Health & Education

Pharma Land

Incentives for pharmaceuticals in Lebanon

Lebanon has always been the region's leader in all things health related. Its pharmaceutical industry is no exception, and the country's incentives for international pharma companies to operate, manufacture, and distribute in Lebanon are only getting stronger.

Lebanon is the indisputable hub for pharmaceuticals distribution in the Middle East. With an estimated market of USD1.6 billion and an annual growth projected at 6.2%, the pharmaceuticals industry is expected to have a value of USD2.2 billion by 2020. Despite being a reduced market with less than 4.5 million potential consumers, there are 175 pharmaceutical companies currently operating in Lebanon through distribution centers, import hubs, and manufacturing facilities. The industry represents 3.15% of Lebanon’s GDP, the largest portion for any country in the MENA region.

For a number of years now, Lebanon has served as a platform for multinational pharmaceutical companies to export to other countries in the Levant and the Gulf region. Global pharmaceutical giants such as GSK, Merck, Abbott, Pierre Fabre, Novartis, and Pfizer all operate in Lebanon through distributors that coordinate their operations to other Middle Eastern markets from the cedar nation. Despite the recent complexities the industry experienced due to the conflict in Syria and Lebanon’s own political stagnancy, pharmaceutical exports from Lebanon peaked again to reach a total USD55.3 million in sales during 2015, or an increase of around 30% in comparison to the USD38.2 million sold during 2014. Iraq, Saudi Arabia, Jordan, and the UAE represent the bulk of pharmaceutical exports from Lebanon, with 57% of total sales.

There are many factors that account for Lebanon’s position as a pole of attraction for pharmaceutical companies. The country’s universities offer a good range of undergraduate and postgraduate degrees in medicine, pharmacy, and chemistry, placing Lebanon far ahead of its peers in the Arab world. Second, the country has always been known for its advanced private healthcare system and for being the leading destination for health tourism in the Middle East; Lebanon possesses a ratio of beds-to-population of 35 for every 100,000sqm, and a ratio of 35 physicians for every 10,000 patients, again leading the ranking in the MENA region. Finally, Lebanon’s privileged position in the epicenter of the Middle East, Africa, and Europe accounts for the vast opportunities the tiny nation has to serve as a distribution center.

But further than its inherent assets, Lebanon has also structured a particular strategy to incentivize the flow of international pharmaceutical companies into the country. The Lebanese government has pushed through comprehensive legislation to protect intellectual property rights for pharmaceutical companies and established a special police unit to supervise the enforcement of this legislation, which has been in place for 17 years now. Through the Investment Development Authority of Lebanon (IDAL), pharmaceuticals are offered tax exemptions that can go up to 100% for a period of 10 years, while the Ministry of Industry offers 100% exemption on R&D expenditures and 50% exemptions on all taxes incurred from exporting activities to third-party markets.

Regarding the legislation implemented to incentivize the establishment of pharmaceutical distributors in the country, the Ministry of Public Health has also been active in increasing the legislation for pharmaceutical imports, commercialization, and distribution across Lebanon. On this line, Armand Pharí¨s, President of the Lebanese Pharmaceutical Importers Association (LPIA), told TBY that “legislation in Lebanon is moving in two directions: one that addresses the good storage and distribution practices in an advanced way, and another that calls all players to be creative and prepare for the challenges of bio-pharmaceuticals and patient-oriented therapies.” With a local production that represents less than 10% of the total consumption of medicines in the country due to its high costs, the strategy for Lebanon points to incentivizing multinationals to distribute from its territory.

You may also be interested in...

Economy

Cost of Change

Lebanon's Protests and the Economy

View More
Beautiful,Woman,Standing,Outdoor,Wearing,Professional,Business,Formal,Fashion.,Arab

Telecoms & IT

What to Wear?

Lebanese fashion

View More
Lebanese,Village,Villa,With,Brick,Roof

Real Estate & Construction

More to Offer

Real estate growth

View More
42f35a4a-50d0-412f-9e08-be971a557ae4

Health & Education

Modern Thinking

Technology in schools

View More
f7e0467e-48de-4d86-91f4-e9c3f1a897f6

Transport

Open the Gateway

Port of Tripoli

View More
Tech Hub

Telecoms & IT

Tech Hub

The tech start-up scene

View More
Mom & POP

Industry

Mom & POP

Family businesses

View More
Stairway to prosperity

Finance

Stairway to prosperity

Youth and finance

View More
Not Easy Being Green

Green Economy

Not Easy Being Green

FOCUS Electricity sector reform plan

View More
I Have a Plan

Economy

I Have a Plan

Lebanon’s economic vision

View More
View All Articles