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Home > Healthcare > Pharmaceutical > General Pharmaceutical
Lebanon Pharmaceuticals and Healthcare Report Q4 2009
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We expect total drug spending in Lebanon to increase from under US$500mn in 2008 to US$605mn in2013, a compound annual growth rate (CAGR) of 3.9% in US dollar terms, with 1.75% of GDP dedicatedto pharmaceutical expenditure by 2013.
The Minister of Health, Mohammad Jawad Khalifeh, has held the position since 2005 and hasdramatically reformed drug pricing in the country, highlighting the fact that other countries in the regionwith similar economies were paying significantly less for medicines than Lebanon. Following a lengthyperiod of pressure, the government finally reduced average pharmaceutical prices by 5%, with themomentum and support gained in the process providing the impetus for other regulatory changes,including the introduction of transparency guidelines.
Public sector health provisions have been scrutinised and challenged by Khalifeh in light of high unmetdemand for subsidised services. He said the budget for the Ministry of Public Health in 2005 was only3.5% of GDP and subsequently the department ran into deficit every year. While a small population willrestrict growth, we believe government subsidisation will do much to boost the drug market. Moreaffordable prices and access to hospitals will allow people to spend more on medicines instead offorgoing treatment altogether.
Despite the price differences, there is little perceivable demand for off-patent drugs outside of the publichealthcare sector. However, the prescribing habits of doctors are a major factor in determining demand.
The lack of transparency and registration notification to physicians for new generic drugs exacerbates thisproblem. While government websites aim to clarify which patented medicines have a generic equivalentin the country, the low exposure of off-patent medicines to the patient is the reason the CAGR for thissector is only 3.85% between 2008 and 2013.
The generic drug sector in Lebanon will experience slow growth over the next five years, largely due toestablished partnerships between the private sector and the government in determining procurementpolicies. Critics of the Ministry of Public Health have said that importers and wholesalers in the countrycannot profit as much from selling generic medicines as patented - an obvious incentive against orderingcheaper drugs. In this sense, the pharmaceutical industry in Lebanon is not being regulated in favour ofthe patient.
Another key issue is that the country lacks an internationally accredited drug testing and analysislaboratory, and therefore relies on patented medicines as these are already approved by the US Food andDrug Administration (FDA) or the European Medicines Agency (EMEA). Relying on internationalregulatory standards is a means of assuring quality if the country does not have the means to do so itself.The expense of reopening a laboratory that closed in 2007 remains off-putting and continues to inhibitprogress. However, Lebanon’s pharmaceutical sector cannot progress without a centralised drug testinglaboratory and as a result is set to remain restricted in terms of drug choice and market growth.
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