Algeria to encourage use of generic drugs

2008-03-14

Caught between rising drug prices and a desire to give the public access to affordable healthcare, the Algerian government has found a solution: encouraging the production and use of generic drugs.

By Mohand Ouali for Magharebia in Algiers – 12/03/08

[Getty Images] Algerian women work on a pharmaceutical production line in Algiers. The government passed legislation on March 4th aimed at encouraging the production and distribution of lower-cost generic drugs.

Amid growing consumer complaints about the high price of prescription drugs and government concerns about its rising bill for imported medications, the Algerian government recently passed legislation to promote the use of generic pharmaceuticals.

On March 4th, the cabinet approved measures encouraging the production and distribution of generic drugs. The legislation provides for the creation of a national pharmaceutical agency tasked with monitoring drug availability, safety, quality, inspections and regulatory compliance. The list of state-reimbursed drugs was also expanded from 116 to 295 internationally-recognised medications.

The move comes in response to President Bouteflika's demand in late February that the government promote the national pharmaceutical industry and secure the co-operation of foreign competitors in order to reduce the country's drug costs.

According to Minister of Labour and Social Protection Tayeb Louh, this new policy should contribute to reducing price of drugs and a slowdown in social security spending, which climbed from 7.6% in 2006 to 18.8% in 2007.

Algerian drug manufacturers are not so readily persuaded. National Union of Pharmaceutical Operators (UNOP) President Ammar Ziad voiced his concerns about opening the Algerian drug market to competitors during a press conference last week. Foreign producers are "menacing" the five-year-old Algerian pharmaceutical industry, he said, adding that due to negotiations over Algeria’s admission to the WTO, the domestic industry has received no support since 2004, despite promises from the government. In his view, this has led to slower production by drug factories operating at one-third of capacity.

"Today, we find ourselves open to importation without any measure of encouragement for local production," Ziad said. His group wants the government to set a transparent regulatory framework and accelerate registration procedures for locally-made drugs.

"If these recommendations are followed," he said, "Algeria will cover 65% of its own needs by 2012." In 2007, Algeria imported drugs with a total value of over 1.4 billion dollars.

At a meeting with social security fund directors on Thursday (March 6th), the Labour minister issued a warning to "all those who seek to protect other interests or other laboratories by selling products at inflated prices which are not in the national interest". The minister reiterated his hope that the project would succeed, saying that the plan was in "the interest of Algeria and all Algerians".

Nadir Mellah of pharmaceutical company Merinal, however, argued that the government measure encourages importation and not local production of generic drugs. "It reflects the politics of encouraging generic fabrication by the 'magic wand' [approach]," he explained.

"While it is easy to require that operators import at least 45% generic drugs, it is less easy to sell them," Mellah added, because consumers will not be able to immediately obtain the generic pharmaceuticals. Medicines must be registered before becoming available for public purchase and this process takes more than a year to effect.

For the government's plan to succeed, Mellah said, it will be necessary for pharmacists, doctors, importers and manufacturers to work together.

"That's not the case today," he said.

An initial assessment of the current state of the Algerian pharmaceutical industry presented Tuesday (March 10th) to Industry Minister Abdelhamid Temmar indicated that generic drugs account for 35% of local market share but only 24% of revenue.