Market Research Reports, Inc. has announced the addition of “CountryFocus: Healthcare, Regulatory and Reimbursement Landscape - United Arab Emirates” research report to their website http://www.marketresearchreports.com
Lewes, DE -- (SBWIRE) -- 07/22/2014 -- The UAE’s healthcare market has significant potential for growth, driven by an increasing burden of lifestyle-related diseases, medical tourism, straightforward regulatory guidelines and a preference for branded imported products. However, factors such as frequent price cuts by the government and usage of counterfeit drugs will restrict the growth of the pharmaceutical market.
The UAE is the second largest country in the Middle East in terms of capital invested in the pharmaceutical sector. In 2013, the UAE’s pharmaceutical market was estimated to be worth $2.4 billion, having increased from $1.3 billion in 2008 at a Compound Annual Growth Rate (CAGR) of 12.6%. The market is expected to reach $3.7 billion in 2020 at a CAGR of 5.3% (Kulkarni, 2010). Increased healthcare expenditure, the growing popularity of medical tourism and a growing elderly population are the main contributors to market growth.
Due to its growing healthcare infrastructure and lower treatment costs compared to competitors, the UAE is quickly gaining popularity as a medical tourism destination due to its low costs, English-speaking medical staff and virtually non-existent queues for treatment (Woodman, 2012). Dubai Health Authority is working to develop the medical tourism sector. It is formulating different healthcare packages according to patient requirements and the first package (wellness and preventive services package) is to be launched in October 2014 (UAEinteract, 2014f).
Branded imported drugs dominate the pharmaceutical market, with approximately 80% of the market share. Therapeutic segments such as cardiovascular diseases and cancer are expected to grow significantly in the coming years due to the growing incidence of certain lifestyle diseases. Multinational companies will continue to penetrate the market as they offer largely patented drugs, whereas a lack of R&D activities from domestic manufacturers has limited their ability to offer patented drugs.
The UAE government has been reducing the prices of drugs since 2011 to make them more affordable for people as the prices of pharmaceutical medicines were comparatively much higher than in other neighboring GCC countries. Since 2011, the Ministry of Health (MoH) has reduced the prices of medicines five times, by percentages ranging from 1% to 60% (Sophia, 2014; Zain, 2014).
The proliferation of counterfeit drugs in the UAE is very high. According to a 2010 European Commission report, 73% of the drugs seized in the European Union (EU) were routed through the UAE (Underwood, 2010). These factors hamper the pharmaceutical market in the UAE.
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In 2008, the UAE’s medical device market was valued at approximately $600.2m and $733.3m in 2013. The medical device market is estimated to reach $978.9m in 2020, at a CAGR of 4.2% from 2014, mainly due to positive demographics, increased healthcare awareness and a rise in healthcare spending. The significant demand for medical devices in the UAE is met through imports.
In an attempt to prevent age-related chronic diseases and lifestyle diseases, the government has implemented the national Weqaya program and set up various specialty healthcare facilities.
The regulatory authority provides an efficient system for approving pharmaceutical products and medical devices, positively influencing the growth of the healthcare market.
In 2008, the MoH introduced an online registration system with the aim of increasing transparency and expediting the overall process by making the filing process easier and allowing companies to determine the status of their application at any time.
To overcome the language barrier, the government allows filing in both English and Arabic.
In 2012, according to the World Intellectual Property Organization (WIPO), the UAE registered 50 patents and was second only to Saudi Arabia, which had 339 registered patents (WIPO, 2014).
In 2008, in order to strengthen clinical trial regulations the MOH issued instructions for the approval and registration of a research ethics committee to help the country to meet global clinical trial regulation standards. In the same year, the MOH established the Emirates Health Authority (EHA), which will allow the government more control over their healthcare delivery system in the northern emirates, which comprise Ajman, Umm al-Quwain and Ras al-Khaimah.
The UAE’s healthcare system is characterized by high public expenditure on the implementation of healthcare policies and growing private infrastructure to provide more sophisticated facilities.
The overall healthcare system is in a development stage, and total healthcare expenditure increased from approximately 2.7% of the Gross Domestic Product (GDP) in 2008 to an estimated 2.9% in 2013, at a CAGR of 1.6%. Healthcare services and medicines provided by public hospitals are free to citizens, while expatriates must pay for services. The number of private hospitals increased from 58 in 2008 to an estimated 67 in 2013, and the government is encouraging investment by promoting specific zones for healthcare (NBS, 2014b).
The UAE government provides easy access to healthcare facilities through primary care services. The public-sector share accounted for 61.7% of the overall healthcare expenditure in 2008 and increased to an estimated 69.3% in 2013. In 2008, OOP payment (as a percentage of total healthcare expenditure) was 28.1%, and decreased to an estimated 18.8% in 2013.
In 2012, the government started the Labor Abroad Medical Fitness Program to protect the country against communicable diseases spread by the immigrant labor force. Its main aim was to make it compulsory for individual workers to have a certificate confirming them as being free of infectious diseases. A school health program was initiated in 2012 with the aim of increasing disease awareness among children.
The wealth generated from strong economic growth, favorable government initiatives, high investment from global players and political stability will further aid development.
According to the Global Competitiveness Report 2012-2013, the UAE is the 24th largest economy in the world, compared to 27th in 2011-2012 report. In 2011, it ranked fifth worldwide in terms of basic requirements. At the same time, an almost tax-free and trade-barrier-free environment placed the UAE third in terms of cross-border trading (Schwab, 2013).
Since 1980, the government has adopted a strategy of economic diversification in order to reduce its dependence on non-renewable sources of energy for economic growth. This has led to the development of a number of new service sectors and hubs of non-oil industrial activities such as Dubai Healthcare City and Dubai Biotechnology and Research Park, among others.
The government’s free zone initiatives have encouraged foreign investors to invest strongly in the UAE, through the introduction of 100% ownership and tax-free income conditions for foreign companies.
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