The strong growth forecast comes despite regional pressures such as low oil prices, which have caused a slowdown in public sector growth and pressure on drug prices
The pharmaceutical market in the Middle East and North Africa (Mena) region is expected to grow to around $50 billion by 2025, up from $32 billion last year.
According to BMI, the Mena’s $32 billion drug market is forecast to post a 7 per cent compound annual growth rate (CAGR) through to 2020. The $10.7 billion North Africa market will be a strong driver of growth with a 7.6 per cent CAGR through to 2020. This will be followed by the Middle East’s $21.3 billion pharmaceutical market and it’s projected 6.6 per cent CAGR through to 2020.
These strong growth forecasts come despite regional pressures such as low oil prices, which have caused a slowdown in public sector growth and heightened pressure on drug prices.
Increased privatisation, in combination with a continued dependence on drug importation has seen regional corporations partnering with pharmaceutical companies in developed countries to market and distribute drugs.
The Mena region›s pharmaceutical markets will remain a key area of opportunity for multinational drugmakers, forecasts BMI in its roundup. The main trends over the coming years will be increasing healthcare privatisation and greater public-private health partnerships – which should provide momentum for drug sales. However, a challenging economic and political outlook for the region as a whole will create operational hurdles for pharmaceutical firms in Mena.
Whilst austerity and regional instability is set to remain the norm in several states, all Mena countries will look to restrain public sector bills and advance cost-containment measures within the pharmaceutical sector, it said.
In 2017, the Mena region›s pharmaceutical and healthcare markets will be shaped by a range of opportunities and challenges. Ongoing trends such as the rollout of compulsory health insurance schemes, generic substitution and medical tourism are expected to continue shaping the pharmaceutical market. Challenges will intensify, however, and while discrepancies exist at the country-level, growth is expected to be muted in 2017 as the impact of a slow recovery within the oil sector will continue to impact pharmaceutical spending.
The sector in the region will be shaped by numerous factors in 2017, including a slowdown in public sector growth as a result of low oil prices, regional challenges on the back of heightened pressure on drug prices and economic instability. According to a BMI forecast, Mena›s pharmaceutical expenditure will increase to $33.4 billion in 2017, up from $32.2 billion in 2016.
UAE PHARMA TO DOUBLE
Dubai is poised to play an increasing role in the global pharmatech industry with the UAE pharmaceutical sector’s value is set to double in the next four years, a senior official has said.
The UAE’s pharmaceutical industry, which is valued at over Dh11 billion ($3 billion), is expected to almost double to Dh21 billion ($5.7 billion) by 2020.
The global demand for pharmaceuticals and the increasing expenditure on healthcare, is helping Dubai consolidate its position in the global pharmatech ecosystem, said Marwan Abdulaziz Janahi, executive director of Dubai Science Park.
Speaking at the Healthcare Investment Middle East and North Africa (Mena) in Dubai, Marwan Abdulaziz Janahi, executive director of Dubai Science Park, said: “The regional healthcare industry has grown exponentially, and sustained investment in world-class infrastructure means we are now in a unique position to be able to attract some of the world’s leading companies and experts in the field of pharmaceutical manufacturing and pharmatech to Dubai Science Park.”
“Many of these companies are leading the way when it comes to research and development, and is one of many reasons why our business community has grown to more than 300 companies,” he said.
Investments in healthcare infrastructure has enabled opportunities for global and regional manufacturers who benefit from Dubai’s location to reach the rest of the Middle East region, he said.
Over the last decade, Dubai Science Park has created an ecosystem to enable the growth of the emirates’ life sciences business community, and established new benchmarks for infrastructure available to business partners. This has resulted in the rise of a thriving community of healthcare professionals who benefit from a robust regulatory environment and one of the highest per-capita medicine expenditures in the world.
Janahi’s remarks came during a panel discussion on the relationship between the pharmaceutical manufacturing and supply chains, where the discussion mainly focused on how investors can maximise emerging opportunities in manufacturing and pharmatech in the region’s healthcare sector.
A report published by BMI expects these sectors to contribute to a regional life sciences industry that could be worth Dh69.3 billion ($18.8 billion) by 2019, equivalent to 37 per cent growth from Dh50.7 billion ($13.80 billion) in 2014. As companies take advantage of innovative new trends in the industry, the region could be braced for a spate of mergers and acquisitions, which amounted to $520 billion in 2014, according to Deloitte.
Janahi said: “At present, most of the world’s top multinational pharmaceutical companies have set up regional headquarters and manufacturing plants in the UAE, and we are privileged to call some of them our partners.”
“Together with Pfizer, Bayer, Amgen and Medtronic, to name a few, we have built a strong and healthy ecosystem that will see a myriad of medicinal manufacturing plants to come online by 2020,”he added.