Pharmaceuticals products sales in Saudi Arabia are expected to surpass $7 billion by 2018 as compare to $4 billion 2012, “Saudi Arabia Pharmaceutical Market Opportunity Analysis” report said Sunday.
Saudi Arabia is expected to emerge as one of the fastest growing markets in future, it noted. The country is one of the most developed and technologically advanced medical sectors in the GCC region with modern equipment and amenities.
Saudi pharmaceutical market has recorded significant growth over the years owing to various factors like increasing ageing population mostly in the above 60 years bracket, changing demographics and rise in the incidence of lifestyle diseases, increased spending power, result driven government initiatives to promote the growth of indigenous pharmaceutical companies. In spite of all the progress, the pharmaceutical market in the Saudi Arabia is still in an emerging phase, and the drug manufacturing is at a relatively nascent stage owing to many challenges, which need to be resolved.
The report said the Kingdom relies substantially on imports of pharmaceutical products, primarily from Europe, to meet local demand as a result of insufficient domestic drug production and lack of indigenous research capabilities.
Government is taking efforts to promote FDI in the pharmaceutical sector especially directed to help development of skills of local companies to manufacture patented medicines as well. Policies like free trade agreements have played a significant role in encouraging foreign investments.
Increased penetration of the healthcare sector by insurance providers, price regulation guidelines to ensure uniformity in pricing and dedicated healthcare reforms, have further ensured growth of pharmaceutical market in recent years, the report further said.
Saudi Arabia is the largest pharmaceutical market in the GCC, with a size of $ 5.1 billion in 2012, primarily on account of its large consumer base, Alpen Capital said in another report.
Sales per capita in the year amounted to $175. The market thrives on provision of free medical and healthcare services by the government to its citizens. Around 35 percent of the value of pharmaceuticals sold is purchased by the government. However, compulsory health insurance for expatriates, who reside in the Kingdom in large numbers, and healthy personal income of locals mean that private sector’s contribution and out-of-pocket expenditure is also high. Pharmaceutical expenses of expatriates are covered under insurance policies maintained by their employers, while locals are not reluctant to purchase expensive medication even if they have to directly bear the costs, Alpen said.
Saudi Arabia has the largest manufacturing segment in the Gulf, however, most of the local production is destined for the export markets. Domestic production accounts for around 15 percent of the overall supply of pharmaceuticals in the market, the report added.
There are around 15-20 pharmaceutical manufacturers operating in the kingdom including indigenous companies and subsidiaries of multinational pharmaceutical giants. Leading local players in the kingdom include SPIMACO, Jamjoom Pharma, Tabuk Pharmaceutical Manufacturing, and Jazeera Pharmaceutical Industries.
In February 2013, the Saudi health ministry was reported to have launched preparations for making health insurance coverage compulsory for the dependents of expatriates.
In January 2013, the Kingdom’s health minister announced that a health budget of SR54.4 billion for 2013 would help to improve healthcare services and meet the health requirements of citizens.
This article was first published in the Saudi Gazette on September 16, 2013.