Finances News Hebdo: The new program contract for the pharmaceutical industry 2022-2027 was signed on September 27, 2022. What regarding it?
Abdelmadjid Belaïche : This is the third program contract that had been set up for the pharmaceutical industrial ecosystem. The first was signed in Tangier in the presence of His Majesty King Mohammed VI, may God assist him, on February 20, 2013. The signatories were then the Ministry of Health, the Ministry of Industry, Trade and News technologies, that of National Education and that of Finance as well as the three pharmaceutical professional associations, namely the Moroccan Federation of Pharmaceutical Industry and Innovation (FMIIP), the Moroccan Association of Generic Medicines (AMMG) and Pharmaceutical companies in Morocco (LEMM Ex-MIS). This contract was to run for the entire decade 2013-2023. In 2016, the Minister of Industry, Trade and the Digital Economy, Moulay Hafid Elalamy, launched a second program contract, under the name of performance contract of the pharmaceutical ecosystem 2016-2020.
This contract had prematurely buried that of 2013-2023, when it was not yet finished and had not produced its effects or fulfilled its commitments. This 2016-2020 performance contract fell within the broad policy of My Hafid Elalamy’s 2014-2020 Industrial Acceleration Plan. The contract of performance was much more ambitious in terms of turnover, employment, added value or reduction of the deficit in the pharmaceutical trade balance. In the meantime, the Covid-19 pandemic has hit our country. From now on, another reality has imposed itself on us, highlighting health and socio-economic priorities. the September 27, 2022, a third program contract was signed in Casablanca. The signatories this time were the Ministry of Industry and Trade, the Ministry of Health and Social Protection, the General Confederation of Moroccan Enterprises (CGEM) as well as the three pharmaceutical professional associations: FMIIP, AMMG and LEMM.
FNH: What are the main lines of this new program contract?
A. B. : Broadly speaking, the new pharmaceutical program contract has been placed at the heart of Morocco’s national health sovereignty and in compliance with the new national pharmaceutical policy (PPN), launched in 2022, and this through the strengthening of substitution imports through local manufacturing, improving the technical environment of companies, in particular through regulatory upgrading, the creation of an institute dedicated to new professions in industrial pharmacy as well as the financing of pharmaceutical projects.
FNH: In this program contract, it is planned by 2027 to increase direct turnover by nearly 15 billion dirhams, with dense creation of direct and indirect jobs. What is the feasibility of this large-scale project?
A. B. : With regard to the objectives targeted by this third program contract, we are talking regarding the creation of 16,000 jobs, including 6,000 direct jobs which will be added to the current 55,000 jobs, the increase in the turnover of the sector by more than 15 billion dirhams, to be added to the 16 billion dirhams currently made. According to this document, the pharmaceutical trade balance will be improved by more than 10 billion dirhams. This means that this deficit will drop from less than 11.626 billion dirhams in 2021 to just less than 1.626 billion dirhams. Finally, the direct pharmaceutical industrial added value will be improved by more than 6 billion dirhams and which will be added to the current 5 billion, by 2027.
FNH: Do you think that the objectives of this new program contract are achievable?
A. B. : Some are. This is particularly the case for the turnover of the sector which will, in any case, be driven by the integration of more than 22 million additional citizens into universal health coverage (UHC). In reality, we should not speak of more than 22 million additional Moroccans, but of a CSU for all Moroccans. This means that by 2027, not 22 million, but 27 million Moroccans will be integrated into the CSU. The healthcare needs of the entire population of Morocco in 2027 will boost the pharmaceutical market both in volume and in value. Even taking into account the impacts of price reductions, savings generated by generic drugs and biosimilars, the pharmaceutical industry’s turnover of 31 billion dirhams for 2027 remains plausible. With regard to employment, the objective of 16,000, including 5,000 direct, is also achievable if we manage to replace the essential imports by local manufacturing. Indeed, employment is much more boosted by local manufacturing through its various functions (production, quality control, quality assurance, trade and marketing, etc.) than by imports. Similarly, the added value objective is also achievable, if the industrial component is reinforced. On the other hand, the reduction of the abyssal deficit of the pharmaceutical trade balance will represent a real challenge. Unless we drastically reduce imports in favor of local manufacturing and give a serious boost to pharmaceutical exports, it will be very difficult to achieve this latter objective.
FNH: Did the old 2015-2020 program contract achieve the set objectives?
A. B. : The 2016-2020 performance contract had failed to achieve its objectives, which were more than 1.1 billion dirhams additional to the figure for the pharmaceutical industry, which in 2014 was 13.7 billion dirhams. i.e. a target of 24.8 billion dirhams for 2020. For the pharmaceutical trade balance, this performance contract provided for an improvement of more than 7.8 billion dirhams, while its deficit in 2015 was calculated at less than of 4.090 billion dirhams. However, in 2020, we ended up not with a profit balance of more than 3.71 billion dirhams as expected, but with a deficit of less than 6.108 billion dirhams and which worsened the following year with the purchase of Covid-19 vaccines at less than 11.626 billion dirhams. We were far, very far… from the objectives set by this performance contract for 2020.
FNH: Why did the old 2015-2020 performance contract fail?
A. B. : The reasons for the failure of this 2016-2020 performance contract lie in a lack of coordination and consistency between the Ministry of Health, and in particular its pharmaceutical arm the DMP, on the one hand, and the Ministry of Industry, Commerce and New Technologies, on the other hand. The Directorate of Medicines and Pharmacy (DMP) did not play the game and even hindered the policy of My Hafid Elalamy, aimed at substituting imports with local manufacturing, by excessively issuing marketing authorizations the import market (AMM), for medicines that can be perfectly manufactured in Morocco. In 2018, the latter accounted for almost half of Morocco’s pharmaceutical imports. Without forgetting the pharmaceutical regulations and especially their application which, instead of facilitating the operations of registration, manufacture, export etc., have on the contrary often constituted real obstacles to the development of the sector. Thus, the deadlines for granting marketing authorizations and various other authorizations were abnormally long and locally manufactured products were disadvantaged compared to imported products.
FNH: What regarding medical devices? Do they appear in the new program contract?
A. B. : While the 2016-2020 performance contract devoted an entire chapter to developments in the medical devices sector, the new 2022-2027 program contract remained silent on this subject. However, a program contract that is positioned within the system of national health sovereignty cannot ignore this sector, which is also strategic for the country. The Moroccan Federation of the Health Industry and certain players have expressed their desire to invest in the local manufacture of certain medical devices and certain operators in the sector have already started to produce MDs made in Morocco. Is this a simple oversight of the MD sector or is another program contract dedicated to MDs in preparation and will be implemented in the near future? The future will tell.
FNH: Can we say that there are improvements between the first program contract signed in 2013 and the third which has just been signed in September 2022?
A. B. : It is true that in the second program contract (Performance contract 2016-2020), there were significant improvements compared to the first CP, but it is a pity that it experienced problems in terms of its operationalization and of its execution. Unfortunately, this second performance contract recorded setbacks on certain important projects compared to the first contract, such as the pharmaceutical export consortium or the common distribution platform for the African pharmaceutical market, which provided for the grouping of products at export and pooling the efforts of exporters. As for the third program contract, it remains much more coherent and in line with the needs of national health sovereignty and with the constraints imposed by the country’s health context. Moreover, the Minister of Health and Social Protection seems to be more involved and more committed to the success of this program contract than his predecessors. We hope that all the partners involved in this program contract will contribute to its operationalization and its success.
