Lebanon needs to boost its pharmaceutical industry

Local production of medicines currently makes up between 7 and 10 percent of medicines consumed in Lebanon, but there is potential to increase the share of locally-made generics. Bernard Tannoury, chairman of Lebanese pharmaceutical BentaPharma, said in a public statement that Lebanon’s 11 pharmaceutical companies could satisfy the medicine needs of the country, which could significantly reduce out-of-pocket and public spending for over-the-counter and prescription medications.

Tannoury also suggested that a greater reliance on locally produced medicines, rather than importing more expensive brand name drugs, could help reduce the deficit of Lebanon’s trade balance.

According to Lebanese Customs data, Lebanon’s total imports have greatly outpaced total exports by $16.6 billion on average for the period 2014 to 2017.

Lebanese total trade

While pharmaceuticals do not make for a significant portion of Lebanon’s total trade, any measure to reduce the total import bill can help. Lebanon is a net importer pharmaceutical importer, outpacing exports of locally produced medicines by nearly $1 billion per year for the period 2014 to 2017.

Lebanese pharmaceutical trade

Patented drugs, meaning brand name medicines, dominate the local market. According to the trade figures imports make up about 95 percent of the Lebanese medicine market. More uptake of locally produced generic medications, instead of costlier imported brand name drugs, could reduce the burden to out-of-pocket payers and for public and private insurance spending.

2012 data from Lebanon’s Ministry of Public Health, the latest figures available, show out-of-pocket expenditures accounted for 37 percent of health-related spending, with the rest covered by public funds and private insurance schemes. In dollar terms, this equates to $751 per capita with health expenditures accounting for 7.2 percent of GDP.

In 2019, Lebanon could introduce legislative or regulatory measures to boost the local pharmaceutical industry and to promote the use of cheaper generic medicines that have the same efficacy as the more expensive brand name drugs. In so doing, this could help the country chip away at its trade deficit while also reducing out-of-pocket, public and private insurance expenditures on medicines. At the same time, support to the local pharmaceutical industry could boost exports of Lebanese medicines to regional markets. State support could also allow sourcing new active ingredients to manufacture unique medicines, such as cannabis-based medicines, to kickstart a new branch of Lebanon’s pharma industry.

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About Jeremy Arbid