Executive Summary

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The steady annual growth of the Lebanese pharmaceutical market recorded in recent years has been severely disrupted by the 2006 conflict with Israel as well as by the more recent internal turmoil. While the stabilisation of the political situation will eventually normalise the market, its short-term prospects have been diminished. The situation is further complicated by the influx of donated essential medicines, which will distort market figures for this year.

Nevertheless, prescription medicines can be expected to dominate the market over the coming years, reflecting the relatively low income of the majority of the population, as well as the traditional reliance on hospitals as main points of care. Over-the-counter (OTC) drugs, which presently account for approximately 10% of the total by value, will witness some improvement towards the end of the forecast period, mainly driven by cost-containment initiatives and rising healthcare awareness. In the meantime, generic drugs will continue to account for a limited share of the total market due to a lack of awareness of their merits among both consumers and health professionals, and the dubious quality of some of the local products.

The adjusted BMI's Business Environment Rankings for the Middle East and Africa for Q307 again place Lebanon in 11th place, ahead only of Iran, Nigeria and Zimbabwe. BMI's judgement of the market potential is primarily negatively influenced by regulatory barriers such as lax intellectual property (IP) standards, as well as the country's uncertain long-term political climate. On the upside, the local manufacturing industry is limited, producing mainly basic medicines, which provides considerable potential for the expansion of foreign company operations, in order to meet the demands of the rapidly growing population. However, counterfeiting remains rife, severely impacting sales for multinational companies, which also have to contend with a sizeable volume of parallel trade.

BMI forecasts that the Lebanese drug market will be worth US$608mn at retail prices by 2011, up from US$475mn in 2006 and still small in comparison to other regional and global markets. While drug prices in the country remain relatively high by regional standards, the government's proposal to implement a new pricing system based on the reference prices of drugs in similar markets around the world will serve to dent market revenues over the coming years, despite improving volumes.

Contents

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Chapter 1 - Executive Summary

Lebanon Pharmaceuticals & Healthcare Industry SWOT

Political SWOT

Economic SWOT

Business Environment SWOT

Chapter 2 - Business Environment Ranking

Table: Business Environment Ranking: Middle East & Africa

Chapter 3 - Market Summary

Chapter 4 - Regulatory Regime

Public Tender

Intellectual Property Developments

Parallel Imports

Counterfeit Drugs

Table: Losses Due to Counterfeit Drugs in the MENA Region, 2004

Pricing & Reimbursement Issues

Table: Lebanon Incremental Drug Margins

Chapter 5 - Industry Developments

Health Profile

Healthcare Sector

Hospital Sector

Healthcare Sector Reforms

Pharmaceuticals Sector

Recent Company Developments

Research and Development

Regional Developments

Chapter 6 - Industry Forecast Scenario

Overall Market Forecasts

Table - Lebanon Health Expenditure Forecasts

Key Growth Factors – Industry

Table: Lebanon Drug-Market Forecasts

Key Growth Factors – Macroeconomic

Lebanon: Macroeconomic Data & Forecasts

Prescription Market Forecast

Table: Lebanon Prescription Market Forecast

OTC Market Forecast

Table: Lebanon OTC Market Forecast

Generics & Branded Market Forecasts

Table: Lebanon Generics Market Forecast

Export/Import Market Forecasts

Table: Lebanon Export/Import Forecasts

Other Healthcare Data Forecasts

Table: Lebanon Other Healthcare Forecast

Key Risks to BMI Forecasts

Chapter 7 - Country Snapshot: Lebanon Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Chapter 8 - Competitive Landscape

Company Profiles

Novartis

Merck & Co

Johnson & Johnson

Sanofi-Aventis

Abbott Laboratories

Pfizer

GlaxoSmithKline

Chalhoub Pharmaceuticals

Alfa Laboratories Chalhoub Pharmaceuticals

Algorithm

Codipha

Chapter 9 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Pharmaceutical Industry

Chapter 10 - Appendix: Regional Demographic Data

The Long View: Data Over The Economic Cycle (2000-2007)

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Middle East & Africa Pharmaceuticals and Healthcare: Sample of Companies Ranked

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Cross-border analysis of regulatory systems comparing the patenting environment, summarising regional pricing and reimbursement factors and monitoring the growth of the Pharmaceuticals sector across the region. Company SWOTs cover leading multinational and national drug companies operating in each market.

Network of Middle Eastern and African Pharmaceutical & Healthcare Sources

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BMI's Middle Eastern & African Pharmaceutical & Healthcare Reports are based on an extensive network of multilateral organisations, government departments, pharmaceutical & healthcare industry associations, chambers of commerce and company reports. Information sources include: