BMI View: Similar to other North African markets, Morocco's inclusion on PhRMA's Special 301 Submission for 2015 for intellectual property and pricing issues highlights the ongoing challenges that multinational drugmakers face in the market. However, we expect innovative drugmakers to continue seeking opportunities in Morocco, particularly with recent updates to the intellectual property law that highlights the country's commitment to improving the operating environment for multinationals.
Headline Expenditure Projections
Pharmaceuticals: MAD12.12bn (USD1.44bn) in 2014 to MAD12.99bn (USD1.35bn) in 2015; +7.2% in local currency terms and -6.5% in US dollar terms. Forecast revised upwards from last quarter.
Healthcare: MAD55.76bn (USD6.63bn) in 2014 to MAD60.00bn (USD6.22bn) in 2015; +7.6% in local currency terms and -6.1% in US dollar terms. Forecast revised downwards from last quarter.
In our latest proprietary Pharmaceutical Risk/Reward Index table, Morocco continues to be viewed as a moderately attractive pharmaceutical market in the Middle East and Africa region, from a longer-term perspective. Morocco ranks 14th in the region out of the 31 countries assessed, with a score of 43.0 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 And Developments
Moroccan health minister El Hussein Louardi, has voiced his support for abortions in the country during an interview with French-speaking magazine Telquel. 'I think it is absolutely necessary to legalize abortion, because it is not only a medical problem but also a social problem,' the minister told the magazine. Around 600 woman and girls are reported to have abortions illegally every day; a further 200 are carried out by non-medical practices, according to The Moroccan Association for the Fight against Clandestine Abortion.
UAE-based developer Tasweek Real Estate Development and Marketing is planning to invest around USD3bn in medical tourism and other projects in Morocco to expand its healthcare portfolio, reports Hespress. The company will develop advanced 'healthcare cities' in Tangiers, Agadir and Casablanca in Morocco, according to CEO Masood Al-Awar. The developer is also likely to open the Marrakech Healthcare City in H115. The mixed-use USD60mn project covers 21,000 square metres and is near the international airport and the central business district of Marrakech in Morocco.
Morocco has once again been included on the Priority Watch List for Pharmaceutical Research and Manufacturers of America (PhRMA)'s latest Special 301 Submission for 2015, as it was in 2014. The Moroccan government announced a new economic policy in 2013, prioritising the biopharmaceutical industry as a strategic sector within its economy. PhRMA and its member companies saw this as a chance to collaborate with the government to develop policies with the aim of transforming the sector in Morocco into a regionally and globally competitive one. However, there have been delays in implementing expanded medical coverage for Moroccan patients. Furthermore, the report also highlights that since 2013, the government has done very little to engage in policies with innovative drugmakers to promote the sector.
BMI Economic View
Growth forecasts made by international institutions for Morocco are currently too optimistic, with the IMF forecasting 5.0-5.5% average growth over the next 10 years. This forecast downplays the several structural constraints that will slow down Moroccan growth, including overreliance on agriculture, and an underqualified workforce. We therefore forecast the country's growth to average 4.0% over the next decade, below the annualised rate of 4.5% recorded between 2000 and 2013.
BMI Political View
Morocco's foreign policy will remain stable over the coming years, aimed at strengthening its relationship with the EU and the Gulf Cooperation Council, and looking to West Africa for trade and investment opportunities. The Western Sahara issue will remain at the forefront of Rabat's foreign policy agenda, and we do not see any significant progress taking place in the near future.