Algeria is the second-largest African country by territory, and one of the key markets on the continent. While the standard of healthcare provision across the country is uneven, the market’s relatively large size (Algeria’s population is in excess of 34mn), high dependence on imported medicines and steady forecast growth are key attractions. By 2012, BMI forecasts that the market value will top US$1.26bn, with an average annual growth of around 6%. Generics will continue to represent the bulk of consumption in terms of volumes, although improving conditions for multinationals will gradually result in the further erosion of their market value share by patented drugs.

Algeria has been included in BMI’s Business Environment Ranking table for Q308 for the first time, sharing 11th place with its North African peer, Egypt. Algeria is found above all the other African markets in the table, namely Kenya, Nigeria and Zimbabwe – bar the more advanced market of South Africa. Algeria’s score for risks to potential returns is negatively impacted by the government’s progenerics stance and some shortcomings of the country’s intellectual property rights (IPR) regime. In addition, the country’s excessive red tape and corruption are also viewed with concern, as are certain macroeconomic indicators. On a positive note, the forecast pharmaceutical value growth and rising numbers of urban dwellers are factors in favour of local investment, as is the fact that the country is making progress towards World Trade Organisation (WTO) membership.

Illustrating the above situation, local press in October 2007 revealed that French pharmaceutical major Sanofi-Aventis is considering creating a local manufacturing facility in Algeria, which would be engaged in the production of generic medicines. Although no further details have been revealed, it is known that Sanofi-Aventis continues to record annual growth rates of over 10% in Algeria. Other major multinationals are also highly visible in the country, with the UK’s GlaxoSmithKline (GSK), Swiss Novartis and US-based Pfizer being among the top five suppliers. Pharmaceutical market growth over the next five years will be stimulated by the continuation of the US$2bn healthcare modernisation 2005-2009 programme, which envisages the building of numerous hospitals and clinics. Authorities are aiming to improve healthcare access, with adequate provision of health services being a challenging proposition, given the vast inhospitable areas of the country. Additionally, the World Bank has warned that projects should be implemented gradually and that the government should return to the viable level of spending for the longer term.