R&D and Production of Pharmaceuticals and Parapharmaceuticals
R&D and Production of Pharmaceuticals and Parapharmaceuticals
Business Model Description
Invest in R&D and development of pharmaceutical and parapharmaceutical production
Expected Impact
Investing in R&D and the production of pharmaceuticals will increase the competitiveness of the health industry and improve equal access to healthcare
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Tunisia: Centre-East
Sector Classification
Health Care
Development need
Despite significant improvement, Tunisia is confronted with a limited healthcare system in terms of quality and efficiency. Access to healthcare services is a common problem, particularly in rural and inland regions. COVID-19 has exacerbated the issue and highlighted the underinvestment in basic and specialized services of sufficient quality (1).
Policy priority
The government pays particular importance to improving universal and equal access to healthcare, closing the gap between rural and coastal areas in terms of accessibility and quality of health services (2,3).
Gender inequalities and marginalization issues
Inadequate natality health services endanger the mother's and child's life. Between coastal, interior, and rural regions, there is a high degree of disparity in terms of care availability and quality.
Investment opportunities introduction
Health expenditure accounts for about 7% of GDP and is mostly driven by the private sector, which has expanded over the past two decades with the addition of private hospital beds and clinic projects underway. While Tunisia's health expenditure per capita is among the highest in the region, further efforts are now required to combat the COVID-19 epidemic (4)
Key bottlenecks introduction
Tunisia’s health system is faced with several challenges such as increased need for health financing, low rates of insurance penetration and unregulated private health sector.
Consequences include higher health costs and inconsistent quality of healthcare services. It is critical to emphasize the value of integrated care and the significance of public-private sector coordination and complementarity (5).
Biotechnology and Pharmaceuticals
Development need
The biotechnology and pharmaceutical sector has significant development potential and has accelerated its growth in the aftermath of the COVID-19 pandemic. It requires substantial investments and growth efforts, as well as a favorable investment climate (6).
Policy priority
The government promotes the development of biotechnology-based medication manufacturing, as well as the production of generic and bioequivalent medicines (3,7). The 2019 Investment Legislation identified pharmaceuticals as a priority sector.
Gender inequalities and marginalization issues
Insufficient natality health programs put at risk the lives of the mother and child. High levels of inequality in care availability and quality between coastal and internal and rural areas.
Investment opportunities introduction
Tunisia has a competitive advantage over rival locations in terms of high-technology exports, the number of researchers engaged in R&D, and innovation. The pharmaceutical industry expanded by more than 45% between 2014 and 2018, accounting for about 2% of national GDP (4).
Biotechnology represents the most attractive field for the growth of Tunisian pharmaceutical sector, due to high demands from local, regional and international level. (6)
Key bottlenecks introduction
Certain raw materials have been in low supply during the COVID-19 epidemic, owing to increased production demand. Tunisia should develop a strategy to encourage domestic active substance industry in order to prepare for probable raw material shortages.
Biotechnology and Pharmaceuticals
Pipeline Opportunity
R&D and Production of Pharmaceuticals and Parapharmaceuticals
Invest in R&D and development of pharmaceutical and parapharmaceutical production
Business Case
Market Size and Environment
> USD 1 billion
5% - 10%
As of 2020, the Tunisian pharmaceuticals market size was estimated around 3.3 billion USD (8). In 2018, the pharmaceutical sector accounted for around 2% of the national GDP of almost 40 billion USD (4).
Since 2014, the sale of drugs in Tunisia has experienced an annual growth of 10% (1), with CAGR expected to reach 20.9% from 2021 to 2030 (8).
Indicative Return
20% - 25%
Adwya, one of the leaders in the health market of Tunisia, reported a gross profit margin for 2021 of 21.99%.
Investment Timeframe
Long Term (10+ years)
As significant R&D investments are required in the pharmaceutical sector, investments are long term.
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
Market - High Level of Competition
Capital - CapEx Intensive
Business - Supply Chain Constraints
Impact Case
Sustainable Development Need
According to the 2021 report of the Tunisia Investment Authority, Tunisia suffer from the lack of global strategy in medical research, which represent an obstacle to the development of the industry. (3)
Despite a growing research sector, Tunisia still suffers from a lack of visibility with respect to foreign investors in the health sector, and a strengthening of the institutional framework of medical research is an important prerequisite for attracting foreign investment. (5)
According to the last report of the Tunisian Investment Authority, the production tool of some pharmaceutical companies suffers from obsolescence which represents a brake to the industry. (9)
Gender & Marginalisation
Rural and poor areas in Tunisia suffer from lack of investment and drug shortage which made them even more vulnerable to covid 19 pandemia
Expected Development Outcome
Improve biotechnology prouduction to position Tunisia as a Mediterranean and African pole of excellence in medical research to generate positive spill-overs in the health sector (6)
Strenghten collaboration between companies with R&D and coordination with public sector to increase efficiency in the production of affordable and high quality medicine
Gender & Marginalisation
- Creation of employment for women - Increase access to essential medicines for female, inmigrants or rural ppopulation
Primary SDGs addressed
3.b.1 Proportion of the target population covered by all vaccines included in their national programme
3.b.3 Proportion of health facilities that have a core set of relevant essential medicines available and affordable on a sustainable basis
0,92
9.5.1 Research and development expenditure as a proportion of GDP
9.b.1 Proportion of medium and high-tech industry value added in total value added
- 0.60132%
- 27.57%
Secondary SDGs addressed
Directly impacted stakeholders
People
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Outcome Risks
Pharmaceutical production may pose health risks without an effective and transparent regulatory system that closely monitors processes and quality standards.
Impact Risks
- Medical research and production activities usually take a long time, increasing the probability of execution risks and potentially leading to non-delivery of the desired impact. - Lack of a strategic public vision might slow down the investments and limit the delivery of desired impact.
Impact Classification
What
Increase competitiviness of R&D and access at affordable price to pharmaceutical and parapharmaceutical medicines.
Who
Medical researchers, R&D centers and universities, the general public/patients, healthcare providers, academia
Risk
While pharma R&D and production model is proven, potential execution risks and need for a strategic public vision require consideration.
Impact Thesis
Investing in R&D and the production of pharmaceuticals will increase the competitiveness of the health industry and improve equal access to healthcare
Enabling Environment
Policy Environment
-(The 2016-2020 Development Plan): For global value chains, the repport insist to develop industries of priority sectors such as biotechnology and pharmaceuticals (6). -(Economic Recovery Plan 2019-2020): This plan encourages the development of the manufacture of drugs derived from biotechnology.
- (Voluntary National Report of 2021): Tunisia provides continuous efforts to scientific research, with a budget allocated to medical research growing from 3 millionTND (1 million USD) in 2021 to 7 million TND (2.4 million USD) in the additional budget of 2021.
- (The 2016-2020 Development Plan): In order to develop the healthcare sector, biotechnology and pharmaceutical are considered as priority targets.
Financial Environment
Financial incentives: The investment premium in research and development PIRD is a tool offering subsidies to all public or private actors involved in the effort of R&D. This premium consists of 50% of the total cost of the studies with a ceiling of the premium fixed at 25,000 TND (8,700 USD) and 50% of the cost of realizations of the experiments and the technical tests of prototypes.
"Fiscal incentives: Law n°2017-8 of February 14, 2017, recasts the system of tax benefits with tax deductions on personal income or corporate tax, income or profits. Regarding regional development sector, tax incentives to operate of 100% during 5 years in zone 1 and 10 years for second zone.
This law also covers tax deductions for exports and for newly established companies with a will in part to encourage investment in innovative and high value-added sectors"
Other incentives: Medical research is mainly funded by the state, and the share of funding allocated to medical research will increase from 3 million DT to 7 million DT in the 2021 supplementary budget of the Minister of Health.(10)
Regulatory Environment
- Law No. 85-91 of November 22, 1985 regulating the manufacture and registration of medicines for human medicine - Circular n11/2001 of February 2, 2001 recalling and supplementing certain provisions relating to the registration of medicines.
- Order of the Minister of Public Health of September 10, 1996, establishing the terms and conditions for granting a marketing authorization for drugs for human use, its renewal and transfer. - Order of the Minister of Trade and Export Development and the Minister of Health of 25 Nov 2020, determining the products whose import monopoly is reserved to the Central Pharmacy of Tunisia.
- Joint Order of the Ministers of Health and Trade of March 27, 2020, on the prices of pharmaceutical products.
Marketplace Participants
Private Sector
Medis, Pharmaghreb, Cytopharma, Pharmaderm, TERIAK laboratoires, SANOFI, NOVARTIS, PFIZER, ASTRA ZENECA, Adwya
Government
Directorate of Pharmacy and Medicine (DPM), National Center for Pharmaco Vigilance (CNPV), National Laboratory for Drug Control (LNCM), the National Agency for Sanitary and Environmental Control of Products (ANCSEP),Ministry of Health, Central Pharmacy of Tunisia (PCT) , Faculty of Pharmacy of Monastir, INRAP, SIPHAT, Pasteur Institute of Tunis, Biotechnology Center of SFAX, Biotechnology Technopole of SIDI Thabet, UNIMED, INEAS,
Multilaterals
World Health Organization, African Development Bank.
Target Locations
Tunisia: Centre-East
References
- (1) Maxula Bourse. http://www.maxulabourse.com.tn/sites/default/files/note_valeur/FOCUS%20VALEUR%20ADWYA_0.pdf
- (2) The Republic of Tunisia, 2021. Voluntary National Review 2021. https://sustainabledevelopment.un.org/content/documents/279442021_VNR_Report_Tunisia.pdf
- (3) WHO, 2018. Tunisia: Health Systems Profile. https://rho.emro.who.int/sites/default/files/Profiles-briefs-files/TUN-Health-System-Profiles-2018.pdf
- (4) Tunisia Investment Authority. PHARMACEUTICAL SECTOR SECTOR PRESENTATION. https://tia.gov.tn/storage/app/media/ARGUMENTAIRES/TIA_TUNISIA_PHARMA/AG%20PHARMA%20ANG.pdf
- (5) Shops Plus and Health Finance&Governance, 2018. Trends in Health Financing and the Private Health Sector in the Middle East and North Africa. https://shopsplusproject.org/sites/default/files/resources/Trends%20in%20Health%20Financing%20and%20the%20Private%20Health%20Sector%20in%20the%20Middle%20East%20and%20North%20Africa.pdf
- (6) Tunisia Investment Authority, 2021. Pilotage des feuilles de route sectorielles, secteur Pharmaceutique.
- (7) CAE, 2019. http://www.cae.gov.tn/wp-content/uploads/2019/08/Plan-de-relance-V-Finale-12-oct.pdf
- (8) Vision Research Reports, 2021. Tunisia Pharmaceutical Market (By Formulation: Tablets, Capsules, Injectables, Sprays, Suspensions, Powders, Other Formulations) - Global Industry Analysis, Size, Share, Growth, Trends, Revenue, Regional Outlook 2021 – 2030. https://www.visionresearchreports.com/tunisia-pharmaceutical-market/38350
- (9) Grand View Research, 2021. Active Pharmaceutical Ingredients Market Size, Share & Trends Analysis Report By Type Of Synthesis (Biotech, Synthetic), By Type Of Manufacturer (Captive, Merchant), By Type, By Application, By Region, And Segment Forecasts, 2021 - 2028. https://www.grandviewresearch.com/industry-analysis/active-pharmaceutical-ingredients-market?utm_source=report_sample&utm_medium=referral&utm_campaign=sampletest_tunisia_pharmaceutical_market&utm_term=active_pharmaceutical_ingredients_market