PharmaBoardroom recently conducted a roundtable event with the key opinion leaders of Algeria’s healthcare sector. This is a sample of the conversation at our recent roundtable with senior figures from the Algerian Ministry of Health, AstraZeneca, Novo Nordisk, Clinica, the National Association of Pharmacy Producers, the Chief Economist of the The European Federation of Pharmaceutical Industries and Associations and the Professor in Public Health at the University of Aix Marseille. Here they discuss Algeria’s manufacturing laws
Frederic Boucheseiche – Publisher of PharmaBoardroom: The government has the ambition to reach 70 percent local production by 2017, from the current rate of 38 percent. How can they achieve this? Are there specific mechanisms at the fiscal level? What is being done to attract investments in the sector?
Hamou Hafed – Director General of Pharmacy and Medical Devices, Ministry of Health, Hospital Reform and Population: I find that the pharmaceutical environment in Algeria is changing right now. Measures have to be taken related to approaching the industry, and talking with the pharmaceutical industries. This is the way we can reach our goals.
One very important feature of Algeria’s national production strategy is that every time a product has three manufacturers operating locally, imports of that product are banned. Since this was introduced, local production has begun to soar. I believe this will allow us to reach our 70 percent goal.
Habib Bennaceur – North & West Africa Regional Manager, AstraZeneca: One of the key elements you need if you want to succeed in your investments is to pick a good company to partner with. AstraZeneca showed that it wanted to invest in emerging markets, including Algeria. Today, local manufacturing investments in China have been completed, and nearly completed in Russia, leaving Algeria as the last market where AstraZeneca will open a new manufacturing unit.
What makes Algeria different from its neighbors is the equality in accessing healthcare and the equality in accessing medicine with an egalitarian repayment system that has limitations and constraints but that also shows lots of advantages – actually, more advantages than constraints.
I think that as an industry, our role is to follow the policies that the government is putting in place. Wherever you come from or however you organize yourself, what matters is to localize production. AstraZeneca decided to build its own manufacturing site to be able to realize this concept on a global level.
In Algeria, we are partnering with Saidal. We are collaborating to transfer knowledge and technologies for now. But for us, and because this is a significant investment in terms of time and money, we think this partnership has to reach another level and unfold as a more concrete collaboration for local manufacturing.
Peter Ulvskjold – Country Manager, Novo Nordisk Algeria: Novo Nordisk has been in Algeria for more than 20 years now. Of the 18 trials that have been conducted in diabetes in the country, 15 were done by Novo Nordisk. We have worked to develop infrastructure, improve education, and bring clinical trials here – and we are doing a very good job of developing clinical trial sites.
Also, with our production sites, we can now produce for the whole market. We can also export: within the next three months we’ll be ready to export to neighboring countries, which we are very excited about because we can start fulfilling the promise we made to the minister of health about becoming a hub for Africa. And this is our plan not just for our production site in Tizi Ouzou but also in our collaboration with Saidal, working together to produce insulin.
Our strategy is to create a production site that mimics what we’re doing internationally, allowing us a very high level of engagement in Africa. We believe that in the long-term, we can develop a very strong presence for production and export, together with the local government.
The work we are doing here is not a pilot. Rather, it should be seen as a model of engage- ment for elsewhere, including Asia and South America. If we can do there what we have done here, then maybe we can also have a better future there.
Rafik Morsly – President, ANPP (National Association of Pharmacy Producers): It’s important to keep in mind that when we talk about the Algerian pharma industry, we are mostly talking about local manufacturers and family businesses. There are very few listed companies. The Health Ministry helps these companies but banks do not: surely one of our priorities should be to address this, and help speed up our performance. But all stakeholders need to take a seat at the table first.
Salah Eddine Sahraoui – CEO, Clinica Group: The priority should be to encourage manufacturing, not to enforce it. I think the Health Ministry today is working along these lines. The incentives are in place to encourage companies to come and manufacture here.
Richard Torbett – Chief Economist, EFPIA (The European Federation of Pharmaceutical Industries and Associations): I think it’s probably fair to talk about the difference between explicit obligations to produce versus implicit obligations to produce.
There is a perception of Algeria from outside that there is an implicit obligation to produce here, coupled with a market access environment that seems to be very challenging for innovation. I understand that the government needs to control its budget. My plea would be: let’s try to dis- cuss other ways of managing the budget in a meaningful way. I genuinely think that all sides can meet these common objectives through some kind of framework agreement or common vision – start with a common vision before getting to an agreement.
Mondher Toumi – Professor in Public Health, University of Aix Marseille, School of Medicine: The authorities are indeed helping to structure the terms of investments and the providing the right incentives, in a very legitimate manner. On a more long-term basis though, some strategies are more efficient than others, and I believe that Algeria’s manufacturing strategy is shortsighted: we are already starting to see that the profile of products being brought to Algeria are changing dramatically, including cell therapy and biotech. The amount companies invest in manufacturing today is miniscule compared to the investment that goes into R&D: what investing in manufacturing really means is that we will end up with production facilities that don’t manufacture cutting edge drugs, all locked in tight competition with one another and with other countries.
As well as innovation, another aspect for the authorities to consider is a plan for developing the Greater Maghreb market – around 400 million people. The idea would be to design an industry plan, sharing parts with other countries within this region. Today this doesn’t happen, despite some cross-border partnerships.
The only way to earn return on investments today is to invest in research. Algeria won’t be able to do this on its own. It can only work out if there are real partnerships with real researchers. The more research you can work on and develop, the more value you add. And before you set up a cluster, you need to have a talent pool to recruit from. And this leads us to a second point: the need to develop a strong academic environment.
Hamou Hafed: An additional incentive for manufacturing locally is that the prices of products manufactured domestically receive a 27 percent mark up. We think we can make our offer more attractive than other countries. Security of supply is an important aspect in this for us: we want a list of essential medicines to be manufactured domestically.
Whenever you deal with public authorities, there are always improvements to be made. We need to work hand in hand with the industry. The goal is first to provide the Algerian population with medicine, and second to offer opportunities for investment and exports.