The Middle East and North African countries are dominated by 18 countries spanning from Morocco to Iran. The MENA pharmaceutical market began to develop in 1970’s and more than 140 pharmaceutical factories operating across the region today. There is a local production of pharmaceutical medicines and is dominated by generic manufacturers. There is a strong dependence on imported finished products, raw materials and packaging in the 18 countries. There has been an extensive licensing by domestic producers has helped to accelerate the adoption of good manufacturing practices across the region. In the classification, many analysts also classify Pakistan and Afghanistan in the MENA markets

MENA markets offer significant growth opportunities for generics
The region has a mix of both opportunities and challenges.

The region has growing populations, increasing affluence, increasing government health expenditure, fluctuating pricing environment, developing health insurance industry and lower manufacturing costs.

Extensive brand promotion by multinational companies, fragmented regulatory procedures, preferential treatment for local producers and lower quality perception limiting generic penetration are some of the key challenges facing the MENA region.

Potential: Significant scope to increase per capita pharmaceutical spend
In comparison with the developed nation of the west, i.e. in North America and Europe, The MENA countries per capita drug spending is extremely low. Even one of the growing and prosperous countries like UAE, Kuwait and Saudi Arabia, the spends are nearly half of the European countries and less than one third of their North American counter parts.

Scenario in the year 2010 for MENA markets as per estimates from PRTM consulting are that only GCC Pharmaceutical Sales (Gulf governing council countries) were $5.6 billion in 2010, and are expected to grow at 6-8% to reach $11 billion by 2020.

In the GCC countries, Imports constitute 80% of sales, Saudi Arabia is the largest market (~51% of sales) and there is exceptionally low investment in R&D in the region compared to international levels.

The number of pharmaceutical factories in the GCC grew from 11 In 1990 to 40 In 2009

1. The majority of the factories are in Saudi Arabia and UAE
2. Few companies are publicly listed which creates opportunities for Private Equity and Venture Capital investors

Africa - the growth driver of the pharmaceutical market in the MENA region
Africa comprises 54 countries in various stages of economic evolution, medical care facilities, healthcare policy, and population wealth. Sub-Saharan nations, in particular, have a limited economic base from which to kick-start their development, and thus a considerable way to go before they can match the economic pace of the wealthier areas of the continent. Nearly 70 percent of HIV/AIDS patients live on the African continent. This is a huge burden on a growing economy and an impediment to more rapid economic development. An estimated 14 million children in Africa have been orphaned as a result of HIV/AIDS. In addition, infant mortality rates are the highest in the world, at about 109 per 1,000 in some parts of sub-Saharan Africa. All these factors are reflected in the growth forecast for the African pharmaceutical market .  As part of the anticipated general economic growth, the African pharmaceutical market is expected to achieve a year-on-year growth rate of 10.6 percent by 2020, resulting in pharmaceutical sales of $45 billion in 2020.  Above and beyond the general economic development, pharmaceutical growth is also driven by governments striving to improve access to healthcare for their citizens. For example, Nigeria, Africa’s most populous country, is aiming to implement its National Health Insurance Scheme to provide universal healthcare for all citizens by 2015. Taking these factors into account, leading participants in the pharmaceutical field consider South Africa and the Northern African economies to be as important for their businesses as second-tier emerging markets.

As a result of the improving standards of living and the more Westernized lifestyle, the World Health Organization predicts that disease patterns in Africa will shift significantly.  Infectious diseases, maternal and perinatal conditions, and nutritional deficiencies currently account for nearly two-thirds of Africa’s overall disease burden. The incidence of “basic” health issues, such as infant mortality, will decrease. Lifestyle diseases, particularly diabetes and cardiovascular diseases, are expected to increase, and will gain noticeably in importance by 2030 (from 11 percent in 2008 to 19 percent in 2030).

 Longer life spans will have a knock-on effect on the rates of oncological diseases, which are expected to double over the next two decades, from 5 percent of all diseases to 10 percent. Anti-infectives and antivirals will retain their dominant market position and continue to demonstrate strong growth over the next five years As the wealth of the general population increases, affordability of medication will rise similarly. This means that healthcare that was previously denied on the grounds of cost, such as that for HIV/AIDS patients, will be increasingly taken up.

Development of the African Pharmaceutical Market
Major Markets in the MENA region by sales according to IMS health
The table below shows highlighted markets in the MENA region, and their performance in 2013. Saudi Arabia is the largest pharma market in the region, with Iraq as the fastest growing market

Market characteristics

1. Relatively low generic penetration means scope for growth
2. Largely Branded market
3. Patented, generic and OTC products marketed under specific brand names
4. Relative wealth of population, particularly in the GCC, drives demand for branded drugs
5. Generic penetration is fairly low across the region, especially in the GCC
6. BMI estimates that generic drugs account for less than 10% of the GCC pharmaceutical market
7. Markets like Egypt and Tunisia have higher generic penetration