BMI View: The attractiveness of Jordan's pharmaceutical and healthcare markets in the short term will be shaped by the prevailing political and economic conditions. The perceived worsening of the country's regard for intellectual property (IP) rights will deter some investors, especially given the relatively modest overall market size - when compared to some of its regional peers - and the increasing usage of generic medicines. Nevertheless, imports will continue to supply most of high-tech medicines.
Headline Expenditure Projections
- Pharmaceuticals: JOD448mn (US$632mn) in 2011 to JOD486mn (US$686mn) in 2012; +8.5% in local currency terms and +8.6% in US dollar terms. Forecast broadly unchanged from Q112.
- Healthcare: JOD1.73bn (US$2.45bn) in 2011 to JOD1.90bn (US$2.68bn) in 2012; +9.3% in local currency terms and +9.4% in US dollar terms. Forecast broadly unchanged from Q112.
- Medical devices: JOD112mn (US$158mn) in 2011 to JOD123mn (US$173mn) in 2012; +9.4% in local currency terms and +9.5% in US dollar terms. Forecast broadly unchanged from Q112.
Business Environment Rating: Jordan's composite Pharmaceutical Risk/Reward Ratings (RRRs) score for Q212 is an unchanged 48.8, which again places the country 10th out of the 30 markets surveyed in the Middle East and Africa (MEA) region. Jordan's rewards and risk scores are relatively evenly balanced, although risks are considered elevated, as Jordan was named on the Watch List of the Pharmaceutical Research and Manufacturers of America (PhRMA)'s Special 301 submission report for 2011. Jordan is showing little sign of being able to improve its regulatory environment in the short term, especially due to political and social tensions.
Key Trends And Developments
- In November 2011, it was reported that Jordan's Ministry of Health will increase the minimum age limit of diabetes patients receiving free insulin treatment from 16 to 24. Kamel Ajlouni, the director general of the National Centre for Diabetes, Endocrinology and Genetics, has expressed concern about the rise in diabetes cases in the country. He said the disease affects about 250,000 people, 7.5% of the population, and is this is expected to increase to 3mn by 2050.
- In January 2011, the King Hussein Cancer Centre (KHCC) in Jordan entered a partnership and twinning deal with the Hassan II University Hospital in Fes, Morocco, to increase the level of care offered to patients in the region. The agreement is for close partnership between the two facilities, according to a KHCC statement. It also involves staff training, capacity building and experience sharing, specifically in the segment of quality assurance and hospital accreditation. The Hassan II Hospital is initiating the process of securing accreditation as a general hospital from the Joint Commission International.
- According to the State of Jordan's Population Report 2010, the Health Insurance Fund lacks sufficient financial resources to expand health insurance coverage in the Kingdom, reported Jordan Times in September 2011. Approximately 150,000 citizens of the Kingdom are still in need of health insurance, according to the Health Minister Abdul Latif Wreikat. Moreover, family income is set replace geographic location as the primary indicator for the inclusion of families under public health insurance in Jordan,
BMI Economic View: Political turmoil in the Levant has led us to revise down our forecast for real GDP growth in Jordan in 2012, from 3.4% to 3.1%. While we remain relatively sanguine about the prospects for private and public consumption, the uncertain political climate is likely to weigh on the outlook for fixed investment and exports in the near term. The government will also have to address its fiscal position, which has significantly worsened in the past months. Additionally, for the most part, the risks to our view are to the downside. In particular, the growing conflict in Syria has the potential to result in considerable instability in the region.
BMI Political View: Following a series of political and economic reforms by the government in the recent years, we maintain that Jordan's long-term political outlook is among the most stable in the region. Nonetheless, we highlight that the social uprisings that emerged in the region at the start of 2011 are indicative of the threat that low living standards and lack of political freedoms - both features that Jordan shares - pose to the long-term sustainable stability.