© Oxford Business Group's series of on-line and print publications have become renown as the leading source of information for Eastern Europe, North and South Africa, The Middle East and Asia.

LATEST ECONOMIC BRIEFINGS
KUWAIT | 26.06.2007
Kuwait's insurance industry is relatively underdeveloped compared to some of its Gulf Cooperation Council (GCC) neighbours like the United Arab Emirates (UAE) and Saudi Arabia, but the takaful sector is showing impressive growth.

OMAN | 26.06.2007
With the clock ticking on the life expectancy of the Middle East's fossil fuel reserves, a private firm in Oman is planning to produce biofuel from plant cellulose that derives from the sultanate's abundant date palm groves.

TURKEY | 26.06.2007
One of Turkey's biggest corporations has flagged a major shake-up of its operations, looking to consolidate its core activities and divest peripheral interests in a drive to improve profits and build up capital for future investments.

INDONESIA | 26.06.2007
Expectations for the cement sector have been exceeded by market performance in the first five months of this year.

MOROCCO | 25.06.2007
La commission des investissements, présidée par Driss Jettou, premier ministre du Maroc, a annoncé le 13 juin dernier la création de trois grandes cimenteries pour un investissement global de 8,9 milliards de dirhams ($1.1bn).

GCC Technology Insight
GCC | 28.05.2007
The present surge in establishing universities and technology parks in the Gulf Cooperation Council (GCC) region is beginning to show a gap in the market: the need for improved research standards.

RSS feed

Pharmaceuticals Boom

Jordan, Volume 168
21.06.2007

Jordan's pharmaceutical industry is continuing to play a key role in bolstering the kingdom's exports.

According to figures released by the Jordanian Association of Manufacturers of Pharmaceuticals and Medical Appliances (JAPM), the pharmaceutical industry accounted for 11% of the country's exports in 2006, for a total of almost $500m. This was almost a 20% increase on the 2005 figure. The production capacity of the sector as a whole now reaches $1.4bn and exports from the industry extend to 60 countries.

This is welcome news for the local pharmaceuticals sector that continues to perform competitively in a thriving regional market. Jordan has a long history in the industry and has developed a strong technical expertise to underpin the sector. This has been supported by improved regulation over the last five years, which is helping to foster research and development. As part of the process of gaining World Trade Organisation membership, granted in 2000, the Jordanian government worked with the US Agency for International Development to improve the regulatory environment governing trademarks and patents. This has strengthened Jordan's intellectual property rights and attracted foreign investment into the pharmaceuticals sector.

The stringent governance of Jordan's Food and Drug Administration has also helped facilitate growth. Its role not only makes the clearance to sell pharmaceuticals in neighbouring countries easier, but also makes attaining approval to market the drugs in the EU and the US within reach. Aware of the local strengths of the market, the Jordanian government is expecting the sector to double in size to reach $1bn by 2010.

The Jordanian pharmaceutical industry has strong export links with North Africa, particularly Algeria and Libya, as well other markets such as Saudi Arabia and Iraq. However, drugs makers in Jordan are increasingly trying to tap the lucrative European and US markets.

These two areas are differentiated by the difficulty in acquiring licences to sell, for example, Jordanian-made generic products. The EU Commission Enterprise and Trade issue a Good Manufacturing Practice certificate, which is necessary to produce pharmaceuticals in the EU. Also needed is approval by the European Medicines Agency. Seven Jordanian companies are so certified. These include Hikma Pharmaceuticals, United Pharmaceuticals and the Jordanian Pharmaceutical Manufacturing Company. Companies can apply for EU approval for their manufacturing facilities without filing a product for testing at the same time.

The US Food and Drug Administration, however, requires that a specific product must be filed before a manufacturing facility can be approved. That means that the investment necessary to get US regulatory approval is hefty - an estimated $300m. The only Jordanian company that has made the grade so far is Hikma, which has had over 40 products approved by the agency. Hikma reported revenues of $154m in the first half of 2006, up 17% on the same period in 2005. Solid growth in each of Hikma's three core markets - the EU, the US and the Middle East and North Africa region - is fuelling its financial success, a pattern which other Jordanian companies would like to emulate.

Despite strong export growth, the local market is still largely reliant on imports. Locally manufactured pharmaceuticals cover just 30% of the local market's demand, as they are unable to compete with the quality and pricing of larger international drugs makers.

However, competition remains fierce with 17 local companies producing many generic drugs. Samir Mansour, the regional representative for the Middle East and North Africa for Pharmaceutical and Research Manufacturers of America, told OBG, "There are too many players in the local industry. Consolidation could help to strengthen the sector and maintain its competitive position within the region."

Pricing remains a key issue in the Jordanian market. Margins remain low because of the number of cheap generics that are available and a government policy that puts a price cap on pharmaceuticals. Drugs makers are currently negotiating this pricing policy with the government [CM5]and they are largely optimistic for the future. Majida Jboor, the country manager for the Swiss pharmaceutical firm, Novartis, told OBG, "I think the new pricing law expected this year will have a positive impact on the industry especially as the government is keen to include all stakeholders in the discussions."
Valid HTMLValid CSS