Growth Prescription:Mideast Drug Marketing Firm Lunatus’ Global Sales Entry Plan Could Expand Sales 50%
By James Simms
DUBAI – Major Middle East pharmaceutical distribution company Lunatus Marketing & Consulting is planning expansion into Europe and Africa, along with more growth in its home region – moves with the potential to expand its turnover by 50%.
Lunatus President and CEO Lina Kouatly says that development will happen in partnership with Tokyo-based trading giant Marubeni Corporation, which took an undisclosed stake in it in 2022. Lunatus, since its 2002 founding, has been handling regulatory, marketing, sales, distribution and supply chain management for European and U.S. pharmaceutical and medical-device makers entering the growing Middle East market.
“Lunatus is very well known and very successful [in the Middle East], but I think we have room to grow. And I want to be in Europe and expand in the region more. In a few years’ time, we should be 50% more [in turnover] than we are now,” Lina says from her office overlooking Dubai’s skyscraper-filled skyline. “It’s teamwork. We are working as partners [with Marubeni].”
In the past two decades, Dubai-based Lunatus has grown from two people to some 250 today with offices in nearly a dozen countries throughout the region, including the United Arab Emirates and Saudi Arabia, which account for over 70% of sales. About 80% of its employees are medical representatives, who handle the sales and marketing to hospitals, clinics and pharmacies.
“In 2002, I realized that there is something missing in the region. For multinationals who want to come to be present but don’t have that capacity, they need someone to help them. So, we as Lunatus offer the link for multinational companies to come and be more successful in the region because we have the know-how. We have the reach. And the intricacies of the region are very, very complicated,” says Lina. “It’s a lot of investment, and it takes time and know-how to build your presence.”
Marubeni’s Lunatus investment is part of its plans to expand its medical and healthcare business worldwide, including into Europe, Africa and Southeast Asia, and leverage its ties with Japanese drug manufacturers. That expansion already includes a pharmaceutical joint venture in the No. 2 drug market by revenue in the world, China, and an investment in a hospital operator in Indonesia.
In the Middle East, including countries like the UAE, Saudi Arabia, Qatar, Kuwait, Oman and Bahrain, the current value of the drug market is around $25 billion and expected to reach $31 billion in 2027, according to IQVIA, a U.S.-based healthcare IT and clinical research firm. The forecast compounded annual growth rate for the market is 5.6% between 2022 and 2027, higher than rates in mature industrial economies, like Japan and the U.S., it says.
Several factors are driving the Middle East market’s expansion: More foreign investment, which is increasing access to new treatments; greater government healthcare spending; and an aging population, says the government-affiliated Japan External Trade Organization. Moreover, it adds, in contrast to the region’s previous emphasis on basic healthcare, there are a higher proportion of specialized treatments and an increasing number of people with lifestyle diseases like diabetes and hypertension as incomes rise.
Building Relationships, Imparting Knowledge
So what exactly does Lunatus do?
At the ground level, there’s a 200-person strong staff of medical reps, all of whom have medical or pharmaceutical degrees and hail from some two-dozen countries. One of them, Kenji Tokui, who is a licensed pharmacist in Japan and visits about a dozen or more medical facilities and pharmacies every weekday to talk to medical professionals, says the keys to doing his job well are “active listening” and thoroughly explaining. Through that, one can build trust with practitioners and feed those conversations back to the company to help it assess market needs.
Tokui notes that, in the UAE, the background of these professionals is multinational, coming from within the region, India, Pakistan, the Philippines and even Japan; the lingua franca is English; and 90% of the pharmaceuticals by value are imported from overseas, namely from Europe and the U.S. And because the physicians had careers in their home countries before working in the region, they use treatment regimens and drugs familiar to them.
“When they come here, those drugs sometimes aren’t available here, and if they’re here, they may be under a different [brand] name. As medical reps, we have to inform them about available pharmaceuticals that have the same active ingredients, but under different names, and that the usage guidelines, even if in a different language, are the same globally. We have to properly inform them of that and enable doctors to feel secure in their treatments,” he says. “We really have to listen to our medical professionals. Of course, we have to make them aware of our products, too.”
Tokui says those relationships with physicians are key. “Even when they are busy, in between patients, if they have something they want to ask, they trust me, so they ask me. And if there is some information I want to get to them, they make the time, an indication that they trust me,” he says.
One Lunatus customer, Dr. Hassan Galadari, a Dubai-based dermatologist with American-board certification, says the firm differentiates itself from rivals through its customer service.
“That relationship between you and your supplier, in this case Lunatus, is very, very important. If you don’t have that relationship – or anything that breaks it or anything of that sort, you tend to not only lose faith in that company but also that product. The fact that they are really are dedicated to what they do – you feel that there is an actual bond between yourself and them,” he says. “They are not only there to make business. They are actually there to foster a relationship.”
Creating an Edge, Clearing Regulatory Hurdles
Dr. Galadari adds that Lunatus does its due diligence on the products it represents. “Whatever it is that they provide—[it] will have a positive effect” on his patients and practice, he says.
Lunatus says it goes beyond that.
The company’s strategy is to have products, whether newly entering the market or already in it, that have a competitive advantage and therefore will attract the attention of physicians, Tokui says. That in combination with a disciplined and trained sales force means that the drugs that it represents become top sellers in their categories. “If you see our track record, you will see that most of the companies that we have partnered with have become No. 1 or No. 2,“ Lina says, adding that knowing market needs is also critical when deciding on a product introduction.
And behind that is a regulatory team that gets drugs over the necessary government hurdles around the region to get them into the market. In the UAE, approval for usage, similar to other Gulf nations, is contingent on the pharmaceuticals being registered in the country of origin, which must be a “reference” country or economy (such as the European Union, the U.S. or Japan), and other filings with the Ministry of Health, she says.
Looking ahead, Lina is confident about the expanding partnership with Marubeni. But she isn’t sanguine about the work ahead for Lunatus in the highly competitive market. “I tell my team,” she says, “‘If you don’t run, you are run over.’”
All information contained in this article is based on interviews conducted in October 2023.
