This article is supported by the Friedrich Naumann Foundation Beirut Office. The opinions expressed here do not necessarily reflect those of the donor.

Lebanon has faced a series of crises that have devastated its healthcare and pharmaceutical sectors. The economic collapse in October 2019 caused widespread unemployment, poverty, and a severe depreciation of the Lebanese pound, drastically reducing the population’s access to medications and healthcare services. This economic turmoil set the stage for a broader collapse of Lebanon’s healthcare infrastructure. The COVID-19 pandemic further destabilized Lebanon’s fragile healthcare system, leading to overwhelmed hospitals and shortages of essential medical supplies. This crisis, in turn, was exacerbated by the Beirut port explosion in August 2020, which destroyed healthcare facilities and disrupted the pharmaceutical supply chain.

In 2021, the World Bank ranked Lebanon’s financial collapse among the worst global crises in 150 years (1). The removal of government subsidies on critical commodities like fuel and medications further limited public access to healthcare. By July 2022, Lebanon was reclassified as a lower-middle-income country, a significant decline after 25 years as a higher-middle-income nation (2). Political instability, marked by a caretaker government since October 2022, has hindered essential reforms, leaving the country ill-equipped to address its overlapping crises.

A closed expert roundtable was convened by the Lebanese Center for Policy Studies (LCPS) on July 9, 2024, to analyse the impact of the consecutive shocks and crises that have affected Lebanon's pharmaceutical sector over the past five years. The discussion focused on the challenges hindering reforms, potential opportunities, and strategies for the future. The roundtable brought together a diverse group of experts from the pharmaceutical sector, representing the public and private sectors, academia, professional orders, and syndicates. Stakeholders examined the barriers to reform within the pharmaceutical sector and proposed key solutions and recommendations to drive change.

Impact on Health and Pharmaceutical Sector

Before the economic collapse, approximately half of Lebanon’s population had health coverage through public funds, such as the National Social Security Fund (NSSF), the Civil Servants Cooperative (COOP), and the armed forces, or through private insurance. However, the economic downturn forced over 70% of the population to rely on the Ministry of Public Health (MoPH) for healthcare, up from 50% before the crisis. Despite this increased demand, the MoPH’s budget plummeted from over $486 million in 2018 to under $37 million in 2022 (3).

Out-of-pocket healthcare expenses surged to over 85% (4), leaving more than 80% of the elderly population without health insurance and vulnerable to financial and medical insecurity (5).

Lebanon’s pharmaceutical sector has been profoundly affected by the economic crisis, impacting medication affordability, availability, and quality. The collapse of the Lebanese pound has made medications prohibitively expensive. Only 129 out of 5,500 registered drugs remain partially subsidized by the central bank (6). Between 2018 and 2022, medication costs rose by over 1,100% (7), particularly for life-saving treatments such as those for cancer and multiple sclerosis. These price hikes have rendered essential medications inaccessible to many, thus endangering lives.

Severe shortages of essential medications have plagued Lebanon since 2021. Importers’ inability to secure foreign currency has disrupted supply chains, with $400 million owed to international pharmaceutical companies by mid-2022 (8). Basic over-the-counter drugs are scarce, and pharmacies report frequent stockouts, leaving patients with chronic conditions untreated. Furthermore, the reliance on informal channels and overseas imports has raised concerns about medication quality. Limited pharmaceutical quality control in Lebanon has led to an influx of counterfeit or substandard drugs, endangering patient safety. The lack of a centralized drug testing laboratory and inadequate regulatory enforcement exacerbate these risks.

Financial constraints have forced many patients to alter or abandon their treatment regimens, particularly for chronic conditions. A 2022 study revealed widespread medication skipping and reliance on less effective or unsafe alternatives, leading to preventable health complications (9). While NGOs provide some relief, the quality and safety of donated medications are not always guaranteed. With medication imports becoming increasingly difficult, Lebanon has come to rely heavily on humanitarian aid to meet its pharmaceutical needs (10). However, logistical challenges, distribution delays, and limited aid coverage prevent consistent access to necessary drugs. This reliance underscores the sector’s fragility and the urgent need for systemic reform.

The economic crisis has also severely impacted Lebanon’s pharmaceutical workforce. A 2020-2021 study found that 41% of community pharmacists planned to leave their jobs, and 85% considered emigrating (11). Hundreds of pharmacies have closed, and international pharmaceutical companies have downsized, resulting in over 2,000 job losses (12). Although local pharmaceutical industries have increased employment by 22% (13), this cannot offset the overall loss of expertise.

Opportunities for Improvement

Despite these challenges, Lebanon’s domestic pharmaceutical industry presents a promising opportunity. The market share of local manufacturers has grown from 10% in 2018 to 30% in 2024, with locally produced medications being significantly cheaper than imported ones (14). Expanding the generics market, which accounted for 24% of the market in 2022 (15), could further reduce medication costs and alleviate healthcare pressures.

Challenges to Reform

Policies like the Unified Medical Prescription, intended to reduce drug costs, and the Pharmaceutical Strategy of 2022 have seen limited implementation due to political and economic challenges. The lack of integration between pharmaceutical and national health strategies hampers efforts to achieve Universal Health Coverage (UHC).

Effective reform requires strong governance, stakeholder coordination, and resource mobilization. The absence of drug quality laboratories and weak regulatory frameworks compromise medication safety. Smuggling and a lack of regular inspections exacerbate these risks. Financial constraints affecting public funds and the MoPH further limit healthcare access. Addressing these issues is critical for reform.

Local pharmaceutical companies face regulatory delays, limited financial incentives, and insufficient investment in research and development (R&D). Difficulties in accessing affordable raw materials and maintaining international quality standards hinder growth. Weak export capacity and low public awareness of locally produced drugs further constrain the sector’s potential.

Potential Strategies, Solutions, and Recommendations

To address the challenges facing Lebanon’s pharmaceutical sectors, several strategies and solutions are proposed to support both immediate and long-term reforms:

Regulatory Improvements: Aligning health sector reforms with international standards and establishing the Lebanese Drug Authority (LDA) for regulatory oversight are crucial steps. Reactivating key systems like the Central Lab will ensure quality control, and modernizing the unified medical prescription system can prevent misuse and enhance functionality.

Cost Control: Reforming prescription and reimbursement systems is necessary. Implementing unified prescription forms with generic drug options can increase transparency. Public funds should negotiate drug prices, particularly for expensive treatments, and pharmacoeconomic studies should be incorporated into the drug registration process.

Drug Procurement: Centralizing procurement among public funds can reduce cost and improve efficiency. Establishing joint procurement systems will help negotiate better pricing, and a National Health Technology Assessment (HTA) system should be developed to optimize resource allocation.

Pharmacovigilance: Strengthening Lebanon’s pharmacovigilance program will help monitor adverse effects and ensure quick recalls of faulty products. Strict regulations governing interactions between healthcare professionals and pharmaceutical companies are necessary to prevent conflicts of interest.

Rationalizing Medication Imports: Revised regulations should prioritize innovative treatments and life-saving medications. Policies and regulations must be better communicated to stakeholders to improve compliance.

Support for Local Industries: Upgrading regulatory and legal frameworks, particularly improving Good Manufacturing Practices (GMP) to meet international standards, is essential. Strengthening local pharmaceutical production will ensure a stable supply of essential medications.

Innovation and Workforce Development: Encouraging collaboration with international pharmaceutical companies and investing in R&D will drive innovation. Public-private partnerships for R&D and enhanced workforce education can address the shortage of specialized professionals in the healthcare sector.

Financial Strategies: Introducing a sin tax on harmful substances like cigarettes and sugary drinks could generate revenue for the healthcare system. However, the challenge lies in earmarking tax revenue specifically for the health sector, as earmarked taxes face legal obstacles in Lebanon (16). Leveraging the Lebanese diaspora and collaborating with international and regional organizations will also enhance technical expertise and improve access to medications.

Digitalization and Primary Care: Optimizing digitalization efforts can improve prescription management and reduce misuse. Enhancing primary care systems through sustainable funding strategies and better management of patient distribution is another critical step.

Conclusion

Lebanon’s healthcare and pharmaceutical sectors are in dire need of reform. Addressing the affordability, availability, and quality of medications requires immediate action and a coordinated effort from public and private stakeholders. By focusing on local pharmaceutical production, stronger regulatory frameworks, maintaining the presence of international pharmaceutical companies and innovative digital health solutions, Lebanon can navigate its current challenges and secure a healthier future for its citizens. Financing and sustainable funding remain the cornerstone of all suggested reform efforts.

References

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2. New World Bank country classifications by income level: 2022-2023. https://blogs.worldbank.org/en/opendata/new-world-bank-country-classifications-income-level-2022-2023
3. National Health Sector Strategy 2023-Vision 2030-Executive Summary. https://www.moph.gov.lb/en/view/67044/lebanon-national-health-strategy-vision-2030
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10. ACAPS- LEBANON-The Effect of the Socioeconomic Crisis on Healthcare-Thematic Report, 2023. www.acaps.org/fileadmin/Data_Product/Main_media/20231019_ACAPS_thematic_report_Lebanon_effect
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12. International Trade Association. Lebanon-Country Commercial Guide, June 2024. www.trade.gov/country-commercial-guides/lebanon-pharmaceuticals
13. Syndicate of the Pharmaceutical Industries in Lebanon (SPIL) 2024. Information shared upon request.
14. Syndicate of the Pharmaceutical Industries in Lebanon (SPIL) 2024. Information shared upon request.
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16. Abou Samra, C, Assal, M, El-Jardali, F, K2P Policy Brief: Financing Universal Health Coverage in Lebanon through Health Taxes. Knowledge to Policy (K2P) Center. Beirut, Lebanon; August 1, 2023. www.aub.edu.lb/k2p/Documents/K2PPolicyBrief_HealthTax_August12023.pdf.