Morocco’s pharmaceutical industry is now ranked by the World Health Organization on a par with Europe’s in terms of performance and expertise but, in order to become a truly global competitor, the sector will need to make full use of the new Pharmaceuticals Code, which aims to open up the sector to foreign investment, according to local reports.
The industry has recently lost some domestic share, which has dropped to just over 70% from around 85% five years ago, but Omar Tazi, chairman of the Moroccan Pharmaceutical Industry Association (AMIP), points out that, while local demand for advanced drug treatments is growing, these are not produced locally and have to be imported. However, overall sales increased 10% in the first quarter of 2007, boosted by the introduction of compulsory medical insurance last year.
Morocco’s 35 pharmaceutical production plants have no problem adhering to the quality requirements of the European Union - with which it commenced a Free Trade Agreement (FTA) in March 2000 - but becoming compliant with US requirements will require increased levels of investment if it is to take full advantage of the opportunities presented by the country’s US FTA, which came into force on January 1, 2006. Moreover, the “protectionist procedures of the [US] Food and Drug Administration can be considered restrictive,” says AMIP director general Ali Ghandi, interviewed in the 2007 edition of the American Chamber of Commerce in Morocco (Amcham)’s guide to investing in the country.
US investors are not interested in the Moroccan market, Dr Ghandi believes. “They believe that domestic demand is largely satisfied by the 30 existing laboratories and that any investment aiming to meet that demand wouldn’t be profitable. On the other hand, Americans can invest in Morocco as a launching pad for other markets, including the American market – they’re more oriented towards relocation than creating subsidiaries,” he says.
The Amcham study reports that US drug major Pfizer chose Morocco as its regional hub for French-speaking Africa, for reasons including its infrastructure and human resources, but more recent improvements - including FTAs, an ongoing tariff elimination program, tougher and better-enforced intellectual property rights laws and the development of the social security system including compulsory health insurance – have “confirmed the wisdom of our choice of Morocco,” it quotes a leading Pfizer executive as stating.
Morocco’s industry now ranks second in Africa, after South Africa, but its exports still account for only 8%-10% of production. Dr Ghandi believes that, in order to become more competitive, it needs to enter into partnerships with raw materials producers, for example through equity stakes in Moroccan firms. Such deals will allow local companies “to benefit from preferential raw material prices, reduced unit costs and increased value-added on finished products, which will then be more competitive in world markets,” he says. By Lynne Taylor