Interview with Salim El Guermai, CEO of Galenica
What is your overview of the health of the pharmaceutical industry here in Morocco and your outlook for 2014 and beyond?
Morocco has a very good development according to its pharmaceutical industry and to the pharmaceutical sector, as Morocco has been considered as European territory according to the quality of the drugs we can find manufactured in Morocco or imported and marketed in Morocco. We have a very clear laws and very clear regulatory aspects of the sector, which give a very good safety for the citizens. I think that it's a very good opportunity because it's good for the health of the Moroccan people and Morocco in general. It's also very good for the sector as the rules are the same as the ones you can find in Europe or in the US more or less. That means that Morocco can figure as an attractive country for companies which would be interested in giving some contract manufacturing or trying to install their activities in Morocco. So I think that Morocco is doing well in the pharmaceutical sector. The distribution is very wide, you can find drugs everywhere in the country, we have around 12,000 pharmacies in Morocco, 45 wholesalers, around 35 pharmaceutical laboratories, and around 5,000 drugs marketed in Morocco with European quality. And all the actors of the sector are very well identified and they have very clear responsibilities. So I think the sector is very well managed and very clear.
Do you see generic drug manufacturing in Morocco as a promising niche?
Can you give us a little brief history of Galenica; how it started, the founders, and some of the accomplishments that you have achieved in the course of these years? Is your strategy to become the leading generic drug manufacturer in Morocco?
Galenica was established in 1978 in Casablanca, and it has been created by Mr El Guermai Abdelghani. He is a biologist and pharmacist. And since the very beginning, the focus was on the manufacturing of pharmaceutical drugs for human, and the main objective was to offer to the Moroccan people drugs of quality and at an affordable price. This was the very beginning of Galenica pharmaceutical company. Galenica has developed gradually a wide range of products, according to the needs of the market, private market and of course public market through the tenders of the ministry of health, according to the needs. So mainly the first drugs were belonging to the antibiotics and pain management, metabolism, and also drugs belonging to some national programs, according to anti-tuberculosis program, fight against tuberculosis. Since the seventies and the eighties, the program to fight against Tuberculosis was already implemented in Morocco, and it was done with Moroccan health ministry MOH and WHO. And since the seventies this program is still implemented and working well with very nice results. So Galenica has developed its activities and has been able to be efficient in the development of drugs, the marketing of drugs and the sales in Morocco, but also in foreign countries, mainly Arabic countries, and West African French-speaking countries. So actually Galenica is known in foreign countries like Senegal, Mali, Cameroun, Guinea, and also some Arabic countries like Libya, Iraq, Yemen, Algeria. But depending on the change of flows from one country to another, to the change of the market, of course our activities in the foreign sales are changing, but we are trying to do our best.
What type of drugs are you manufacturing for the local market, and where do you see growth the most, what are the areas that are growing? Do you see generic drug manufacturing in Morocco as a promising niche?
Actually in Morocco and in some other countries we are living a kind of an epidemiological transition. In the seventies and eighties we used to have a very important growth in the antibiotics, pain management, metabolism, and actually these kinds of drugs are not as growing as they used to do before, and actually we assist to the growth of other kind of drugs, like CVS: cardiovascular drugs, and CNS. And of course we are working attached to this evolution of the market, so we have a wide range of course of antibiotics and other products, and now we are working on CNS and CVS products, to be able to respond to the needs of the market and to the evolution of the market. Also we are trying to work on generic products which are freshly coming in the market as generics, as the APR are not anymore marketed, I mean protected by patent, we are always searching for what is the good API to follow and to work on.
Does Galenica hold any patents, any international patents?
No, we do' make any kind of fundamental research, we are more specialized in the pharmaceutical development and we are also good in generics drug manufacturing and in combinations. So we are very good at manufacturing process development, formulation development, and this is our work, we do' have the capacity to do fundamental research. Our main job is pharmaceutical development.
Do you have any plans to expand beyond the countries you have mentioned—beyond the West Africa and the Gulf?
We have been present in the Arab health Event in Dubai, and we met many people from the GCC countries. We also have participated to CPHI, as exhibitors for three times, and with many contacts, in West African countries, in also African countries, English speaking countries, and also with countries from east Europe, and we found some needs there. These countries are looking for some specific drugs or maybe some affordable drugs, and I think we can respond to what they are looking for, we can help them, we can work together. There is another way of development of our activity, to figure as contract manufacturers, and of course I think that Morocco, according to its very good geographic situation, to its location, can figure as a very good partner in the contract manufacturing for African countries, for European countries and Arabic countries.
You mean just to produce for another laboratory?
Yes, and recently we have been visited by the WHO, and this was according to the programs they have in some African countries, which are facing some problems in the logistics and in the supply of drugs involved in the programs, and they found that Morocco can help them a lot, as they found in Morocco professional manufacturers like Galenica or others, which can support them in the manufacturing of drugs, anti-TB drugs or even other drugs.
Are you looking for partnership with other entities? Is there a need for investment, are you looking for international investors basically eager to expand to worldwide market?
Our capital is not opened, and we do' need any kind of specific financial help, we can support our development. But of course we are interested in having some partners for developing our activities, to have other products, to manufacture for other laboratories, and also maybe to find some kinds of Joint Ventures for finding new markets and I am sure that there are some opportunities.
There is a controversy recently about the government trying to control the drug prices; can you talk to us a little bit about that?
Since the very beginning, since the sixties, the prices are decided by our MOH. And there was a rule saying that the prices of the drugs should not be more expensive than in the countries of origin. Unfortunately, this rule has not been respected, and we found some drugs which were more expensive. This work had to be done, but not all the products were concerned. Many people were complaining about the fact that some prices were too high. At the same time, the afford ability of the drugs was not good enough, not because the prices of all the drugs were expensive, but because most of the Moroccan people could not afford the prices of the drugs. Even if we had reduced the prices of 20%, the drugs would have stayed to much expensive for them. Because the problem in Morocco is not that the drugs are expensive, it's the fact that 65% of the population does not have any medical insurance, so if they need to buy drugs, they will do it with their own money. And this is the problem. So instead of trying to find a way to help people getting medical insurance, and being declared in their companies, the government worked on reducing the prices of the drugs. And the effect is really negative, because the turnover of the pharmaceutical companies will get down for 10 to 20% depending on the companies. And now we can find some companies which are firing people, which are thinking about leaving Morocco, and this is a very bad situation for the manufacturers. And I hope that the government will find a way to secure the situation for the pharmaceutical manufacturers. Because we need some safety and we need some decisions to help pharmaceutical industry.
What are some of the challenges and opportunities that you see in your sector?
Morocco can serve as a very good hub for the pharmaceutical industry and this is thanks to its location: North Africa, south of Europe, most of the people can speak French, English and Arabic. Of course this is a good opportunity. A very good fact also is that Morocco has a pharmaceutical culture, and this is very important because Morocco manufactures its own needs in drugs at a level of 85% since maybe 20 or 25 years. Morocco is self-sufficient in drugs. This is a very good point showing that Morocco is capable of manufacturing good drugs, European level quality, and it has also a good manufacturing capacity, so it can figure as a good partner to supply drugs for other countries. We can also say that some Moroccan companies can be in partnership with foreign laboratories for contract manufacturing or even for finding foreign markets. We have a very good capacity and a very good experience.
Finally I would like just to ask you about the vision that you have for Galenica.
Galenica is getting more and more efficient and professional, and we try to be very attentive to the evolution of the markets, to be able to respond to the needs and to support health in Morocco, especially in Morocco which is our major market, and also other countries in which Galenica is registered and is selling its own drugs. So I can be only optimistic about our development, and we have developed a very good expertise and know-how in the manufacturing of drugs and we feel optimistic about future.