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Market |
Healthcare and Medical |
Report Type |
Market Research |
Country |
Algeria |
Published |
9 February 2009 |
Number of Pages |
60 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
In recent years, Algeria has emerged as one of the key pharmaceutical markets in Africa, as illustrated by its climb to joint ninth position in the Business Environment Rankings matrix for the 17 main countries in the Middle East and Africa (MEA). Main draws of Algeria’s pharmaceutical market include its considerable size (with a population of over 34mn) and the substantial potential for healthcare investment, given the fact that the country is a major hydrocarbons exporter. However, the government remains accused of giving preferential treatment to generics products and the domestic industry, while the country’s wider intellectual property rights (IPRs) environment is also a cause of concern for multinationals operating within Algeria.
Algeria’s over-reliance on hydrocarbons increasingly leaves public-sector finances vulnerable to changes in global energy prices. As the global financial crisis is forecast to dampen Algeria’s GDP growth over the coming two years somewhat, its pharmaceutical market growth will also be affected, especially as 20% of expenditure on pharmaceuticals comes from out-of-pocket expenditure by Algerians.
Nevertheless, the market will grow from an estimated US$2.35bn in 2008 to US$3.15bn in 2013, which is a substantial figure in regional terms. With a presidential election scheduled for 2009 (most likely contested by the incumbent, Abdelaziz Bouteflika), cutting back on expenditure would be politically risky, even if there is no clear contender able challenge Bouteflika's reign.
Presently, one of the main reasons deterring foreign investment is the fact that Algeria is not yet a member of the World Trade Organization (WTO), although negotiations are well under way. Submitting to WTO regulations would create attractive operating environments for multinationals. Other risks to business environment and overall market values are the recently introduced measures stipulating 45% of imports be generics.
In November 2008, the Algerian government began reviewing medicine laws with the objective of reducing reliance on drug imports, forcing domestic pharmaceutical companies to produce more drugs, and preventing capital from leaving the country. Judging by the consequences of the previous import bans, the measures may mean medicine shortages, showing that such a simplistic approach cannot overnight make Algeria self-sufficient with regard to the supply of pharmaceuticals.
In the meantime, several foreign companies – mainly generics specialists - are increasing their involvement in the Algerian market. In December 2008, Icelandic Actavis signed a major distribution deal in Algeria, entering into an exclusive distribution and packaging agreement for a number of generic products with Laboratoire Pharmaceutique Algérien (LPA), an Algerian owned and operated pharmaceutical company. BMI notes that the timing of the deal is particularly interesting, considering the government's current objective of reducing reliance on drug imports and increasing domestic manufacturing. Whether the Icelandic firm’s collaboration with a local company sidesteps the planned legislations remains unclear.
Healthcare and Medical Company Profiles contain up to date financial, strategic, operational, SWOT analysis and product information on the activities of thousands of healthcare and medical companies.
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