BMI's Executive Summary

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Saudi Arabia's pharmaceutical market was estimated to be worth US$1.48bn in 2007, making it the largest of the Arab drug markets. BMI forecasts market growth to beat the rise in GDP and reach US$2.34bn by 2012. Key drivers of growth will be a rapidly expanding population and changes to the healthcare sector that should lead to rising demand for pharmaceuticals.

The market remains heavily reliant on imports, particularly for high-tech patented drugs. Local manufacturers remain focused on the production of basic medicines. However, this may change as they gain access to greater funding as a result of a loosening of the laws on foreign ownership, which now allow for 100% foreign equity investment in local companies. The government is becoming increasingly concerned over spiralling drug costs that are some of the highest in the world, largely as a result of high demand for imported patented drugs. The government made a recent move aimed at controlling costs. A new medical supply company, set to be publicly listed in the next few months, with an exclusive licence to supply government health facilities – a significant source of demand for pharmaceuticals. While unified purchasing may go some way to reducing costs in the short-term, a reduced reliance on imported high tech drugs will be needed for long-term price control.

There are encouraging signs for Saudi Arabia's intellectual property (IP) environment, all be it from a low base. While the country remained on the USTR Watch List for 2007, Saudi Arabia was commended for its progress on regulation and enforcement of IP issues since being admitted to the World Trade Organisation (WTO) in 2005. Consequently we expect Saudi Arabia's days on the list to be numbered.

In BMI's all new Business Environment Rankings, Saudi Arabia is placed 7th out of 14 Middle East and Africa (MEA) markets surveyed. Under the new rating system, our estimation of Saudi Arabia's potential is lowered, largely due to the high market risks perceived to be present for the pharmaceutical industry. The regulatory system remains weighted against foreign drugmakers, which, as a result, continue to operate largely through imports or contract manufacturing with local companies. Despite the risks, the country scores well in terms of its potential for growth with a favourable country structure and large market size by regional standards.

As the largest member of the increasingly integrationist Gulf Co-operation Council (GCC), Saudi Arabia could present a growing attraction to foreign drug makers over the coming years if authorities can convince the world that it has turned the corner in terms of its regulatory regime. In addition to GCC membership, oil wealth and commitments to health insurance should drive demand.

Contents

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Chapter 1 - Executive Summary

Saudi Arabia Political SWOT

Chapter 2 - Saudi Arabia Pharmaceuticals & Healthcare SWOT

Saudi Arabia Economic SWOT

Saudi Arabia Business Environment SWOT

Chapter 3 - Saudi Arabia: Business Environment Ranking

Business Environment Ranking: Middle East & Africa

Business Environment Ranking

Economics - Long-Term Risk

Politics - Long-Term Risk

Regulatory Barriers

Domestic Sector Threat

Market Growth Potential

Market Size Ranking

Chapter 4 - Market Summary

Regulatory Regime

Regional Regulatory Developments

Intellectual Property Developments

Pricing and Reimbursement Issues

PhRMA Criticises Market Barriers

Tendering Procedures

Table: Saudi Arabia Import Margins

Chapter 5 - Industry Developments

Healthcare Sector

Health Insurance

Key Epidemiological Trends

HIV/AIDS

Pharmaceutical Sector Developments

Chapter 6 - Industry Forecast Scenario

Key Growth Factors - Industry

Table: Saudi Arabia Drug Market Indicators

Macroeconomic Scenario

Table: Economic Activity

Prescription Market Forecast

Table: Saudi Arabia Prescription Market Forecast

OTC Market Forecast

Table: Saudi Arabia OTC Market Forecast

Generics Market Forecast

Table: Saudi Arabia Generics Market Forecast

Export/Import Market Forecasts

Table: India's Export Of Pharmaceutical Products To The GCC Countries 2001-2005 (US$MN)

Table: Saudi Arabia Export/Import Forecast

Other Healthcare Data Forecasts

Table: Saudi Arabia Other Healthcare Forecast

Chapter 7 - Competitive Landscape

Company Profiles

GlaxoSmithKline

Saudi Pharmaceutical Industries & Medical Appliances Corporation (SPIMACO)

Saudi Arabian-Japanese Pharmaceutical Co Ltd (SAJAPHCO)

Tabuk Pharmaceutical Manufacturing

Chapter 8 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Pharmaceutical Industry

Sources

Chapter 9 - Appendix: Regional Demographic Data

The Long View: Data Over The Economic Cycle (2000-2007)

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Chapter 10 - Country Snapshot: Saudi Arabia Demographic Data

Section 1: Population

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Competitive Landscape for Middle East & Africa Pharmaceuticals and Healthcare: Sample of Companies Ranked

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Cross-border analysis of regulatory systems comparing the patenting environment, summarising regional pricing and reimbursement factors and monitoring the growth of the Pharmaceuticals sector across the region. Company SWOTs cover leading multinational and national drug companies operating in each market.

Network of Middle Eastern and African Pharmaceutical & Healthcare Sources

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BMI's Middle Eastern & African Pharmaceutical & Healthcare Reports are based on an extensive network of multilateral organisations, government departments, pharmaceutical & healthcare industry associations, chambers of commerce and company reports. Information sources include: