The 15 th Annual IGPA Conference December 2012 Kyoto, Japan Mazen - PowerPoint PPT Presentation

The 15 th Annual IGPA Conference December 2012 Kyoto, Japan Mazen Tantash JAPM

Agenda MENA Facts About the Spring Effect on Generic Producers Post Spring Future Trends

Facts about MENA Pharma Market Size USD 18 billion Generic Market Size USD 8.8 billion Generic Market Growth CAGR +12% Population 340 million Population Growth 2.7% GDP USD 2.2 trillion GDP Growth 3-4% No. of Generic Manufacturers 280 No. Countries 18

1000 1500 2000 2500 3000 3500 4000 500 0 Saudi Arabia Egypt in millions Market size by country Algeria Iraq Morocco Syria UAE Tunisia Yemen Libya Lebanon Jordan Sudan Kuwait WB & Gaza Qatar Oman Bahrain Generics Brand

1000 1500 2000 2500 3000 3500 4000 500 0 Egypt Morocco in millions Generic market size by country Algeria Iraq Syria Saudi Arabia Tunisia Jordan Lebanon Sudan Yemen Kuwait WB & Gaza UAE Libya Qatar Oman Bahrain Generics Brand

Generics Share by Country in millions Nominal� Pharma� Pharma� Generics� Generics� 2011 Population GDP� � � � � � � � � � � Expenditure� Sales % Value in� billions per� capita Saudi� Arabia 26.5 651.6 � � � � � 3,680 � 12% 442 139 Egypt 83.7 252.4 � � � � � 3,056 � 91% 2781 37 Algeria 35.4 210.1 � � � � � 1,630 � 60% 978 46 Iraq 31.1 82.1 � � � � � 1,550 � 60% 930 50 Morocco 32.3 100.3 � � � � � 1,400 � 90% 1260 43 Syria 22.5 59.0 � � � � � 1,090 � 70% 763 48 UAE 5.3 360.0 � � � � � � � � � 930 � 9% 84 175 Tunisia 10.7 46.0 � � � � � � � � � 790 � 48% 379 74 Yemen 24.7 31.2 � � � � � � � � � 700 � 30% 210 28 Libya 9.7 26.8 � � � � � � � � � 600 � 11% 66 62 Lebanon 4.1 39.2 � � � � � � � � � 590 � 39% 230 144 Jordan 6.5 27.5 � � � � � � � � � 500 � 54% 270 77 Sudan 34.0 53.0 � � � � � � � � � 460 � 49% 225 14 Kuwait 2.6 144.2 � � � � � � � � � 390 � 30% 117 150 WB� &� Gaza 4.3 6.6 � � � � � � � � � 280 � 35% 98 65 Qatar 1.9 109.0 � � � � � � � � � 215 � 10% 22 113 Oman 3.1 62.2 � � � � � � � � � 210 � 6% 13 68 Bahrain 1.2 22.3 � � � � � � � � � 118 � 9% 11 98 Total � � � � � � � � � � � � 339.6 � � � � � � � � � 2,284 � � � � 18,189 � 49% � � � � � � 8,878 � 54

2011 Per Capita Pharma Expenditure 180 160 Approx. USA: 960, Spain: 600 140 120 100 USD 175 80 150 144 139 60 113 98 40 74 68 65 62 62 50 48 46 43 20 37 28 14 0

Facts about MENA generics • MENA markets have high dependency on imported drugs 52%. • Almost all MENA countries have local production of generics • Jordan is the leading Arab pharmaceutical exporter • Egypt, Saudi Arabia and Algeria, are the largest markets • The United Arab Emirates, has the highest-priced market in the region

The Middle East – Spring Influenced No Change

Phases of Arab Spring 5 1 2 3 4 Peaceful Violent Armed International Regime Change Demos Demos Struggle Interference The Spring has not ended yet

Symptoms of Arab Spring • Directed against dictatorships • Need transitional governments • Lead by youth • Utilize internet and social networks for communication • Call for more democratic rights • Against corruption • Faced with government repression • More women participation

Spring Effect on GDP Growth Libya Egypt 80 76.3 60 4.7 5.1 40 1.8 20 -0.1 1.5 2.5 0 -20 2009 2010 2011 -40 2012 -60 -61 Both Egypt & Libya had -80 their Spring in 2011

Effects on Generic Producers

Reaction of the Generic Pharma Defer Capital Investment Minimize Finished Product Inventory Build RPM Inventories Reduce Headcount Conserve Cash

Effect on Demand Demand during the spring is reduced Pharma Generic Sales CURRENT State Pre-spring 2012 2015

Effect on Demand Demand is expected to grow beyond pre-spring levels at a faster pace Pharma Generic Sales CURRENT State Pre-spring 2012 2015

Post Spring Recovery Reduced Unemployment & Economic growth 4 Economic Stimulus & Re-building programs 3 Recovering Assets 2 Constitutional Reform After electing the new 1 government, there are needed steps to recovery

Trends 2013 and onwards 1. Increased mergers, acquisitions, and partnerships 2. Local manufacturers will mushroom regionally to diversify risk 3. Health Care reform 4. Rise of bio-similar to reduce the pharma bill 5. High / increased level of regulatory scrutiny and more focus on Quality 6. Regulatory downward pressure on pricing

What does it all mean? More democratic decision making People will demand More economically 30% better and more priced healthcare Growth in comprehensive will be called for generic healthcare pharma