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Empowering Growth

The Rise of Palestinian Pharmaceutical Manufacturers in the Global Market

By Ouf Awadallah

In recent years, the Palestinian pharmaceutical industry has experienced significant growth, emerging as a pivotal player in the regional and international markets. Despite facing numerous challenges, Palestinian pharmaceutical manufacturers have managed to carve a niche for themselves through innovation, resilience, and a commitment to quality. This article explores the journey of Palestinian pharmaceutical manufacturers, their economic impact, and the potential for further growth.
The Palestinian pharmaceutical industry has a rich history dating back to the mid-nineteenth century. Its modern development began after the 1967 war, which resulted in the separation of the West Bank from the Arab world and the closure of borders. This situation led to a significant challenge for Palestine in terms of providing and importing medicines, as Israeli products and medicines imported through Israeli agents flooded the Palestinian markets. In response to this, some individuals took the initiative to establish pharmaceutical companies as an alternative. Most of these companies were agents for international pharmaceutical companies, and they experienced significant growth, becoming key players in the national pharmaceutical industry. Their product range diversified, and their influence expanded to regional and global markets. Despite facing numerous challenges, these pharmaceutical companies gained recognition for their stability, innovation, and commitment to quality.
The Palestinian pharmaceutical industry began in 1969 with limited quantities and modest technological and production capabilities. However, it rapidly grew to compete with Israeli and foreign counterparts, gaining the trust of Palestinian doctors and pharmacists due to its high quality. It successfully penetrated both Arab and international markets despite the difficulties imposed by Israeli control over borders, crossings, export conditions, and the absolute prohibition of Palestinian medicines entering Israeli and occupied Jerusalem markets, even as Israel flooded Palestinian markets with competitive Israeli medicines and this requires a serious consideration of actions to enter the Israeli markets through fair trade between both parties.
Today, six Palestinian pharmaceutical factories operate in the West Bank: Dar Al-Shifa Company, Birzeit Pharmaceuticals Company, Jerusalem Pharmaceuticals Company, Beit Jala Pharmaceuticals Company, Sama Pharmaceuticals Company, and Alison Company. They have reached 55 percent of the local market size and are certified with the Palestinian Good Manufacturing Practice (GMP) certification – some even hold the European Good Manufacturing Practice certifications (EU GMP). They are registered in more than 30 countries worldwide, adhering to the highest quality standards. Two pharmaceutical companies operate in the Gaza Strip, namely Middle East Pharmaceutical and Cosmetics Laboratories and ArabGerman Pharmaceuticals and Cosmetics. Currently, the Palestinian pharmaceutical industry employs around 2,000 employees and serves as the cornerstone of a vast industrial integration network with an estimated workforce of 18,000 workers engaged in various industries and their supporting services, such as packing, packaging, and specialized transportation.
As we continually aims to enhance and develop partnerships and investments that cover significant needs, such as oncology medications, with the goal of achieving Palestinian pharmaceutical security. It has strengthened its efforts through networking and by seeking opportunities in various regional and international countries. Thus, UPPM members have visited several countries, most recently Lithuania and Libya, to explore market entry opportunities and are preparing to visit other markets, including the Iraqi, Kurdish, and Omani markets.
In addition, we effectively network with related organizations and encourages Palestinian factories and the private sector to establish research and scientific development centers to develop the pharmaceutical industry. Thus, UPPM encourages its members to increase their high-quality production and improve their export capabilities and competitiveness in the international market, all in compliance with local and international standards. It supports its members in increasing their market share locally and internationally and helps them enter new markets, introduce local products, and participate in specialized commercial exhibitions and marketing commissions. Finally, UPPM focuses on sustainable development.
Unfortunately, the Palestinian pharmaceutical industry faces many challenges, but the UPPM is doing its best to overcome them. For instance, the ongoing Israeli closure policy and control system prevent Palestinian companies and individuals from obtaining the necessary permissions to import medicines and raw materials. Numerous pharmaceutical shipments are confiscated at crossing points and may sometimes be stored under inadequate conditions for extended periods. Furthermore, the Israeli occupation authorities prevent the Palestinian pharmaceutical companies from importing certain raw materials that Israeli companies use in order to protect the Israeli pharmaceutical industry. Most importantly, the occupation authorities are preventing Palestinian pharmaceutical industries from marketing their products in East Jerusalem, including medicines donated to hospitals and care centers.
Non-Israeli-related challenges include the small size of the Palestinian market. This clearly imposes constraints on expansion and diminishes opportunities for significant growth in the local market. Companies cannot benefit from large scales of production and distribution that would reduce production costs. Moreover, the small size of the Palestinian market may expose the overall economy to fluctuations and challenges, as it tends to be less stable and influenced by political and economic events.
For a growing and ambitious industry like this, it is essential to open up Arab and international markets to support its growth and development, allowing it to play its desired role in boosting the national economy. Additionally, the government should implement measures to protect and promote this industry, assisting it in accessing new international markets through Palestinian diplomatic efforts with sisterly and friendly countries.
Furthermore, local companies tend to focus their production on medications that do not require complex technology, known as conventional rather than advanced drugs. This leads to a duplication of the former, while vital categories must be imported from neighboring countries or abroad. Additionally, there is a lack of coordination among local companies regarding production and distribution.
However, despite the limited market and the absence of significant government support, the Palestinian pharmaceutical industry has recently witnessed a rapid transformation. It has begun to cover a more extensive range of essential domestic medicines and has timidly ventured into research and development of new drugs in collaboration with local and international research centers. This aims to meet the increasing needs of the population and respond to the growing confidence in Palestinian pharmaceutical products both locally and globally.
In order to overcome this challenge, the UPPM believes that the sector should become a hub and take advantage of its unique geographical location and the availability of highly skilled scientific talents ready to invest in new production lines. The UPPM also works closely with Palestinian universities in providing pharmacy students with practical programs at Palestinian pharmaceutical factories and encouraging pharmaceutical research. In addition, it works towards mutual recognition with various particularly advanced countries to leverage their expertise in the Palestinian pharmaceutical industry. It has established joint investment to attract and increase know-how and entered more than 23 export markets, many of which are highly regulated.
Differences in medication registration procedures and requirements between the West Bank and the Gaza Strip clearly pose another challenge. The sector lacks a clear pharmaceutical policy that regulates the importation of medicines, the identification of categories and quantities, or designated importation locations. The lack of sufficient funding and financing sources prevents the development and improvement of local producers’ capacities and limits the implementation of necessary updates and the expansion of biosimilar studies, not to mention the transfer of modern technology.
Despite these challenges, the industry has demonstrated significant resilience by finding innovative solutions and adapting to the circumstances, becoming one of the main pillars of the Palestinian national economy. The pharmaceutical industry has consistently increased its market share and reached 55 percent of the local market size while providing safe and effective medications at reasonable prices to the Palestinian population. Palestinian pharmaceutical manufacturers now project 1,500 pharmaceuticals products in various pharmaceutical forms, covering the recently expanded list of essential medicines certified by the Ministry of Health, raising the local contribution to 45 percent of the list’s quantitative size, and providing 31 percent of its financial value.
Future goals include the continued expansion of the pharmaceutical sector’s investments into new production lines of different pharmaceutical forms and new medicines. By seeking advanced industrial technologies, the industry aims to enter new and distinctive categories, such as biosimilar and oncology drugs. It aims to increase its market share to 70 percent of the local market and expand its export markets to make significant contributions to the Palestinian national economy and at the global health level. To this end, required steps include further investment in international quality certifications, the registering of more medications, and the building of partnerships.
The achievements of the pharmaceutical industry, which is in continuous development, can serve as a benchmark for the role of manufacturing in boosting the national economy, addressing high unemployment rates, and gradually moving towards reducing dependence on external financing. Indeed, the industry forms the foundation for building a promising national economy. Therefore, it is essential to begin the process of establishing and amending regulations and laws to remove all obstacles imposed by occupation on our national economy. Additionally, it’s crucial to work towards building a genuine partnership between the public and private sectors in the development process.
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  • Ouf A. Awadallah is the executive director of the Union of Palestinian Pharmaceutical Manufacturers. With an MA in international law and diplomacy, he is a strategic PR and communications professional with over 23 years of experience in the field. Working with the Palestinian governmental, nongovernmental, civil society, and private sectors, he has engaged with senior officials from around the world.

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