Morocco's pharmaceutical industry, second in Africa in terms of turnover
The Policy Centre for the New South, a leading Moroccan research centre, has analysed the state and prospects of the pharmaceutical sector in Morocco, the second largest on the African continent in terms of turnover after South Africa, and the fifth largest in the Middle East and North Africa region.
Health sovereignty
The study, published on 26 July, is entitled "Is Morocco's industrial pharmaceutical sector ready to meet the challenge of the Kingdom's health sovereignty?" and is signed by Henri-Louis Vedie.
According to the study, the country's pharmaceutical ecosystem in 2024 is "particularly dynamic, with strong development potential based on a dual growth engine: internal and external".
The report reflects that Morocco has become a centre of excellence, specialising in the production of cheaper generic medicines, which generates significant savings, essential to preserve the financial balance of health insurance, but also to improve the country's trade balance.
"The sector is now facing another challenge highlighted by the Covid-19 pandemic and the consequences of the Russian-Ukrainian war: health sovereignty. By prioritising the use of generics and diversifying its offer, is this centre ready to meet the challenge of Morocco's health sovereignty?," asks the study by the Policy Centre for the New South.
80% of health needs
The study concludes that the pharmaceutical sector covers 80% of Morocco's medicine needs: "these results would not have been possible without a particularly ambitious and proactive strategy, developed within the framework of the industrial acceleration plan covering the period 2014-2020, supported by an industrial development fund since 2015".
The report analyses the three sub-sectors that make up the Moroccan pharmaceutical sector: pharmacies, a total of 11,000 private pharmacies; the distribution sector, represented by wholesale distributors; and the industrial sector, the manufacturing of medicines.
Of the three, the most relevant for the authors of the study is the industrial sector: "Of course, the other two components are important, even essential, but they do not have the existential character of the first. Without productive activity, the sector would be reduced, as is sometimes the case in certain countries around the world, to a service activity: distributing what we have imported".
This sub-sector, the industrial one, began in 1933 with the arrival of the first company, Cooper Pharma, in the country. Today, it has a total of 50 establishments, ranging from SMEs to multinationals. Some twenty of them are Moroccan subsidiaries of foreign multinationals.
In total, a dozen foreign countries have invested in Morocco's pharmaceutical industry: France, with six companies; Switzerland and the United States, with three companies each; Germany, with two German companies; and the United Arab Emirates, India, Jordan and Portugal, with one company each.
Investments of 700 billion
The pharmaceutical sector has climbed over the past few years to become Morocco's second largest chemical activity after phosphate production, and over time has become the leader in the generics sector.
According to the report, the sector's annual investments are around 700 billion dirhams, and its turnover is between 14 and 15 billion dirhams, according to the latest data available from the Ministry of Industry and Trade.
This has allowed it to rank second on the African continent, behind South Africa, and fifth among the countries of the MENA region (Middle East and North Africa).
The evolution over the last few years has been spectacular: turnover increased by 15.3% in 2021, in the context of the Covid-19 pandemic; in 2022, turnover grew by +7.9% compared to the previous year, demonstrating its resilience at the height of the pandemic; in 2023, turnover increased by 50%, exceeding 21 billion dirhams. By 2024, it is expected to exceed this figure.
In terms of employment, the 2022-2027 plan will see the creation of 16,000 jobs (6,000 direct and 10,000 indirect) over the period, an increase of more than 30%.
Government strategy
As confirmed in Parliament by the Minister of Health and Social Protection, Khaled Ait Taleb, Morocco is capable of producing 70% of its medicine needs, as a result of the government's strategy to promote local industry not only in terms of the medicines themselves, but also in terms of health supplies. This would also include reducing the price of medicines, especially those for cancer treatment, and boosting the stock of strategic reserves to cope with a potential crisis.
The growth of the sector in recent years has also been related to two factors: on the one hand, the universalisation of health coverage for all citizens; and on the other, the abolition of the 7 % VAT on medicines, which has led to increased consumption.
Morocco is also a major exporter of medicines to the African continent: around 10% of its production is exported.
The Minister also pointed out in his parliamentary appearance that, during the last Covid pandemic, the vaccine factory ordered to be built by King Mohammed VI, which had been built by the Moroccan government, had been used to produce vaccines for the African continent.
The Minister of Health stressed that the vaccine factory, whose construction was ordered by the Moroccan King Mohammed VI, made it possible to produce 100% of the vaccines needed at national level and even to export to the rest of Africa, thus contributing to the strengthening of the continent's pharmaceutical sovereignty.