Market Brief for Egypt
The medical market is estimated at about $600 million. There is very little medical equipment manufacturing in Egypt. The use of sophisticated medical equipment is growing, but total expenditures are still small for a country of nearly 70 million. The most promising sub-sectors include dialysis equipment and lasers, medical/laboratory equipment, and MRI and ICU monitoring equipment. As hospitals increase in number, so too does equipment demand.
The government’s current five-year plan (2002-2007) allocated some $1.5 billion for upgrading more than 40 general hospitals, clinics, and laboratories in rural areas and to build ten new hospitals in the coming two years. The high technological content of American products, their solid reputation, and well-developed marketing systems contribute to the leading position of American suppliers of medical and clinical equipment in Egypt.
According to a January 2002 decree, the importation of used and refurbished medical equipment and supplies to Egypt is banned. The ban does not differentiate between the most complex computer-based imaging equipment and the most basic of supplies. At present, even new medical equipment must be tested in the country of origin and proven safe before it will be approved for importation into Egypt. The above regulations also apply to medical equipment that is being donated, not sold for profit. FDA approval is key to having medical products registered, although the Ministry of Health may still do additional testing on any medical device.
Egypt’s pharmaceutical industry is relatively mature. Growth is moderate: local production grew at a compounded annual growth rate of 11% over the last 6 years, while per-capita consumption grew at a rate of 9%. Egypt manufactures 93% of its pharmaceutical products, the balance which is imported includes cancer, cardiac, liver and renal medicines. Egypt exports 5% of production, which is low compared to other countries in the region.
Egypt is the largest producer and consumer of pharmaceuticals in the Middle East/North Africa region because of its large population, although it has relatively low per capita income and per capita drug consumption. Egypt is due to implement fully operable Intellectual Property Rights (IPR) systems under World Trade Organization Trade Related International Property Rights (TRIPS) obligations by 2005. TRIPS-compliant legislation, if enforced, will likely have a serious impact on the local pharmaceutical industry. The proportion of drugs protected by patents is estimated to be 50-60%, and multinational companies will either choose to export their final products to Egypt because of removal of tariffs, or open up new factories in Egypt with improvement in market penetration procedures. The main growth drivers for pharmaceuticals in Egypt are population and GDP growth.
Biotechnology priorities will include anticancer drugs (this alone is estimated to represent about 30% of the entire market), immunopotentiators, immunosuppressors, vaccines, sera, blood cells and plasma fractions, and transplantation technology. In the year 2001 alone there were 369 new products introduced in Egypt including treatments for HIV/AIDS, digestive disorders, infectious diseases, transplantation technology, auto-immune controls, eye conditions, infertility, cancer, genetic conditions, neurological disorders, blood disorders, growth disorders, respiratory disorders, diabetes, heart disease, and skin disorders. Development of new drugs for specific diseases currently focus on liver, kidney, cartilage, endemic, and skin diseases.
According to the Egyptian Ministry of Health's regulations, natural products, vitamins and food supplements are prohibited from importation into Egypt in their finished form. The only way this can be marketed in Egypt is by local manufacturing under license, or by sending ingredients and premixes to a local pharmaceutical firm to be prepared and packed here in accordance with specifications of the Ministry of Health. Otherwise, only local factories have the right to produce food supplements, and import raw materials to be used in the manufacturing process.
For more information, please contact Commercial Specialist Jihan Labib, U.S. Embassy Cairo; Jihan.Labib@mail.doc.gov
Market Brief for Israel
Total Israeli healthcare spending, having risen 5% annually between 1998 and 2003, was $12 billion in 2003. Annual per capita spending is $1,664, or 8.8% of GDP. National healthcare spending includes the cost of healthcare services expenditure on drugs and medical equipment, research, administration and investments in new equipment and medical infrastructure. A global comparison shows that the 8.3% of GDP spent on healthcare in Israel in 2000 compared favorably with Denmark, Australia, and Greece, and was close behind United States (13%), and Germany, Canada, Switzerland, and France (about 10%).
According to the National Health Law, public health services are provided to every citizen through four non-profit/non-government health insurance organizations known as “Sick Funds.” These four funds also operate their own in and out-patient facilities. The NHL does not include dental care, plastic surgery, pain management and alternative medicine, which are provided by the private sector and covered by complementary insurance plans.
Country Data
| Population | 6.6 million (2.1% annual growth rate) |
| Religions | Judaism, Islam, Christianity, Druze |
| Government | Parliamentary Democracy |
| Languages | Hebrew and Arabic (English is widely spoken) |
| Work Week | Sunday-Thursday |
Total Inpatient Institutions by Type and Ownership
| Long Term | General Care | Psychiatric | Rehab | Total | |
|---|---|---|---|---|---|
| Public | 136 | 8 | 1 | 1 | 146 |
| Private | 114 | 13 | 7 | 0 | 134 |
| Sick Funds | 14 | 8 | 2 | 0 | 25 |
| Government | 6 | 11 | 11 | 1 | 28 |
| Local muni | 2 | 0 | 0 | 0 | 2 |
| Mission | 1 | 6 | 0 | 0 | 7 |
| Hadassah | 0 | 2 | 0 | 0 | 2 |
| Total | 273 | 48 | 21 | 2 | 344 |
Total Inpatient Beds
| Long Term | 18,220 |
| General Care | 14,165 |
| Psychiatric Care | 5,589 |
| Rehabilitation | 639 |
Market Size & Trade Statistics (Millions of U.S. Dollars)
| Pharmaceuticals& Preparations | Medical Equip. | Dental Equip. & Supplies | Laboratory/Scientific Instruments | |
|---|---|---|---|---|
| Total Market Size | 1,105 | 540 | 60 | 220 |
| Total Imports | 663 | 400 | 40 | 220 |
| U.S. Imports | 70 | 200 | 12 | 55 |
Sources: Israel Central Bureau of Statistics of Israel, U.S. Department of Commerce
For more information, please contact Commercial Specialist (Mrs.) Yael Torres, U.S. Embassy Tel Aviv; yael.torres@mail.doc.gov
Market Brief for Jordan
Jordan is striving to become a medical hub for the Middle East, attracting patients from many parts of the Arab world who travel to Jordan for relatively high-quality care at comparatively inexpensive rates, and is constructing modern state-run and private hospitals and other medical facilities. Despite the rapidly growing attention to health care services in Jordan, it has yet to catch up with its 2.8% population growth rate. The Jordanian government is working on reforms to improve the long-term financial sustainability of the health.
Sales of medical equipment and service by foreign suppliers are expected to continue to increase during 2002-2006. The Ministry of Health (MOH) plans to continue to invest on hospital infrastructure throughout the country. Purchases will consist of a variety of equipment including sophisticated laboratory diagnostic, hospital infrastructure, and broadening of sophisticated medical equipment as well as other laboratory equipment (laboratory reagents), testing equipment, cardiology equipment, as well as hospital furniture.
The primary health care sector reforms will require renovating and adding medical diagnostic devices and therapeutic equipment; improving the quality of health care services; better quality of hospital services; upgrading hospital infrastructure; and development and implementation of health information systems, among others.
Note: Jordan’s Pharmaceutical industry is third largest exporting industry. This sector has modern plants, established regional marketing channels and a skilled, low-cost workforce. Local production grew at an annual growth rate of 15% in 2003. The total US pharmaceutical imports estimated at $9 million in 2003, however market opportunities may increase for US products as European pharmaceutical products become increasingly expensive due to the rise of the euro vis a vis the US dollar. There are opportunities for U.S. firms to explore licensing agreements and joint ventures with Jordanian companies. The demand for imported, patented medicines is expected to continue increasing.
Total expenditure on health, based on 2000 statistics is estimated at $325 Million, almost 9.12% of total GDP (annual per capita spending is averaged at $ 1,657). $168 Million of which is government expenditure on public health. In addition, USAID and WHO are major players, among other donors, in funding upgrades in healthcare services and supporting reforms to Jordan’s health care system.
Foreign products largely dominate the medical equipment market. Domestic production is limited, and the market relies heavily on imports. In 2002, the size of the market for medical upgrades was estimated at USD 7.7 million – USD 10 million, while the Jordanian market for medical equipment and supplies was estimated to be $94.1 million. In 2001 US took over from Germany as the leading supplier, with a 21% share of the market. The medical equipment and services sector in Jordan is rapidly growing, and US suppliers and manufacturers of medical equipment are strongly encouraged to compete aggressively in this market. Jordan’s health care system is regarded as one of the best in the region. Jordan is a leader in various fields of medicine in Cardiology and Cardiovascular Surgery, Laparoendoscopic surgery, Kidney transplantation, Ophthalmology, Neurosurgery, Plastic surgery, Oncology and many others. Opportunities exist in developing aesthetic procedures and related products.
Demand for medical equipment and services should increase within the next few years with increased number of government and privately owned hospitals; new equipment for hospitals under construction; renovated equipment to replace existing equipment in functioning facilities, upgrading clinics and health care structures, health insurance and shift from older conventional methods to modern treatment method in order to better the quality of their medical care.
US companies will remain competitive in the high-end of the market as technology advances. These products are usually perceived to be of high quality, at a reasonable prices, which is further enhanced by the drop in the dollar vis a vis the Euro, making European imports increasingly expensive. Furthermore, local agents for American companies provide quality maintenance and parts, and the after-sale support is often seen as exceptional.
Attractive projects expected to come on line within the next five years in the private and public sector, which are under construction and/or in the pipeline include (among others),
Prince Hamzeh hospital - 450 beds;
Prince Hashem Hospital, the Royal Medical Services/Military – allocated JD 8 million ($11.2 million) to establish outpatient clinics and other facilities;
Drugs Quality Control Laboratories - equipment to be tendered;
Building offices for the Food and Drug Corporation – at a cost JD 6.5 million ($9 million);
Yarmouk Hospital in the Bani Kinana Region - 56 beds, at a cost of JD 5.39 ($7.58);
Thiban Hospital - 30 beds;
Haud Al-Baqa’ Hospital - 80 beds;
Jerash Hospital, under extension;
Maan Hospital, Princess Basma hospital in Irbid – under construction; Zarqa Hospital – in the pipeline to be constructed at a cost of JD 35 million ($49.4 million);
Baqaa Hospital near Aqaba - to be construction at a cost of JD 12 million ($ 17 million);
Quweireh Hospital near Aqaba - to be constructed at a cost of JD 5 million ($7 million);
Al-Hussein Hospital in Salt - will be moved to the new building in the same area, estimated to cost JD 15 million ($21 million);
Renovation and expansion of hospital facilities in Karak Hospital, Al Eman Hospital in Ajloun, and Muath Ben Jabal Hospital in North Shuneh;
Queen Alia Heart Institute extension/ Military - 70 beds;
Pediatric Children’s Hospital-National One/ Military; the Royal Medical Services are seeking financing for a national pediatric center to be constructed on the premises of the Royal Medical Service, King Hussein Medical Center;
University of Jordan Hospital, equipment upgrade, will spend JD 1.5 million ($ 2 million) to upgrade its electromechanical equipment, JD 4.5 million ($6.3 million) to buy new medical equipment and furniture and JD 1.5 million ( $2 million) to furnish a new floor;
Construction of a health center in Deir Abi Saeed in Irbid Governorate at the cost of JD 139,000 ($196.327) drawn from the government sponsored Socio Economic Transformation Program (SETP);
Construction of 3 health centers, in the Tafileh Governorate for which it allocated JD 500,000 ($ 706,214);
Upgrade medical equipment by the Royal Medical Services/ Military – allocated JD 15 million ($ 21 million);
Furnish a children hospital by the Royal Medical Services/Military – allocated JD 22 million ($ 31 million);
Modernize and expand infrastructure at Al-Hussein Medical Centre/RMS – Military - allocated JD 20 million ($20 million);
Completion the second and third stages of the computerization project for RMS/Military – allocated JD 2 million ($2.8 million);
Consulting hospital at Wadi Saqra/Private - 105 beds, is tendering the Medical equipment starting with Kitchen, laundry and Sterilization Department ;
Al-Bashir renovation and remodeling/ MoH - 850 beds; Under renovations part,
Al-Bashir Hospital is undergoing major construction and rehabilitation works (renovation and extension program) as part of the health sector reform project. The World Bank is financing the project and has largely completed phase one. Phase two, of the project to rehabilitate Al-Bashir Hospital in Amman at an estimated cost of JD 5 million ($ 7 million) and involves the construction of major facilities including buildings, kitchens, and car parks. And will create 350 additional beds for internal medicine and general surgery. Phase three, which will also be started during this period will add 150 extra beds for specialized surgeries (a renovation of surgical and interior wards, whose capacity will be expanded to 500 beds at a cost of JD 15);
Prince Rashed Hospital in Irbid, Prince Hashem Hospital in Zarqa and Drugs Quality Control Laboratories – both hospitals and the laboratory will go thru major renovation work that is related to infrastructure services and upgrades to the medical equipment/MOH; and
Ministry of Health second stage of a project to computerize its administration – the plan will a cost of JD 3.3 million ($4.66 million), equip a JD 5.6 million ($7.9 million) public health lab, establish 251 health centers at a cost of JD 2.5 million ($3.5 million) and provide existing ones with ambulances and equipment worth JD 8 million ($ 11.2 million).
For more information, please contact the U.S. Commercial Service in Amman, Commercial Specialist Muna Farkouh, muna.farkouh@mail.doc.gov .
Market Brief for Lebanon
Lebanon is the leading importer of pharmaceutical drugs in the Levant area with over 50 pharmaceutical importers. Some 5,976 types of drug are imported from more than 508 factories in 25 countries constituting between 92 and 95 percent of the total available in the market. In 1999, $275 million worth of pharmaceutical drugs were brought in. The number went up to $280 million in 2000 and to $294 million in 2001, which generated some $7 million worth of Customs duties.
There are eight companies in Lebanon that manufacture pharmaceuticals and export around $4 million worth of pharmaceuticals yearly mostly to Arab countries. In 1998, locally manufactured drugs made up 5.7 percent, or $14 million, of all drugs consumed.
The pharmaceutical market generates around $400 million every year in retail sales. There are around 1,405 independent pharmacies and hospital-based pharmacies, of which an estimated 200 of those outside hospitals are working without a license. Among the regulations governing pharmacies is one that is meant to control their number. It is now required that a minimum of 300 meters be maintained between each facility.
The Government of Lebanon continuously tries to control and limit medication costs, and a proposal to open up the facility to import drugs away from exclusive agencies is seen as increasing competition and therefore reducing costs. The cost of health service is generally high. The market for medications, which accounts for 35-40 percent of health care expenditures, is largely unregulated. Local industry provides only a small share of the market. Imported medication is expensive and not wholly controlled. In any case, the government formed the National Drugs Office (NDO) to handle direct medicine imports to reduce the fees charged by exclusive dealers. NDO acts as an importer of basic drugs and its mandate allows it to manufacture pharmaceutical drugs on low profit margins. To decrease the amount of drugs in the marketplace, the NDO in 1992 selected a list of essential drugs, including 290 used to treat the most common diseases.
The supply of physicians has been growing at a rate of around nine percent annually since 1993, a rate that greatly exceeds the rate of population growth of 1.9 percent per year. In 2001 there were 8,598 registered doctors, or around 250 doctors for every 100,000 residents.
Lebanon has 144 medium sized private hospitals with 10,137 beds, and 17 large private hospitals with 3,378 beds. The rehabilitation and development of the public health sector saw the addition of one new public hospital in 2000 and the rehabilitation of eight others. In addition, the Lebanese government is supervising the setting up of a drug quality control laboratory, funded mainly by the World Bank and by Saudi Arabia.
For more information, please contact Commercial Specialist Naaman Tayyar, U.S. Embassy Beirut; Naaman.Tayyar@mail.doc.gov
Market Brief for Turkey
Market Size
Turkish imports of medical equipment should amount to $430 million by year’s end 2003 while production is estimated to reach USD 1.3 billion. The Republic of Turkey witnessed growth in the domestic medical device industry as imports fell as a result of the 2000 and 2001 financial crises. The United States maintains the largest market share among imports and is strong in radiology, surgical equipment and supplies, pathology and laboratory equipment, and hospital furnishings.
Turkey relies on imports for a large portion of its sophisticated medical equipment needs. The "Health Reform Project" of the 1990's foresees a gradual privatization of hospitals and the introduction of the "family physician" system. The reform program comprises service delivery, finance, administration/management, human resources, the establishment of a national health academy and the creation of a management information system in the health care services sector.
The largest single buyer of medical products is the Ministry of Health and its healthcare facilities. Teaching hospitals, university hospitals, and the private hospital system, as well as private physicians' offices are also among potential buyers of U.S. medical products.
Market growth for medical products is expected due to expansion of private sector health care services, rising expectations among patients, and efforts of some private hospitals towards attracting foreign patients. Modern private hospitals in Istanbul, Ankara and Izmir have set new standards for the health sector in Turkey. Many existing hospitals are launching renovation projects in order to compete. The private sector strives to import equipment with advanced technology, an area where the United States has a good reputation.
U.S. suppliers are expected to maintain their present lion's share of the import market despite the elimination of customs tariffs applied since January 1996 to EU-origin goods. This is because U.S. products are already well and favorably known. Turkey is also an excellent stepping-stone for U.S. suppliers to the markets of countries like Georgia, Azerbaijan, Uzbekistan, Tajikistan, Kirgyzstan, Kazakhstan, and Ukraine.
Turkey's demand for medical products is expected to continue to grow in the next several years. In 2003 there are 1,240 hospitals in Turkey with a total bed capacity of 175,000. Average capacity utilization is 60 percent. An important new development is towards receiving incoming patients from European or Middle Eastern countries for treatment in Turkish hospitals.
There is a strong trend of privatization in Turkey's health sector - although 80 percent of total hospital bed capacity is provided by government agencies. A larger number of private hospitals being built offers increased sales opportunities and less complicated procurement requirements vis-à-vis the often-confusing tender requirements of established by government agencies.
Market Strategy
Most medical equipment suppliers, however, prefer to appoint national and, usually, exclusive distributors in Turkey. The distributor/importer is knowledgeable about shipping products into Turkey, and about building a good reputation with Turkish customers. Currently a large majority of U.S. manufacturers use exclusive distributors to export to Turkey. Prospective agents should be selected on the basis of their organizational and technical ability to support a manufacturer's products in Turkey's own unique national environment. They should be evaluated over time to be sure that they have also earned the respect of customers. The distributor is responsible for advising the manufacturer about the customers' preferences and specific sales requirements. In interviews with hospital buying offices in Turkey, a manufacturer's performance was equated with the performance of its distributor. In short, a good distributor is the single most important key to success in this market. The critical need, therefore, is to be cautious in the selection of a Turkish distributor.
In Turkey, medical equipment sales are highly dependent on the seller's extension of credit. Cash payment is rare. An effective sales promotion tool is to offer a financing package with the product. Deferred payment terms are common, usually tied to installments programmed in accordance with revenues expected from the equipment's use.
Training in conjunction with sales of advanced-technology equipment is an important tool for market access. Student exchanges, or scholarships for Ph.D. degrees on U.S.-origin high-technology equipment are other possible means of improving sales. Conferences/seminars in cooperation with agents and importers are also recommended as a means of supporting physicians and thereby increasing market share. The technical and financial strength of the local distributor, availability and cost of service and parts, and length of guarantee period are also important.
Statistics
Market size estimates (US$ millions):
| 2001 (actual) | 2002 (actual for first 11 months) | 2003 (estimate) | 2004 (estimate) | |
|---|---|---|---|---|
| Total Market Size | 1,390 | 1,503 | 1,695 | 1,950 |
| Total Local Production | 1,000 | 1,150 | 1,300 | 1,500 |
| Total Exports | 20 | 32 | 35 | 50 |
| Total Imports | 410 | 385 | 430 | 500 |
| Imports from the U.S. | 155 | 162 | 180 | 210 |
For more information, please contact Commercial Officer Erik Hunt, U.S. Commercial Service Ankara; Erik.Hunt@mail.doc.gov
Market Brief for West Bank & Gaza
The population in the Palestinian West Bank and Gaza is 3.6 million. According to mid 2003 figures, the growth rate is 3.9% and about 47% of the population is 14 years or younger. GDP in 2002 was $3.396 billion.
The size of the medical equipment and supplies market in the West bank and Gaza has been estimated to $20 million annually. The figures change depending on international donors’ support for specific health projects carried out in the area. The market is made up of medical capital equipment, medical supplies, and lab equipment and lab disposable supplies. There is no domestic production of medical equipment and supplies, so Palestinians depend 100% on imports. Germany and the UK are the primary sources, and are followed by European and Asian countries, the United States and Israel.
The U.S. share of the market is roughly 15% of the total, but two factors are expected to change the percentage: the falling value of the U.S. dollar vs. the Euro that makes U.S. exports more competitive and the continued support by USAID of healthcare projects in the West Bank and Gaza. USAID regulations stipulate that funds can be spent on American-made equipment only.
There are no import duties on U.S.-made goods entering the West Bank and Gaza, however products are subject to value added tax that is currently 18% and purchase tax. In order to benefit from duty free entry, products must have a U.S. certificate of origin for exporting to the West Bank and Gaza. Also prior to shipping approvals must be obtained from both the Palestinian and Israeli ministries of health for any medical product coming into the area.
The majority of the Palestinian population relies on medical services provided by public hospitals that are run by the Palestinian Ministry of Health under a general health insurance program. The Ministry is in charge of providing all medical equipment and supplies that are paid for mostly through international donors support programs. The total number of public and private hospitals in West Bank and Gaza is 72 and total number of beds is 5,000.
U.S. Commercial Service West Bank and Gaza Contact:
Issa Noursi, Commercial Specialist
19 Keren Hayesod, Jerusalem
Tel: 972-2-625-5201, Fax: 972-2-623-5132
E-mail: issa.noursi@mail.doc.gov