1) The Middle East pharmaceutical market is valued at over $9.7 billion and is expected to grow 10-15% annually. Generics account for 28.9% of the market on average across countries. 2) Growth in the region is driven by increasing health insurance coverage, population growth, and government support for domestic production. However, manufacturers face challenges of regulatory scrutiny, limited production capacity, and slow drug registration processes. 3) Jordan presents an opportunity as a low-cost manufacturing and regional sales hub for generics due to its economic freedom, well-educated workforce, medical infrastructure, and strategic location serving over 60 export countries.

1. November 2011
Middle East Generics Pharma
Ata D. Nazer
Pharma Strategist

2. The Middle East

3. Topics
• Facts about ME markets
• Demand/ Growth Drivers
• Growth – What are the issues?
• ME Generics Challenges
• Registration Barriers
• Pricing
• Generics Share by Country
• Outlook 2011 - 2014
• The ME Opportunity
• Jordan – As a generic hub

4. Facts about ME market - 1
• ME markets have high dependency on imported drugs
• All ME countries with the exception of Bahrain have or
started local production of generics
• Jordan is the leading Arab pharmaceutical exporter
• Lebanon, an almost exclusive import market
• Saudi Arabia, the largest market of the Arabian Gulf
• The United Arab Emirates, has the highest-priced market in
the region

5. Facts about ME market - 2
• Overall the Middle East’s pharmaceutical market is valued at
more than $9.7bn and is expected to grow at healthy 10-15%
annually.
• There are more than 120 pharmaceutical manufacturers in
the Middle East- With the exception of Syria, all Middle
Eastern countries are high importers of branded drugs.
• Saudi Arabia, as the richest regional market, has embarked
on an ambitious hospital building project - growth is partly
driven by greater access to generics
• Local manufacturing capabilities are constrained to generics
or under license from originators

6. Generics Share by Country
2010 Local
Production Population GDP
Pharma
Sales
Generics
% Value
Bahrain No 1.0 22.3 118 9.0% 11
Oman 2000 3.1 62.2 152 6.0% 9
WB & Gaza 1960s 4.1 6.6 200 35.0% 70
Qatar 2008 1.0 109.0 227 10.0% 23
Kuwait 1992 3.6 144.2 374 30.0% 112
Jordan 1957 6.0 27.5 400 54.0% 216
Yemen 1980s 24.1 31.2 565 30.0% 170
Syria 1970s 22.5 59.0 800 70.0% 560
Lebanon 1960s 4.1 39.2 914 39.0% 356
Iraq 1970s 30.0 82.1 1,300 60.0% 780
UAE 1984 5.0 250.6 1,841 9.0% 166
Saudi Arabia 1986 26.1 442.9 2,860 12.0% 343
Totals 130.6 9,751 28.9% 2,815

7. Per Capita Pharma Expenditure
0
50
100
150
200
250
300
350
400
23 36 43 49 49
67
104 110 118
223 227
368
USD
Source: JAPM, BMI 2010
USA: 956, Spain: 578

8. Size of ME Markets
-
500
1,000
1,500
2,000
2,500
3,000
118 152 200 227
374 400
565
800 914
1,300
1,841
2,860
USDMillion
Source: JAPM, BMI 2010
Total: USD 9.7 Billion – 1% of Global Market

9. Share of Generic
-
500
1,000
1,500
2,000
2,500
3,000
USDMillion
Source: JAPM, BMI 2010
Highest: Syria 70%, Lowest: Oman 6%
9% 6%
30%
70%
39%
60%
9%
12%
35% 10%
30% 54%

10. Demand/ Growth Drivers
• Acceptance and use of
branded generics is growing
• Governments' support for
domestic production
• Increase health insurance
coverage
• Population growth is higher
than global average

11. Growth- What are the issues?
Limited Market Access
Regulatory Scrutiny
Required marketing spending
Internal Capabilities
Limited production capacities
specially for injectables which
accounts for 34% of products to be
off patent by 2014
ME producers will struggle to capture market share in
this decade due to:
Availability of skilled technical staff

12. ME Generics Challenges
Market Challenges
Development
Investment
Price
competition
& erosion
Reference
Pricing
Availability of
Expertise
Slow
Registration
Consumer
Awareness
Marketing
Expenses vs.
originator
Lack of
strategic vision
for growth

13. Registration Barriers
• Registration time takes 1 to
3 years
• Some countries give
preferential treatment to
local producers reflected by:
– Faster registration time
– Preferential pricing
– Limitation on imports
• Saudi FDA has stringent
regulations influencing
other GCC countries

14. Pricing is controlled
• Prices are controlled by health
authorities
• First generic is priced 20% or
lower than originator
• Prices are determined by:
– Country of origin price
– Reference countries’ prices

15. IP Protection Developing
Country WTO Membership TRIPS Implementation
Bahrain January 1995
Iraq Observer
Jordan April 2000
Kuwait January 1995
Lebanon Observer
Oman November 2000
Palestine N.A.
Qatar January 1996
Saudi Arabia December 2005
Syria Observer
Yemen Observer
Initiated IP protection legislation Considering IP legislation

16. Top Manufacturers by Country
Country Company
1 Saudi Arabia SPIMACO, TABUK
2 Jordan Hikmah, Dar Al Dawa, Midpharma
3 UAE JULPHAR
4 Iraq State Drug Industry Company (SDI)
5 Syria Thameco, Asia, Oubari

17. Outlook 2011-2014
• It is estimated that USD 200 billion worth of drugs will go
off patent by 2014
• ME share of the global is 1%, the potential new generic
sales by 2014 is up to USD 900 million
• Average generic prices in ME is about 50% of originator,
which means USD 450 million of new sales
• More privatization of the industry is encouraged for the
few countries that have high government involvement
• Better implementation of TRIPS

18. The ME Opportunity
• Demand for generics in ME will have CAGR of
15%
• Manufacturers will need to establish new
facilities, expand existing capacities, and look for
acquisitions.
• Labor costs in ME are relatively low
• All ME governments support local pharma
production

19. Pharma in Jordan
• Pharmaceutical exports reach more than 60
countries worldwide with more than 80 patents
registered in Europe, the United States and
Japan.
• A low cost regional manufacturing/sales hub
• Exports reaching $US 620 million in 2010
• 30% less cost than Europe and USA in clinical
trial testing and bioequivalence studies.
• Market driven legislations: Strict adherence to
Intellectual property laws and enforcement
• 11 universities with medical subjects, 8
pharmacy colleges, 7 clinical research
organizations (CROs).
• World class Medical infrastructure: Jordan is
the region’s medical treatment hub (ranked no.1
as medical tourism destination according to
World Bank)

20. Turn to Jordan
Scored 68.9 on Economic Freedom World Av. 59.7
4th Most Free Economy in the Region
Scored 70.0 on Investment Freedom World Av. 50.2