Paper short abstract:

Through greater regional integration, Maghreb States could expand regionally the scope of their domestic pharmaceutical industry. This paper discusses policy options demonstrating potential impact on value chain development, highlighting the role of the States in unlocking regional markets.

Paper long abstract:

Maghreb countries (Algeria, Morocco, Tunisia) are experiencing a transformation driven by demographic growth, rising income and educational attainment, urbanisation and social pressures for greater democracy. These developments are accompanied by shifts in lifestyle patterns, bringing about demographic, nutritional, epidemiological transitions and stressing the need to meet domestic demand in terms of jobs, food security, and healthcare. The pharmaceutical sector - a traditional sector in the three countries - offers an opportunity space, for it could concurrently contribute to industrial transformation and deal with the growing demand for medicines in the region, carrying both export-oriented and import-substitution opportunities. Maghreb States have a critical role to play, not only individually but collectively. Regional pharmaceutical markets are influenced by idiosyncratic factors that give local producers a competitive advantage (consumers proximity). However, being subject to increasing returns to scale, the pharmaceutical industry in the Maghreb region, one of the least integrated in the world, is hindered by the narrowness of domestic markets. Creating a regional market would help local value chains scale up and upgrade, as this paper argues addressing two cooperation options that demonstrate how the nexus between the States and the industry could materialize in the promotion of regional value chains: 1) harmonization of the rules on the granting of marketing authorizations for pharmaceutical products; and 2) strategic implementation of a joint procurement policy for pharmaceuticals inputs and products. The paper shows that such initiatives could require protectionist measures, but most importantly, greater cooperation between Maghreb States and the domestic private sector