BMI View: Access to medicines in Morocco has been improving significantly over recent years with the implementation of numerous drug price cuts and expanding health insurance coverage. However , the proposed legislation to increase VAT on pharmaceuticals will negatively impact pharmaceutical consumption, if passed in parliament. An unclear future regarding drug prices in Morocco will result in the country maintaining its status as a challenging market for multinational drugmakers.
Headline Expenditure Projections
Pharmaceuticals: MAD12.01bn (USD1.43bn) in 2014 to MAD12.83bn (USD1.33bn) in 2015; +6.8% in local currency terms and -6.8% in US dollar terms. Forecast revised downwards from last quarter.
Healthcare: MAD55.56bn (USD6.60bn) in 2014 to MAD60.75bn (USD6.30bn) in 2015; +9.4% in local currency terms and -4.6% in US dollar terms. Forecast revised upwards from last quarter.
Morocco is viewed as a moderately attractive pharmaceutical market in the Middle East and Africa (MEA) region. In our latest proprietary Pharmaceutical Risk/Reward Index (RRI) table, Morocco remains the 14th most attractive market in the region out of the 31 countries assessed, with a score of 40.6 out of 100. The market's constraints include low per capita consumption and an underdeveloped reimbursement system, although such factors are to a degree offset by a relatively predictable operating environment.
Key Trends a nd Developments
In August 2015, Moroccan Prime Minister Abdelilah Benkirane proposed to increase the value added tax (VAT) on medicines under a 2016 draft law in a move that is likely to raise the prices of certain drugs to record highs. The bill seeks to increase VAT on medicines to 10% from the existing 7%. The change in VAT will hike the prices of frequently used medicines, such as painkillers and antibiotics, and will reportedly negatively affect the access to treatment services in the country.
In August 2015, the Moroccan government announced it will allocate approximately USD11mn to provide compulsory health coverage to around 260,000 university students in 2016. The move comes after the Moroccan Parliament recently enacted a health coverage bill to cover higher education and technical training students in the public and private sectors. The scheme aims to extend coverage to 460,000 students over the coming five years.
Also in August 2015, the Moroccan government stated that it aims to provide compulsory health coverage to the whole population before the end of 2015.
In July 2015, it was announced that Morocco's National Social Security Fund (CNSS), posted a surplus of MAD2.18bn (USD222mn) in 2014. The CNSS runs Morocco's compulsory health insurance scheme - Assurance Maladie Obligatoire (AMO) and the Medical Assistance Scheme for the Economically Disadvantaged - Regime d'Assistance Medicale (RAMED).
In July 2015, the Saudi Fund for Development granted USD175mn to Morocco to finance health projects in Agadir. Under the first of the two agreements signed, USD33mn has been provided for the establishment of a Faculty of Medicine and Pharmacy. The second agreement provides USD142mn to fund the University Hospital Centre project in the capital's university.
BMI Economic View
After three years of decreasing revenues, the Moroccan tourism industry, an enormous contributor to the country's economy, will continue to underperform over the coming quarters as the Tunisian terrorist attacks and regional insecurity take their toll. This will affect private consumption and the current-account balance, but the impact will be limited.
BMI Political View
The stalemate between Morocco and the region of Western Sahara will hinder the prospects of oil resources offshore in the Atlantic being exploited over the course of our 10-year forecast period. All-out conflict between Moroccan armed forces and the Algerian-backed Polisario Front is unlikely, but we could see skirmishes between the two sides become more frequent if Rabat presses ahead with plans to explore resources in waters claimed by Western Sahara.