Boston, MA -- (SBWIRE) -- 11/11/2013 -- Saudi Arabia will continue to attract the interest of foreign pharmaceutical companies, and not just that of multinationals. An increase in the number of joint venture (JV) agreements with local partners shows that generic drug-based foreign players are also targeting the rising demand for a range of medical treatments. Healthcare modernisation and facility expansion should further support this increasing demand, which is already being driven by epidemiological factors.

Headline Expenditure Projections

- Pharmaceuticals: SAR20.41bn (US$5.45bn) in 2012 to SAR22.57bn (US$6.03bn) in 2013; +10.6% in both local currency and US dollar terms. Forecast broadly unchanged from Q313.
- Healthcare: SAR88.36bn (US$23.59bn) in 2012 to SAR98.03bn (US$26.18bn) in 2013; +10.9% in both local currency and US dollar terms. Forecast broadly unchanged from Q313.

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Risk/Reward Rating: In our latest Pharmaceutical Risk/Reward Rating (RRR) table, Saudi Arabia remains ranked second of the 30 Middle East and Africa (MEA) markets. Its attractions include wealth and a sizeable population, which will support the longer-term development of its pharmaceutical market, especially as the country suffers from high rates of non-communicable diseases such as diabetes and hypertension. On the other hand, Saudi Arabia's commitment to intellectual property (IP) protection remains a major issue for foreign research-based pharmaceutical players.

Key Trends And Developments

- In May 2013, Malaysian pharmaceutical major Pharmaniaga entered into a 15-year JV agreement with Modern Healthcare Solutions, a subsidiary of Modern Industrial Investment Holding Group, to set up a company that will construct and manage a pharmaceutical manufacturing plant in Sudair Economic City, Riyadh. Apart from the construction of the pharmaceutical manufacturing plant, the JV company will also produce, market and supply healthcare products and services to countries in the Middle East and North Africa region. Pharmaniaga commented that the JV formed part of its long-term strategy to accelerate growth plans for its international business by capitalising on the rapidly-growing opportunities within the Middle East and North Africa region. Modern added that the venture would speed up its capability to serve the fast-growing Saudi and Middle East markets.
- According to a report published by the Riyadh Chamber of Commerce and Industry, 51% of the country's healthcare workforce at present are foreign nationals. The study backed the nationalisation of the sector owing to the high degree of its dependence on skilled and experienced foreign workers, as reported by Arabian Business in June 2013. The Saudi Arabian government is planning to nationalise the country's healthcare sector by recruiting only Saudi Arabian nationals over the coming five years.

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