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Syria: National Diamond for Pharmaceutical Industry

Submitted to: Submitted By:

Dr. Archana Pillai Harshal Gandhi

Nishant Rao

At the end of the 80ies, the pharmaceutical industry in Syria was very poor, covering only 6% of thenational needs. In less than 20 years, with the government support in terms of legal frame and strategicpolitical engagement, the Syrian pharmaceutical industry finally covered almost 92% of the nationalneeds, in terms of drugs, and exported drugs in around 56 markets worldwide, mostly Arab andAfrican nations and some Asian countries, with exports to European Union member states beginningmore recently. Beyond covering the local market, the main added values of this huge development

consisted in exporting drugs in amount of 150 million dollars per year. The number of pharmaceuticalfactories in Syria has reached 63, producing 5700 types of products and offering jobs to about 17000workers, out of which around 85% are women.

Syria has the largest number of pharmaceutical companies compared with any other Arab market, eventhough its domestic market size is smaller than many others. Private capital inflows have increasedsignificantly in the last decade thanks to the involvement of several major industrial and trading groupsin the drug industry. The two largest cities in the country, Aleppo and Damascus host the largestindustrial firms.

The Syrian pharmaceutical industry is producing good quality medicine based on internationalstandards. The provision of safe and effective medicines is based on the essential medicine list. Thegovernment goal is monitoring the pharmaceuticals to ensure quality control. The results of qualitycontrol have been very good; however, the application of the national medicine policy and the rationaluse of medicines should be enforced.

Factor Condition

63 manufacturing plants

Due to the intensive ongoing training and rehabilitation programs, there are a large number of qualified

workers with very high level of efficiency in the Pharmaceutical industry in Syria; over 25% of them areuniversity graduates. Also the learning level is in initial level so the government helps people to learnthem outside the country. And after getting the proper knowledge, they come back and serve theirown country.

Also, The Medical City is to be built in the West Mazzeh area of Damascus. The project is estimatedto be around $112 million.

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Syria: National Diamond for Pharmaceutical Industry

Demand conditions

The signing of an association agreement with the EU in 2010 is expected to further expand thepharmaceutical market, which has become an increasingly vital export earner for the country.

Production has reached almost 600 million dollars; the local market consumes more than 400 milliondollars and the rest is sent for export.

The industry has been stimulated by the special attention given to healthcare provision which has beenoffered as a free service to Syrian citizens. Public spending on health has run at around 4.5% of GDP.

Also, a plan is being promoted for the production of generic drugs for cancer treatment, medicinesrelated to blood diseases, vaccines, etc., and to cover 98 99% of the Syrian health sector needs isbeing implemented. According to this plan, the above mentioned products will be manufacturedlocally.

Related and supporting industries

The firms are importing the major raw material. So the opportunity exists in the production of the rawmaterial for pharmaceutical product.

Disadvantages of this system might be the development and growth of the pharmaceutical industry isdone more horizontally than vertically; lack of attention to the production of the raw materials, whichare still imported from abroad; weak cooperation between Syrian pharmaceutical companies andweakness in the pricing mechanisms.

Firm strategy, structure and rivalry

The industry has become more competitive gradually after 1980. Before that only 2 national firms werepresent. But now the picture has changed. Already more than 63 firms are there and new competitorsare coming.

The challenge is reviewing the medicines pricing base in accordance with the internationalspecifications and within the moderate price range, elimination of foreign medicine, which are veryexpensive and helping producers to continue producing.

The pharmaceutical industry is really very concentrated.