The value of pharmaceutical sector in Saudi Arabia is estimated to shoot up to USD 12,281.4mn by 2026, swelling at a CAGR of 9.0%. The market is witnessing a steady growth in the demand for generic drugs, thanks to insurance firms promoting them. These low-priced generic medicines and international players like Astellas, Pfizer, Sanofi, and GlaxoSmithKline are posing a threat to domestic pharmaceutical producers who make up 18% of the market. Other major players in the market are Tabuk Pharmaceutical, Jamjoom Pharma, Novartis AG and SPIMACO. Meanwhile, branded drugs are likely to yield USD 2,760.8mn by the end of 2016. Retail pharmacies are expected to remain more popular (with 80% market share) than hospital pharmacies.
Check Out the 8 Factors Bolstering The Pharmaceutical Market:
1. Increase in lifestyle disorders:
Lifestyle disorders including diabetes are increasing in the country. The kingdom is said to see the strongest demand for drugs treating cardiovascular diseases in 2016.
2. Demand for branded drugs:
Demand for branded drugs is on the rise as people have an assumption that branded drugs are more effective and can instantly cure/reduce illnesses.
3. Health insurance providers:
Because of the financial backup from health insurance providers, Saudi people willingly spend on healthcare and expensive medicines.
4. Rise in per capita income:
Saudi Arabia has a very high Human Development Index and disposable income. As the country’s per capita income surges, citizens’ ability to spend on healthcare also rises.
5. Strategic alliances:
Partnerships between Saudi Arabia and well established international players in the healthcare industry are likely to strengthen and improve markets in the Kingdom. Such alliances will also introduce better research and technological infrastructure in the country.
“The Saudi Arabian pharmaceutical market, estimated to hit USD 5,209.5mn in 2016, is largely supported by the government.”
6. Government initiatives:
The government of Saudi Arabia is putting great efforts to establish world class healthcare systems in the Kingdom. Over the next 15 years, 2,259 health centres and 295 hospitals in the country will be privatised, as declared by the Ministry of Health in May 2016. Moreover, the Ministry will be investing USD 18.5bn each year for a decade to bolster national production of pharmaceuticals and medical devices.
7. 100% Foreign Direct Investment:
The government has allowed 100% Foreign Direct Investment (FDI) in the pharmaceutical industry. Because of such open moves, Saudi Arabia recently earned the South Korean healthcare industry’s interest.
8. Vision 2030:
Saudi Arabia is putting maximum efforts in all sectors to make Vision 2030 a reality. Expansion of the healthcare sector is also a part of this vision. With Saudi Arabia giving the 1st priority to attainment of Vision 2030, opportunities for pharmaceutical segment are many.
However, for the pharmaceutical sector to enjoy a positive future, Saudi Arabia will have to solve major problems including difficulty in registration of drugs and medical patents, lack of research facilities for pharmaceutical sector, trade restrictions, slumping oil price crisis, and other economic instabilities.