Regional competition is forcing Jordan’s pharmaceutical firms to up their game.
By Nada Atieh
Jordan’s pharmaceutical sector isn’t the biggest in the Middle East, but the head of the Jordanian Association for Pharmaceutical Manufacturers, Salah Mawajdeh, said it stands out for being that all-too-rare of things: a net exporter.
About 75 percent of the sector’s products – worth around $600 million are exported to MENA, the United States and Europe. Today, there are 16 pharmaceutical companies based in the Kingdom and five of them are publically listed on the Amman Stock Exchange, with one company, Hikma Pharmaceuticals, also quoted on the London Stock Exchange.
Growth is modest, but the industry is doing well compared to other countries in the Middle East, said Mawajdeh, who is also a former minister of health. The pharmaceutical industry was once booming in Jordan due to regional turmoil; patients flocked to Jordan from throughout the MENA region and this increased demand on products and pharmacists in the country. Now, the demand has downsized and the traditional markets Jordan exports to like Iraq, Saudi Arabia, Algeria, Lebanon, and North Africa are becoming producers too.
It’s becoming increasingly difficult for Jordanian companies to export to these parts, said Mawajdeh, since preference is given to local medicinal manufacturers and the Jordanian market by itself is too small to sustain the industry.
MS Pharma is a pharmaceutical company headquartered in Amman that manufactures generic medications through 22 markets across the Middle East, Turkey, and Africa. Nouha Aissat, the strategic planning manager of MS Pharma, is also concerned it’s becoming harder to export. “The last few years have been very tough for us because most of the countries are closing their borders and focusing on the local manufacturers,” she said. “This is the case with the North African markets such as Tunisia, Morocco and Algeria but today we face this even with the Gulf countries, especially KSA.”
About a fourth of the company’s sales are made in Jordan but the company relies primarily on exports, which are waning since the regional medicinal sectors are strengthening their manufacturing efforts.
Aissat stressed the importance of innovation to stay ahead of the competition. The face of medical treatment is changing and leaning more towards products that the country doesn’t manufacture like oncology medications and biotechnology. Although some companies venture into cancer treatment and have oncological manufacturers in Jordan, there are no biotechnology manufacturers in the country.
So MS Pharma is entering the biotech sector, Aissat said. Their first product was recently registered in the Kingdom and is being imported from a spanish company until transfer of know-how and industry is ripe in the country. “Our agreement is to transfer to local manufacturing gradually and this is a very important strategic product for the region,” she said.
She considers Jordan a well-placed market but also believes that pharma companies have to become innovative now, at least incrementally, to be able to differentiate themselves from nearby countries and penetrate increasingly competitive markets.
Hikma Jordan’s general manager, Tamer Jardaneh, agrees. He is responding to these challenges by staying ahead of the competition and focusing on having a strong product pipeline while complying with international standards.
Hikma Jordan was founded 40 years ago and established the first FDA inspected manufacturing facility in the region in the 1980s. It is the first and only pharmaceutical company to be listed on the London Stock Exchange as well as the Amman Stock Exchange.
The company built a business model comprising three businesses and operations in more than 50 countries across three continents, with export sales concentrated in the GCC, Algeria, and the United States. It is diversifying the business model, markets, investing in employees, and evolving the product portfolio to match the company’s commitment to stay ahead of the competition, Jardaneh said.
The company is rebranding. Hikma unveiled its new global brand platform: “Better Health. Within Reach. Every day,” logo earlier this year. It will be bringing all the Hikma-owned companies around the world under the new brand and updating products and packaging design, including all under-licensed products. The rolling out of this new brand began in the Middle East and North Africa, and will then take place in Europe, and finally the United States.
“The new brand brings to life Hikma’s role in improving the health of people around the world by making quality medicines and making them affordable and accessible,” he said. “Operating all our companies as Hikma in all our markets will allow us to better serve customers.”
“Our industry overall, particularly in the United States, is going through a difficult cycle. Competition is increasing and pricing pressure is intensifying. Lack of reimbursement and public funding, price pressure, local competition, and talent acquisition are key challenges and threats to further growth in the MENA market,” he added.
Every year, there are more pharmacy students who graduate and begin their job search than the market can absorb according to the National Center for Biotechnology Information. The high number is considered alarming since the number of graduates suggest the supply of pharmacists continue to exceed the domestic demand, Mawajdeh said.
Studies suggest that the sector plays an important role in resolving the country’s unemployment problem. In 2008, there were over 5,000 direct employees and 8,000 indirect employees in the sector. This year, that number jumped to 10,250 direct employees and 15,760 indirect employees, totaling 26,800 people employed both directly and indirectly.
But Mawajdeh disagreed. “I don’t think any country in the Middle East can do this,” he said. “In a small country we are employing this much because we have so many companies and we export. Almost every university has a school of pharmacy and produces hundreds of students. The local industry cannot absorb all of them,” he said.
Employment opportunities for pharmacists in Jordan are similar to those in other countries in the Middle East and worldwide. Most pharmacists work in the private sector with cosmetic and medical supply companies. Public sector pharmacists work in the Ministry of Health, university hospitals, Royal Medical Services, and not-for-profit organizations like the UNRWA.
Pharmacists in local pharmaceutical companies work in research and development, quality control, regulatory affairs, or sales and marketing and generally manage inventory and the preparation and dispensing of medicines.