PHARMA LAND
Lebanon has always been the region's leader in all things health related. Its pharmaceutical industry is no exception, and the country's incentives for international pharma companies to operate, manufacture, and distribute in Lebanon are only getting stronger.
Lebanon is the indisputable hub for pharmaceuticals distribution in the Middle East. With an estimated market of USD1.6 billion and an annual growth projected at 6.2%, the pharmaceuticals industry is expected to have a value of USD2.2 billion by 2020. Despite being a reduced market with less than 4.5 million potential consumers, there are 175 pharmaceutical companies currently operating in Lebanon through distribution centers, import hubs, and manufacturing facilities. The industry represents 3.15% of Lebanon's GDP, the largest portion for any country in the MENA region.
For a number of years now, Lebanon has served as a platform for multinational pharmaceutical companies to export to other countries in the Levant and the Gulf region. Global pharmaceutical giants such as GSK, Merck, Abbott, Pierre Fabre, Novartis, and Pfizer all operate in Lebanon through distributors that coordinate their operations to other Middle Eastern markets from the cedar nation. Despite the recent complexities the industry experienced due to the conflict in Syria and Lebanon's own political stagnancy, pharmaceutical exports from Lebanon peaked again to reach a total USD55.3 million in sales during 2015, or an increase of around 30% in comparison to the USD38.2 million sold during 2014. Iraq, Saudi Arabia, Jordan, and the UAE represent the bulk of pharmaceutical exports from Lebanon, with 57% of total sales.
There are many factors that account for Lebanon's position as a pole of attraction for pharmaceutical companies. The country's universities offer a good range of undergraduate and postgraduate degrees in medicine, pharmacy, and chemistry, placing Lebanon far ahead of its peers in the Arab world. Second, the country has always been known for its advanced private healthcare system and for being the leading destination for health tourism in the Middle East; Lebanon possesses a ratio of beds-to-population of 35 for every 100,000sqm, and a ratio of 35 physicians for every 10,000 patients, again leading the ranking in the MENA region. Finally, Lebanon's privileged position in the epicenter of the Middle East, Africa, and Europe accounts for the vast opportunities the tiny nation has to serve as a distribution center.
But further than its inherent assets, Lebanon has also structured a particular strategy to incentivize the flow of international pharmaceutical companies into the country. The Lebanese government has pushed through comprehensive legislation to protect intellectual property rights for pharmaceutical companies and established a special police unit to supervise the enforcement of this legislation, which has been in place for 17 years now. Through the Investment Development Authority of Lebanon (IDAL), pharmaceuticals are offered tax exemptions that can go up to 100% for a period of 10 years, while the Ministry of Industry offers 100% exemption on R&D expenditures and 50% exemptions on all taxes incurred from exporting activities to third-party markets.
Regarding the legislation implemented to incentivize the establishment of pharmaceutical distributors in the country, the Ministry of Public Health has also been active in increasing the legislation for pharmaceutical imports, commercialization, and distribution across Lebanon. On this line, Armand Pharès, President of the Lebanese Pharmaceutical Importers Association (LPIA), told TBY that “legislation in Lebanon is moving in two directions: one that addresses the good storage and distribution practices in an advanced way, and another that calls all players to be creative and prepare for the challenges of bio-pharmaceuticals and patient-oriented therapies." With a local production that represents less than 10% of the total consumption of medicines in the country due to its high costs, the strategy for Lebanon points to incentivizing multinationals to distribute from its territory.
PHARMA LAND
TABLE OF CONTENTS
Focus: Lebanese-French Relations
Let’s be Franc
Lebanon shares a close relationship with its former colonizer, both in terms of economic relations and cultural identity among Lebanese. In spite of hardships like the presidential power vacuum and Syrian war next door, the bond is only getting stronger.
read articleFocus: Tripoli Economic Free Zone
The Tripoli Transformation
The Tripoli Special Economic Zone (TSEZ) is one of most ambitious projects in Lebanon at the moment. With an initial cost of USD27 million, it is meant to provide an alternative to the heavily centralized economic activity in Beirut, a new gateway for investments and trade to settle in northern Lebanon, and will transform the image of a long-neglected region.
read articleInterview
Dr. Freddie Baz, Vice Chairman & Group Strategy Director, Bank Audi
TBY talks to Dr. Freddie Baz, Vice Chairman & Group Strategy Director of Bank Audi, on the bank's increase in profits, dealing with currency devaluation, and working to turn the economy into an export-driven one.
read articleReview: Insurance
Life is a Rollercoaster
Unlike many emerging markets, Lebanon enjoys a relatively high insurance penetration rate and strong life segment, buoyed by compulsory lines and bancassurance. Competition remains fierce, however, and reform aimed at encouraging consolidation looks far off.
read articleInterview
Max R. Zaccar, Chairman of Commercial Insurance & President of the Association, Insurance Companies
TBY talks to Max R. Zaccar, Chairman of Commercial Insurance & President of the Association of Insurance Companies, on the resilience of the sector, increasing the already-high penetration rates in the country, and remaining one of the strongest insurance companies in the region.
read articleInterview
HE Arthur Nazarian, Minister, Energy and Water Resources
TBY talks to HE Arthur Nazarian, Minister of Energy and Water Resources, on the potential offshoots from oil and gas explorations, the country's National Energy Efficiency Action Plan, and attempts to increase renewable energy consumption.
read articleInterview
Wissam Zahabi, Chairman, Board of the Lebanese Petroleum Administration (LPA),
TBY talks to Wissam Zahabi, Chairman of the Board of the Lebanese Petroleum Administration (LPA), on making the investment climate attractive for foreign companies and becoming self-sufficient in energy.
read articleFocus: Sovereign Wealth Funds
Gas Pipe Dreams
Despite excitement over exploration of Lebanon's hydrocarbons, the creation of a sovereign wealth fund, which was included in legislation, has yet to take place. The country faces several obstacles in its path to creating and properly managing a fund.
read articleInterview
Pierre El Khoury, General Director, Lebanese Center for Energy Conservation (LCEC)
TBY talks to Pierre El Khoury, General Director of the Lebanese Center for Energy Conservation (LCEC), on the development of energy efficiency in Lebanon, awareness of energy conservation, and the country's 2020 renewable energy goals.
read articleInterview
Dr. Fady Gemayel, President, Association of Lebanese Industrialists (ALI)
TBY talks to Dr. Fady Gemayel, President of the Association of Lebanese Industrialists (ALI), on the group's work to promote industrialists, new developments in terms of industrial cities, and the future of industry in the country.
read articleFocus: Industrial Cities
Industrial Solution
Domestic and regional events have stifled Lebanon in building a strong national industry to protect and sustain its economy. Four proposed industrial zones throughout the country may provide it with the economic backbone it so desperately needs.
read articleInterview
Marianne Hoayek, Director of the Executive Office, Banque du Liban
TBY talks to Marianne Hoayek, Director of the Executive Office of Banque du Liban, on the roots of the Circular 331 concept, bridging funding gaps throughout the startup lifecycle, and the country's growing knowledge economy.
read articleRoundtable
Thinking It Through
On June 12, TBY and the American-Lebanese Chamber of Commerce (AmCham) organized a roundtable titled “Startup ecosystem sustainability: fostering cooperation to drive entrepreneurship." The participants discussed the impact of Circular 331, an initiative by Bank du Liban, the Lebanese central bank, to inject a potential of USD400 million into the local enterprise market and guarantee 75% of banks' investments in startups and startup support.
read articleFocus: Infrastructure for the startup ecosystem
The New Star
Startups are ubiquitous in Lebanon despite the difficulty of starting a business and the lack of services available to new businesses. However, a number of actors, both public and private, are innovating the environment and allowing startups to fulfill a greater role in the country's economy.
read articleFocus: Maritime Exports Bridge
Bridging The Gap
The conflict in Syria has wrought serious damage on the Lebanese economy, effectively closing off the country's trade routes through Syria. However, a new program geared at balancing the price disparities between land and sea transit is poised to help Lebanese industries.
read articleFocus: Real Estate
A Stimulus For The Rest Of Us
The real estate market in Lebanon is nothing like it used to be. The sector has slowed considerably, and demand has shifted from the traditional center, Beirut. However, stimulus packages from the central bank over the years have proven beneficial for all parties involved.
read articleInterview
Armand Pahrés, President, Lebanese Pharmaceutical Importers Association (LPIA)
TBY talks to Armand Pahrés, President of the Lebanese Pharmaceutical Importers Association (LPIA), on the development of legislation in the sector, boosting further innovation, and opportunities for Lebanon to become more self-sufficient in pharmaceuticals.
read articleFocus: Incentives for pharmaceuticals in Lebanon
Pharma Land
Lebanon has always been the region's leader in all things health related. Its pharmaceutical industry is no exception, and the country's incentives for international pharma companies to operate, manufacture, and distribute in Lebanon are only getting stronger.
read articleInterview
HE Elias Bou Saab, Minister, Education and Higher Education
TBY talks to HE Elias Bou Saab, Minister of Education and Higher Education, on the ministry's initiatives to improve the education system, ensuring access to education for Syrian refugee children, and reversing the brain drain in the country.
read articleInterview
Mohamed Harajli, Provost, American University of Beirut (AUB)
TBY talks to Mohamed Harajli, Provost of the American University of Beirut (AUB), on his upcoming plans for the university, the key role played by the AUB alumni, and fostering an entrepreneurial spirit among students.
read articleFocus: Programs to school Syrian refugee children
High Marks
Proportional to its population, Lebanon has taken in significantly more Syrian refugees than any other country. With the country now facing the problem of placing the tens of thousands of Syrian children in school, international donors and local and foreign organizations are making educational support a priority.
read articleInterview
Joseph G. Jabbra, President, Lebanese American University (LAU)
TBY talks to Joseph G. Jabbra, President of the Lebanese American University (LAU), on embracing technology at the university, the challenges of Lebanon's brain drain, and the importance of having international links with other institutions.
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