When the CNAM boosts the Tunisian pharmaceutical industry!
23 October 2008
Read by 1335 persons
The implementation, two years ago in Tunisia, of the health insurance reform and the creation of a National Health Insurance Fund (CNAM), was the prelude to structural changes for the health sector. Less known is the fact that this reform also had an effect on the national pharmaceutical industry, which has since benefited from preferential conditions that have led to an increase in sales volume and profit margins.
The CNAM, as a reminder, was created to guarantee equitable access to care for all Tunisians. To do this, it has established a system of conventional relationships with the majority of national healthcare providers. The CNAM has also imposed a price list for the reimbursement of medicines based on generic medicines, i.e., the cheapest on the market. The only exception: cases where there are no generic medicines for the treatment of the disease. In this scenario, the CNAM agrees to reimburse the price of the originator drug.
Indeed, promoting generic drugs is doubly beneficial. Generic drugs are 30% to 40% cheaper for the patient than licensed drugs, and offer the advantage of being more profitable for Tunisian laboratories even if the selling prices are lower than originator drugs. It should also be noted that the profit margin for a generic product is generally higher than for a licensed drug (up to 30%). The price of a generic varies greatly depending on whether it is recent or not; a generic recently placed on the market without an equivalent or competitor may be more expensive than an older one that competes with other similar drugs.
Under these conditions, the new Tunisian health insurance system is a godsend for the country's 41 pharmaceutical production units, whose local production exceeds 300 million dinars. 54% of Tunisian drugs are produced under license, while generic drugs cover 47% of the value of products sold and 57% of the volume of national consumption.
As a reminder, the industry, which employs more than 3,800 people (including 37% pharmacists, pharmaceutical engineers, senior technicians, etc.), exports nearly 7% of its production abroad. These Tunisian exports, with a total value of 20 million dinars, are mainly destined (75%) to 4 markets (Libya, Algeria, France, Morocco).
The Tunisian pharmaceutical industrial fabric, which is mainly composed of small-sized units, is increasingly turning towards export, a situation that requires reaching a critical size and therefore encouraging mergers. This is to allow better visibility and to pool the resources essential in the field of biotechnology, which is the main innovation sector allowing the Tunisian pharmaceutical industry to assert itself against European and American pharmaceutical giants.
The profit margins generated by the sale of generics should allow Tunisian laboratories to mobilize the resources necessary for the research and development of new drugs. It should be recalled that international laboratories (big pharma) allocate nearly 15% to 20% of their revenue to research and development (R&D). From now on, Tunisian laboratories want to reach this level. A first step has already been taken with the establishment of the BiotechPole of Sidi Thabet, which will cover nearly 112 hectares. The organization in December 2008 of the first International Pharmacy and Wellness Fair in Tunisia and the development by the Ministry of Health of a strategic health plan until 2016 and a specific roadmap for the pharmaceutical industry announce significant changes and rapid development for this sector.
Published on October 8, 2009
Posted online on October 9, 2009
africanmanager.com
The CNAM, as a reminder, was created to guarantee equitable access to care for all Tunisians. To do this, it has established a system of conventional relationships with the majority of national healthcare providers. The CNAM has also imposed a price list for the reimbursement of medicines based on generic medicines, i.e., the cheapest on the market. The only exception: cases where there are no generic medicines for the treatment of the disease. In this scenario, the CNAM agrees to reimburse the price of the originator drug.
Indeed, promoting generic drugs is doubly beneficial. Generic drugs are 30% to 40% cheaper for the patient than licensed drugs, and offer the advantage of being more profitable for Tunisian laboratories even if the selling prices are lower than originator drugs. It should also be noted that the profit margin for a generic product is generally higher than for a licensed drug (up to 30%). The price of a generic varies greatly depending on whether it is recent or not; a generic recently placed on the market without an equivalent or competitor may be more expensive than an older one that competes with other similar drugs.
Under these conditions, the new Tunisian health insurance system is a godsend for the country's 41 pharmaceutical production units, whose local production exceeds 300 million dinars. 54% of Tunisian drugs are produced under license, while generic drugs cover 47% of the value of products sold and 57% of the volume of national consumption.
As a reminder, the industry, which employs more than 3,800 people (including 37% pharmacists, pharmaceutical engineers, senior technicians, etc.), exports nearly 7% of its production abroad. These Tunisian exports, with a total value of 20 million dinars, are mainly destined (75%) to 4 markets (Libya, Algeria, France, Morocco).
The Tunisian pharmaceutical industrial fabric, which is mainly composed of small-sized units, is increasingly turning towards export, a situation that requires reaching a critical size and therefore encouraging mergers. This is to allow better visibility and to pool the resources essential in the field of biotechnology, which is the main innovation sector allowing the Tunisian pharmaceutical industry to assert itself against European and American pharmaceutical giants.
The profit margins generated by the sale of generics should allow Tunisian laboratories to mobilize the resources necessary for the research and development of new drugs. It should be recalled that international laboratories (big pharma) allocate nearly 15% to 20% of their revenue to research and development (R&D). From now on, Tunisian laboratories want to reach this level. A first step has already been taken with the establishment of the BiotechPole of Sidi Thabet, which will cover nearly 112 hectares. The organization in December 2008 of the first International Pharmacy and Wellness Fair in Tunisia and the development by the Ministry of Health of a strategic health plan until 2016 and a specific roadmap for the pharmaceutical industry announce significant changes and rapid development for this sector.
Published on October 8, 2009
Posted online on October 9, 2009
africanmanager.com
