Tax breaks and the promise of preferential treament for locally made drugs were key to attracting Pfizer to the UAE says DuBiotech.
Last week Pfizer partnered with Abu Dhabi-based drugmaker Neopharma in a joint venture that will see the latter firm make three or four of the US drugmaker's products for markets in the region.
Marwan Abdulaziz, executive director of DuBiotech - the UAE life science freezone, and part of TECOM Investments’ Science Cluster - said the deal is indicative of the growing trend of international investment in the country.
He told in-Pharmatechnologist.com, “the UAE market has reached a point where local manufacturing makes sense,” citing the rise in population over the past ten years, and the country's strong economic growth.
Though the pharma market is still relatively small (worth about $2bn a year, according to Abdulaziz), multinationals are keen to invest, he said, with Pfizer’s partnership coming a year after Merck Serono penned a deal that sees Neopharma manufacturing its diabetes drug Glucophage for the local population.
“Other multinational partnerships will be announced in the next few months, with very similar style deals coming through,” Abdulaziz told us, with Pharma keen to benefit from Government concessions and incentives.
“Locally made drugs are given a preference over imported products, as part of a very clear mandate from the Government,” he said, adding there were also tax benefits for home-grown medicines.
“[DuBiotech and the Government] are encouraging this in order to reduce the reliance on imports. Currently about 90% of drugs in the UAE are imported but we’re trying to reduce this to around 70%.”
We asked Abdulaziz why Big Pharma firms were collaborating with local manufacturers rather than setting up their own production plants, to which he said partnerships were a stepping stone to further future investments.
“Companies like Pfizer do not like to invest capital expenditure [in the UAE] but prefer partnerships with existing companies. There is a logical step for them to start with a joint venture and then later invest directly.” He added Pfizer had no manufacturing site of its own in the UAE but had invested in a large regional headquarters, employing over 200 people.
Furthermore, the partnership model represents the third stage of external investment in the UAE’s burgeoning pharma industry, he continued.
Firstly, he said DuBiotech has encouraged and seen investment in sales and marketing. The second step is ensuring the supply chain and distribution platforms. Thirdly is local manufacturing – as in the case of Pfizer; and fourthly, he continued, the UAE has seen a surge of interest from both pharma and CROs for clinical trials, especially for larger molecule products.
Ergomed was the first CRO to have an office in the country in 2007, whilst Clintec set up space in Dubai citing top ten pharma’s presence . In 2012, the world’s largest CRO Quintiles added capabilities in the region through a partnership with local firm Dayarn pharma .