Strong Medicine

Pharmaceuticals are a success story for big business in Syria. But for quality assurance, consumers need more accountability, writes Andrew Lee Butters.

Just a few kilometres outside Damascus, the MPI Pharmaceutical Industries factory is easily missed alongside the car dealerships and cow pastures that line the highway to Aleppo. But once inside, past the airlock chambers and contamination-control rooms, MPI, with its glistening equipment and workers in white lab coats, is a vision of modern Syria.

MPI, started by the Attar family in 1986 as the first private pharmaceutical company in Syria, began its life with the simplest line of generic drugs: cough syrups and pain killers. Today it has license arrangements with American and European giants like Roche, Astra Zeneca and Novartis, and annually produces about 20 million packs of pills, including food supplements and a range of complex cardiology products. MPI exports to South America, Africa and the rest of the Middle East. The company’s Lebanese-born and American-trained head operating officer, Ramez Haddad, hopes that someday soon MPI will produce complex drugs for treating cancer.

That success hasn’t come easily. The company’s main problem is finding employees. The state universities do not produce suitably qualified workers, according to Haddad. So he prefers to hire recent graduates from pharmacology faculties and train them himself. This keeps him out on the factory floor well into the evening most work days. But Haddad is quick to share credit for the success of MPI. “We have to be fair,” he said. The Syrian government “played an important role in creating the industry.”

The pharmaceutical industry is one of the great success stories of Syrian economic reform. Thirty years ago, Syria bought all its medicine from abroad. Today, there are some 55 fully operational pharmaceutical companies in Syria and 87 percent of the pharmaceutical products used in Syria are made locally. The industry creates around USD 350 million worth or drugs annually. And most importantly, Syrian patients have easy access to a wide range of drugs at affordable prices.

The drug business is not without its problems. Quality controls may vary from company to company. Many consumers do not have access to reliable information. And the industry relies entirely on foreign research and development. But at their best, Syrian pharmaceutical companies make money, create jobs, and improve (sometimes even save) the lives of Syrian consumers.

The Syrian pharmaceutical industry was invented out of necessity. During the hard currency crisis of the 1980’s, it became impossible for the Syrian government – which up until that time had centralized control over this and most other industries – to import expensive foreign drugs and medicine. There were shortages of all kinds, and queues forming at pharmacies, even for things like aspirin. So the government decided to allow private businesses to invest in the industry, and to import equipment, raw materials, and experts from abroad, principle from the Far East and India. The goals (and result) was Syrian self-reliance. Though the country’s currency problems have faded, the government still maintains its protection over the sector: Foreign companies are not allowed to operate directly in Syria.

The industry today is a hodge-podge. There are two public companies, including Thameco, which has a built-in market: it provides drugs to the military and to government institutions. But most Syrian drugs are produced by private companies. These come in two flavours: those that make licensed brand name drugs and those that make generics, or non-branded drugs.

In order to have access to Syrian markets, some 35 multinational companies work with private local partners. The Syrian companies pay license fees to the multi-nationals, and using lower cost Syrian labour, produce cheaper versions of well known foreign products which are marketed in Syrian under both the local company’s name and the foreign brand. Foreign companies provide almost all the raw materials – the active and inactive ingredients – and the packaging, since how a drug is packaged affects its quality. (If, for example, the product is sensitive to light or exposure.) The Syrian partners are in effect, running assembly lines that put together parts they get from abroad.

Other companies produce less expensive generic versions of foreign brand name drugs, most often through Indian and the Far Eastern companies, which provide raw materials. There are sometimes important differences between licensed and generic products. Companies such as MPI, which produced branded drugs, often have the best quality control measures. That is in part because they have to meet the standards of their international partners or risk losing their license. The factory floor at MPI, for example, looks cleaner than a Swiss hospital, and employees are never allowed to work alone. There is always one person to perform a task, and one person to monitor and make sure there are no mistakes.

Theoretically, it is possible for companies that make generic products to make them just as well as their branded competitors. But not every company is as obsessed about quality control as they should be, and it is hard for consumers to know whom to trust, according to experts. “We have very good companies which produce products according to international standards,” said Dr Amer al-Mardini, Dean of the Faculty of Pharmacology at Damascus University, which tests many Syrian pharmaceutical products itself. “And we have some companies whose products are not so good.” Mardini declined to name which companies are producing below standard, and said he passed such information only to the Ministry of Health.

However, it is not clear that such information is being passed along to consumers. The Ministry of Health, which is responsible for monitoring the quality of Syrian pharmaceutical companies, has just one benchmark by which to judge companies, according to Dr Rajwa Jobaili, director of Pharmaceutical Quality Control at the Ministry of Health. “They are either safe or unsafe,” she said. This seems fair enough. If a company is not safe it should be shut down. And the Ministry of Health recently did just that to two different factories that failed to meet its standards, or Good Manufacturing Practices, which it developed with the World Heath Organization in 1994.

But it is often difficult for government regulatory agencies in any country to keep up with rapidly changing industries, and the Ministry of Health has its work cut out for it. From her constantly ringing mobile phone and the parade of staff members who come through her office, it is clear that Jobaili must be one of the country’s busiest bureaucrats. She has to approve all plans for new pharmaceutical factories, inspect existing factory lines, and take product samples to test for safety and quality. “We are overworked,” she admits. “We need more money and we need more training.”

The job of telling consumers which products are best often falls to pharmacists, according to Damascus University’s Mardini. But pharmacists are already playing an overburdened role in the Syrian society. Because many Syrians can’t afford regular visits to the doctor, most people get their medical advice from pharmacists, and about 80 percent of drugs sold in Syria are done so without prescriptions, according to Dr. Ahmad Samir al-Nouri, President of the Syrian Union of Pharmacists. This can lead to several problems. One is that pharmacists have a built-in incentive to sell as much as they can. The over prescribing of drugs and medicines is a problem that is particularly acute with antibiotics, which become ineffective if used improperly. And pharmacists can simply misdiagnose customers, in which case the quality of the drug is irrelevant. A product cannot cure what it is not designed to fix. Moreover the regulation of pharmacists appears to be weak. Like any professional organisations, the Pharmacy Union has standards that its members are supposed to uphold, but Samir said that the union has limited control over its own membership.

Inevitably, the lack of controls on how drugs are prescribed and delivered to consumers harms the reputation of the industry. Syrian pharmaceutical companies complain that they often see counterfeit versions of their products, sometimes shortly after they’ve been introduced. Even if such counterfeits are harmless in of themselves, it is not harmless for a sick patient to take medicine that does not work. “This wouldn’t be a problem if some pharmacists weren’t buying from disreputable sources,” said MPI’s Haddad. In such a low-information environment, Syrian consumers who can afford to, lean heavily towards foreign-produced drugs, or Syrian produced Western brands. “It’s a very brand conscious market,” said Haddad.

Another burden for the industry is the system of price controls that is set by the Ministry of Health. The Ministry, in cooperation with the private sector, first decides how much each product costs to manufacture, taking in consideration such factors as the higher costs for producers of licensed medicines. Drug makers are then allowed to charge an additional 15 percent, on top of which pharmaceutical wholesale distributors charge an additional 5 percent, and pharmacists add a final 22 percent, though the Ministry of Health may soon make some minor adjustments in these percentages. “Syria is a social market economy,” said Jobaili. “It is government policy to keep drug prices at a level where people can afford them.”

Pharmaceutical companies say they understand the need for the pricing system, but they complain that the government-set rates take too long to reflect rising costs. And with rising costs, pharmaceutical companies can find themselves forced to produce unprofitable products. “What can we do when a drug line becomes unprofitable?” said MPI’s Haddad. “You can’t withdraw it from the market. It’s medicine.”

But by limiting profits, the Syrian government is inevitably limiting incentive for some companies to improve quality controls and introduce new product lines, specifically complicated blood-derived products and cancer drugs. And with less profit motive, companies also have less incentive to put money into research and development so that one day there might be original Syrian innovations.

However, Syrian companies may be wise not to try to compete with the ability of huge multinationals to do research and development. Syrian universities cannot currently produce the quantity and quality of scientists available elsewhere in the developing world, like India and China.

In the end, the future of the industry depends not on innovation but on increasing exports. The Syrian pharmaceutical industry could continue to thrive as a low cost way to assemble first world products for third world markets. But in order to do so, it will need to address the quality control problems that affect the image of Syrian products. For his part, MPI’s Haddad says his company is ready for the future. “I’m in favour of more competition,” he said. “And I would rather compete with the best.”

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