. Patented drugs make up 65% to 80% of the pharmaceuticals market in total sales.
Similarly, opportunities abound in Latin America. In Brazil, the sixth largest market worldwide, an increased focus on earlier phase clinical trials is good news for the innovative research efforts. Brazil continues to have a strong generics market, as well. While some challenges are seen in Argentina, biologics and biosimilars will be more important in the future of the Argentinean pharmaceutical industry.
In total, the MENA region – stretching from Morocco on the west to Oman and Iran to the east – encompasses a population of 436 million, according to Cortellis Competitive Intelligence. The region’s GDP exceeds $3 trillion. Algeria, Egypt and the Gulf Cooperation Council countries alone comprise an emerging market of about 180 million people, boasting a compound annual growth rate (CAGR) of 12% to 15%.
Indeed, the region has everything that a drugmaker could want:
- an expanding and aging population
- unmet medical need
- a growing middle class
- the desire and the ability to pay for branded and generic therapies
- longer life expectancy, lower mortality rates and rising income levels.
Recent data from Boston Oncology LLC shows the increased prevalence of lifestyle-related diseases such as diabetes in the region. The group found the incidence of diabetes and obesity is now greater in Saudi Arabia than it is in U.S. or Europe, for example.
In addition, the MENA region offers a doorway to the largely untapped African market.
What about patents and instability?
Many outside companies will have two key concerns about doing business in the region. One is around patents.
Over the past several years, almost every country in the MENA region has updated, revamped or introduced new patent laws, with many adopting internationally accepted practices. While in the past only pharmaceutical processes were patentable, it is now possible to patent pharmaceutical products or substances. In most cases, only new chemical entities are patentable, while in others, second medical use or Swiss-type claims are allowed.
Similarly, outside companies will have concern for the region’s instability. Marketing in MENA requires a deep understanding of the culture of the various countries and sensitivity to their distinct needs. The geopolitical instability and diverse regulatory schemes also may require manufacturing redundancies and extensive diplomatic know-how.
“Things change on a dime,” Abdullah Baaj, CEO and founder of Boston Oncology, told BioWorld, the biopharma news service from Clarivate Analytics, noting that a few years ago, Syria had one of the fastest growing economies in the region. Because of the challenges, foreign drugmakers often partner with a domestic company that has years of experience working in the market. They also create contingency plans to transfer manufacturing if key sites are affected by political or social strife and they develop geographic diversity within the region to reduce the impact of issues arising in one country.
Further suggestions for building rapport in the region from experienced international pharma executives:
- use social media and mobile apps to offer patients helpful health tools;
- raise community awareness about health issues and diseases; one company holds a Middle East camp for children with diabetes, for example, and sponsors a campaign on safe ways for diabetic patients to fast during Ramadan;
- recruit and train a skilled biopharma work force through internships, online courses and scholarships;
- provide regional training programs and scholarships to global conferences to help MENA doctors keep abreast of medical developments;
- conduct a clinical trial in-country for an approved drug to raise doctors’ awareness and confidence in the quality and effectiveness of specialty products.
Latin America landscape
Some positive developments likewise are unfolding in Latin America. Though Brazil boasts a national healthcare program, Sistema Único de Saúde, 25 percent of the population opt to purchase private insurance for access to second and third-tier care.
This has resulted in a large patient population with reduced access to beyond-basic level care, leaving potential subjects largely treatment-naïve which promotes not only participation in clinical trials, but retention as well.
Brazil ranks highest in clinical study starts among Latin American countries and ranks among the leaders in approval times after submission.
Following years of strong expansion, pharmaceutical sales growth has slowed in Argentina, the region’s fourth largest market, a result of sharp economic deceleration, erosion of real incomes and persistent inflation.
Against this backdrop, life sciences companies are facing the dual challenges of providing affordable, effective treatments to consumers and achieving revenue and market goals.
And while clinical trial starts have decreased in recent years – similar to other countries in the region – reforms are in place to increase trial starts.
For more details on proven strategies employed by successful drugmakers in the MENA region, click here to see the author’s full presentation from CPhI Worldwide, which includes detailed analyses of 12 markets in the Middle East and Africa. The presentation also includes a look at “The LATAM Pharmaceutical Market as Seen in the Data” with a special focus on Brazil and Argentina.