Farming pharmaceuticals: The government leads an effort to push generics over branded drugs

One beneficiary of the roll-out of Qatar’s new national health service will be the pharmaceutical industry. As part of the new health care system, the Supreme Council of Health (SCH) is leading an effort to promote generic drugs in partnership with Hamad Medical Corporation (HMC), the Primary Health Care Corporation (PHCC) and other providers. Known as the Healthcare Products project, it should boost the use of generic drugs in Qatar, which the SCH prefers to the costlier branded type, provided they are qualitatively equivalent.

The project is expected to alter consumer behaviour, which tends to favour branded drugs over generic ones. This, plus the strong buying power of Qatari consumers, has created a favourable climate for industry multinationals operating in or importing to Qatar. Underpinning the scheme will be a new national formulary, a list of drugs and their classifications, to which dispensaries will be compelled to adhere. With this will come a new set of regulations for pharmaceuticals and medical devices, with big consequences for the industry.

Domestic Market

The move comes as part of a long-term plan to spur the country towards economic diversification and away from dependence on hydrocarbons. The government thus hopes to build a strong domestic industry in medicine-making. This would cut the costs of drug imports and boost consumption of generic medicines at lower prices, thereby cutting health bills. Less dependent on imports, the country's supply of medicines would also be more secure.

Local production of drugs is so far minimal. The country's size has given foreign companies few motives to build factories there, despite legal incentives allowing 100% foreign ownership. As of 2012, there were seven importers and 17 pharma agents operating in Qatar, Dr Aisha Al Ansari, director of the SCH’s Pharmacy and Drug Control Department, told local press that year. She did not name any manufacturers.

Consumers have nonetheless shown a willingness to spend. In 2012, analysts valued Qatar’s pharmaceutical industry at $379m, with annual per-capita sales of $206. In 2010, sector imports totalled $280m – an annual average growth of 16% from 2008 – according to the Ministry of Development Planning & Statistics.

Spending on medical services, meanwhile, grew almost 120% in real terms from 2006 to 2011. Given the prevalence of imported drugs, these are strong figures.

A clutch of new drug manufacturers were expected to open in 2013. As OBG went to press, the only big domestic company of this sort was still Qatar Pharma, a producer of intravenous infusions including parenteral nutrition, medical devices and topical medicines. It expects to start making generics by the end of 2014.

The new formulary is likely to change how some drugs are classified. The two key categories are over-the-counter (OTC) and “ by prescription only”, and current regulations in Qatar put some medications in the opposite category to other countries. Any renaming of these opens a door for OTC suppliers. Personal health care is of growing interest to Qataris, who are buying more OTC supplements and topical agents that can be sold only at licensed pharmacies in accordance with state regulations. Any medication that jumps categories in the new formulary is thus a potential marketing opportunity for suppliers, if they are agile enough to steer around the rigorous regulations on imports.

Regulation

The government is keen to curb costs, but attempts to control the price of prescription drugs have not gone to plan. Prices spiked 50% in some cases, and the government was forced to impose price caps.

More recently, the SCH changed course. It has ditched price controls and instead broken up a few monopolies on pharmaceutical imports to boost competition and drive down prices. To promote generic drugs, SCH also obliges physicians to use generic names for prescribed medications, raising patient awareness.

Trade law could also wield new influence. A free trade deal between the GCC and India, under way since 2005 but not yet final, could open the country to waves of low-cost generic drugs, and so stimulate the industry.

The GCC imports about 90% of its pharmaceuticals, according to Abdulaziz Bin Hamad Al Aqeel, Secretary-General of the Gulf Organisation for Industrial Consulting. He has urged GCC nations to wean themselves off foreign imports of medicine, and has called on local manufacturers to step up in their place, citing big opportunities. He expects the medicine markets in GCC countries and Yemen to reach around $10bn by 2020.

Local Access & Expertise

A related undertaking, the Community Pharmacies project, aims to support the NHS by expanding the role of local drugstores. At the pharmacy wing of the nation’s main hospital, HMC in Doha, resources are stretched thin. That is partly because it is the only place that stocks the full range of medications legally available to Qataris. The Community Pharmacies project would decentralise the filling of prescriptions, increasing access and improving efficiency. Here, too, the new formulary is likely to play a role, as smaller pharmacies could then stock the same variety of drugs as HMC at the same prices.

The main hurdle is training pharmacy staff. A recent study on the efficacy of community pharmacies in Qatar, conducted by Dr Mohamed Izham Ibrahim, associate dean of research and graduate studies affairs at Qatar University's College of Pharmacy, assisted by two undergraduates, found big gaps in learning. In a letter to the Journal of Pharmacy Practice and Research, he wrote that “although there is potential for pharmacies to contribute more effectively to primary care, a systematic review reported that there were deficiencies in the quality of professional practice.” The reviewers see room for improvement in the quality of advice given for common symptoms, and in the stock of medicines they supply. Practices were at times out of sync with current guidelines, highlighting the need for training programs to meet the obligations stated in the NHS.

Finding Alternatives

Another study, published in the Qatar Foundation Annual Research Forum getting keener on complementary and alternative medicine (CAM). Community pharmacists, however, know very little about CAM, and this obstructs the industry's potential. The study found that, “most pharmacists felt they were not equipped with sufficient information to competently recommend CAM to their clients” and that they lack proper access to such information. Pharmacists also expressed doubts about the safety of CAM, and felt that their undergraduate courses had not prepared them to assist their patients with these matters. The authors concluded that, given the rising interest in CAM, and the need for patient autonomy when choosing health care regimes, pharmacological colleges should “make radical changes to those undergraduate courses that teach subjects related to CAM.”

Qatar's pharmaceutical sector thus teems with opportunities to expand, but faces challenges in getting the mix right. Education will be a cornerstone of growth in a sector likely to see big global changes in the years ahead. With the end of old monopolies and the start of new free trade deals, the international market for generics may soon swell. National and international firms should find room to take part in this evolution.