Jordan's pharmaceuticals go global (page 1 of 2)

By PAM DOUGHERTY AMMAN

Pharmaceuticals are Jordan's second largest export earner - worth $170 million in 2000 and $185-190 million last year - but those in the business see this as just the beginning. "The Middle East and North Africa [MENA] region is our main market now, but there is huge potential in the European market," says Maher Matalka, the secretary general of the Jordanian Association of Manufacturers of Pharmaceuticals & Medical Appliances (JAPM). "We are aiming for a vertical integration of the industry that will open even more opportunities."
Joint ventures. By Jordanian standards, the industry has a long history. The first local manufacturer, the Arab Pharmaceutical Manufacturing Company (APM), started production back in 1966. It was followed by Dar Al Dawa in 1975 and Hikma Pharmaceuticals in 1978. A couple of more companies were established in the following decade, and there was a surge of investment in the 1990s, with nine new companies setting up shop. Sixteen companies are currently in production and two more are under construction. One of the latest is a joint venture with Organics of France for the first insulin production facility in the Middle East.
Jordan's small domestic market forced even the earliest producers to look for export markets, and 80 percent of all production currently goes abroad. While most exports still go to the MENA region, with smaller amounts to sub-Saharan Africa, the Far East and Eastern Europe, two companies have broken into the European Union market. United Pharmaceuticals has secured a $50 million contract with Germany, while Hikma Pharmaceuticals is now selling antibiotics in the British market. The European market is attractive for both its size and its proximity, although standards are high and only three other local companies are close to the final stage of gaining European good manufacturing practice approval for their facilities. Even at home, local producers have always had to work in a competitive environment, as Jordan has never allowed protection for pharmaceuticals. Local companies currently take $40 million of $150-160 million total local sales annually.
Company activities in the country include the manufacturing of raw materials, gelatin capsules and formulation; Jordan also has several bio-equivalence centers.
Matalka sees the next stage in its development as a stronger vertical integration that will attract foreign investors to use Jordan as a base for the MENA, European and US markets.
He says a major step forward was a new patent law that brought Jordan into line with international standards. It has been moderately successful so far, but one US-Jordanian joint venture is up and running. In 1999, Schein Pharmaceuticals of the United States took a 21 percent share in the local company Pharma International, which has a US Food and Drug Administration-standard plant near Amman producing a range of generics. Schein was subsequently bought out by Watson Pharmaceuticals of California, bringing Pharma International into partnership with the largest US-owned generics company.
Pharma International's general manager, Paul Glover, says after just 12 months in production, the company now has 39 products on the Jordanian market and has ambitions to be one of the top local companies within four to five years. Jordan is just its starting point, though. The company is already exporting to Oman and has had inspections from four other countries in the region. "Our big year in the region will be 2002," he predicts, "and we will also be going to Europe, with the US market to follow by 2004 or 2005."
Glover has been impressed by the infrastructure available in Jordan.