Abstract
In BMI’s Q409 Business Environment Rankings matrix for the 17 key
countries of the Middle East and
Africa (MEA) region, Algeria remains in a
lowly 14th position. While its considerable population size
(over 34mn and
growing) and the substantial potential for healthcare investment provide some
draws, low
per-capita spending and wide-ranging deficiencies in its
regulatory and pricing and reimbursement
environment will continue to
hamper major improvements in the country’s score. The country
remains
among the bottom ten markets of the 71 countries surveyed by BMI
globally. Nevertheless, depending on
the wider economic climate,
Algeria’s pharmaceutical expenditure should increase over the coming
five
years, from DZD159bn (US$2.35bn) in 2008 to reach DZD209bn
(US$2.94bn) in 2013, growing at a
compound annual growth rate (CAGR) of
5.62% in local currency terms.
The government has indicated its commitment
to the improvement of its population’s health, outlining a
programme
through to 2025 which includes the expansion of hospital beds. While this
situation will
provide substantial opportunities to foreign players
– most of which operate in the country through
imports or local
partnerships – they may be discouraged by the ban on imports of drugs
that can be made
locally, especially as the list of such drugs is to be
extended from the start of 2010. Even though this will
put the brakes on
Algeria’s bid for World Trade Organization (WTO) membership, the
government is
keen to protect the local drug industry, which is mostly
engaged in the manufacture of generics.
In fact, Algeria’s generics
market is relatively advanced, having been stimulated by the
government’s
encouragement, lax intellectual property (IP) laws and
the fact that public expenditure represents some
80% of total healthcare
spending. In 2008, the country’s generics market was valued at an
estimated
DZD60.6bn (US$0.89bn), accounting for just over 38% of the total
market by value, and up to two-thirds
by volume terms. The requirement
that generics account for 45% of all imports will support generics
development over the longer term, especially as the longer-term target is the
figure of 70%. Additionally,
promoters of generics and local industry
recently suggested that the social security should issue rebates to
those
using generic drugs. If implemented, the proposals have the potential to
increase the penetration of
generics to higher than forecast over the
coming years, although low prices of such products will depress
value
growth.
In July 2009, the government reported that it would import 65mn
swine influenza vaccines, with the
Minister of Health adding that all of
the seven cases of the virus diagnosed in the country were visitors
from
abroad. The vaccine for the A (H1N1) virus will be available free of charge,
with Algeria judged by
the government to be well-prepared for this
eventuality. However, local press did not make it clear from
where the
vaccine would be imported, with many European countries recently announcing
that they are
likely to fast-track human trials for swine flu vaccine.
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