Mohammad Ali Shahin, CEO of Joswe

Local Pharma: A Model Industry

Mohammad Ali Shahin wears many hats. He is the Chairman of the Jordanian Association of Pharmaceutical Manufacturers and Medical Appliances (JAPM), and is also the CEO of Jordan Sweden Medical and Sterilization Co. (Joswe) and the chairman of three manufacturers of pharmaceutical and healthcare products in Africa.

Founded in 2000, Joswe was established as a private limited liability company that covers a wide range of products, from analgesics, central nervous systems, chronic medications, to anti-infectives. Within three years of operation, Joswe was recognized as a leading pharmaceutical company, achieving the highest evolution rate among competing pharmaceutical companies in Jordan. Today it exports to more than 20 countries in the MENA region and Africa.

In this interview, Shahin discusses the local pharmaceutical industry and its prospects.

Jordan is a regional leader in pharmaceuticals, what makes your company stand out from regional competition?

Joswe acquired its position among the top 10 pharmaceutical manufacturers in Jordan due to its commitment to quality, as well as its marketing and sales policy. We provide high quality and affordable products and after sales service to ensure compliance, as well as doctor and patient satisfaction.

What would you say is the main reason for Jordan’s success in pharmaceutical manufacturing?

Jordan’s pharmaceutical industry started more than five decades ago with proven commitment and quality that depends on the extensive experience of Jordanian scientists, who were able to build a formidable industry in Jordan and the region. Demand enabled the industry to be rooted in Jordan and to weather the storms of change that hit the area during the last decade, and emerge even stronger.

How big is the contribution of pharmaceuticals to the local GDP?

If we take into consideration the industry’s total production, contribution to employment, and other supportive industries and services like R&D, clinical studies, capacity building, marketing training, technical training institutions, local and export values, then this industry can claim about 5 to 7 percent of Jordan’s GDP.

Do you believe that local pharmaceutical companies are fulfilling their potential, or is there still room for growth? How?

Jordan’s Pharmaceutical industry’s contribution to the export bill was about $1 billion in 2016 and about $0.2 billion for the domestic market, totaling $1.2 billion. But the installed capacity of the sector exceeds this figure and could reach $2 billion or more. We were not able to utilize this installed capacity because of the prevailing regional circumstances that affected our exports to neighboring countries. These circumstances created difficulties in transportation, currency devaluation, and led to the erosion of the consumers’ buying ability in the export markets.

Locally, continuous price reductions have also affected the industry. These difficulties require both the government and sector’s attention to increase its dependency on local manufactured products in order to compensate for the decline in export opportunities. Furthermore, the sector should look for untraditional and more stable markets.

What are the main challenges that the pharmaceutical sector is facing today?

There are many challenges facing the industry today, including the availability of many substitutes for the same product in the market; price reductions and their negative impact on marketing services and retail pharmacy profit margin for local products; highly subsidized competitive industries in our export markets, which negatively affects our export to those countries; and absence of a government and sector’s strategy to consider pharmaceuticals as a strategic industry.

Is the government giving enough support to the sector?

The government is trying to support the sector but with limited effect due to its commitment to various trade agreements, the World Trade Organization (WTO) and intellectual property laws and regulations, which were not fulfilled by the other parties.

However, lately the government has been trying to communicate with the private sector to alleviate some of the obstacles, but the prevailing laws and regulations leave a lot to be desired.

How healthy are Jordanian pharmaceutical exports?

The export bill was JD676 million/$952 million in 2016, which marked an over 10 percent increase compared to 2015. We hope to maintain the 10 percent annual growth in 2017, and to increase the local consumption by 10 to 15 percent. If we manage to achieve that, the industry will overcome the drop in local consumption and exports to jumpstart another era of growth.

Do you think we will see another HIKMA emerging from the local market? Why?

Some companies emerged as multinational entities, which indicates how strong and viable our industry and vision are. Some other companies are trying to follow in Hikma’s path and we hope that they will succeed. Again, this shows that Jordan should consider the pharmaceutical industry as a strategic pillar of the national economy.

How do you see the future of the sector? 

The future of the sector depends on how the sector can adjust its plans and vision to deal with ever-changing factors in the market. The future is promising and we should continue our effort to create products that meet high standards, to continuously develop human resources, update our means and practices, produce what our patients’ need, and create new markets.