Over the past decade, the Tunisian pharmaceutical sector has experienced steady double-digit growth at between 10% and 15% a year as a result of increased domestic demand for drugs, emerging export markets and the implementation of a favourable business environment. As a whole, the Tunisian drug sector generated $745m in 2015, with local private production accounting for 60% of the domestic market’s needs in terms of volume and 47% in terms of value, according to the World Health Organisation (WHO).
Structure
Tunisia is home to 39 drug manufacturing companies, which primarily operate as joint ventures with international firms for the production of medications for human use, as well as veterinary drugs, medical devices and raw materials. With an annual turnover of $50m, Adwya is the largest local drug manufacturer, accounting for 15% of local output and 7% of market share, followed by Unimed, Sanofi Tunisie, Teriak and Opalia. Most such companies were founded by local professionals following the sector’s privatisation in the 1990s and the introduction of favourable tax incentives, including exemption from import duties, tax breaks and improved conditions for public bids. In terms of drug imports, a system of centralised purchase was implemented in 1961 and is overseen by the Central Pharmacy of Tunisia.
Generics
Similarly to Morocco and Algeria, Tunisia has sought to encourage the local production of generic medicines to reduce health care costs and provide the population with better access to medicine. Generics account for two-thirds of local production, with the remainder being licenced medication. Hatem Hachicha, managing director of Pfizer Tunisia, told OBG, “Generic medications will be a major growth driver for pharmaceutical companies in Tunisia.”
The Tunisian pharmaceutical industry also adheres to strict international standards and many companies are registered in the EU zone. However, the market environment is changing rapidly as growing competition has prompted drug manufacturers to launch new products. Ali Naas, managing director of Adwya, told OBG, “The sector is now oriented towards the development of innovative products such as high-tech, hormone-based treatments and cancer and anti-coagulant drugs, but it is always keeping in mind the need to reduce import-related costs.”
Exports
Tunisia is increasingly eying export markets, with an emphasis on Francophone countries in Africa. Naas told OBG that exports account for roughly 7% of turnover, which include some EU-certified subcontracting deals to supply European markets and regular export streams to neighbouring and West African countries. The next step for manufacturers is to develop on-site production in sub-Saharan nations. In late 2015 Teriak purchased Cameroon’s Cinpharm plant with a view to exporting to Central African markets. However, Amor Toumi, adviser on Tunisia at the WHO, told OBG, “Though Tunisian drug manufacturers have a good reputation in African markets, they still suffer from a lack of infrastructure allowing for direct air connections, maritime routes or business events that would allow them to fully tap into the potential of African countries.”
Similarly, Tunisia’s EU-certified medication production has raised increased interest among foreign investors. UAE-based private equity firm Abraaj Group invested in two Tunisian manufacturing companies: namely, Opalia in 2009 and Unimed in 2011. Abraaj later sold its stake in both firms. Abraaj and its partners also bought two Tunisian clinics in 2014. As a whole, growth in the pharmaceutical sector should continue at a rate of at least 10% over the next five years, with the possibility for Tunisian manufacturers to meet 65% of Tunisia’s needs, according to Naas. He told OBG, “Tunisia has a chance to be a mover and shaker in African markets, as it boasts competitive production based on an available qualified workforce, a good logistical position and competitive prices.”
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