Opportunities to invest in the health care sector continue to increase as the population grows at an annual rate of 2.1%, applying pressure on existing hospital infrastructure, especially in the urban centres where 72% of the population resides. As life expectancy, currently averaging at 76.3, steadily increases and the young population grows in tandem with changing consumer lifestyles, the rise of non-communicable diseases (NCDs) has become a priority for the state.
The health infrastructure has made considerable strides in recent years in a number of important areas, particularly the treatment of cancer. Nevertheless, there are still challenges in providing equal access to care across Algeria’s vast territory and overcoming the shortage of medicines. In line with a sustained government budget allocated to health, attracting new investment from the private sector will be critical for meeting the growing demand for health care.
Public & Private Structure
The infrastructure of the health care system reflects the state’s commitment to the provision of free care for all citizens. The system has come under strain, however, due to rising birth rates and urbanisation causing an increase in demand for treatment and medication. This has led to the state welcoming greater private sector activity.
According to the most recent figures from the Ministry of Health, Population and Hospital Reform (Ministère de la Santé, de la Population et de la Réforme Hospitalière, MSPRH) there were 71,770 beds in 580 public hospitals, compared to 5475 beds in 187 private hospitals, as of 2015. The 2017 report by the National Statistics Office recorded that there were 74,937 doctors, 13,747 dentists and 11,888 pharmacists operating in Algeria in the public and private sectors. The public sector employs the majority of doctors, whereas pharmacists predominately belong to the private sector. Before doctors can work in the private sector, they are required to fulfil civil service obligations in public institutions. As part of the five-year investment plan (2015-19) the state has committed to spending €4.85bn on the construction of new hospitals and the renovation of existing facilities, but the hydrocarbons crisis of 2014 has limited these ambitious objectives. Instead, Mokhtar Hasbellaoui, minister for health, population and hospital reform, has stated that plans to expand medical infrastructure will advance based on the needs and requirements of each wilaya (province). To this end, four hospitals are expected to open their doors in the wilaya of Oran before the end of 2018 to reduce the strain on university hospitals in the region and a number of polyclinic projects and cancer treatment centres are also planned to be established.
Budget
Despite the decline in oil prices that has led to a contraction in the government’s fiscal resources since 2014, the state has reiterated its commitment to expanding the health care system even further. The plan for the 2019 Finance Law, drafted in September 2018, is consistent in its allocation of AD399bn (€2.9bn) to the MSPRH, a very slight increase of 0.9% over its 2018 budget. This figure represents approximately 8.1% of the state’s drafted operating budget for 2019 of AD4.9trn (€35.6bn).
New Health Care Law
In August 2018 a 450-article bill was passed to update Algeria’s 33-year-old health care system. The legislation definitively maintains doctors’ civil service requirements, although this was a point of contention with some doctors and has led to ongoing strikes since November 2017, and reiterates the state’s emphasis on health care as a fundamental right. Far from shying away from cooperating with businesses, Article 13 of the law stipulates that the state organise an “effective complementarity” between the public and private sectors so as to work towards greater equality in access to health services.
Government Strategy
State policy is geared towards addressing challenges related to a double-edged demographic transition, in which the population is simultaneously growing older while the birth rate is also increasing. The government’s commitment to health care provision has allowed life expectancy to increase to 76.3 years, an improvement of 29 years since the country’s independence in 1962.
This commitment has required the expansion of programmes and treatment options for NCDs such as cardiovascular diseases, diabetes and cancer. In addition to this, the population has been growing by nearly 1m people each year, making improvements to maternity care and child health services urgently needed. In order to provide care to the whole of Algeria’s vast territory, the state has pursued the expansion of ICT networks that allow for remote diagnostics, and the MSPRH plans to introduce a system of medical caravans to address shortfalls in remote regions. NCDs: The spread of NCDs has been described by the MSPRH as an “ever-increasing burden on the national health system”. The state is facing the challenges of increasing rates of cardiovascular diseases, cancer, diabetes and chronic respiratory illnesses. While prevention campaigns emerged to encourage good nutritional practices and warn of the side effects of tobacco, the state also seeks to promote early diagnosis and diversify treatment options. In 2016 the leading causes of death among citizens were ischaemic heart disease and cerebrovascular disease.
A recent change in regulation allows citizens to now be reimbursed for certain cardiac operations conducted at private clinics. “Under the new health care law, specialised private clinics will be responsible for treating certain diseases through contracts with the public sector,” Dr Toufik Hamadache, director of the private Fatéma Al Azhar Oncology and Radiotherapy Clinic, told OBG. However, currently only cardiac operations can be financed by the state; any other procedures are still paid for by the patient.
Oncology
The second-most-common cause of death after cardiovascular diseases, cancer has remained at the forefront of government policy. The National Network of Cancer Registries predicts that the number of new cancer diagnoses per year in Algeria will increase from 41,870 in 2015 to reach around 49,000 in 2020 and 61,000 in 2025. In order to deal with this expected increase in demand for treatment services, the government’s 2015-19 Cancer Plan emphasises the need for collaboration with the private sector to ease the strain placed on public services. Four new anti-cancer centres were due to have opened in 2018; bringing the national total to 17. At these four centre locations, 12 new radiotherapy accelerators will be installed, which will bring the national total to 48. “Radiotherapy is one of the priorities of the Cancer Plan because it was one of the weakest segments in Algeria. While it represents heavy investments, this is crucial since around 70% of people with cancer need radiotherapy services for their treatment,” Mourad Belkheyar, interim director-general of Varian Medical Systems, told OBG. As of February 2018, there were 36 radiotherapy accelerators in Algeria, including 10 in the private sector, an increase of 29 since December 2013. The state has also been proactive in implementing the Cancer Plan by increasing the capacity of general practitioners to identify and treat cancer, as well as by investing in the local manufacture of pharmaceutical products related to cancer treatment.
Maternal & Child Health
With the population increasing at a rate of 2.1%, the state aims to improve maternal and child health to support this. The rate of infant mortality has declined significantly since 2000, from 36.9 deaths during the first year of life per 1000 live births to 21 in 2017. While these figures indicate improvement, the numbers are high compared to what would be expected of a country with Algeria’s GDP and income level as upper-middle-income countries had an average rate of 11.6 per 1000 live births in 2017.
Algeria’s maternal mortality has declined by more than 50% since 1999, from a 117.4 per 100,000 live births to 57.7 in 2016. However, this figure is also higher than the upper-middle-income country average, which was 41 as of 2015. These relatively high rates can be attributed in part to Algeria’s vast territory and the difficulty in providing access to quality health care for the 28% of the population that resides in rural areas.
In order to address maternal and infant health, the government has implemented a number of projects such as the establishment of a care plan for pregnant women in Algiers in April 2018. Under the plan, pregnant women are classified in one of four categories, ranging from simple to complicated delivery, and are then provided with the necessary care.
Expanding Access
The government has prioritised improving health care access in remote locations, particularly among those populations living in the Hauts Plateaux and the southern wilayas. The health care system is looking to incorporate ICT into its daily operations to modernise the sector and extend access to care across more remote areas. In November 2017 the Algerian Business School hosted the Health Digital Days conference, bringing together sector experts who discussed the extent that digitisation could address the challenge of universal health coverage without heavy investment. The potential of mobilising digital technologies to establish coverage in remote areas through telemedicine networks was introduced in the 2018 Health Law. The legislation also provides for the creation of a national health information system, along the lines of the SIHATIC system that was launched in February 2017, which integrates all health data and ensures secure connections to the information systems of other sectors to which all institutions and structures, both public and private, are obligated to join. In July 2018 the MSPRH also announced its collaboration with the Ministry of Post, Telecommunications, Technology and Digital Economy to interconnect 4000 health facilities across Algeria, specifically targeting the most remote locations to improve the quality of their care. This project is an extension of the telemedicine network launched in April 2016, which has connected five university health centres with 12 public hospitals in its pilot phase. The MSPRH has worked with local officials to implement a strategy of medical caravans offering mobile health services to improve analogue access to health care in rural regions. In October 2018, 100 specialists started a three-week caravan tour through the border wilaya of Tebessa providing free consultations.
Human Resources
As of 2018, the World Health Organisation estimated the number of physicians per 1000 people to be 1.2 and nurses and midwives to be 1.9. Both of these statistics are below the MENA region averages of 2 physicians and 3.7 nurses and midwives per 1000 people. These figures are also lower than what Algeria’s GDP and income level would suggest – at 1.9 and 3.3 respectively – which can partly be explained by the “brain drain” that draws Algerian doctors to work abroad. A study published in October 2017 by the National Council of the Order of Physicians (Conseil National de L’ordre des Médecins d’Algérie, CNOM) identified nearly 5000 doctors in France with Algerian diplomas, representing an increase of 56% since 2007. If Algerian-born graduates of French institutions are taken into account, this figure increases nearly threefold to 14,305 physicians.
Health Insurance
The rise of private sector activity has inspired a move towards health insurance in financial markets. While there is currently no product on the Algerian market specifically dedicated to health insurance, government initiatives are aiming to encourage developments in this sector. In November 2017 it was announced that 2018 would see the creation of a paying third-party administrator (TPA) for health insurance, allowing customers of insurance companies to access private medical care without paying beforehand. The Central Reinsurance Company, in tandem with the four main non-specialised public insurance companies in the Algerian market, plan to launch the pilot programme for this scheme in 2018. The TPA will grant patients an advance for medical expenses provided by private operators. The project is expected to strengthen the market for both health insurance and life insurance, which currently comprises 11.93% of the insurance sector, and is growing at an annual average rate of 11%.
Pharmaceuticals
The pharmaceuticals industry is currently experiencing a period of significant growth, fuelled by growing demand across Africa as a whole. Algeria is the largest market in the continent, worth an estimated $3.7bn, making it a very attractive location for foreign investment. As the country increases pharmaceutical production to cater to the population’s growing medicinal needs, which rose by an average of nearly 9.3% per year between 2007 and 2017, the industry is also positioning itself to pursue the export of locally manufactured products.
The government has worked to forge partnerships with international players who have invested in a number of manufacturing plants. Since 2008 Algeria has restricted the importation of all drugs that can be manufactured locally, and thanks to this incentive has successfully orchestrated the development of domestic pharmaceuticals. As of May 2017, there were 80 production units located across the country. “As digitalisation transforms the industry on a global level, the country can count on a health care sector that is robust enough to incorporate and take advantage of these new technologies,” Haissam Chraiteh, director general of the France-based pharmaceutical manufacturer Sanofi Algeria, told OBG.
Local Production
Pharmaceutical production remains one of Algeria’s most successful industries. Output has increased fivefold between 2012-17, and imports of finished and bulk goods have declined by 14.5% during the same period. While the government aims to meet 70% of national demand for medicine with locally produced products by 2019, Algeria still relies heavily on imported pharmaceuticals, which cost more than $2bn per year. However, the domestic pharmaceutical industry is improving and working towards its goal of meeting 70% of national demand, having reached 45% in 2015 and 60% in 2017.
In May 2017 Hamou Hafed, pharmacy director of the MSPRH, stated that over 140 new pharmaceutical investment projects had been registered since 2014 and that an average of three to four manufacturing establishments are being developed annually. A number of plans for new pharmaceutical plants have recently come to fruition. Most recently, the largest drug production and distribution complex in Africa was completed in October 2018. The new production facility, which received an investment of AD10.6bn (€77m), is operated by Sanofi Algeria and located in Sidi Abdellah. The plant has an annual production capacity of 100m units, covering around 100 products.
Larger projects announced in recent times include a joint venture between the French company Ipsen Pharmaceutical and local firm Isly Holding to establish an oncology drug production facility, and an agreement between state-owned pharmaceuticals manufacturer Saidal and France-headquartered Sanofi for a vaccine production facility, both of which were signed in December 2017. Construction also began on an insulin production plant in Boufarik as part of a partnership between Danish firm Novo Nordisk and Saidal in March 2018, accompanied by the announcement of two new pharmaceutical plants in Constantine and Tizi Ouzou.
Drug Shortages
While the local pharmaceutical industry is manufacturing more and more medications, patient access to medication remains an issue in recent years due to import restrictions on certain drugs. As of September 2018, over 240 medicines were unavailable in Algerian pharmacies, a situation that CNOM has attributed to bureaucratic delays and growing demand. In addition, the Algerian Federation of Medicines maintains that the root cause of the crisis is poorly calibrated import restrictions that have been applied by the government since 2006 in order to stimulate local pharmaceutical production.
MSPRH officials held a meeting in August 2018 in order to formulate an effective plan of action and emergency licences have been issued to relieve the supply tensions regarding essential drugs for the treatment of chronic illness. According to Article 216 of the 2018 Law on Health, the state assumes responsibility for ensuring the availability of pharmaceuticals and medical devices. Towards this end, on an institutional level, the legislation created two new regulatory bodies that suggest greater supervision and improved management of sector supply: a National Agency of Pharmaceutical Producers that will have a public service mission to register, approve and control pharmaceutical products and medical devices, and a cross-sector economic committee for medical products that will set drug prices.
R&D
There is significant potential in Algeria for clinical trials given the strength of the pharmaceutical industry. The state is working to encourage and support research and development (R&D) to develop these capacities. “There is willingness on behalf of the health authorities to develop clinical trials. A biotech cluster was initiated by the MSPRH in collaboration with the sector and we are starting to work together to create a dedicated website for research and related events,” Dr Amine Sekhri, country manager for Algeria at Swiss pharmaceutical firm Roche, told OBG. “The vision is changing towards considering and valuing R&D, and that in itself is a key development.”
Outlook
Updates to the legal framework of the health care system confirm the state’s commitment to the provision of free care, which will become increasingly challenging to deliver in the face of demographic changes. As the state works in partnership with the private sector to ensure the provision of sufficient treatment facilities for its entire population, especially in the realm of NCDs, health indicators are poised to improve. The pharmaceutical industry is also set to experience significant growth in the short term, as international players recognise the sizeable potential of the domestic market and the state seeks to increase manufacturing, with a view towards capitalising on the industry’s opportunities to export on a larger scale.
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