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Jordan Pharmaceuticals and Healthcare Report Q1 2012
Business Monitor International, Nov 2011, Pages: 96
Jordan Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Jordan's pharmaceuticals and healthcare industry.
View: Regionally speaking, Jordan’s pharmaceutical market will continue to be viewed as a moderately attractive destination for foreign drugmakers. The country has a well-developed local pharmaceutical industry, which has allowed it to maintain a positive trade balance, and a broadly acceptable intellectual property (IP) environment. However, the perceived worsening of its pricing and reimbursement environment will continue to detract investors, especially during the politically unsettled times that have also had a negative impact on the inflows of medical tourists.
Headline Expenditure Projections
- Pharmaceuticals: JOD412mn (US$581mn) in 2010 to JOD448mn (US$632mn) in 2011; +8.8% in local currency terms and +8.8% in US dollar terms. Forecast down slightly from Q411 due to revised macroeconomic expectations.
- Healthcare: JOD1.60bn (US$2.27bn) in 2010 to JOD1.73bn (US$2.45bn) in 2011; +8.2% in local currency terms and +8.2% in US dollar terms. Forecast down slightly from Q411 due to revised macroeconomic expectations.
- Medical devices: JOD100mn (US$141mn) in 2010 to JOD112mn (US$158mn) in 2011; +11.9% in local currency terms and +11.9% in US dollar terms. Historical figure down significantly from Q411 due to exclusion of re-exports.
Business Environment Rating: Jordan’s composite Pharmaceutical and Healthcare Business Environment Ratings (BER) score for Q112 is 48.8, a substantial downgrade from 51.3 in the previous quarter. This puts Jordan 10th out of the 30 markets surveyed in the Middle East and Africa (MEA) region. Jordan’s rewards and risk scores are relatively evenly balanced, given that we have downgraded Jordan’s industry risk rating from 57 out of 100 to 47, as Jordan was named on the Watch List of the Pharmaceutical Research and Manufacturers of America (PhRMA)’s Special 301 submission report for 2011. Jordan is showing little sign of being able to improve its regulatory environment in the short term, especially due to political and social tensions.
Key Trends And Developments
In October 2011, Hikma Pharmaceuticals, a multinational pharmaceutical company headquartered in Jordan but listed on the London Stock Exchange, agreed to acquire 63.9% of Moroccan Promopharm. Hikma plans to initiate a mandatory tender offer to purchase the rest of the company, which is the ninth biggest manufacturer of pharmaceuticals in Morocco, with revenue of US$45mn in 2010. Hikma said it has identified an additional 20 products it intends to launch in the Moroccan market on top of Promopharm’s portfolio of 200 generic medicines and licensed products. Hikma may also be able to extend some of Promopharm’s licences to sell and market drugs to other markets in the region. Following its purchase of a small stake in Chinese active pharmaceutical ingredient (API) manufacturer Hubei Haosun Pharmaceutical, Hikma said it was targeting acquisitions in Morocco, Turkey and the Commonwealth of Independent States (CIS) countries. Now that it has successfully entered the Moroccan market, the company is likely to be looking to export drugs to West African markets as well.
Economic View: We continue to expect inflationary pressure in Jordan to subside heading into 2012. Due to the impact of a sharper than anticipated decline in food prices, we revised down our inflation forecasts for 2011, from 5.5% to 5.2%, and 2012, from 5.0% to 4.0%. This will provide some respite for the consumers and also stimulate spending on consumer health products and over-the-counter (OTC) medicines, to a degree.
BMI Political View: The dismissal of Marouf al-Bakhit as prime minister by King Abdullah II was a signal that the political establishment is taking activists’ demands for reform seriously. We therefore view it as a positive step for political stability in the country. However, a different government is unlikely to tackle the dispute at the root of Jordanian politics, which focuses on an electoral law that discriminates against Islamist groups. As a result, we continue to expect political tension to persist, which will affect overall investor sentiment in the country.
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