The UAE pharmaceutical market is the second largest in the Arabian Gulf region and was worth US $548,542 million in 2006 within a population base of less than 5 million people.
Record oil revenues and the expansion of the private healthcare sector have fuelled the robust growth of the UAE's pharmaceuticals and healthcare market. Strong growth in pharma business can also be attributed to rapid modernization in the healthcare sector, expanding population and growing foreign direct investments. The market enjoys some of the highest drug prices in the region. However, recent government price-restrictions on a range of drugs will have an impact in coming years.
UAE remains reliant on imports, which account for more than 80 per cent of the drug market. In order to wean itself from foreign imports, the Ministry of Health (MOH) is taking action to facilitate private drugs production. The government is helping local companies by speeding up the registration process for their drugs. The MOH is constantly bringing procedures in line with international standards.
As per Mat (2) 2007 IMS Reports, total UAE market is 1.65 billion Dirham and by 2009, the market is likely to cross US $1 billion mark.
The Gulf Co-operation Council (GCC)'s joint tender for drugs and healthcare products was worth US $665 million in 2006, an increase of US $84.5 million over 2005, according to official reports.
Authorities are planning to extend health insurance coverage to the entire population through the establishment of a National Insurance company. The UAE's expatriate workforce is estimated at around 2.7 million and is growing rapidly as the country embarks upon a construction boom. In the case of making insurance compulsory for all, Abu Dhabi has already taken the lead and it is likely to see the implementation of insurance coverage in Dubai first and in other Emirates subsequently.
UAE drug market could offer a strong investment opportunity over the next five years, as a number of factors are expected to push the medicine consumption up. The rise of chronic diseases at alarming level dictates long-term need for chronic care products. Diabetes and cardio vascular health care products are gaining top most market place, while life style products have always been popular among UAE consumers with the high purchasing capacity. The high market growth coupled with the country's world-class intellectual property rights is also protecting the innovators.
Indian presence
A few Indian majors like Ranbaxy, Dr. Reddy's, Cipla, and Lupin are already having a major presence in UAE and other GCC market. Several other Indian companies are trying hard to make their presence in this part to take advantage of the vast growing economy. The biggest hurdle for them is the strict regulatory rules existing in the region. Only quality products and quality manufacturers can survive the tough competition.
World class manufacturing facilities
The UAE's domestic manufacturing industry was lacking technological capabilities and this made the country an excellent investment destination for foreign drug makers. However, today, the region is noted for the significant number of ultra modern developments such as the Dubai Healthcare City (DHCC) and the biotechnology park Dubiotech.
Opportunities
The pharma companies can gain strong market position in the MENA region by launching new products, expanding the geographic reach and increasing market share. This is made possible due to the world-class infrastructure available through out the UAE.
Also, the companies can grow business by expanding the product portfolio, developing manufacturing capabilities as almost 80 per cent of the pharmaceutical products are still imported.
Besides, they can enter into technical collaboration with the multinational companies and grab niche product opportunities by meeting the market demands.
Neopharma: It is an integrated pharmaceutical company and is driven by innovation and quality. The company has a state-of-the-art pharmaceutical manufacturing plant and world-class technology.
Neopharma has emerged as Abu Dhabi's first state-of-the-art pharmaceutical facility spread over an area of 100,000 m2. The facility encompasses two independent production blocks - one dedicated for the manufacturing of general products and the other, an exclusive centre for manufacturing beta lactam products. The plant is designed for large-scale production of tablets, capsules and liquid orals.
The core component of both the plants is an exclusive research and development section. The manufacturing complex has been laid on the foundation of modular concept - a time tested design used by leading manufacturing companies across the world.
The plant design is framed on US FDA guidelines and complies with current good manufacturing practices. Besides following global benchmarks in manufacturing technology, the plant incorporates efficient control methods to ensure stringent product quality regulations.
As a part of ever-increasing nmc group's business neopharma signed an MOU with Biocon to establish Neobiocon, a joint venture company in Dubai's biotechnology and research park, Dubiotech.
The new venture expands Biocon's global network to provide affordable bio-therapeutics for unmet medical needs. This will serve the regions alarming need for biotech products in treating cardiovascular and other chronic disorders.
Julphar: Popularly known as Gulf Pharmaceutical Industries, Julphar is one of the leading and established domestic pharmaceutical manufacturers in the region. The company has got manufacturing facilities located strategically to cover the MENA as well as European Union markets.
Julphar is expanding its capability by developing state-of-the-art plants to produce antibiotic powder filling injectables and ointments that can be exported to USA and Europe. The company also has projects specialized for producing bulk raw material and finished biotech products.
The Government of Ras Al Khaimah is the major shareholder in Julphar (presently holding 24 per cent of the capital) and plans to export its products to all over the world.
Global Pharma: It is Dubai's first pharmaceutical manufacturing company which is designed to global standards. While Dubai Investment holds 65 per cent equity in global pharma, the Indian firm Kopran, holds the rest of the equity and is responsible for technology transfer.
Global pharma offers international quality pharmaceutical products to the Middle East and is aspiring to spread its reach in the global markets.
The company expands its horizon by offering contract manufacturing, exporting, licensing-in, marketing and distributing products of multinational pharmaceutical companies in the Arab world. The range of dosage forms manufactured at global pharma includes tablets, capsules and dry syrups.
Pharmacare: located in Jebel Ali Free Zone, Pharmacare has a world-class pharmaceutical manufacturing facility. Pharmacare plans to manufacture a wide range of pharmaceutical specialties ranging from highly sophisticated prescription products to common OTC products in most of the common dosage forms. Pharmacare started its operations with generic brands in therapeutic categories where high volumes could support the plant and keep operational. The company focuses mainly on leading therapeutic classes in the UAE market where major brands are to go off patent in the near future.
Medpharma: Based in Sharjah, Medpharma is a pharmaceutical generic manufacturer, offering a wide range of pharmaceuticals - liquids, solids, semisolids and OTC products. Medpharma is Sharjah's first pharmaceutical manufacturing plant. The company proposes to manufacture products for global pharma players on licensing. The companies also render its products to other GCC countries including Saudi Arabia.
UAE's strategic location between Europe and Asia, has established numerous Free Trade Zone Areas to give businesses an additional incentive.
The Free Trade Zones in the UAE are well equipped with all the modern amenities and communication infrastructure required for setting up a business. Corporate tax and customs duty exemption and absence of levy on exports and imports are some of the other benefits.
Over all, the UAE provides a platform for pharmaceutical companies to spread their products and services to consumers who are willing to improve their life and reduce health risk associated with modern and sedentary day-to-day life style.
(The author is managing director and chief executive officer of Dubai-based Neopharma)