Pharma sector in the pink
Per capita expenditure is set to increase to Dh883 per year from the current level of Dh662 – which would mean a 33 per cent growth in the UAE's consumer medicines market to Dh4.4 billion by 2012.
Price cuts are expected to stimulate higher sales, said the UAE Pharmaceuticals and Healthcare Report Q2 2008, produced by Business Monitor International. Health authorities are making concerted efforts to reduce the prices of medicines in the UAE, which are among the highest in the region.
The report says other factors that will drive the growth of the country's pharmaceutical market include rising purchasing power, record oil revenues and the expansion of the private healthcare sector. The private sector has expanded in recent years after the government stopped providing free medical assistance to expatriates – a trend that is spreading to other GCC countries.
In addition, the UAE has one of the fastest-growing populations in the world and this will drive up market value in the long term.
In the next decade healthcare spending in the four emerging markets of China, Russia, India and the Middle East is set to triple, keeping pace with the expected population increase in these territories of one billion people. The development of regional harmonisation is another important factor in market growth. The GCC is hoping to implement a unified pricing policy and drug regulation system. Such harmonisation will lead to a fall in medicine prices in the UAE but should establish stronger regional trade links and bring regulations into line with international norms, boosting market development.
A UAE committee charged with devising a new system has suggested the cost, insurance and prices of imports be reduced to put them on par with the lowest in the region.