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Algeria Pharmaceuticals and Healthcare Report Q2 2009
Market |
Healthcare and Medical |
Report Type |
Market Research |
Country |
Algeria |
Published |
16 April 2009 |
Number of Pages |
61 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
Gradual liberalisation of Algeria’s economy over the past decades has resulted in the country emerging as one of the more promising new markets. In terms of opportunities for the pharmaceutical industry, however, the country is judged as having one of the most challenging operating environments out of the 17 key markets surveyed by BMI’s Q209 Business Environment Rankings matrix in the Middle East and Africa (MEA) region. Main criticisms include certain shortcoming of its regulatory and intellectual property (IP) regimes, which are biased against local – overwhelmingly generic – producers.
Nevertheless, although per capita spending on healthcare and drugs continues to lag behind some of its MENA peers, Algeria’s position as a major oil and gas exporter will play a significant role in healthcare system modernisation over the coming years.
In the forecast period, Algerian pharmaceutical expenditure at consumer prices is forecast to rise at a compound annual growth rate (CAGR) of 6.16% in local currency terms, with the market value increasing from DZD158.98bn (US$2.35bn) in 2008 to DZD214.41bn (US$3.02bn) in 2013. This rate of growth is roughly in line with a number of other regional markets, with faster value development severely hampered by the emphasis on the use of cheaper, generic medicines, both imported and produced locally.
The government aims to reduce its reliance on imports, with latest steps taken in this direction including the announcement that a new hepatitis B producing plant will be built by local drugmaker Saidal, in partnership with Cuban Heber Biotec and the vaccine specialist Institute Pasteur. In the meantime, rising health awareness and the tightening of dispensing legislation is expected to lead to a CAGR 15.13% increase in the value of the over-the-counter (OTC) market, which is forecast to top DZD14.8bn (US$0.2bn) in 2013.
In terms of the wider operating environment, the news is relatively positive. In fact, we are forecasting a global trend-busting 5.7% expansion in Algerian real GDP in 2009, driven by hydrocarbons output.
However, growing restrictions on foreign investment continue to bode ill for economic diversification efforts, as does the fall in oil export revenues, amidst lower prices and demand. Nevertheless, public sector spending in general is forecast to increase as the government pushes ahead with its ambitious economic development plan in the year of the presidential election, although much of this budget has been earmarked for infrastructure development. However, we continue to have concerns regarding the clampdown on foreign investment which, combined with lower oil prices, has already resulted in reduced interest from foreign oil firms for production concessions.
In the meantime, the performance of the social security system, which is largely financed by contributions from employees and employer and is responsible for around 5% of the country’s GDP, will be closely tied to the wider economic climate. The government is, therefore, making improvements to the administration of the social security funds, which should improve the processing of reimbursement claims through the reduction in bureaucracy. To this end, the national-roll out of the country’s first electronic social security smart card (Chifa) is underway, with the project expected to be completed in early 2010.
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