The MENA pharmaceutical industry has registered impressive growth in recent years and is predicted to reach around US$60 billion by 2025. In the MENA Region, the pharmaceutical market of Bahrain is the smallest, while the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE) are the largest due to a growing population and new westernized lifestyle.
All Middle Eastern nations, excluding Syria and Iraq, are major importers of name-brand pharmaceuticals and branded generic medications.
Governments play an important role in the MENA region’s pharmaceutical industry by regulating both the sector and its prices through their Ministries of Health. The Saudi government is attempting to encourage generic consumption by limiting imported branded pharmaceuticals and encouraging local generic manufacturing to reduce healthcare costs and diversify their economy. Recently, there have been some major investments made by international companies, including joint ventures with domestic producers and the construction of new facilities.
There are several factors, such as rapid population growth, and aging, among others, that make MENA an alluring market for the pharmaceutical business. The shift in lifestyle over the past few years has resulted in many common ailments, such as diabetes, cancer, heart disease, etc., resulting in a shift in the pharmaceutical market becoming more attractive.
It is estimated that the generic drug market will continue to expand in the coming years, with lifestyle shifts being the main drivers of this expansion.
Current scenario of generics in MENA region
Middle Eastern countries, especially those in the Gulf Cooperation Council (GCC), are taking active measures to help the development of the pharmaceutical sector and in-house generic manufacturing.
In Saudi Arabia, the pharmaceutical industry is one of the key components of their vision 2030. The Kingdom believes that the Pharmaceutical sector is worth developing due to high local demand as well as its proximity to countries in MENA.
The Kingdom aims to increase local production while shifting to advanced products and becoming a leading and innovative country in the MENA region.
They have launched several initiatives such as “Support the procurement and production of generic drugs” headed by the Ministry of Health and “Clinical trials and laboratories development” headed by National Guard Health Affairs.
Generic drug demand is growing as a result of continued improvement in the health sector, investments by the government, and implementation of visionary plans, especially in UAE and Saudi Arabia.
Iran has one of the largest production capacities of generic medicines in the Middle East and North Africa, and the sector is capable of meeting the local needs of essential life-saving drugs.
Nearly 5000 drugs have been registered in Sudan, and 84% of those are generic imports that account for 70% of the country’s entire pharma market.
Saudi Arab Pharmaceutical and generic market
Saudi Arabia is one of the most alluring markets in the MENA region. The sheer scale of the market, the sophistication of the demand, and the positive epidemiological trends are major draws.
The government’s promotion of generic replacement as a cost-cutting measure supports Saudi Arabia’s generic medication market and serves as a primary growth driver of this trend. In Saudi Arabia, spending on generic drugs is anticipated to increase quickly over the long term compared to that on patented drugs.
The population’s relatively high per capita spending on pharmaceuticals and prescribers’ predilection for copyrighted medications are two major barriers, albeit both factors will facilitate the growth of branded generic drugs.
The goal of Saudi Arabia is to generate 40% of all pharmaceuticals domestically is ambitious but doable with sufficient funding.
What are the drivers and foreseen opportunities for generics in the MENA region?
The Middle East’s generic pharmaceutical industry is growing and is being driven by several demographic factors. These reasons include the rapidly altering dynamics of the population, such as population growth and aging populations. Due to the high number of pending patent expirations, generic medications have performed better in the Middle East.
A greater emphasis on population health, technological advancements in product innovation, and a rise in Middle Eastern pharmaceutical distributors have been the main reasons behind the UAE’s phenomenal expansion in the pharmaceutical business.
Rising per capita income and greater healthcare awareness have led to an increase in demand. In the coming years, the demand for pharmaceuticals is anticipated to be driven by a high life expectancy and rapid population expansion.
Despite several favorable factors, the MENA region’s healthcare systems have difficulties with service funding and delivery, with current regional policy emphasis on decreasing pharmaceutical expenditure.
Moreover, the countries in the region face difficulties in providing healthcare services as a result of a confluence of factors including an increase in the prevalence of non-communicable diseases, fiscal and economic pressures. As a result of the worldwide economic downturn, public health systems are under growing pressure to cut back on rising medication budgets.
MENA Region seems to have a beneficial opportunity for both local and international pharmaceutical companies for generic drug manufacturing and import. The decreased mortality rate, and improvements in the healthcare system has led to an increase in population which in turn has led to increased disease rate and generics demand. Countries like Sudan, Kuwait, and Jordan are working to integrate generics into prescription activities. Post-Covid multiple initiatives have been taken by the government to promote local generic manufacturing to deal with the increasing disease burden.