Saudi Arabia Pharmaceuticals Market
The Saudi Arabia Pharmaceuticals market estimated to be valued USD 5,748 Million in 2017 and poised to grow at CAGR 6.7%. The market for Saudi Arabia Pharmaceuticals projected to reach US$ 8,465 Mn by 2023.
Furthermore, the exceptional rise in the per capita income of Saudi Arabia is also expected to foster the demand for branded drugs. The Saudi market is expected to expand at 9 percent year-on-year over the forecast period 2016-2026. In terms of market value, the pharmaceutical market in Saudi Arabia is estimated to be worth SR46 billion by the end of the forecast period, which explains the long-term outlook of the local pharmaceutical market.
Imports accounted for more than 92 percent of the market at $1.8 billion, American and European companies top the list of suppliers with a 21 percent share of total imports. The NTP envisages boosting and supporting foreign investments in the healthcare sector, especially for pharmaceuticals and medical devices.
The Kingdom of Saudi Arabia accounts for 59.4 percent of the purchases of pharmaceuticals products in the Gulf region and will remain a key market for many leading multinational pharmaceutical companies in the Middle East. In addition to the demographic and epidemiological driving factors, the transition to an increasingly privatized and comprehensive healthcare system will drive the demand for both patented and generic drugs.
Although government procurement of pharmaceuticals aims to promote local manufacturing and replace many research-based medicines with generics, patients in Saudi Arabia favor branded products since most medicines can be acquired without a doctor’s prescription meaning consumers can easily exercise their preference for branded medicines.
Over the past couple of decades, domestic players have come a long way to becoming a core element of the Saudi pharmaceutical market formula. Starting as sole importers and distributors of pharmaceutical products, companies such as Spimaco, Tabuk Pharmaceutical Manufacturing, Sitco Pharma, Al – Haya and Al-Jazeera Pharmaceutical Industries gradually developed their capabilities, ultimately establishing fully-fledged local manufacturing facilities. In addition, several domestic players created partnerships and joint ventures with global and regional Pharma players lured by various government-sponsored incentive schemes aimed at promoting local manufacturing.
As a result, there are currently 27 pharmaceutical manufacturers operating across the Kingdom accounting for around 18% of the market’s value. Despite representing a relatively small share of the market, local production has recently picked up momentum increasing from 14% to 18% of the total market value. In spite of all the progress, the pharmaceutical market in 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.