Multinational pharmaceutical companies are increasingly choosing Algeria as a base for their regional headquarters, despite the complexities of the local market. The representatives of Lilly, bioMérieux and Abbott in Algeria tell us why.
As geographically the largest country in Africa, Algeria stands out, as does its universal healthcare system which bears the bureaucratic legacy of its French colonial past. Furthermore, prohibitive joint venture rules, frequent state interference and market unpredictability can make investing in Algeria seem like a risky decision.
“Algeria has traditionally not always been considered the obvious location for situating a regional office, but though a multitude of administrative and logistical hurdles remain, the logic for doing so is becoming ever-more apparent,” explains Doria Oughlis, Lilly’s general manager for North West Africa.
As soon as you start to factor in the rapid population growth and the epidemiological shift, then the envelope of opportunity to get involved with this market is immense.
Doria Oughlis, Lilly
“Firstly, the market is growing at a frenetic pace, which is certainly not the case in either Morocco or Tunisia or even much of Europe for that matter. As soon as you start to factor in the rapid population growth and the epidemiological shift, then the envelope of opportunity to get involved with this market is immense. Moreover, Algeria is also very much an outlier within its region when it comes to the willingness on the part of the state to engage in public-private partnerships. The hard-nosed fact is that we don’t have public-private partnerships (PPPs) on issues like patient and practitioner education in the other North West Africa cluster states and it is testament to the vision of the Algerian Ministry of Health that we are able to roll out such programs here,” she continues.
“Making Algeria the sub-regional hub has its advantages and disadvantages. Traditionally, many MNCs have regarded the comparatively open and liberalized economies of Tunisia and Morocco as more welcoming to foreign investment and more aligned with international norms so have preferred to place their headquarters there. However, we saw things rather differently,” recounts bioMérieux’s area business manager for the Maghreb, Nadia Oka-Bousbia. “The sheer size of the Algerian market, the volume of entrepreneurial opportunities and maturity of the public health system all render it strategically and commercially interesting and present a pretty compelling business case.”
Abbott’s Francophone Africa Cluster head, Mohamed Benali Khoudja has come to the same conclusion. “From a business standpoint, it’s a no brainer to build the greatest presence in the largest market, which, for us, is Algeria by quite some way. The country today represents some 45 percent of our French African market sales alone with a turnover surpassing 35 million and is the uncontested mega-market in the region: not only in terms of size, but also in terms of strategic relevance as the interface between north and south.”
Then there is also the argument that Algeria requires a more embedded presence precisely because of the intricacies and complexities of this mammoth, but technically difficult marketplace. “We calculate that our stronger presence on the ground here in Algeria generates greater added value. This is not the sort of place where you can direct things remotely from afar. It is essential to be physically present to fully understand the local dynamics and engage with right people. Because this is a complicated market it, quite naturally, requires extra attention. For example, Algerian market access issues take up approximately 75 percent of the entire regulatory affairs workload of bioMérieux North Africa, therefore it is logical to want to base the area’s regulatory affairs resources in Algiers rather than in Tunis or Casablanca,” reasons Oka-Bousbia.
