VZCZCXYZ0012
RR RUEHWEB

DE RUEHAM #0694/01 0770913
ZNR UUUUU ZZH
R 180913Z MAR 09
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC 4672
INFO RUEHAS/AMEMBASSY ALGIERS 0219
RUEHGB/AMEMBASSY BAGHDAD 6198
RUEHLB/AMEMBASSY BEIRUT 3030
RUEHEG/AMEMBASSY CAIRO 3967
RUEHDM/AMEMBASSY DAMASCUS 4122
RUEHJI/AMCONSUL JEDDAH 0861
RUEHJM/AMCONSUL JERUSALEM 5424
RUEHRH/AMEMBASSY RIYADH 2121
RUEHTV/AMEMBASSY TEL AVIV 1622
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAUSA/DEPT OF HHS WASHDC

UNCLAS AMMAN 000694 
 
UNCLASSIFIED 
SIPDIS 
 
STATE FOR NEA/ELA AND EEB 
 
E.O. 12958: N/A 
TAGS: ECON BTIO KIPR JO
SUBJECT: Jordan's Pharmaceutical Sector Grew in 2008 but Sees 
Difficult Year Ahead 
 
REFS: A. AMMAN 545 
      ¶B. AMMAN 472 
 ¶C. 08 AMMAN 3017 
 ¶D. 07 AMMAN 4962 
 
¶1. (U) Summary: Jordan's domestic pharmaceutical sector saw its 
exports increase 18.1% in 2008 to reach a historic high of $498 
million, compared to $422 million in 2007.  Pharmaceuticals are 
considered Jordan's highest value-added industry and employ 8,000 
Jordanian workers, many of whom are college-educated and female. 
While the sector continues to work on enhancing its ability to serve 
the European and U.S. markets, interlocutors agree that 2009 will be 
a difficult year revenue-wise due to the global economic slowdown. 
The sector's IPR compliance record remains good (ref A).  Local 
representatives of Pharmaceutical Research and Manufacturers of 
America (PhRMA) criticized the GOJ's sluggishness in purchasing the 
newest international drugs for its public hospitals and the 
preferences given to Jordanian manufacturers.  End Summary. 
 
Employing 8,000 Jordanian Workers, Many Female 
--------------------------------------------- - 
 
¶2. (U) Jordan's 17 pharmaceutical companies employ 8,000 workers in 
manufacturing, clinical testing laboratories, and in related 
packaging companies.  99% of the employees are Jordanian; 30% of 
them have a college degree; and 39% are female, including many 
professional positions.  Dr. Hanan Sboul, Secretary General of the 
Jordanian Association of Pharmaceutical Manufacturers, said the 
pharmaceutical sector has a high percentage of female professionals 
because pharmacy schools in Jordan are disproportionately female. 
The sector's growing reputation for good work at relatively high 
wages is, however, increasing the number of men entering university 
pharmaceutical programs. 
 
Feeling Impact of Global Economic Crisis 
---------------------------------------- 
 
¶3. (SBU) Jordan's domestic pharmaceutical manufacturing sector has 
been viewed as one of the most promising export industries with high 
local value-add.  The sector manufactures primarily generic and 
branded generic drugs, 70% of which are exported to 65 countries, 
including the United States.  Pharmaceutical exports increased 18.1% 
in 2008 to $498 million, the industry's highest level to date, from 
$422 million in 2007 (ref D).  In just five years, these exports 
grew 167% from $186 million in 2003.   Sboul confirmed that 2008 was 
a good year for Jordan's drug manufacturers but said sales slowed in 
the fourth quarter and predicted a significant decline in 2009 due 
to the global economic slowdown.  She believes the association's 
goal of reaching $1.4 billion in exports in 2011 is now unlikely. 
 
¶4. (SBU) Sboul was most concerned about protectionist actions being 
taken by the Algerian government to keep out foreign drugs, 
including Jordan's, and to protect its own small pharmaceutical 
sector.  Algeria accounts for 20% of Jordan's pharmaceutical exports 
valued at approximately $100 million.  Sboul said that even the four 
Jordanian companies with operations in Algeria will be limited to 
selling just Algerian-made products in Algeria.  Hiba Zarour, 
Intellectual Property Counsel for Hikma Pharmaceuticals (the largest 
pharmaceutical company in Jordan), said that Hikma has a factory in 
Algeria but that the country's vacillating industrial policy and the 
unpredictability of the law there had made it a difficult place to 
do business. 
 
¶5. (SBU) Other challenges for the sector include competition from 
Egyptian drug manufacturers whose goods are often cheaper but of 
poorer quality, according to the Jordan Food and Drug 
Administration.  Sboul said Iraq represents a good future 
opportunity but added that the level of corruption and the 
pervasiveness of counterfeit drugs there have hindered export plans. 
 The current credit crunch in Jordan is also making it difficult to 
expand business.  Zarour noted that Hikma is interested in acquiring 
other companies, particularly as a way to open factories abroad, but 
has had difficulty obtaining financing for such acquisitions. 
 
Respecting IPR 
-------------- 
 
¶6. (SBU) All interlocutors complimented the state of intellectual 
 
property (IP) rights law and government's enforcement of IP for 
pharmaceuticals in Jordan.  Zarour said that the government's 
commitment has been increasing and that there are regular raids on 
counterfeit drugs, including counterfeits of Hikma's brands.  Sboul 
added that while Jordan's pharmaceutical sector had struggled with 
IP in the past, those problems were growing pains as it learned how 
to operate under the WTO agreement.  Samir Mansour, Regional 
Representative, PhRMA, said that his organization believes Jordan's 
IPR model, including legislation, regulation, and enforcement, 
should be emulated in the region.  He said PhRMA registered Special 
301 complaints against Saudi Arabia, Israel, and Lebanon but had no 
IPR concerns with Jordan (ref A). 
 
Complaints about GOJ Bias against International Firms 
--------------------------------------------- -------- 
 
¶7. (SBU) While complimenting the GOJ's IPR approach, Mansour 
complained that the GOJ's business practices are biased in favor of 
local manufacturers and against international companies which 
constitute 70% of sales revenues.  He claimed pricing directives 
lacked transparency and pointed to a ten percent price advantage 
awarded to Jordanian companies bidding for government tenders.  He 
added that the government committee which identifies drugs for 
purchase by the country's largest customer, the Ministry of Health, 
had not added any new international drugs to its tenders in the last 
two years.  He said such delays erode the years of data protection 
and data exclusivity, as well as impact patient health.  Some of 
these new drugs also happen to the most profitable for the foreign 
manufacturers.  Mansour also questioned whether the absence of the 
newest medications at public hospitals would jeopardize Jordan's 
medical tourism sector. 
 
Visit Amman's Classified Website at 
http://www.state.sgov.gov/p/nea/amman 
 
BEECROFT