Saudi pharmaceutical market value forecast to rise to SR14bn

30/01/2011 00:00 AST

The Saudi pharmaceutical market is the largest in the Gulf Cooperation Council (GCC). The vast majority of the market is currently provided by imports, mainly comprised of patented and over-the- counter (OTC) drugs. Local production is mainly involved in the secondary manufacturing of generic products. In 2008, patented drugs dominated the market, with generic drugs trailing well behind. However, the market share of patented drugs is expected to erode over the 2009-2012 forecast period as mandatory price cuts are imposed, generic-friendly policies enacted and registration for innovative drugs delayed in laboratory analysis, the Jeddah-based National Commercial Bank (NCB) said in its Saudi pharmaceuticals sector review released on Saturday.

The leading Saudi pharmaceutical companies are Saudi Pharmaceutical Industries and Medical Appliances Corporation (SPIMACO), Tabuk Pharmaceuticals Company and Jamjoom Pharmacy with market shares of 7.2 percent, 3.9 percent and 3.2 percent, respectively in 2009. Multinationals tend to enter the market through joint ventures with Saudi firms. Currently there are 9 joint ventures in the Kingdom, and GlaxoSmithKline's (GSK) strong product portfolio allows it to dominate the market with a share of 10.3 percent in 2009.

Market determinants

The most significant factor driving pharmaceutical demand is the rapidly growing population. Total population has grown at a CAGR of 2.4 percent over the 2000-2008 period and is expected to continue accelerating at this rate, reaching 28.5 million by 2012.

The rising wealth and private consumption of the population account for a great deal of pharmaceutical market expansion. Despite dipping slightly in 2008 in light of the global economic crisis, GDP (gross domestic product) per capita has been steadily rising for the past decade at a CAGR of 6.27 percent and is estimated at SR60,669 for 2010. Although there is a major unemployment problem within the Kingdom, government benefits, subsidies and high levels of personal wealth will keep the consumer market active, the NCB said in its report.

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