Morocco, Algeria or Senegal? – Strategic drugs call for strategic thinking

Africa Report

By Fanny Rey

Local manufacturing is important, says Moroccan company Sothema’s managing director Lamia Tazi – and that’s precisely why she’s looking abroad.

Sothema's managing director Lamia Tazi is not shy of threatening to transfer Sothema's production to Algeria/Photo/All Right Reserved

SOTHEMA’S MANAGING DIRECTOR LAMIA TAZI IS NOT SHY OF THREATENING TO TRANSFER SOTHEMA’S PRODUCTION TO ALGERIA/PHOTO/ALL RIGHT RESERVED

Angry with the Moroccan government’s treatment of local pharmaceutical company Sothema, managing director Lamia Tazi has threatened to transfer its insulin manufacturing to Algeria.

The fight dates back to a 2010 tender launched by Morocco’s ministry of health for 2.5m doses of insulin that was won by Laprophan, a company that imports insulin from the Danish company Novo Nordisk.

Four months later, Sothema, the only Moroccan manufacturer of insulin, appealed to the competition commission. It accused its rival of dumping cheap products on the market.

But in its early February 2012 report, the commission said both companies “had abused a dominant market position” and were responsible for lowering prices.

The commission said Sothema and Laprophan had been slashing prices to win government contracts and were recouping their losses by overcharging on retail sales, sometimes at five times the normal price.

Tazi rejects the accusation: “We sell a dose at Dh85 ($10) and Laprophan at Dh196! And what is more, you have to subtract from this price the 30% margin for the pharmacists, the 10% for the wholesalers and the cost of promoting the drug.”

She raises the spectre of a foreign monopoly on insulin in Morocco but is not shy of threatening to transfer Sothema’s production to Algeria. “This plan dates from 2005 because Algeria applies a protectionist policy. Nothing has been decided yet. We are also in discussions with Saudi Arabia,” says Tazi.

The new government in Morocco has not reacted to the threat, but Tazi believes the foreign exchange deficit the country faces should encourage politicians to prefer local production.

“The World Health Organisation is favourable to the choice of national production for certain strategic drugs. Stopping local protection risks slowing down local investment, harming job creation and increasing demand for foreign exchange,” argues Tazi.

Sothema’s own Africa expansion plans could presumably damage local manufacturing in other countries. A Sothema facility in Dakar began production at the end of 2011, focused on anti-malaria drugs and drugs to slow down rates of infection.

“If the Senegal experience is positive,” says Tazi, “we will extend it to the other countries in the UEMOA zone [West African Economic and Monetary Union], where harmonised drug preferences represent a major boost for us.” .

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Posted on May 15, 2012, in Morocco News and tagged , , . Bookmark the permalink. Leave a comment.

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