A recent study by CPhl forecast that demand for generics in Africa and the Middle East could help boost lagging sales for India’s drug manufacturers that have seen revenue declines for their generic drugs mainly in the U.S. market.
The study said increased geopolitical stability, regulatory changes and increased generics consumption in those regions are the key drivers behind the expected jump in demand.
“The high-income economies offer excellent opportunities for innovative and branded medicines, (while) the free trade agreement between the Gulf Cooperation Council (GCC) nations will undoubtedly increase generics consumption,” Cara Turner, the brand manager for CPhI Middle East & Africa, said in a statement.
Turner added that high-growth economies in countries like Nigeria, Ghana and South Africa are likely to generate annual compound growth rates of 10% each in generics consumption over the next five years.
Supporting the positive outlook is a recent free-trade deal with the GCC that includes Bahrain, Oman, Saudi Arabia, Kuwait, the UAE and Qatar that reduces trade barriers. A drug pricing strategy put in place by the GCC to standardize pricing is also expected to fuel generics consumption, the report said.
The potential for growth in those regions hasn’t gone unnoticed in recent years. In 2015, Pfizer began production at 32,000-square-meter facility in Rabigh on the western coast of Saudi Arabia.
That news came on the heels of Saudi Arabia-based Neopharma announcing it was investing $266.5 million to build both a drug manufacturing facility and a hospital in Jarzan City in Saudi Arabia. Another UAE-based company, Gulf Pharmaceuticals, also rolled out plans in 2015 to invest $10 million on a sterile injectables plant in Ethiopia.