At present major Indian pharma players like Ranbaxy Laboratories, Dr Reddy's Laboratories, Cipla, Wockhardt, Plethico Pharma, Unichem Laboratories, Lupin, Bal Pharma, Dabur, Mission Viva Care, Intas Biopharmaceuticals (IBPL) etc already have considerable presence in this region. To be part of the emerging pharma hub major multinational giants like Amgen, Roche, Sanofi, Teva, Sandoz and J&J also have strong presence across the region. Simultaneously, base players of the MENA market; (Julphar, Hikma, MEENA, Rhino, Sedico, Dar-Al-Dawa), are coming up very strongly which is thanks to government's preferential policy. Asian and Latino companies like Green Cross, LG, Bio-Sidus, NCPC have also entered into selective market due to its low cost manufacturing advantage.
The Middle East segment consists of
"As economic activities will grow in the region, we will see continued focus by various Governments in this region for further encouragement of investments in healthcare segment. This will create its own demand driven growth for pharma segment"
- Dinesh Gupta
"Due to the stringent regulatory norms in most MENA markets, it is the big pharma players who are our competitors"
- Akkshay G Mehta
"Earlier these markets were predominantly import oriented and because of the high regulation, imports were predominantly from
- Archana Dubey Mitra
"GCC countries and
- Simon Daniel
The growth potential for this region looks to be very positive based on growth drivers like growing economies in the region, high purchasing power, increased spend on healthcare facilities by governments, mandatory health insurance schemes and demographic trends like an increase in life expectancy, literacy rates and prevalence of life style related diseases like diabetes, cardiovascular, gastro and niche cancer therapies. These therapies constitute around 18-22 percent of total pharma volume. Besides this, nutrition segment is continuously growing and at a higher level along with the antibiotics segment, which is also growing with wider medical insurance overages.
The market has seen a very good gross domestic product (GDP) growth in last couple of years due to increase in oil revenues leading to all around focus on healthcare and establishment of pharma manufacturing base in many countries in MENA region to serve local demand. The healthcare sector throughout the Middle East is experiencing significant growth following modernisation programmes and increased private participation in the health sector compounded with a higher than average population growth.
Another trend visible is that as more pharma manufacturing units come up, support services are following their user clients and expanding into these regions. For example, Bry Air,
The increasing incidence of lifestyle disorders and a population with an increased life-expectancy account for growth in various therapeutic segments. Value added over the counter (OTC) products have wide potential as they are out of price control and have better opportunities with high levels of awareness about health related nutrition and supplements in MENA region. Dr P A Mody, Chairman and Managing Director, Unichem Laboratories, says, "In the Maghreb territory, especially in
Sharing Unichem's strategy plan for Middle East, Mody comments, "In the Middle East, currently we have operations only in
The MENA region is believed to be one of the stringent regulatory approval systems across the globe. "Due to the stringent regulatory norms in most of the MENA markets, it is the big pharma players who are our competitors. Simultaneously, competition from domestic manufacturers in these countries and other growing companies from
The regulatory environment is characterised by tough entry barriers largely to protect local industry, restrictive price controls and strict factory audits. The patents production, novel drug discovery and strong influence of Western world keeps alive the interest of MNC's in the MENA market. The regulated market remains high and MNCs have been enjoying monopoly with very high pricing. Indian pharma companies operating in these regions found that doing business here is more time consuming due to mandatory plant inspection and other stalwarts of the regulated market. There is also a preference for US FDA or UK MHRA labelled principle. As per the current norms, pricing is based on the price determined by the emerging country in the absence of a formal price regulating authority, which is another advantage enjoyed by MNCs.
Sharing details of the regulatory process, Mody points out, "The general regulatory route comprises a few steps. The first step is the submission of the dossier with all required documents for registration including approval of manufacturing site (if required by MOH of the country in question). It is followed by company registration and analysis of drugs applied for registration. And the last step is the pricing approval according to pricing norms of the country."
Gupta says, "It is important to be very careful of any adverse effects leading to legal cases. There have been no IPR issues that have come to light in the MENA region as general laws are very stringent; we can expect very limited ventures in this direction." Data exclusivity and protection of intellectual property remain key areas of concern in these regions. There is no uniformity in the product patent laws and as such there are large discrepancies in the way IPR is implemented across the region. Highlighting the hindrances posed by regulatory norms in the MENA market, Simon Daniel, Chief Executive, Marketing, IBPL, says, "The strong patent protection, high level GMP and mandatory bio-equivalence and clinical trials are the key elements of registration, which turned out to be high entry barriers in this region. The pharma companies deciding to enter this region are required to have deep pockets (in terms of high financial investment to fulfill regulatory requirements) and patience. GCC countries and
In MENA markets, manufacturing bases in
Mody informs, "The most potential country in the Maghreb territory is
Indian pharma companies are adopting several models for strengthening their presence in this region. Pharma manufacturers are moving towards joint ventures (JVs), technology transfer and licensing which are seen as ideal models by multinationals as well for this market. For example Lupin, Dishman Pharmaceuticals, Biocon and Mumbai-based Kopran established themselves in the
Exploring export opportunities in
While the process is quite regulated in major markets like Saudi Arabia, UAE which insist on approvals from Europe or US, other countries like Oman, Muscut, Qatar etc are opening up to Indian pharma regulation products. North African countries like
"We have already registered in a few MENA market countries and are adding thrust to develop new markets while consolidating present with more number of products. We are on a continuous lookout for the right associates to establish the Bal Pharma product range in the market," comments Mitra.
IBPL has adopted the out-licensing business model in MENA region. The company is also planning to open their representative office, subsidiary through partnership with local companies in Northern Africa, Arabic countries and
Along the same lines, Gupta says, "We have been supplying our products in this region for last about two decades. This led to the establishment of our regional sales office in UAE, to be closer to the market we serve. We are looking at establishing our office in
"We are currently in the process of registering our products in the MENA markets. We are taking the MENA markets as an interesting area to do business and we will be having a strong focus in this region," adds Mehta.
Thus inspite of the obstacles, Indian pharma companies are not giving up the race to make a mark in the MENA markets. Their patience seems to have finally paid off as various countries in the Gulf region like