Massive growth is being forecast for the pharmaceutical and biotechnology markets of the Middle East states, driven by moves to liberalise national economies, the introduction of mass health insurance and the determination of the region’s governments to become self-sufficient in pharmaceuticals production.

All these factors are leading to “huge investments taking place in both the private and public health sectors, with major benefits to the pharmaceutical industry,” according to Simon Page, group director of life sciences at IIR Middle East, which is organising the Pharmaceutical and Biotechnology Middle East (PABME) conference being held later this month in Dubai.

Overall, the Middle East’s pharmaceutical market is currently valued at more than $12 billion, and it is expected to continuing increasing at around 10%-15% annually, compared to the forecast slowdown to less than 5% a year growth in the mature markets of the USA and Europe. The major drivers for growth in the Middle East are greater access to generics and innovative new medicines, as primary care improves and more people are covered by health insurance, while chronic diseases, traditionally the leading killers in the developed world, are now also the leading cause of death in the region.

More than 450 pharmaceutical manufacturers are now operating in the Middle East, and the number is growing fast. These firms are also “determined to grab a share of the global export, research and contract manufacturing markets,” said Mr Page. Governmental “free zones” offer incentives to overseas firms, including 100% ownership and tax benefits, to set up within developments such as Saudi Arabia's $534 million King Fahd Medical City in Riyadh and the Dubai Biotechnology and Research Park (Dubiotech) - the Middle East's first dedicated life sciences hub which will cover 30 million square feet upon completion.

These initiatives are expected to fuel massive growth in the region’s overall market for biotechnology products, which is currently valued at more than $10 billion and growing 15%-18% a year.

Regional differences
The Gulf Coooperation Council (GCC) nations - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) –constitute the leading pharma purchasing group in the region, accounting for combined sales of $2.7 billion and with a population expected to reach 44 million in 2020 from 31 million at the end of 2000. All six states are currently heavily dependent on drug imports.

The GCC’s largest pharmaceutical market is Saudi Arabia, with a population of over 27 million, annual pharma sales of $1.7 billion (65% of the GCC total) and accounting for 85% of all medicines imported into the region. Second is the UAE, a federation of seven states including Abu Ahabi and Dubai, with a small (4.5 million in 2006) but fast-growing population, which imports 90% of its medicines. The UAE market is expected to be worth $1.1 billion by 2009.

The small populations of other GCC states, such as Qatar’s 907,000 and Bahrain’s 800,000, make them less attractive to drugmakers, although a recent report by Research and Markets forecasts that, “driven by a growing non-communicable disease burden and continued reliance on imported patented drugs,” Bahrain’s pharmaceuticals market will increase from $58.3 million in 2007 to $83.8 million by 2012.

Oman is also small, with a population of just 3.2 million, but with a world-leading health care system which has helped its drugs market grow 10% to a year an estimated $100 million in 2007. And wealthy Kuwait’s 2.5 million inhabitants have exceptionally high per capita health spending, which Business Monitor forecasts will grow the market from $360 million in 2005 to $525 million by 2010.