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A SOLID BASE FOR

THE REGION PAGE 12

THE PAST & FUTURE OF THE DOMESTIC

INDUSTRY PAGE 14

DOLIPRANE: A MOROCCAN

EXCEPTION PAGE 29

SANOFI: ATTACKING THE CAUSES OF DIABETES

& MENTAL HEALTH PAGE 30

JULY 2015

MOROCCO

COVER STORY UNCLOUDED

AMBITION Morocco’s High Hopes For Its

Pharma Sector page 18

Healthcare & Life Sciences Review: Morocco 2www.pharmaboardroom.com

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CONTENTS —July 2015

This edition of Healhcare & Life Sciences Review was produced by Focus Reports.

Publisher & Project Director: Julie Avena Written by: Karim Meggaro Contributors: Carla Verdera Mateu, Zachary Burnside

For exclusive interviews and more info, please log onto www.pharmaboardroom.com or write to [email protected].

Copyright: All rights reserved. No part of this publication maybe repro-duced in any form or by any means, whether electronic, mechanical or otherwise including photocopying, recording or any information stor-age or retrieval system without prior written consent of Focus Reports. While every attempt is made to ensure the accuracy of the information contained in this report, neither Focus Reports nor the authors accept any liabilities forerrors and omissions. Opinions expressed in this report are not necessarily those of the authors.

A Solid Base For The Region

Feature 12

HEALTHCARE & LIFE SCIENCES REVIEW MOROCCO

Unclouded Ambition Cover story 18

Doliprane: A Moroccan Exception Feature 29




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5 Acknowledgements

6 PREFACE Morocco

8-10 MOROCCO IN FIGURES Industrial Overview / Top Players / Top Drugs

12 REGIONAL HQs FEATURE Multinationals Speak

14 THE PAST & FUTURE OF THE DOMESTIC INDUSTRY INTERVIEW Abdelilah Lahlou, Iberma

16 MANAGING THE PRICE CUTS INTERVIEW Mehdi Zaghloul, Novartis Morocco

18 MOROCCO COVER STORY Unclouded Ambition

20 Shifting Sands: Market Restructuring

21 Getting The Generics Equation Right

22 Why Invest In Morocco?

23 The Gateway To Africa

26 PARTNERSHIPS AND EXPORTS FEATURE Lamia Berrada & Samir Bachouchi, Bottu

29 DOLIPRANE IN MOROCCO FEATURE Bottu And Doliprane

30 CSR SPOTLIGHT FEATURE Sanofi, Diabetes And Mental Health

32 RISING STAR INTERVIEW Mohamed El Bouhmadi, ZenithPharma

34 THE INNOVATION GAP INTERVIEW Radia Chmanti Houari, GSK Morocco

36 MOROCCAN M&A INTERVIEW Brahim Oulammou, Promopharm

38 ONCOLOGY IN ACTION FEATURE Projects To Improve Treatment Levels

40 EXPORT OPPORTUNITIES INTERVIEW Driss Chaoui, Afric-Phar

42 PRODUCTION HUB INTERVIEW Myriam Lahlou Filali, Pharma 5 Group


www.pharmaboardroom.com

mailto:contact%40focusreports.net?subject=

http://www.bottu.com

Acknowledgements

PharmaBoardroom would like to thank:

The Moroccan Ministry of Health

Abdelmajid Belaiche, Director General, AMIP

Hubert de Ruty, President, MIS

Mohamed Houbachi, President, AMMG

Abderrahim Derraji, Founder, Pharmacie.ma

and the industry leaders that we have met for taking the time to share with us their thoughts, their stories and their ambitions.

A warm thank you for the support, assistance and enthusiasm we have received from the Moroccan pharmaceutical community.

6 Healthcare & Life Sciences Review: Morocco www.pharmaboardroom.com

10° 20° 30° 40° 50° 60°0°10°20°30°

40° 50° 60°

30°

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MOZAMBIQUE

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Morocco is too often overlooked as a pharmaceutical nation. However, thanks to decades of experience, the domestic phar-maceutical industry is strong, with a well-developed base of local producers that today manufacture products to high international standards. The quality of local producers in Morocco today is somewhat unknown to the outside world, something we hope to address with this report.

Thanks to Morocco’s regional competitiveness, many multinationals have chosen to establish their regional headquarters in the country, a nod to its political stabili-ty, liberal economy and educated workforce. Indeed, in its 2015 Africa Competitiveness Report, the World Economic Forum identified Morocco as the most competitive country in North Africa.

One place where the quality of Moroccan pharma is well known is in sub-Saharan Africa. Indeed, Moroccan

pharma companies have been making inroads as export-ers for years now, benefitting from the vision of King Mohammed VI to open Morocco to the south. As well as looking to continue this expansion southwards, many Moroccan companies are now looking at the possibili-ties beyond Africa – to the north, Europe, and to the west, the US.

Quietly, sedately then, Morocco’s pharmaceutical sec-tor is shining. Domestically, with the introduction of new healthcare coverage through the RAMED program, increasing numbers of Morocco’s populace are getting access to medicine; aside from this, manufacturers are improving standards, MNCs are finding new ways to bring innovation to the country, and trade continues to flour-ish. Morocco’s ambitions in healthcare are clear, and the skies overhead are unclouded.

Preface

PREFACE Morocco



EVOLUTION OF MOROCCO’S GDP GROWTHTHANKS TO THE DEVELOPMENT OF NEW INDUSTRIAL SECTORS OTHER THAN AGRICULTURE,

MOROCCO´S GDP HAS BECOME MORE PREDICTABLE EACH YEAR

Source: World Economic Forum

15%

13%

11%

9%

7%

5%

3%

1%

0

-1%

-3%

-5%

-7%

1991

2000

2009

1993

2002

2011

1995

2004

2013

1997

2006

1998

2007

1990

1999

2008

1992

2001

2010

1994

2003

2012

1996

2005

MOROCCO BY THE NUMBERS

MOROCCO EXPORTS

THE MOROCCAN MARKET

Source: IMS Health, AMIP

1.51MARKET SIZE: USD

BILLION TOTAL BILLION PRIVATE MARKET

0.89USD

EXPECTED CAGR 2013-18

4%

LARGEST PHARMA SECTOR IN AFRICA BY SIZE (AFTER

SOUTH AFRICA)

2nd

OF DOMESTIC DEMAND

%69.4LOCAL PRODUCTION COVERS

INDUSTRIAL UNITS

33

7-8%OF ITS PRODUCTION IN TURNOVER 2012-13

21.7%

AN INCREASE OF

MOROCCO IN FIGURES Industrial Overview

MOROCCO ALGERIA TUNISIA EGYPT LIBYA NORTH AFRICAN AVERAGE

72 79 87 119 126

4.21 4.08 3.96 3.60 3.48 3.87

57 65 85 121 111

4.74 4.64 4.38 3.73 3.86 4.27

78 125 94 106 137

3.92 3.34 3.74 3.58 3.03 3.52

82 133 93 113 143

350 2.91 3.40 3.18 2.49 3.09

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THE GOBAL COMPETITIVENESS INDEX 2014—2015

COUNTRY/REGION: NORTH AFRICA ValueRank



TOP 10 LABORATORIES IN UNITS PRODUCED IN 2013

Source: IMS Health

1BOTTU

2COOPER MAROC

4SOTHEMA

6GALENICA

8PHARMA 5

10GSK

5LAPROPHAN

7SANOFI-AVENTIS

9BAYER MAROC

MAPHAR3

Source: IMS Health

TOP 10 LABORATORIES IN VALUES IN 2013

1SOTHEMA

2SANOFI-AVENTIS

4MAPHAR

6BOTTU

8GALENICA

10PFIZER MAROC

5LAPROPHAN

7GSK

9NOVARTIS

COOPER MAROC3

EVOLUTION OF THE PRIVATE PHARMA MARKET IN VALUE

Source: AMIP Exchange rate: USD 1 = MAD 10

0.80

0.89

0.83

0.88 0.87

2010 2011 2012 2013 2014

GENERIC AND ORIGINATORS IN UNITS AND VALUES IN 2013

Source: IMS Health

MOROCCO GENERICS ORIGINATORS

UNITS IN 2013(IN THOUSANDS OF UNITS)

307,426.6 97,856.9 209,569.7

EVOLUTION2012—2013

1.5 4.1 0.4

% IN UNITS 100.0 31.8 68.2

VALUE IN 2013(IN USD MILLION)

897,629 298,771 598,857

EVOLUTION 2012—2013

2.6 6.7 0.7

% IN VALUE 100.0 33.3 66.7

UNITS: Billion USD

MOROCCO IN FIGURESTop Players

Exchange rate: USD 1 = MAD 10



TOP 10 THERAPEUTIC CLASSES IN UNITS (2013)

Source: IMS Health

12.0%

4.0%

4.5%

7.1%

7.6%

8.0%

11.0%

11.9%

15.4%

18.3%

OTHERS

SENSE ORGANS

DERMATOLOGY

APP GENIT- URIN.HORM.SEX

MUSCULOSKELETAL SYSTEM

BREATHING APPARATUS

APP CARDIOVASCULAR

NERVOUS SYSTEM

GENERAL ANTIINFECTIVES

APP DIGESTIVE METABOLISM

Therapeutic classes in values

Market share in % of value

TOP 10 MEDICINES IN MOROCCO BY VOLUME, 2014

TOP 10 MEDICINES IN MOROCCO BY SALES, 2014

DOLIPRANE ®AUREOMYCINE ®

MICRODIOL ®

MINIDRIL ®

ASPRO ®

COQUELUSÉDAL ®

RINOMICINE ®

ADEPAL ®

PERNABOL ®

AMOXIL ®

1

2

4

6

8

3

5

7

9

10Source: IMS Health

DOLIPRANE ®AUGMENTIN ®

OEDES ®

MICRODIOL ®

AMOXIL ®

ERECTOR ®

CLAVULIN ®

VENTOLINE ®

SURGAM ®

ACLAV ®

1

2

4

6

8

3

5

7

9

10Source: IMS Health

MOROCCO IN FIGURES Top Drugs



PREFACE Morocco



REGIONAL HQsMultinationals Speak

Preface: Why choose Morocco over other countries in the region to base regional HQs? The regional managers of Roche, Bayer and GSK explain.

A SOLID BASE FOR THE REGION

“Regarding where the headquarters are located for this region, there are many factors that drive this deci-sion. It is true that Algeria is the biggest market in the region, has been growing at record rates and still has a lot of potential. But when choosing the best location of the regional hub, you need to take a holistic view. A number of factors play a critical role, including for example, the ease of doing business, ability to getting work permits, overall safety, and access to talent.

“Right now, Morocco is the hub for our Roche Management Center Northwest Africa. I think that Morocco certainly has the potential to become a region-al hub for other companies and sectors as well; how-ever, it needs to take action to change certain aspects. There are currently negotiations happening with the European Union regarding trade, which could be very beneficial for Morocco on many levels. It would be a great opportunity to get Morocco to the next step in its development. With the stability that Morocco offers, and the fact that many companies are already represent-ed here, plus its connection with Europe and Africa, Morocco is a privileged potential hub. But Morocco must take a more long-term view and not a short-term, protectionist view.”

“Today, I am leading GSK North Africa, based in Morocco, supporting three countries: Morocco, Tunisia and Libya. We are ranked second in pharmaceutical mar-ket in both Morocco and Tunisia and GSK is leading the industry in many therapeutic areas: vaccines, anti-infec-tive and respiratory. More than 100 people are working at GSK Morocco today.”

“I believe the main reason why GSK´s North Africa hub is in Morocco and not elsewhere, is the high level of skills and expertise we have in the country. Sir Andrew Witty, GSK’s CEO, visited Morocco last year in September: he commented that he was impressed by the quality of the people here in Morocco. This is a great testimonial! In my leadership team I have diversified profiles who have come over from Canada, US, Switzerland and France, a high caliber of talented people. We made tremendous progress

RALF HALBACHGENERAL MANAGER, ROCHE MOROCCO AND HEAD OF MANAGEMENT CENTER NORTHWEST AFRICA

RADIA CHMANTI HOUARIAREA DIRECTOR NORTH AFRICA AND PRESIDENT GENERAL MANAGER, GSK MOROCCO



REGIONAL HQsMultinationals Speak

in feeding our succession pipeline and filling some local leadership roles internally, and we also did well in export-ing talents last couple of years, either to regional roles or to other locations.”

“One of my key objectives is to upgrade our people capabilities and expose their competencies to the region. At an HQ level, what I am trying to do is to increase my team’s exposure in regional events, projects and meetings. During last CEO visit in Morocco, I insisted on organiz-ing a business review meeting so he could see the quality of the people we have here. Moreover in best practices, we are trying to develop many local projects and have them presented across the region.”

JACQUES HENRI CHARPENTIERDIRECTOR GENERAL OF BAYER HEALTHCARE MAGHREB

“Bayer has been present in Morocco for more than 50 years, through our pharmaceutical practice but also our two oth-er divisions, namely MaterialScience and CropScience. Morocco acts as the Maghreb hub for Bayer’s activities. It had even been a hub for a part of French-speaking Africa up to this year when the group decided to reorganize its regional practice and now Morocco continues as the hub for the Maghreb region: Tunisia, Algeria, and Morocco.”

Morocco certainly has the potential to become a regional hub for other companies and sectors as well; however, it needs to take action to change certain aspects

Ralf Halbach

Sir Andrew Witty, CEO of GSK visits the company’s regional office in Casablanca in 2014.



THE PAST & FUTURE OF THE DOMESTIC INDUSTRY Abdelilah Lahlou, Iberma

THE DOMESTIC INDUSTRY: PAST & FUTUREABDELILAH LAHLOU, discusses the history of the Moroccan pharmaceutical industry, as well as the challenges and opportunities ahead

HCLS: You have a long experience of the Moroccan pharmaceutical industry. What have been the most sig-nificant changes throughout its history? AL: Morocco initiated its pharmaceutical industry after independence, having opted for the liberal option from the very start for drug development and distribution. Facilities in the early years dated from World War II, when French pro-duction was relocated due to the Nazi occupation. After the war, these laboratories became small Moroccan units.

Socioeconomic policy then started to focus on industri-alization. One enlightened policy implemented by His late Majesty King Hassan II was the introduction of subsidies to encourage pharmacists to invest in the pharmaceu-tical industry. The pharma sector inMorocco therefore enjoys sixty years of experience, which is quite considera-ble. We were amongst the first countries in Africa, along with South Africa, to adopt efficient administrative organization of health: it led to the creation of the Drug Division, the National Control Laboratory, the New Code of Pharmacy, and so on. This infrastructure was envied.

However, historically, and even today, the pharmaceutical industry was based on the license model. What we ended up with was a number of national labs working under license for multinationals. Representation through license, in a country that is poor and limited in purchase power, results in a small-batch market, which dragged the market down: no product in the country issues over 15,000 units per month. This small-batch logic leads to high manufacturing costs.

Yet the market has opted for a focus on quality and GMP compliance. Morocco, for making this effort and also thanks to the National Drug Order, has been able to compete with Europe in terms of quality. Imagine the efforts that were pro-vided by the manufacturers to reach these levels!

HCLS: What were the consequences of market organization? AL: We find the following characteristics today: an industry of small batches, heavily dependent on imports of APIs, with high manufacturing costs and limited economies of scale. With a situation like this, one might have doubted the fu-ture of our pharmaceutical industry, but no such thing hap-pened for the manufacturers, who never lost confidence and faith in their industry. Consumption is constantly growing, steadily if not exponentially. Indeed, Morocco remains a poor country so consumption increases at its own pace. In the 2000s, Morocco also experienced a renewal, a palpable socio-economic development; the middle class emerged and drug consumption was able to increase.

Another factor also predominates: in the last five or six years the country has entered a new phase; social coverage was very low but became mandatory (AMO – mandatory health insurance), and although it does not provide 100 per-cent coverage, I defend it as a smart model, for it is better to improve coverage incrementally than to attempt full cover-age all at once.

Today, this coverage goes up to 40 percent and in addition, there is a system in place for the weakest households: Ramed, which covers nearly eight million people, or nearly 25 percent

ABDELILAH LAHLOU

General manager of Iberma



THE PAST & FUTURE OF THE DOMESTIC INDUSTRY

Abdelilah Lahlou, Iberma

of the population. Even AMO gradually improves and it appears that by 2017 or 2018, it will include a maximum of members since new people are added each year.

HCLS: Why has the sector’s reorganization taken so long? AL: Following the commotion in the pharmaceutical in-dustry, which incidentally happened at the same time as the Arab Spring, politicians, pharmacists and manufacturers found themselves face to face, and things needed some seren-ity and rationalism. Bad days seem to be over and Morocco has found a dynamic for the development of its pharmaceu-tical industry which will take it further. Three years ago we signed a program with His Majesty for the emergence of the pharmaceutical industry; unfortunately the manufacturers may have failed to seize this opportunity, which is probably

why we now have to backtrack so we can reconsider our op-tions (organization in ecosystems for instance). The dynam-ic is very vibrant: investment goes on, the number of market entrants has multiplied, and a market composed of multi-nationals at the beginning now includes generic makers from all over the world, including Indians, Portuguese, and Spanish companies. All this heralds a continuous evolution in the drug sector for the years to come.

Morocco has everything to gain from properly creating in-dustries that sustain countries, such as aerospace, automotive, agricultural and pharmaceutical industries. This is the future of Morocco, the added value that will allow its development. Personally and also as a pharmacist, I am committed to this end. It is my duty to be a responsible manufacturer! I believe that everyone has understood these needs and that it is why this industry even exists, even if it is not a bed of roses.

YOUR HEALTHCARE PARTNERwww.iberma.com



MANAGING THE PRICE CUTSMehdi Zaghloul, Novartis Morocco

PharmaBoardroom asks MEHDI ZAGHLOUL, country president and general director of Novartis Morocco, and former president of Maroc Innovation et Santé (MIS), what were the main achievements of his term at the association.

MANAGING THE PRICE CUTS

“The main achievement was to help the industry overco-me a very tough period that began with the implementa-tion of a new price law in Morocco. The first step was dea-ling with the impact that the announcement had on the market in January 2014. The market shrank by around 4.5 percent, which is significant for an emerging market like Morocco. Our biggest challenge was to avoid stock-outs and continue to address distribution issues while restoring confi-dence across all channels. The second step was maintaining an open dialogue with the health authorities and ensuring that the price cut would be linked to a regular reimbursement situation. For the last three years, all reimbursements were completely frozen in the country, the official reason being to re-assess prices in order to manage costs at the insurance level. One commission per month is supposed to take place, but for the last four months only one has been organized.

This was painful, but at the end of the day, reduced pri-ces means improved access, which means that ultimately, the benefits will be felt by the wider population.

In 2010, a new methodology for drug pricing was intro-duced by the Moroccan Ministry of Health based on seven selected counties (France, Belgium, Spain, Portugal, Greece, Turkey and Saudi Arabia). The idea was that the set price for any drug in Morocco would be lower than in those countries. We persuaded the authorities that while this would be accep-table for newly registered products, for generics it would not. We finally convinced the authorities to reduce the local price based on a price average.

Another element was persuading companies interested in investing in Morocco to go through a local partner, as according to Moroccan law you need to be hosted by a lo-cal pharma organization. The difficulty was that the mar-gin required for the access costs was around 15-20 percent: it was not viable to use the lowest price from a basket of seven countries and additionally face extra costs of 20 percent. We lobbied to reduce the import tariffs to 10 percent, which was reflected in the decree published in December 2013.

Last year, we spent at least two days per week at the Ministry of Health, discussing with all stakeholders, and overcame the challenges of restoring growth in the mar-ket through access to tenders, such as those issued as part of RAMED (Regime d’Assistance Medicale), which is still being implemented.

The authorities are managing RAMED without a full complement of essential drugs due to a lack of funding. Although the budget dedicated for drugs has increased, it has focused on volumes without diversifying drugs and con-sequently we still do not cover all diseases.

RAMED covers all employees officially declared, which represent 30 percent of the population. This is a great achievement.

The other point is that today in Morocco we have a new law covering intellectual property, which was announ-ced on January 15th, 2015. We are, as a result, the first non-European country to have signed a memorandum with the European Patent Office (EPO).”



MANAGING THE PRICE CUTSMehdi Zaghloul, Novartis Morocco

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Investment in R&D and related facilities is very active and establishment of plants according to the international standardsis increasing.

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Morocco was among the first nations in Africa to develop a pharmaceutical industry over 60 years ago.



COVER STORYMorocco, Unclouded Ambition

O UR SUCCESS GREW FROM A FRAMEWORK WHERE PHARMA COMPANIES NEEDED TO PRODUCE LOCALLY, WHICH LED TO IN-DUSTRIAL INVESTMENTS IN MOROCCO,”

explains Mohamed Houbachi, president of both Polymédic, a local producer, and AMMG, the Moroccan generics association. “This was a tremendous force in the development of the sector.”

But then the business model changed. “Instead of working on 100 percent local production, companies that wanted to enter the market in Morocco would launch their own products under license with local laboratories,” Houbachi explains. This business model is still widely in place to this day. “Local pharma companies were only seen as providers for the local market, and not as a sec-tor that could export and that therefore deserved to be developed.”

“We find the following characteristics: an industry of small batches, heavily dependent on imports of APIs, with high manufacturing costs and limited economies of scale. With a situation like this, one might have doubted the future of our pharmaceutical industry, but no such thing happened for the manufacturers, who never lost confi dence and faith in their industry,” adds Abdelilah Lahlou, general manager of Iberma. “The infrastructure is there, and this is what has made the country successful: I have personally received representatives from other countries, who were amazed with what we managed to put in place in the country,” he enthuses. “Bad days seem to be over and Morocco has found a dynamic for the development of its pharmaceutical industry which will take it further.”

Morocco has clear ambitions: with a strong focus from King Mohammed VI on forging partnerships with oth-er African countries, the country is keen to develop its pharma industrial base and export capabilities. Minister of Industry Moulay Hafi d Elalamy has included pharma-ceuticals in the list of “ecosystems” which will boost the Moroccan economy according to the Ministry’s Industrial Acceleration Plan.

The Moroccan market is also changing: the outcome of the 2011 Moroccan Arab Spring was very different from

those of its neighbors. A referendum was held, which led to a new Moroccan constitution making access to healthcare a constitutional right. In April 2012, King Mohammed VI officially launched the Medical Assistance Plan (Regime d’Assistance Medicale – RAMED) across all re-gions of the country, with the aim of improving access to healthcare for the poorest segments of the population. Although universal healthcare coverage is still a long way off, RAMED now covers eight million Moroccans, with over 50 percent of the population covered with some form of social security in 2013.

“The social and political transformations experienced by Morocco and other Arab countries have helped raise our awareness, and changed our approach,” explains Morocco’s minister of health, El Houssaine Louardi, voted

HOUSSAINE EL LOUARDI

Minister of Health

MOULAY HAFID ELALAMY

Minister of Industry



JACQUES HENRICHARPENTIER

Director general, Bayer Healthcare Maghreb

SHIFTING SANDS: MARKET RESTRUCTURING

Part of the strategy for making universal healthcare achiev-able in Morocco is a series of price cuts: although in 2014, volumes increased 2.8 percent, the market in terms of value shrank by 4.7 percent during the same period.

“I believe that now, the worst is behind us: 2014 was re-ally an annus horribilis for the sector,” admits Abdelmajid Belaiche, director general of the Moroccan Association of Pharmaceutical Industry director general (AMIP). “Despite this, we hope that in 2015 things will start again on the right foot. AMIP agrees with the price cuts: they make sense in a country like Morocco, where people have difficulties access-ing medicine. Medicine is not expensive in Morocco, but its citizens are poor. In this context, the cuts are very just.” What the industry understood less was a four percent transfer of margins towards the pharmacy sector. “This transfer of mar-gins hit us. We suffered more from this lowered margins than from the price lowering itself.”

Jacques-Henri Charpentier, director general of Bayer Healthcare Maghreb, explains that there are still some impor-tant steps left in the reform process. “The procedures concerning the Autorisation de mise sur le marché (AMM), the price decree, access to reimbursement, all this is still in play. The year 2015 should al-low for extra clarification so that by the

MOHAMED HOUBACHI

President, AMMG

ABDELILAH LAHLOU

General manager, Iberma

ABDELMAJID BELAICHE

Director general, AMIP

“ Now, the worst is behind us: 2014 was really an annus horribilis for the sector

“

Abdelmajid Belaiche, director general of AMIP

the country’s most popular minister in January 2015. The government has put together a health sector strategy to take the country through to 2016, of which RAMED is a key component. “To overcome Morocco’s health challenges, we must have mandatory, universal coverage, so that people can access care without having to pay up front,” he explains.

THE HISTORY OF PRICE CUTS SINCE 2012

Source: Presse Economique.

2012

Price cut on 400 medicines of between 30% and 50%

2013

New price cut on 320 medicines of up to 60%

2015 (JANUARY 1 ST)

Latest cut on 98 medicines

2014 (JUNE)

Cut on 1,578 medicines of between 30% and 60%



GETTING THE GENERICS EQUATION RIGHT

“Today generic medicine accounts for 30 to 35 percent of the market, but I truly believe that this share will grow in the coming years,” says Mohamed El Bouhmadi, CEO of ZenithPharma, a fast growing Moroccan company.

“Morocco is a country highly classified by the World Health Organization, with a pharmaceutical industry that has been around for more than 60 years and plants that operate to European standards. So, the problem is not associated with

“The problem is not associated with the quality of generics. I believe that the generics consumption figure is low because of the lack of a comprehensive medical coverage system

Driss Chaoui, director general of Afric-Phar

“

MOHAMED EL BOUHMADI,

CEO, ZenithPharma

DRISS CHAOUI

Director general, Afric-Phar;

HUBERT DE RUTY

President, MIS

end of the year, beginning of 2016, we start with the politics of medicine having been clearly settled, and that will allow for the predictability that is so essential for MNCs.”

“The price decree hurt many laboratories, in particu-lar the MNCs, and we are now waiting for accompanying measures and have already discussed this with the ministry. Indeed the price cut is a laudable cause but now one has to ensure that the medicines are available on the Moroccan market,” says Hubert de Ruty, country manager of Pfizer Morocco and president of MIS (Maroc Innovation & Santé), Morocco’s association for innovative pharma companies. “The priority for us is access to treatments for patients, particularly important in an emerging country. This is like-wise the priority of the minister of health, who is someone who has taken important decisions to really advance the debate and has put in place serious reforms impacting the daily lives of Moroccans.”

the quality of generics. I believe that the generics consumption figure is low because of the lack of a comprehensive medical coverage system,” says Driss Chaoui, director general of Afric- Phar. “However, with the current reforms being enacted by the government, we are seeing an improvement and believe that the consumption of generics will significantly increase.”

However, it will be a long road to more than double the current rate of generics penetration, and there are still a num-ber of legislative steps that could be taken in order to ease the transition. “70 to 80 percent of government tenders specify generic medicines. Products in these tenders are actually re-ferred to under the international nonproprietary name (INN) system, and not under brand names,” continues El Bouhmadi of ZenithPharma. “In order for generics penetration to soar, doctors should be able to prescribe using INN labels, and pharmacists should be able to substitute products. It’s not possible as of today in Morocco.”

Bayer’s manufacturing plant



HAISSAM CHRAITEH

President anddirector general,Sanofi Morocco

WHY INVEST IN MOROCCO?

The long history of the Moroccan pharma sector has produced a rela-tively strong industry with undenia-ble expertise and skills.

Sanofi was one of the first com-panies to believe in the potential of Morocco, and today, that historical commitment shows: the company has a 20 percent market share in the country. “Sanofi has a historic presence in Morocco going back 60 years,” explains Haissam Chraiteh, presi-dent and director general of Sanofi Morocco. “We were the first pharmaceutical company in Morocco with two affiliates, our own business, namely Sanofi, and a twin company, Maphar, which acts as a service provid-er and partner for a certain number of multinational laboratories.”

Today, Morocco remains a strategic location for the company. “Ten years ago, Sanofi developed an inno-vative treatment for malaria. We created partnerships in Africa to deliver treatments at affordable prices.

These programs developed well and at a certain point we needed to increase our production capacities. We chose Morocco as the place to do this, as it is an African coun-try in which we already had a base and that was starting to develop in terms of regional importance. Ten years ago, we invested enormously in the production site and later in the development of export activity, “ explains Chraiteh. In 2013, Sanofi renewed its commitment to Morocco, launch-ing a new distribution platform, and receiving a visit from the company’s CEO, “who opened this platform alongside the minister of health,” he continues. “We needed to mod-ernize our distribution capacity and hence the development of the new distribution center that allowed us to man-age both our local production needs and our ambitions in Africa.”

Courtesy: SANOFI



KHALID EL ATTAOUI

Director general, Tecnimede

BRAHIMOULAMMOU

Director general, Promopharm

AYMAN CHEIKH LAHLOU

Director general, Cooper Pharma

THE GATEWAY TO AFRICA

“In the past Morocco always looked towards the north but never towards the south,” says Adil Zanfari, president of Genpharma, a local generics player. “When we com-pared ourselves, it was always to Spain, France and England, but never to the likes of Senegal. Before when we wanted to travel to Africa we had to go via Brussels, London or Paris. Now we can take a plane directly to Africa.”

Cooper Pharma, a leading Moroccan company, has been in Africa since the late 1990s. “There is a real coherence with regards to this Moroccan strategy, a relationship not based on exploitation but on working together to evolve together in a win-win cooperation for all the countries concerned,” explains Ayman Cheikh Lahlou,

Another investor, Tecnimede, the Portuguese phar-ma company, chose Morocco as its first subsidiary out-side Europe. “Tecnimede was established here in 1999,” explains Khalid El Attaoui, director general of Tecnimede Morocco. Tecnimede decided in 2009 to build a new plant in the country. “We decided to opt for Morocco for numerous reasons,” El Attaoui re-marks. “Morocco has for quite a long time had the de-sire to attract outside investment and as such the nec-essary fiscal policies have been put in place, policies concerning the level of VAT and company tax rates. Also, Morocco, being politically open, has signed a number of free trade agreements with numerous coun-tries which Europe does not have free trade agreements with, notably Turkey and the USA.”

“We have one production plant in Morocco, along-side two partnerships with Polymedic and Sothema, allowing us to develop local products in the country,” explains Bayer’s Charpentier. “Around 70 percent of what we sell on the Moroccan market is produced local-ly.” Charpentier goes on to explain that Morocco is also serving as an export location. “This year we are going to start using our production plant in Morocco to export a certain number of products, initially to the Maghreb region and eventually to the wider African continent,” he reveals.

Will companies continue to find Morocco an at-tractive investment destination, given its relatively

small market size? In 2011, Jordanian pharma compa-ny Hikma acquired Promopharm, a local Moroccan player. “For Hikma, Morocco is very important, first for its own domestic market but also due to the many opportunities for entry points it provides into the region and Africa,” explains Brahim Oulammou, direc-tor general of Promopharm. “While there isn’t a pharma company in Morocco that hasn’t found the last few years difficult, it is important to take a long-term per-spective. Hikma remains convinced that Morocco is a good investment.”

Cooper’s offices in Casablanca



director general of Cooper Pharma. “We have signed a project to promote local manufacturing in the Ivory Coast and we believe that just as Morocco has a certain degree of self-sufficiency when it comes to the produc-tion of medicines, with a high level of manufacturing quality, that other countries in Africa should develop the same capacity.”

“Morocco indeed has the potential to become a hub for the pharmaceutical industry in Africa, because it is endowed with considerable assets,” says Myriam Lahlou Filali, the CEO of Pharma 5 Group, a leading Moroccan generics company that recently invested MAD 250 mil-lion (USD 24.82 million) in a new production plant. “Firstly, its strong industrial base makes the differ-ence with Algeria and Tunisia. Morocco also enjoys an excellent reputation and the trust of our African partners. Moroccan drugs are well recognized for their quality; the professionalism of the teams, the franco-phone culture, and the geographic proximity are also assets. Our African partners actually tell us that Morocco could eventually have the potential to supplant Indian and Chinese products, which suffer from an increasing deficit in trust.”

Moroccan drugs are well recognized for their quality; the professionalism of the teams, the francophone culture, and the geographic proximity are also assets

“

Myriam Lahlou Filali, CEO of Pharma 5 Group

“

Sanofi’s offices in Morocco

MYRIAM LAHLOU FILALI

CEO,Pharma 5 Group

However, Moroccan regulation does not make direct exports to Africa easy, as Mohamed El Bouhmadi of ZenithPharma points out. “It is ex-tremely difficult to reach out directly to Africa because of the lack of struc-ture currently in place in Morocco: we have to use French companies as inter-mediaries. I hope that authorities con-sider as a priority to set up in Morocco a hub that will allows us to go straight to Africa without any European intermediaries which increase delays and distributing costs of drugs on the African continent.”

This view is shared by Lamia Berrada and Samir Bachouchi, chairman and general manager of Bottu, a Moroccan market leader. “Unfortunately, Moroccan legislation does not allow the creation of a direct export platform. It is a pity that our products go to Europe to be distributed in Africa! For a direct platform to be viable, it should be able to distribute in Africa products that orig-inated outside of Morocco. We can either opt for an off-shore structure or ask for permission and support from



the authorities to create a regulatory framework to open the door to this project. This is something that man-ufacturers want, and they are work-ing on it to make things happen, for this is a priority for the sector,” they conclude.

However, the challenges of entering African markets are numerous: tak-en individually, markets are generally small, with poor infrastructure and low

access to medicine. Will the African strategy be enough to grow the Moroccan industry sustainably? For Zanfari of Genpharma, “to build a Moroccan pharmaceutical giant company we need to go beyond our borders. This is our ob-jective on a long term basis. Becoming an African regional player with a presence in all 54 countries in Africa.”

Laprophan, one of the leading Moroccan companies, has its sights on more developed markets. “We are targeting

Europe and North America especially for our patent-ed medicines,” explains Ali Bennis, the company’s pres-ident. To do this, it is building “a huge state-of-the-art new manufacturing plant of 92,000m2” that will conform to FDA and EMEA standards. “We can benefit from the free trade agreement with the United States to enhance our exports to this high potential pharmaceutical market,” he explains.

Others believe the industry needs a change of strategy. “We need to find the means to innovate, even if these are incremental innovations,” says Cheikh Lahlou of Cooper Pharma. Some, such as Abderrahim Derraji, founder of the website Pharmacie.ma, advocate a more collaborative ap-proach with representatives of the industry speaking with a unified voice.

“What matters is that Morocco is a country where nothing is impossible,” concludes AMMG’s Houbachi. “Morocco is a country where we know how to take up chal-lenges —the first of them being stability.”

ALI BENNIS

President,Laprophan


PARTNERSHIPS AND EXPORTSLamia Berrada & Samir Bachouchi, Bottu

A CLOSE PARTNER FOR MULTINATIONALSLAMIA BERRADA & SAMIR BACHOUCHI, the chairman and the general manager of Bottu discuss their flagship product, Doliprane, the potential for export to the rest of Africa, and partnerships with European labs.

HCLS: What was the impact on Bottu’s activity in Morocco of the recent multiple health reforms, such as the implementation of RAMED? LB&SB: Before RAMED, there was AMO (Mandatory Health Insurance). Its implementation was a wish of the pharmaceutical industry, who expected a market explosion with the introduction of universal coverage. Previously, only 15 percent of the population enjoyed medical coverage, i.e. the employees of large companies that would provide healthcare cover, and civil servants. The impact of AMO, increasing coverage up to thirty percent, was that of a mountain that roared to bring forth a mouse: the efforts to encourage AMO have hard-ly resulted in the expected progression, sales have not improved that much, but rather continued to increase at regular rate.

Then RAMED, which covers the poor, has been set up to continue with the commitment to gradually install universal healthcare coverage. RAMED resulted in sig-nificant state purchases of medicines, very large ones in the case of chronic diseases. However, it happened that the manufacturers engaged in fierce competition, with abnormally low prices. This had a perverse effect, caus-ing a misconception among the public and the author-ities about margins in our industry, while the industry had reasoned in terms of marginal cost: their market being mainly focused on private clients, they assumed

that the distribution of their drugs at exceptionally low prices to healthcare institutions would result in renewed prescriptions thereafter on the private market. This is a theory that has never been proven. RAMED has provid-ed lots of market volume but did not generate any ac-tual economic interest for the industry, margins being non-existent in this market.

HCLS: These two consecutive price declines of 2013 and 2014 have had a particularly negative impact on the pharmaceutical industry, especially regarding the margin transfer to pharmacies, which has been poorly understood by the industry. In this quite sluggish con-text, Bottu is doing interestingly well and grew by 11 percent in the same period. Can you comment on this? LB&SB: Indeed, this is real progress. However, our growth is not necessarily related to the domestic market, because we have developed a lot in export, activities that served as our growth drivers, while the private domestic market has experienced flat growth. The domestic market barely increased over the same period, 2.7 percent growth in units and hardly any improvement in terms of sales. There has been no compensation between volume and turnover. However, Bottu has opened new therapeutic areas, including cardiology, ophthalmology, as well as women’s health, more recently, which provided us some solid growth.

Lamia Berrada, Chairman, Azzedine Berrada, President, Samir Bachouchi, General Manager, Bottu



PARTNERSHIPS AND EXPORTSLamia Berrada

& Samir Bachouchi, Bottu

HCLS: You work with major pharmaceutical com-panies including Abbott and Boehringer Ingelheim, to name a few. What is the appeal of Bottu for them? LB&SB: One of our characteristics is to be among the laboratories that both work internally developed products and licensed products as well. We have always been relative-ly close to multinationals, and we have also developed our own portfolio of generic products, each business account-ing for about half of Bottu’s overall activity.

Laboratories interested in Morocco meet every potential partner, and this is where we enjoy a reputation in the mar-ket that we are proud of: Bottu is viewed as a professional team, serious, invested in quality and continuous improve-ment. We get good press, both with the ministry and pro-fessionals of the sector. To be recommended is an honor, and it helps a lot.

In addition to this, multinationals just don’t blindly en-trust people with their products, they come to check, send their own auditors who review the facilities and processes. Here again, we are proud to successfully complete the dif-ferent steps, which are challenging every time.

HCLS: Exports are now a highly strategic part of Bottu’s development. Can you tell us more about the African journey of your laboratory? LB&SB: Exports started with the new management team: preliminary work began in the mid 2000s, the license was

granted in 2008 and export marketing started in 2009. We established an exports division and allocated the ap-propriate means for it to prospect, register products and launch them on their respective markets.

We have innovated, in the sense that we have not en-trusted any existing promotion structure with our prod-ucts, but instead decided to rely on major European distributors in Africa for our logistics, while retaining promotion under our control. We settled a team of our own in each country to promote our products, we have dedicated agents, sales representatives that we train internally, and our regional managers turn between teams to organize the work on each field. Our training team also regularly goes on site to maintain the level of our delegates.

Because of our performance there, we now receive of-fers to take on products that are not our own in order to promote them in these African markets. Our expertise there brought us some external activity, outside our line.

HCLS: One major issue for laboratories with aims to work in Africa is ethics, especially regarding the activity of sales representatives. How do you address this challenge? LB&SB: Medical promotion teams there are recruited by us. We train them, and they are dedicated to Bottu. The people who train these teams, in sales technics,



scientific aspects and also business ethics are the same as in Morocco. We simply deploy the same working methods that we work with here at Bottu Morocco, in the hands of promotion teams that are under our direct authority: we do not delegate any promotional aspect on our prod-ucts. Therefore, promotion teams in these markets are subject to the same rigor in work, the same reporting as in Morocco.

HCLS: Although Morocco has made its opening to Africa and South/South cooperation, one of the cornerstones of its foreign and industrial policy, the pharmaceutical industry seems to suffer from a lack of state support for the promotion of exports. What forms could this support take? LB&SB: Indeed, regulation suffers from some rigidi-ty. However, I believe that now, there are people paying more attention, and taking our message into account. It might prove interesting for Morocco to create a distribu-tion platform from Morocco towards the outside, so that all Moroccan producers could use it to export to African countries. Unfortunately, Moroccan legislation does not allow such structures, which exist elsewhere, for example in Europe. Our initiatives so far have come to an end, but we hope to make other attempts and build something. It is a pity that our products go to Europe to be distribut-ed in Africa!

For such a platform to be viable, as the trade routes be-tween Morocco and Africa are very busy, it should be able to distribute in Africa products that originated outside of Morocco. The issue is simply that the regulations do not authorize goods to enter Moroccan territory. Now we can either opt for an offshore structure or ask for permissions and support from the authorities to create a regulatory framework to open the door to this project. This is some-thing that manufacturers want, and they are working on it to make things happen, for this is a priority for the sector.

Another obstacle to the competitiveness of Moroccan laboratories is the slowness of marketing authorization applications in the Moroccan market. We sell licensed

products and often the laboratories that entrust us with their marketing authorizations are surprised by the com-plexity and demands of the Moroccan authorities, as com-pared to Europe itself.

From the laudable desire to secure as much quality of drugs as possible on our market, unfortunately, they might have overestimated their capacity to face the vol-ume of work that this entails. Obviously, to export a prod-uct to Africa, it must have received the Moroccan MA. Then, the whole recording process has to repeat in export markets. On this point, the current minister has pledged to reduce the lead-time for marketing authorization down to ten months. Things are getting more fluid.

HCLS: You are also on the way to Middle East. What is the status of your other export markets? LB&SB: We are interested in the Middle East. We also have operations with Azerbaijan, Kazakhstan, and Algeria where our first order should be distributed any day now. The Algerian market is actually terribly com-plicated; we have been working on this opportunity for years and we are pleased that things finally got through. Through Kazakhstan and Azerbaijan, we intend to go to CIS countries. We also work with Libya through single orders.

It might prove interesting for Morocco to create a distribution platform from Morocco towards the outside, so that all Moroccan producers could use it to export to African countries

PARTNERSHIPS AND EXPORTSLamia Berrada & Samir Bachouchi, Bottu



DOLIPRANE IN MOROCCOBottu And Doliprane

Preface: Everywhere in the world, Sanofi controls the rights to Doliprane. Everywhere except Morocco, where the drug is the number one product on the market in both sales and volume.

DOLIPRANE: A MOROCCAN EXCEPTION

I n 1998, Aventis wanted to retrieve one of its best-known products from a previous license. “After much negotiation and discussion, we finally agreed

on the purchase of Doliprane and the line’s exploita-tion rights in Morocco, for quite a large amount at the time,” reveal Lamia Berrada and Samir Bachouchi, chairman and GM of Bottu. “This is how since the 2000s, Doliprane belongs to Sanofi all around the world, except in Morocco, where it is Bottu’s property.”

“Doliprane has been our flagship product, we have worked a lot on it, there was a particular enthusiasm for it and thus it has become the identity of our laboratory,” they continue. “We also shared a wonderful partnership with the promotions company we used to work with, and its leader who was truly passionate about the product. The work in the field was exceptional, and immediately propelled Doliprane as a leading product in Morocco, number one in volume and then in turnover from the year 2007, exceeding Augmentin.”

“

Doliprane has been our flagship product, we have worked a lot on it, there was a particular enthusiasm for it and thus it has become the identity of our laboratory



CSR SPOTLIGHTSanofi, Diabetes And Mental Health

HAISSAM CHRAITEH explains the thinking behind Sanofi’s two most recent CSR programs in Morocco, tackling diabetes and mental health across the more remote regions of the country.

SANOFI ATTACKS THE CAUSES OF DIABETES AND MENTAL DISORDERS

Between November 2012 and December 2013, four campaigns rolled out across Morocco to raise awareness of diabetes. As a result of these cam-

paigns, 1,400 people signed up for voluntary testing and 115 new cases of diabetes were detected.

These campaigns were a direct result of an agree-ment, signed in July 2012, between Sanofi Morocco and La Fondation Mohammed VI de Promotion des Œuvres Sociales de l’Education, aimed at boosting the level of education in Morocco about diabetes and how to treat it. Diabetes af-fects 1.5 million people in Morocco, of which only a fifth are dealt with by the public health services. Sanofi is cur-rently helping Morocco strengthen its capacity to treat patients: under a three-year agreement, the company is helping the Moroccan authorities develop evidence-based clinical practice guidelines, while also training doctors and other healthcare personnel.

Sanofi’s CSR track record in Morocco in recent years ex-tends beyond diabetes to other areas. As Haissam Chraiteh, president and director general of Sanofi Morocco, explains, 2013 was a particularly important year for the company, as the company signed a number of agreements with the Moroccan authorities, for both diabetes and mental health:

“It was a year with numerous events for Sanofi and our partnership with the authorities marked our strong com-mitment to the country and the wider region.”

According to the Moroccan daily LeMatin, approxi-mately 40 percent of the population aged 15 years and older experience some form of mental disorder in their life. Worldwide more than 450 million people are affected by mental health issues. In developing countries, 80 percent of them are not treated. Poor understanding, inadequate training of health professionals and a lack of accessibility to medicines are major barriers to treatment. Discrimination faced by patients and their families have deterred the use of specialized care services.

Professeur Driss Moussaoui, President of the Moroccan Society of Psychiatry, argues that “mental illnesses are among the most destructive and yet the easiest to treat. We urgently need to talk about, and inform people about this illness so as to lift the taboos and fight the stigmatisa-tion of patients.”

HAISSAM CHRAITEH

President and director general of Sanofi Morocco



Aware of the growing challenges posed by these chron-ic diseases worldwide, Sanofi was the first major health group to develop a Global Mental Health Action Plan with a specific focus on access to care for mental health in developing countries. The Public Private Partnership for Access to Mental Healthcare was initiated by Sanofi in

Morocco and established as of October 2008 in the region of Benslimane. A new agreement was signed in April 2013 with the Ministry of Health to expand the partnership na-tionwide. The aim is to reinforce care facilities by training 40 psychiatrists, 40 neurologists, 160 GPs and 160 nurses, while raising awareness about chronic diseases among the Moroccan people.

“There is an important psychological aspect behind mental illnesses in Morocco,” stresses Chraiteh. “Mental illnesses are poorly understood by the population and is stigmatised because it scares people. It is important to re-member that this illness does not only concern educated citizens, but citizens living in rural areas with low levels of education leading to a lack of understanding concerning the symptoms of mental illnesses.” The World Association for Social Psychiatry (WASP) and Sanofi are associated, in this spirit, since 2009, through the FAST project (Fight Against Stigma) to combat the stigma and discrimination many people suffer with mental disabilities.

CSR SPOTLIGHTSanofi, Diabetes

And Mental Health

It is important to remember that this illness does not only concern educated citizens, but citizens living in rural areas with low levels of education leading to a lack of understanding concerning the symptoms of mental illnesses



RISING STARMohamed El Bouhmadi, ZenithPharma

MOHAMED EL BOUHMADI, the CEO of ZenithPharma, discusses the potential of Africa for Moroccan pharma companies, and what it takes to succeed in the Moroccan pharma market.

THE DRAGON OF MOROCCAN PHARMA

HCLS: ZenithPharma’s headquar-ters are located in Agadir. Why did you choose Agadir?MEB: Historically, we started our bu-siness in the pharmaceutical industry here when we opened a wholesale dis-tribution business in Agadir. Strictly geographically speaking, Agadir lies in the middle of Morocco. Industrially speaking, the city is very interesting because there are plenty of human re-sources and executive managers, and also because there is a wide logistical offer. Lots of companies are already there, which is interesting for us becau-se this makes it easier to communicate and share, for instance, with compa-nies from the food-processing indus-try or from the process manufacturing industry.

At ZenithPharma we manufactu-re, import, promote and distribute pharmaceutical, personal hygiene and

beauty products. To be closer to our customers we also have wholesaling structures – four as of today –and we will have more soon. The first is in Agadir to supply the southern part of the country, the second is in Casablanca for the capital and the cen-ter of the country, the third is in Fes for the northern and the eastern part of the country, and finally the fourth is in Marrakech for the central-eastern part of Morocco. The way we are organized helps us to make our products accessi-ble to our customers and be closer to them. Alongside this, we work with all the Moroccan wholesalers.

HCLS: Could you describe us the company strategy, specifically the share of products under license and your own line of products?MEB: Historically, we chose the li-censing business model. We have

around 20 products under license on which we work with multinatio-nal laboratories from Europe, the United States, and Asia. Licensing contracts allow us to benefit from the transfer of technologies, to manufacture or to import the products and to distribute on the Moroccan market and in other places. We also have cross licensing agreements: our partners benefit from our products and we benefit from theirs.

We have lines of products organi-zed according to therapeutic needs. Some are under license. Others are ours; we buy the exploitation rights. The products under license are of-ten innovative ones so we are not only a generic medicine company but also an innovative one. We belie-ve we need to do both. There are 35 million people living in Morocco.


http://pharmaboardroom.com/?s=Morocco&site_section=all_s






RISING STARMohamed El Bouhmadi,

ZenithPharma

We started with a factory project in 2002. Our business was authorized in 2005. From 2006 to 2010 we doubled our revenue every year. Today we belong to the top ten Moroccan laboratories and we are the first market provider all activities combined

Ten percent of them can afford to buy innovative products and are covered by different private heal-thcare insurance systems. We must provide them with these innovati-ve products in Morocco; otherwise they will buy them from abroad. But we also need to sell generic medicine because it’s cheaper to produce, which helps reaching out patients, even the most underprivi-leged ones. Today 30 percent of the population is covered by Assurance Maladie Obligatoire (AMO).

HCLS: Tell us about the African adventure of ZenithPharma.MEB: Morocco always worked with a south-south cooperation perspective – in all areas, including the health sector.

The only issue is that it is extre-mely difficult to directly reach out Africa because of the lack of struc-tures. So we have to use French companies as intermediaries. It makes the transaction more expen-sive but at least guarantees our pro-ducts will be on the African market rather quickly. I hope that the au-thorities consider it a priority to set up a hub in Morocco that will

allow us to go straight to Africa wi-thout any European intermediaries, which increases delays and distribu-tion costs in African countries.

HCLS: How do you see Zenith-Pharma and Morocco in five years?MEB: I have no doubt that Morocco will evolve in a good way. In five years’ time Morocco will realize its potential as a gateway to Africa for Europe –Morocco being distant from Europe only by 14km. It is an interesting platform with all the structures in place. There is everything needed as far as infras-tructure is concerned today –notably highways. There are also excellent human resources: lots of graduates with good skills and international experience. So Morocco is on the right path and will get in the game with Africa.

ZenithPharma will also be more developed because we look at the African potential as something very important. We can’t evolve without Africa – or, to a certain extent, wi-thout Asia. If we have to set up a goal it is to reach the same revenue in Africa and in Morocco.

ZenithPharma is a laboratory with the best evolution in the Moroccan industry. We started with a factory project in 2002. Our business was authorized in 2005. From 2006 to 2010 we doubled our revenue every year. Today we belong to the top ten Moroccan laboratories and we are the first market provider all ac-tivities combined.

This is not mere luck. Our policy is clear. There is a wide investment program involved. We have part-nerships. We choose and select our partners and it’s kind of our secret. Results are very concrete. We are very lucky to have such a wonder-ful team. Most of our executive managers are young and very dy-namic. Something uncommon we are proud of is that we work with lots of women –without any salary gap or any responsibility discrepan-cy. Half of our leadership commit-tee is female. We are a local struc-ture organized as a multinational company. We have the same stan-dards, the same rules, and the same processes as multinational com-panies. Today our partners often come to find us. We see it as a form of recognition.






THE INNOVATION GAPRadia Chmanti Houari, GSK Morocco

Morocco has become GSK‘s regional hub thanks to the quality of human capital in the country, explains the company’s area director RADIA CHMANTI HOUARI, president and general manager for North Africa, who also comments on the reason why she remains optimistic for the future of Moroccan pharmaceutical industry.

FACING MARKET CHALLENGES

HCLS: We have heard from the industry that after a very difficult last two years, the worst is now be-hind us. What do you see as being the remaining challenges? RCH: The last two years were highly challenging for the phar-maceutical industry globally, with the uncertainty and turbulence caused by the implementation of the new pricing system. I believe we have now managed to overcome this hurdle by keeping the patient at the heart of everything we do, ensuring that the supply chain re-mains open and that the patient is provided with the required treat-ment at the right time. Still, for fu-ture development perspective, we need to recover from the large drop faced during the previous two years where growth was flat and early 2014 pharmaceutical market was

declining. One of the key drivers for sustained growth is expanding access to treatment. Access barrier is limiting for Morocco pharma-ceutical development as a country, with only around 40 percent of the population covered by public health insurance and more than 50 percent out of pocket funding. Government implemented several

initiatives to increase access and expand health coverage to a larg-er portion of the population, by putting in place global health-care reform. Only expanded ac-cess will allow patients benefit from innovative and quality med-icine and ensure higher market growth. Another growth driver is new products introduction in the



THE INNOVATION GAPRadia Chmanti Houari, GSK Morocco

coming years, helping to address the need for government to offer larger and better treatment choice to patients, and the need for re-search based pharmaceutical com-panies to offset for the impact of the price decrease implemented by Government and continue de-velopment strategies.

HCLS: When we met with Mohamed Benali Khoudja, VP and General Manager for GSK Algeria, he mentioned that “with-out a shadow of doubt Algeria can become a regional hub.” What impact will the growth of the Algerian market have on the Moroccan operations of GSK? RCH: Today, I am leading GSK North Africa, based in Morocco, sup-porting three countries: Morocco, Tunisia and Libya. We are ranked second in pharmaceutical market in both Morocco & Tunisia and GSK is leading the industry in many therapeutic areas: vaccines, anti-in-fective and respiratory. More than 100 people are working at GSK Morocco today.

We cannot compare both markets: dynamics, growth potential, regu-lations and political environment are completely different. Having

said that, there is no impact on our Markets. However, the quality of Human capital will be decisive on where the regional Hub will be lo-cated in the Maghreb.

HCLS: Global CEO Sir Andrew Witty recently described the ac-quisition of Novartis’ vaccines business as a “major step forward in the group’s strategy to create a stronger and more balanced busi-ness.” What impact will this deal have on Morocco? RCH: The government has achieved a great effort to provide all children with vaccination and GlaxoSmithKline is a key partner in this process, ensuring that we are putting all in place to increase access, makingit affordable for the maximum number of patients.

HCLS: What are the growth and investment opportunities for GSK in Morocco? RCH: GSK has several partnerships with local companies in Morocco, either for manufacturing or second-ary packaging. One of these partner-ships is related to vaccines second-ary packaging. Vaccines operations require highly technical skills and are an important component in our

business. This is a great opportu-nity for knowledge and technology transfer to Morocco. While anti-in-fective products are the base of our business and this will continue, the growth driver will definitely be our respiratory portfolio; GSK has a particularly important and inno-vative pipeline for the future which will help expand our presence in Morocco.

HCLS: When you took on your current role in 2012, what was your vision for GSK in the country? RCH: The priority for GSK and as a member of Maroc Innovation & Santé (MIS), is to have the nec-essary accompanying measures for, a smooth market authorization process, an effective reimbursement system, to allow availability of in-novative drugs for patients.

Improving the reimbursements system is challenging because of the budget constraints, leading government to put in place many cost containments measures. But I do believe in the willingness to move forward, from industry, healthcare professionals and gov-ernment side. We need to work very closely to find and implement solutions together.

Only expanded access will allow patients benefit from innovative and quality medicine and ensure higher market growth



MOROCCAN M&ABrahim Oulammou, Promopharm

MOROCCO: THE MISSING COMPONENTBRAHIM OULAMMOU, the general director of Promopharm (a Hikma company) explains why Hikma decided to invest in the Moroccan market, why a long-term perspective is needed when judging the government’s reform agenda and how the main priority will always be responding to patient needs.

HCLS: In 2011 Hikma acquired a 63.9 percent stake in Promopharm. Why did Hikma decide to invest in the Moroccan market? BO: The investment in Morocco follows a straightfor-ward logic: Hikma is present everywhere in the Arab World, it is present in Egypt, Algeria, Tunisia, Saudi Arabia and in all the countries of the Gulf, but Morocco remained the one country missing from its map. For Hikma, Morocco is very important, first for its own do-mestic market but also due to the many opportunities for entry points it provides into the region and Africa. In addition, despite having production facilities in Europe, Hikma is not yet present in the European market. Today, the company has three production facilities in Europe; and the location of Morocco is certainly a good way into Europe. Given the advantageous and strategic geograph-ical location of Morocco, it was natural for Hikma to develop a presence in the country.

HCLS: Given the difficult last two to three years for the pharma industry in Morocco, does Hikma con-sider its acquisition of Promopharm to be a good investment? BO: It would certainly be considered a good investment. While there isn’t a pharma company inMorocco that

hasn’t found the last few years difficult, it is important to take a long-term perspective Hikma vision for invest-ing in Morocco today remains the same as it did before. While the local industry has gone through a difficult pe-riod, Hikma remains convinced that Morocco is a good investment.

Only a minority of Moroccan patients have access to treatment which is currently reaches below 50 percent of the population. As such, the potential for growth remains considerable. The reforms currently being en-acted by the Moroccan government will have a positive long-term impact. They would not become visible im-mediately as these are projects that take time to show an impact. Improving hospital infrastructure is also crucial; when it comes to access to medicines, this is a key first step. The government is following a logical reform process but it takes time and we are conscious of that.

HCLS: We have heard that there are many local lab-oratories specialising in generics and that too much competition in this area is damaging growth pros-pects. What is your positioning on the local market? BO: Our first priority is to respond to local needs. The Moroccan patient needs to have at his or her disposal



MOROCCAN M&ABrahim Oulammou, Promopharm

competitive field, but there still are unmet needs and we look to provide alternative products. This is where we see the potential for growth, by providing certain treatments that are not currently being prescribed and therefore increasing patients’ options and improving the quality of care.

HCLS: Talking about growth prospects, do you be-lieve Promopharm can use Hikma network to be-come a gateway for the African continent? BO: Hikma benefits from the power that its subsidiaries have in their respective countries. Promopharm can have a particular advantage given that we have the backing of a much larger entity. Our objective is to use this power to serve West Africa by proving high quality products with affordable prices.

HCLS: Having started your position at Promopharm just five months ago, what is your five to ten year vision? BO: Morocco still has many unmet needs our main pri-ority will always be to respond to the needs of patients and support the development of the health care sector in the country, which is in line with Hikma strategy and the company culture perpetuated within the Group.

Given the large number of patients that don’t have access to proper health care system and the reforms cur-rently being enacted by the authorities, we believe in the development of the Moroccan Health Care Sector. This is the most important point to consider and the reason I am optimistic about the potential of the Moroccan pharma market.

medications to treat the full range of therapeutic areas. Our objective is to ensure that our products are widely ac-cessible and at affordable prices. Generics clearly have their role to play in this and we make sure that they are avail-able. Likewise, innovative treatments also have an impor-tant role to play and we also produce such drugs by work-ing with multinational partners. Promopharm turnover is equally generated from generics and originators. And we are aware that medicines that are not currently available for the Moroccan patient, such as biosimilars, need to be in the future. There are many biosimilar products that today are not available on the Moroccan market and we are work-ing to change this, while ensuring that the highest levels of standards are maintained. Moreover all generics that we provide to the Ministry of Health have been authorized ei-ther in Europe or the USA.

Hikma excels in the injectable field, accounting for half of the company´s turnover and produced in the USA and Europe. We look to benefit from Hikma´s experience for the benefit of the Moroccan patient.

Another area in which we are deeply involved is oncol-ogy. Hikma has developed a number of products in this area, and has a dedicated structure in Europe for this purpose. These products are of excellent quality that are produced according to European norms and which we look to put at the disposal of the Moroccan patient.

HCLS: Oncology is a particularly competitive field in Morocco. What can you bring to this market that is different? BO: Our objective is to provide oncology treatments that are not yet available in the country. It is indeed a

Hikma is present everywhere in the Arab World, it is present in Egypt, Algeria, Tunisia, Saudi Arabia and in all the countries of the Gulf, but Morocco remained the one country missing from its map



ONCOLOGY IN ACTIONProjects To Improve Treatment Levels

Preface: How Princess Lalla Salma, the wife of the King of Morocco, is helping push the oncology agenda in Morocco.

FIGHTINGCANCER FROMTHE MAGHREB

In Morocco, only 30 to 60 percent of the population have access to drugs, and even fewer have access to oncology drugs, which means that there still is a lot

of work to do to improve this situation,” explains Ralf Halbach, general manager of Roche Morocco. “We are not only talking about oncology drugs, but also pre-ventative measures and education around this devas-tating disease.” Since 2007, Roche has been in partner-ship with the Lalla Salma Association Against Cancer, a Moroccan anti-cancer NGO founded by HRH Princess Lalla Salma, to improve hospital infrastructure and pro-vide ongoing training for medical and paramedical staff in oncology.

With more than 40,000 new cases each year, and a high therapy cost attached to the disease, fighting can-cer truly a societal priority for Morocco. The partner-ship between Roche and the Lalla Salma Foundation was renewed in 2013, allowing the most impoverished sections of society access to the latest oncolo-gy treatments. Patients are select-ed according to a number of med-ical and socioeconomic criteria: shortlisted patients are analyzed by a commission that decides on a case-by-case basis which patients are eligible to be part of the program. Thanks to the part-nership between Roche and the

foundation, several thousand patients have already received treatment and benefitted from the most advanced therapies in Morocco.

Roche is not alone in investing in oncology in Morocco: Novartis is also planning in investments. “Novartis Oncology has just completed the acquisition of the GSK oncology portfolio, a landmark achievement in our mis-sion to help improve the lives of cancer patients. Morocco will become a hub for North Africa for oncology,” reveals Mehdi Zaghloul, country president of Novartis Morocco. “In 2012, we were the first company in Morocco to sign a memorandum of understanding with health author-ities and the Ministry of General Affairs. There were three pillars to this agreement. The first was to provide the country with innovative access programs in order to allow all Moroccans to benefit from innovation. The sec-ond one was building up training capabilities, helping to create new local centers of excellence. The third element, as demonstrated with oncology in Morocco, is working closely with the WHO and health authorities to build up our level of know-how.”

“

Morocco will become a hub for North Africa for oncology

Mehdi Zaghloul

Princess Lalla Salma (second left) in Basel at Roche headquarters in 2012. Photo © Maroc Agence Presse

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A directory of 4000 companies & CEOS in 35 countries and counting;

Over 1500 1-on-1 discussions with C level executives Worldwide

Over 45 reports available for download

Press releases from around the world and articles posted

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20,000 members and counting...



EXPORT OPPORTUNITIESDriss Chaoui, Afric-Phar

DRISS CHAOUI, general director of Afric-Phar, explains why it is difficult for the local players to compete with multinationals, how the Moroccan market is being reformed for the better and why companies should be looking to Africa to boost their growth prospects.

AFRICAN HORIZONS

HCLS: What are Afric-Phar’s strengths that make it an interesting partner to other companies? DC: We are a Moroccan pharmaceuti-cal laboratory established in 1966, one of the first pharma companies to have been entirely founded by Moroccan pharmacists. Back in the 1960s, there had only been laboratories created by foreigners that were later bought by Moroccans.

While we are proud of our Moroccan heritage, we represent today a large number of prominent European com-panies and multinationals through in-license agreements, distribution and partnerships such as Baxter, Hospira, Allergan and Ranbaxy. In addition, we have our own production facilities and product lines in generics, which we are constantly developing.

When you look at the way the phar-maceutical industry is evolving, it clearly appears that ensuring a success-ful partnership can present a number of challenges for many companies. Partners need to feel confident about their alliance strategies as they rely on patents, confidentiality and trust: this

is a key consideration when deciding whom to partner with.

We were able to build enduring part-nerships based on trust and results with leading multinational compa-nies, a fact that confirms our well-es-tablished reputation for integrity. Our quality, safety and environmental management systems have been con-tinuously accredited by AFAQ, certify-ing that our quality system meet the highest standards. We also have an un-rivalled experience of the national and regional market with extensive exper-tise in regulatory affairs thanks to our strong presence. This helps us provide our partners with real value added ser-vices and guidance, which allows them to make informed business decisions.

HCLS: The generics market in Morocco covers only 30 percent of the market, a comparatively low number when compared to oth-er countries. How do you explain this? Is it a problem associated with quality? DC: That’s an interesting question. Morocco is a country highly classified

by the World Health Organization, with a pharmaceutical industry that has been around for more than 60 years and plants that operate to the European standards. So, the problem is not associated with the quality of generics. I believe that the generics consumption figure is low because of the lack of a comprehensive med-ical coverage system. However, with the current reforms being enacted by the government, we are seeing an improvement and believe that the consumption of generics will signif-icantly increase.

HCLS: What do you see as the main opportunities for growth and investment in the North African region for multinational companies? DC: With its very young popula-tion, Africa is continuously develop-ing and changing for the better. Its growth rates are slowly approaching those of Asia, and multinationals are waking up to the enormous potential that the continent presents. Taking South Africa out of the equation,



EXPORT OPPORTUNITIESDriss Chaoui, Afric-Phar

at the forefront of this potential are the North African countries like Morocco.

The strategic geographical location of Morocco plays a big role in attract-ing investors, and the government has put in a great effort to actively en-courage foreign investment. The U.S. Free Trade Agreement (FTA) and the Association Agreement with the EU are strong signals that indicate the openness of the Moroccan authorities to foreign investment. We can also mention that despite the recent polit-ical events in the region, the country is still broadly regarded as politically stable and as a key hub for the African economy.

Most importantly, we have the knowhow and expertise in the phar-maceutical industry, a factor that fa-cilitates partnerships with local man-ufacturers and distributors. It is also true that the local consumption re-mains very low in comparison to oth-er countries. But when you look at the broader picture and the government’s health coverage reforms, you see a real growth potential.

HCLS: In 2002 Tecnimede ac-quired part of Afric-Phar. What has been the impact of this investment? DC: Indeed, Tecnimede acquired a portion of Afric-Phar under a co-de-velopment plan from 2002 to 2014, which was beneficial to both parts. We represented Tecnimede under license and accompanied them until they built their own facilities to become an independent structure inMorocco. Our partnership evolved into a new system of manufacturing contracts and distribution services, maintain-ing our collaboration and taking it to a whole new level.

HCLS: You have been director of Afric-Phar since 2001. What is it that motivates you every day? DC: Before joining Afric-Phar, I worked in General hospital and private clinics as an Intensive Care Anesthetist. During that time, I was very close to the patients and heard many of their concerns. This back-ground provided me with a patient-ori-ented mindset that helps me better understand what needs to be done,

and I believe that working at Afric-Phar gives me the opportunity to do more. Since my tenure as General Manager, I have signed many part-nerships with laboratories specialized in orphan diseases such as Genzyme, Actelion, Sobi and Orphan Europe to treat special patient cases. Knowing that I can help change people’s lives for the better is humbling and gratify-ing. I am also motivated seeing that I can contribute to the improvement of the Moroccan health sector in general. People want to live longer, better and healthier, but the cost of health care is still a challenge. I think it is our re-sponsibility to help increase access to treatments for the benefit of theMo-roccan patient.

I must also mention that I am fortu-nate to be surrounded by great leaders at Afric-Phar who inspire me everyday.

HCLS: What is your five-year vi-sion for Afric-Phar? DC: We are looking to expand our product portfolio and strengthen our sales force in the Moroccanmarket, especially in chronic diseases such as cardiology, neuropsychiatry and rheu-matology. We are also envisaging a greater presence in the African coun-tries. We are currently operating in 12 different countries in the conti-nent, essentially in the French Western region, and we would like to develop this further. We are looking at numer-ous options, in particular whether to go with a production site or a distri-bution platform.



PRODUCTION HUBMyriam Lahlou Filali, Pharma 5 Group

MYRIAM LAHLOU FILALI, CEO of Pharma 5 Group, one of Morocco‘s largest pharma companies, discusses the real potential of Africa for the country’s drug manufacturers, the potential for exporting Moroccan drugs to the US, and the growth opportunities in the domestic market.

SIGHTS SET ON THE STATES

HCLS: There is much talk about Morocco being a pharmaceutical hub for Africa. What are Morocco’s strengths and weaknesses as a po-tential hub?MLF: Morocco indeed has the poten-tial to become a hub for the pharma-ceutical industry in Africa, because it is endowed with considerable as-sets. Firstly, its strong industrial base makes the difference with Algeria and Tunisia. Morocco also enjoys an exce-llent reputation and the trust of our African partners. Moroccan drugs are well recognized for their quality; the professionalism of the teams, the fran-cophone culture, and the geographic proximity are also assets. Our African partners actually tell us that Morocco could eventually have the potential to supplant Indian and Chinese pro-ducts, which suffer from an increasing deficit in trust.

Yet, being a hub could turn against the country it the Moroccan industry is not protected by our authorities. Many foreign players are highly inte-rested in our country for the reasons I just mentioned: our authorities will have to enforce the law, which requires having a production site in the coun-try to be granted pharmaceutical esta-blishment status. But more and more foreign companies are establishing operations here without a production site: they are present in the country without investing in production, and often merely import their product or perform secondary packaging, while production capacities and the tech-nology do exist in Morocco. We our-selves regularly get canvassed by these companies wanting to rent our facili-ties to import their products or pass them through to Sub-Saharan Africa. One telling statistic is the domestic

production rate: according to data from the exchange office, Morocco secured 60 percent in production of drugs consumed in the country in 2008, against only 54 percent in 2013.

Our position is clear: we are not opposed to new entrants. But this should not jeopardize the Moroccan industry and local production. Our country’s independence is at stake. Foreign players are most welcome, provided they invest in plants, pro-duce drugs here, and create wealth and employment.

HCLS: You operate in 35 countries to date. What is your strategy to in-vest new markets?MLF: We are present in all of fran-cophone Africa, and we are starting operations in Anglophone Africa. There are countries with great po-tential, such as Nigeria and Kenya,

MYRIAM LAHLOU FILALI

CEO,Pharma 5 Group



PRODUCTION HUBMyriam Lahlou Filali,

Pharma 5 Group

but political instability makes things a bit more complicated.

In African countries, we have our own dedicated sales teams, over 100 people to promote and market our products. Our priority is to conso-lidate our positions there. We aim to become the 15th laboratory in each African market within three years. In Senegal, we are already 17th. For now, we operate primarily in private markets because our prio-rity is to establish our brand. In 2015, we are starting to respond to public tenders.

The next step will be to set up a unit in one of our key countries, Ivory Coast, Senegal or Cameroon, and then to move progressively and secure technology transfer: first with secondary packaging, then implemen-ting production units in easily du-plicable forms, and finally injectable

penicillin, the most difficult in terms of pharmaceutical technology.

Regarding the MENA region, our approach is a bit different: we have a partner in each country – there is no centralized distribution like in Africa – but in the same way as Africa, eventually we will set up our own sales teams in the region.

HCLS: What about the US: will Pharma 5 ever export there?MLF: There is a lot of growth po-tential for us in the US, where over 80 percent of drugs consumed are generics. This is far from the case in Morocco, where generic consump-tion only stands at 30 percent, inclu-ding public markets – there are huge steps to be made in this area by the authorities. We are currently working with an FDA team that is auditing us, targeting FDA certification in 2016.

HCLS: Is there still potential left in the Moroccan market?MLF: The potential of the Moroccan generics market is linked to the development of our citizens’ living standards, of so-cial coverage and of RAMED. The motto of Pharma 5 is “quality of care begins with access to care”, and this refers to both financial and geographic access. We were frontrunners, going into areas previously neglected by others. These people still have huge needs. The state has made great progress towards the territorial opening up of rural populations, thanks to the INDH programs inaugurated by His Majesty the King to develop ac-cess roads and infrastructure. This plays and will play a key role in the access to health for all citizens.

In addition, Pharma 5 has a foundation that works on access to care through medical caravans in rural areas. There are fortunately many volunteer doctors and staff, and we support all logistics and drug supply. Last week, we went on a caravan with 70 doctors. 3,600 prescriptions were issued over a day and a half! The need is gigan-tic. RAMED is bringing the begin-nings of an answer, but this issue is still huge. It will take time of course, but people are now aware of this right to healthcare. Covering it is crucial for our coun-try, and it will be leverage for national independence.



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COMPANY INDEX Including list of advertisers

COMPANY NAME PAGE #

Abbott 27Afric-Phar 21, 40, 41AMIP 5, 8, 9, 20AMMG 5, 19, 20, 25Bayer 12, 13, 20, 21, 22Boehringer Ingelheim 27Bottu 4, 24, 25, 26, 27, 28, 29Cooper 23, 24, 25Genpharma 23, 25GSK 12, 13, 17, 34, 35Hikma 11, 23, 36, 37Iberma 14, 15, 19, 20IMS Health 8, 9, 10Lalla Salma Association Against Cancer 38Laprophan 25Ministry of Health 5, 16, 19Ministry of Industry 19MIS 5, 16, 21, 35Novartis 16, 35, 38Pfizer 21 Pharma 5 Group 24, 42, 43Pharmacie.ma 5, 25Polymédic 19Promopharm 11, 23, 36, 37Roche 12, 13, 38Sanofi 22, 24, 29, 30, 31Tecnimede 22, 23 World Economic Forum 6ZenithPharma 2, 8, 21, 24, 32, 33



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