Medical/pharmaceutical industry

2nd Korea-Tunisia-Africa Business Forum (Healthcare & Pharmaceuticals)
Embassy of Tunisia

We would like to share with you the preliminary findings of the 2nd Korea-Tunisia-Africa Business Forum (May this year) on the medical and pharmaceutical sectors (especially cosmetic products such as Botox and fillers), which will be one of the five focus areas of the forum, including the structure and status of the Tunisian market, and the prospects for expansion into the Maghreb and African commercial markets.
We look forward to the participation of medical and pharmaceutical companies.

1. Identification of structural issues in the Tunisian medical and pharmaceutical market and possibilities for Korean companies to enter the market

A. Medical market

In the case of Botox, which is a representative example of a rapidly changing purpose of use (drugs and equipment for cosmetic procedures), 40% of the total volume is classified as a treatment for some diseases such as blepharospasm, palatal muscle spasm, chronic migraine and chronic pain, and mental anxiety, and is allowed to be imported by the country. (In Tunisia, only internal medicine, ophthalmology, and neurosurgery specialists are allowed to prescribe it.) Meanwhile, the remaining 60% of the volume was distributed mostly through the black market for cosmetic procedures.
Although expensive branded products from developed European countries such as France and Germany are allowed to be imported for therapeutic purposes, their high unit costs have put a heavy burden on both doctors and patients who purchase them. On the other hand, Chinese-made products, despite their low price, have very low reliability in terms of quality, performance, and after-sales service, so local doctors refrain from using them.
Therefore, Turkish products are being utilized as an alternative, but there is a growing interest among local doctors to import Korean products that have excellent price competitiveness and quality performance and have excellent export performance.
* In particular, Turkey and China contribute the most to the trade imbalance problem of the host country (huge chronic deficit on the Tunisian side), and there is considerable dissatisfaction at the government level, which can be used as an important argument for the entry of Korean products with excellent price-quality ratio into the local market.

(Equipment in short supply compared to other demand growth) In addition, basic drugs and equipment required for blood tests (diagnostic reagents, result analysis equipment), liposuction machines for the treatment of severe obesity (given the diet of people in the Middle East and the Maghreb region, where sugar and carbohydrate intake is significant, the demand is expected to continue to increase), equipment for the treatment of serious diseases such as tumors and cancer, and rehabilitation treatment equipment such as hydrotherapy machines continue to be in short supply due to high purchase prices.

B. Pharmaceuticals

Refer to the overview of the pharmaceutical sector in Korea (attached), which has high-quality infrastructure and highly qualified professionals.

(Deregulation attempts to resolve supply instability of chronic adult disease drugs) Most of the chronic adult disease drugs prevalent in Tunisia, such as hypertension and diabetes, are imported, leading to bulk purchase and distribution through the Tunisian Central Pharmacy, which is the only distribution channel.
However, due to the recent financial difficulties and dysfunction of the Tunisian Central Pharmacy (which has been unable to make timely payments to foreign pharmaceutical companies, causing their exports to be withheld, resulting in drug shortages and stock-outs), the Ministry of Health is introducing emergency measures, including recently allowing direct sales between domestic importers and foreign pharmaceutical companies for some drugs.

(Drug pricing structure)
As of 2021, the following example of the pricing structure of drugs for the same disease shows the need for Korean pharmaceutical companies to continue to pay attention to their exports to Tunisia and their entry into the African market using Tunisia as a base.

Price of drugs for the same disease
Pharmacies / average price (10.070 TND) Hospitals and other medical institutions / average price (19.040 TND)
Domestic drugs Imported drugs Domestic drugs Imported drugs
8.380 tnd 16.070 tnd 5.930 tnd 52.330 tnd

2. Potential to be used as a base for specialized medical tourism (cosmetic and rehabilitation tourism)

(Infrastructure and human resources) The medical tourism sector, one of the main sources of tourism revenue for the host country, continues to attract customers based on the country’s relatively low cost of treatment and care compared to neighboring Europe, well-equipped infrastructure, and recognized medical capabilities in the Maghreb, Africa, and the Middle East, mainly in Libya, which are much cheaper than in Europe, and medical infrastructure facilities that are rarely found in the region.
In 2018, before the COVID-19 pandemic, the number of medical tourists reached 10,000.
However, it is also true that the strengths of local medical personnel, such as technical skills and capabilities and low prices, are not sufficiently utilized and remain at the level of thalasso therapy for the elderly and retirees from Europe. This does not lead to substantial market development, so a diversification strategy is needed to discover the potential of medical tourism in Korea.

(Given the demand for △ treatment and rehabilitation of severe trauma patients (amputation of limbs, accidents resulting in total paralysis, etc.), which often occurs in countries with simple labor-intensive economies such as the African continent or in civil war situations such as Libya, △ specialty medicines (Botox, etc.) and laser and LED treatment equipment that are being transformed to treat various diseases and for cosmetic purposes, it is worthwhile for our specialized companies to tap into the vast African market while using Tunisia as an outpost.
In particular, the former is expected to open up a new and vast market for Korean companies with excellent technology in the manufacturing of prosthetic hands and feet, while the demand for specialized vehicles (mini-ambulances with 4-5 passengers), which are necessary for emergency transportation of severe trauma patients such as generalized paralysis, is also expected to increase, given the overall poor medical facilities in Africa.
In the latter case, as women in the Maghreb and the Middle East, whose skin is aging rapidly due to excessive sunlight throughout the year, are evolving to prefer appearance improvement procedures using Botox, fillers, lasers, and LEDs rather than expensive and risky plastic surgery, it is also worth considering the development of domestic products in the Middle East market.

3. Vision and Utilization Strategy

(Short-term) Given the price competitiveness and quality excellence of domestic plastic surgery products, it is expected that our companies’ entry into the Tunisian market will contribute to establishing Tunisia as a hub for cosmetic tourism in the region within a short period of time.
In particular, it is necessary to consider the possibility of expanding into the Maghreb, Middle East, and Africa markets and absorbing consumers from Europe, where procedures are more expensive.

A small portion* of the corporate profits that can be earned in the short-term (medium- to long-term) strategy can be reinvested in improving health and medical infrastructure in Africa as a corporate social responsibility (CRS) measure (various methodologies exist, including sponsoring host country R&D institutions, joint research, technology alliances, and establishment of production lines, with the ultimate goal of capturing the African market), while also contributing to enhancing our external brand image by attaching a value of contributing to humanity to Korean medical technology and differentiating ourselves from other developed countries that focus on securing African natural resources.

* It is necessary to shift away from cooperation projects that require huge initial investment costs, such as hospital construction and support for expensive equipment, which make it difficult to fulfill promises, to measures that can maximize public relations effects relative to the scale of investment.
The above mid- to long-term vision can be evaluated as a practical alternative to solving one of the biggest problems facing the African continent other than water and food, which is the lack of health and medical infrastructure, and is very suitable for promoting the 2030 Busan World Expo banner, and will be actively utilized if the participation of Korean companies in related fields in the May 18 Korea-Taiwan-Africa Business Forum is confirmed.