Boston, MA -- (SBWIRE) -- 04/29/2014 -- We hold a very positive outlook towards growth in the Saudi Arabian medicines market over the next decade, with pharmaceutical demand underpinned by a number of factors. However, risks to our outlook are to the downside, some of which include greater-than-expected drops in the oil price, the government's failure to deliver on healthcare infrastructure expansion and medicine price cuts in the short term.
Headline Expenditure Projections
- Pharmaceuticals: SAR22.7bn (US$6.06bn) in 2013 to SAR24.86bn (US$6.64bn) in 2014; +9.5% in both local currency and US dollar terms. Forecast revised downwards due to revisions to historical figures.
- Healthcare: SAR98.63bn (US$26.34bn) in 2013 to SAR108.59bn (US$28.99bn) in 2014; +10.1% in both local currency and US dollar terms. Forecast broadly unchanged from Q114.
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In our Q2 2014 RRR matrix, Saudi Arabia maintains its leading position of the 30 Middle East and Africa (MEA) markets in the region. Its high composite score is due to its wealth and sizeable population, which will support the longer-term development of its pharmaceutical market. Furthermore, its forecast growth rate is high due to favourable public and private healthcare investments. The government is also in the process of creating more public-private health partnerships and encouraging private health insurance uptake, which should provide momentum for drug sales. However, Saudi Arabia's commitment to intellectual property (IP) protection remains a major issue for foreign research-based pharmaceutical players.
Key Trends And Developments
- In March 2014, GSK Vaccines signed a manufacturing agreement with local company Arabio and Glaxo Saudi Arabia Limited (GSAL) to develop vaccine manufacturing capability in Saudi Arabia. GSK Vaccines will provide technical support and knowledge to GSAL and Arabio with regards to manufacturing processes. The partnership's objectives are to develop a robust vaccines manufacturing capability in the country, improve the sustainability of vaccines supply, and enable the supply of vaccines for the vaccination programs of the Gulf Cooperation Council countries according to Masood Jaffery, General Manager of GSK Saudi Arabia and Managing Director of GSAL.
- In March 2014, the Ministry of Health halted free government treatment for nationals working in the private sector without health insurance. Nationals will henceforth have to seek treatment through the insurance companies provided by their employers, which the ministry has stipulated as obligatory for nationals regardless of earnings. Free government health care is not available to expatriates.
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