18 Jun Interview with Mohamed El Bouhmadi, President of FMIIP, Kingdom of Morocco
According to the World Health Organization, Africa imports 70-90% of its medicines. What major strengths does Morocco have that make it an excellent location for a robust pharmaceuticals industry?
Today, Africa consumes very little medicine. In 2015 the continent had 1.2 billion inhabitants; in 2030 it will be around 1.6 billion, in 2050, 2.2, and in 2100 4.3 billion. This means that by 2050 practically one in four patients will be African, and so there will be a need for medicines. But today Africa consumes only 1.1% of its own drug needs – compared to 46% in the US, 24% in Europe, 8.2% in China. The African population suffers above all from parallel circuits and counterfeiting, so it needs its own drugs. Morocco is committed to South-South cooperation, precisely to meet this need in Africa, obviously with European and American countries. This South-South cooperation entails a transfer of technology and know-how from Morocco with our African colleagues. It’s also part of His Majesty’s strategy, may God assist him, to create Moroccan and African health sovereignty.
Morocco is quite dynamic in Africa in various sectors. It is beginning to tackle the pharmaceutical sector. Ambitions are high. The idea is to meet part of Africa’s needs in terms of medicines, starting with essential medicines, to have a certain independence, a certain national and continental sovereignty in terms of WHO essential products. The idea is to manufacture these products at cost price so as to have a reasonable selling price, to try to have these products available in African markets, to have universal social coverage, to some extent to duplicate the Moroccan model in other African countries and to allow access to healthcare for the entire African population.
FMIIP (Fédération Marocaine De L’industrie Et De L’innovation Pharmaceutiques) was created in 1985 and was initially a Moroccan association of the pharmaceutical industry. It was later transformed into a federation, and today brings together a number of laboratories. There are 54 authorized pharmaceutical laboratories in Morocco – laboratories or companies with an authorized establishment and a factory. There are three types of status in Morocco: industrial pharmaceutical laboratories, wholesale distributors and dispensing pharmacists. Out of the 54 laboratories, 33 belong to the FMIIP and of those 33, eight belong to multinationals. In other words, the FMIIP represents both national and multinational laboratories. Even within authorized Moroccan laboratories, there are business models which mean that we have products under license. So, we have this type of business model that enables a multinational to introduce these products in Morocco without needing to invest directly. They can invest in the production plant, but the licensee is responsible for operating the license. Pharmaceutical sales have practically doubled since 2002, when there were 26 laboratories. By 2022, we reached 54 laboratories, showing how dynamic and attractive the industry is.
Around 20% of our production is exported to Africa or Europe. There are also business models in which we manufacture products for foreign markets. Our turnover is MAD 21 billion ($2.1 billion) and we produce over 450 million units a year. We create 60,000 direct and indirect jobs. We have a tax contribution of MAD 2 billion ($200 million) and we contribute 5.2% to the industrial sector’s GDP and 1.7% to the national GDP.
What challenges does the country currently face in terms of legislation, and what steps has it taken to open up the market, such as the exemption from VAT on medicines?
On the regulatory front, the Moroccan Federation is pushing for the operationalization of the National Agency for Medicines and Health Products. The law has been passed and I myself am part of a committee working on setting up this agency. It should be up and running by the end of the year, or even by 2025. This agency will enable us to support the sector’s development by digitizing the submission of applications, since we won’t have to submit applications physically, so we’ll save time, be more transparent and also have more human and material resources, since it will be autonomous in financial matters.
His Majesty has made the pharmaceutical industry a strategic sector. There are three strategic sectors for national sovereignty: food sovereignty, health sovereignty and energy sovereignty. This followed the COVID crisis where Morocco set an example by being the first to manufacture and even export masks. The pharmaceutical industry showed great resilience, not only producing medicines for COVID, but also continuing to produce normal medicines. We never ran out of stock, even today despite the market pressureon raw materials. We have manufactured masks, hydroalcoholic solutions and screening tests. The COVID crisis has also shown us just how important the pharmaceutical industry is. It has to be at the heart of a country’s strategy and above all, it has to ensure a safety stock and a strategic stock of medicines. Sanitary sovereignty is a national duty. We do all we can to ensure continuity of supply and patient access.
Among the challenges is the operationalization of the medicines and health products agency. We also need to give national preference to locally manufactured products, at least for public tenders. We need to encourage local manufacturing and research. Clinical trials are the source of patents and therefore of medicines. When we encourage international laboratories to come and carry out clinical trials here, it means that we’ll be giving these international and national laboratories access to research, patents and exploitation. So we need to change the paradigm from technology transfer to innovative research that will enable us to develop new products and bring them to market. In other words, we’re moving from simple technology transfer to applied research that will lead to patents.
What specific strategy is the FMIIP currently pursuing to grow the sector and support the ‘Made in Morocco’ brand?
FMIIP was created precisely to give Moroccan and foreign investors access to a discussion forum where they can debate issues and take a stand in relation to monitoring and discussions with the authorities and the people who govern us. One of its prerogatives and missions is to encourage training and investment. It also works to promote Made in Morocco, making Made in Morocco a label of quality, sustainability and job security. The FMIIP plays the role of explaining to investors or accompanying investors when they want to enter the Moroccan market, facilitating their access to data and so on. It’s a not-for-profit association and its role is to support those who want to invest, as well as those who are already established.
We hold regular meetings to discuss current issues with our 33 members. We’re always working on projects and legislation. We’re often consulted on all the decrees and laws that are going to be published, so we give our opinion. We work closely with the Ministry of Health on all issues.
We’re involved in all aspects of the pharmaceutical industry, since some of our members also manufacture medical devices and dietary supplements. We also work on training, organizing training and study seminars all the time. We’re in the process of setting up a training institute for the pharmaceutical industry. The pharmaceutical industry is already highly regulated. There are quality standards and a high level of supervision, which in turn guarantees a level of quality that is up to European standards.
How open are Morocco’s main life sciences players in working with foreign partners? What kind of movements are we seeing in this area in the pharmaceuticals sector?
Morocco has signed several free trade agreements including with the US. The American market is a huge market. Morocco respects patents, however in the case of this agreement there were some very complicated constraints in relation to access to undisclosed data. We are going to start discussions with certain parties to try and remedy this aspect. We also need to have more reciprocity in general in our free trade agreements.
With regard to Europe, with the COVID crisis we realized that Europe had completely delocalized the production of these raw materials. We are campaigning for co-location. Today, Europe manufactures around 40% of certain molecules, but zero of others. So, Morocco, as a nearby country, is a real European hub, it has a very interesting geostrategic position, a good community, economic and political stability. We should be able to take advantage of these opportunities to make Morocco a regional hub, a bridge between Europe, Africa and the rest of the world. This means co-locating the production of certain raw materials for Morocco, but also for other regions. Yet today, regulations are very complicated, so we should have a certain flexibility. Today, there are already Moroccan laboratories manufacturing for Europe, but also for the United States.
We’d like to encourage certain multinationals and laboratories that no longer want to manufacture niche products, or are not interested in small volumes, to entrust them to Moroccan manufacturers who meet European quality standards and can scrupulously comply with specifications. Rather than abandoning these products that are still needed elsewhere, we should be able to manufacture them in Morocco. We’ve been approached several times by laboratories in the USA, Canada, South America, to manufacture products here but often European or American certification is required. Often, it’s very costly and sometimes you have to do it by line or by product, so the investment is very heavy. We’re keen to learn from the Americans and the Europeans, but we’re also ready to pass on what we know to other African countries. Cooperation is possible. All that’s needed is discussion, regulatory flexibility and mutual recognition.
How significant is the USA as both a key development partner and investor in building up a world-class pharmaceuticals hub and as a potential export market?
The United States is a very big market, where innovation often takes place. There’s a very good penetration rate for generics, with around 80%. If we could have access to that market, it would be really excellent. American products are present in Morocco and multinationals are present in Morocco, so we encourage them to invest further. The Moroccan or African market must meet all needs. We need generics, of course, because we need to balance the state’s coffers to ensure the sustainability of universal social coverage in Morocco. But we also need innovative products, because we can’t be left behind. There’s a market for both innovative and generic products. We absolutely have to develop these partnerships to introduce innovative products to the Moroccan market.
There’s a major project that’s now seeing the light of day in Marbio, which was initiated by His Majesty Mohamed VI to have vaccines for Morocco and for Africa. This pharmaceutical establishment may well have products of American origin, manufacturing biotech products. In Morocco today, we manufacture conventional products, as well as more complex forms such as insulin, aerosols, biosimilar products, hormone therapy, etc. We have reached a level where we can easily subcontract for countries such as the United States.
What new opportunities are we currently seeing in the market that might be of interest to US and other foreign investors? What segments represent the most potential for major returns?
The pharmaceutical industry is at a new turning point. Today, we have a biological product, which is original or biosimilar to targeted therapy, hormone therapy, the use of messenger RNA and so on. If American investors want to come to Morocco, they should enter this field, which is going to be the future of the pharmaceutical industry and healthcare in general, to treat serious pathologies. The African market is going to grow and now is the time to be there. We need to encourage Americans and other investors to set up in Morocco, not only for the Moroccan market, but also for the African and Middle Eastern markets. There are opportunities and our investment charter encourages investment. There are incentives, there’s flexibility, so now’s the time to go for it.
What are your current priorities as President of FMIIP in 2024?
We carried out a sector study in which we predicted that by 2035, the number of pharmaceutical establishments should reach 100, almost doubling and sales should reach MAD 65 billion ($6.5 billion), a threefold increase. The potential is huge with universal social coverage. The population is aging and the older we get, the greater the need for medicines. The African population needs medicines, because today only 1.1% of them are used in Africa, so there’s real potential here. The industry needs to speed up, we need to create national champions, mergers and acquisitions, create economies of scale and work on targeted therapy and access to care for the whole population.
There was a time, a few years ago, when patients had to pay for medicines out of their own pockets. Today, with universal social coverage, it is covered, and the out-of-pocket expenses are very low. It should even be reduced further, as there will only be a co-payment. This universal social security system should be replicated in African countries, so that they can benefit a little from our experience. Imagine, if Africa had a universal health coverage system, enough doctors, enough pharmacists, enough health care facilities, we’d have far fewer deaths, a population that would work more, create more wealth, so the whole economy would move forward.
Health is a capital asset, which we only see when we lose. We don’t realize when we have health, so we need prevention. Unfortunately, we’re not immune to pandemics, we’re not immune to health crises, we’re not immune to social crises. When the healthcare system is solid and sustainable, it can deal with all these problems. So we need to work together to enable all our fellow citizens to be cared for in good conditions and to enjoy a well-deserved well-being.