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Advancing in pharmaceuticals

Jordan is using its regional leadership in drug manufacturing to expand into higher-value areas such as research, reports Obi Iheme

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A generic version of ciprofloxacin hydrochloride, produced by Hikma Pharmaceuticals for export to Western markets. The company is one of the largest local pharmaceutical manufacturers

ordans pharmaceuticals industry began in 1962, with the establishment of the Arab Pharmaceutical Manufacturing Company, and it has since grown to become one of the most important business sectors in the country. Today there are 18 drugs manufacturers, as well as several clinical research companies and medical appliance manufacturers. Pharmaceutical products are now the countrys second biggest export earner, with overseas sales worth $620 million in 2010 second only to garment manufacturing, according to the Jordan Investment Board (JIB).
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As in many developing markets, Jordans pharmaceutical companies are primarily engaged in producing generic drugs. Almost 90 per cent of revenues come from generic medicine, while the remainder is patented medication produced under licence from multinationals. Companies can take advantage of the Bolar exemption, which means they can manufacture drugs before a patent has expired, allowing them to start selling a product as soon as the patent has lapsed. However, the government is now keen for the industry to expand into higher-value High-profile pharmaceuticals exporter areas. Since 2005 the country has been moving forward with a national biotechnology strategy the Life Science Research & Biotechnology Promotion Initiative. Among the recent developments in this area, the Amman-based King Hussein Institute for Biotechnology & Cancer, which was itself of Jordans production is sold abroad set up only in 2008, formed a partnership in late 2010 with the United States University of Pittsburgh Medical Center and Battelle Technology Partnership Practice, a provider of clinical research strategies. Over a six-month period, the US organisations of these exports go to other helped to develop the countrys national Arab countries, including Saudi Arabia, Iraq, Algeria, Sudan and the UAE biotechnology strategy, including identifying key areas for research and other economic development opportunities. All this means that, from a standing start less than Another area in which the country has already been 50 years ago, Jordan has now become the largest exporter making advances is in clinical trials. Jordan can offer some of pharmaceutical products in the Arab world. The industry advantages over more established markets in this field. In now accounts for around 20 per cent of manufacturing gross particular, patient enrolment is typically faster, while clinical domestic product (GDP). trials and studies take an average of just three to six months to The industry continues to grow at an impressive rate, carry out, compared with nine months in the US and Europe, with the value of exports rising by an average of 20 per cent according to the JIB. The cost of running drugs trials is also each year from 2000 to 2010, according to the JIB. This has half that in Europe and the US. led to the sector becoming an increasingly important source of Among the multinational firms that have run trials in jobs. Between 1991 and 2004, the number of employees in the Jordan are Merck Sharpe & Dohme, Aventis, Novartis and sector increased from 1,700 to 4,000. According to the JAPM, Pfizer. More than 17 clinical trials have been carried out in the drugs manufacturers alone now employ almost 5,100 people. country over recent years, ranging from a three-year trial

In fact, export sales are crucial to the industry. Around 81 per cent of production is sold abroad, according to the Jordanian Association of Pharmaceutical Manufacturers (JAPM), the main industry body. While the sectors products are sold to more than 60 countries, around 90 per cent of exports go to other Arab countries. Among the key markets are Saudi Arabia, Iraq, Algeria, Sudan and the UAE. Companies produce both prescription and over-thecounter drugs. Specialties include antibiotics, anti-ulcer drugs, hormones, treatments for AIDS and cancer, and dosage equipment. Among the largest local companies is Hikma Pharmaceuticals, which has been listed on the London Stock Exchange since 2005 and has overseas production facilities in Algeria, Egypt, Saudi Arabia and Tunisia within the region, as well as Germany, Portugal and the United States.

Furthermore, the jobs are often highly skilled, with around 50 per cent of workers employed in professional and technical roles. The workforce is set to continue growing in the future, with more than 2,000 students enrolled on pharmaceutical and paramedical degrees at the 11 universities in the country that now offer courses.

Moving beyond generics

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The workforce is set to continue growing in the future, with more than 2,000 students enrolled on pharmaceutical and paramedical degrees at the 11 universities that offer courses

evaluating cardiovascular risk factors to the testing of experimental therapies for cancer patients. These trials are generally carried out by contract research organisations (CROs) on behalf of the major pharmaceutical companies. Jordan is home to a growing number of CROs, including the privately owned International Pharmaceutical Research Center, the Jordanian Pharmaceutical Research Center that is part of the Jordan University of Science & Technology, and a subsidiary of US-based Triumpharma. Ziad Maayta, investment promotion specialist at the JIB, says he foresees a stronger role for these CROs in the future.

Increasing demand
Several demographic changes, within Jordan and across the wider region, are expected to prompt greater demand for the type of products and services that Jordans pharmaceuticals sector provides, whether it is generic drugs or these more advanced research services. In particular, increased literacy rates are leading to greater consciousness among the population about health and lifestyle issues, while higher living standards and longer life expectancy are leading to greater demand for medicines that can combat conditions such as asthma, diabetes and cardiovascular diseases. At the same time, the pressure on public finances in many countries means that governments are increasingly keen to use lower-priced generic drugs where they can, to keep their healthcare budgets under control. The Jordanian government is the largest purchaser of drugs in the country, through the Ministry of Health and the Royal Medical Services, which runs a network of military hospitals. Between them, they account for about 65 per cent of all pharmaceutical purchases, with the private sector making up the remainder. There are ongoing talks between the Ministry of Health and local producers, through their trade association the JAPM, to regulate the public tendering

process by which all public and military hospitals buy their drugs, to benefit local producers. Maayta predicts that, over the next five to 10 years, the proportion of Jordanian-produced drugs that are exported will fall from 70-80 per cent now to around 50 per cent. Even at this level, however, export markets will be crucial to the overall health of the sector. And while the importance of Arab countries is likely to remain strong, Jordanian companies are focusing on increasing their sales to countries outside the region over the next five to 10 years, to three regions in particular. The first is Africa which, combined with Asia and Australia, is a market worth approximately $103 billion and growing by almost 16 per cent a year, according to JIB estimates. The main countries of interest include Uganda, Kenya, Nigeria, Ethiopia and Chad.

European opportunities
Europe is also attractive, owing to the budgetary pressure on public healthcare providers to source drugs at a lower cost. The market is estimated to be worth $248 billion and is growing by 4.8 per cent a year. In this region, Jordanian companies are focusing on countries in eastern Europe, including Russia, the Ukraine, Armenia, Azerbaijan and Kazakhstan, although they face fierce competition in these markets from Indian and Chinese competitors. The North American market, estimated by the JIB to be worth $322 billion with a 5.5 per cent average annual growth rate, is the third main area. Jordan is the largest Arab exporter of pharmaceuticals we attribute this achievement to the kingdoms rigorous academic approach in medicine and pharmacy, cost-competitive production, and world-class medical infrastructure, says Samer Asfour, chief executive officer of the JIB. With the expected growth in demand for pharmaceutical products both regionally and globally, coupled with Jordans strong market position, that looks unlikely to change in the foreseeable future.
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