DOHA: Current uncertainties such as product registration, pricing and intellectual property protection are among the top issues that significantly curb the appetite of international drug firms to set up manufacturing facility or do research in the Middle East, including Qatar.
Political instability in the Middle East North Africa (Mena) also plays the spoilsport, despite the fact that the region, especially the GCC countries, has a huge potential for key life sciences markets like the pharmaceutical, biotechnology and medical technology, said a report by Deloitte ‘Global life sciences outlook: Resilience and reinvention in a changing marketplace’.
“In the GCC countries, with most significant economic activity in the Middle East, a growing and aging population and increasing healthcare expenditure per capita are supportive of life sciences and healthcare industry growth,” said Hassib Jaber, life sciences sector leader at Deloitte Middle East. “This is in part due to the spread of chronic diseases, as the region is experiencing epidemics in diabetes and cardiovascular illnesses.”
A key challenge is the speed of registering and approving new drugs. Price controls are stringent and mainly driven by the pricing mechanism set by the health ministers’ council. According to the report, the GCC population is expected to go up by 5 percent year-on-year, driven mainly by the influx of expats. While the dominant age group is estimated to be 30-44, the 45-65 and 65 plus groups are expected to grow cumulatively by an average of 6 percent between 2011 and 2020.
There are several region-based pharmaceutical manufacturers that produce solely generic drugs. Despite efforts to promote these products, doctors and consumers prefer international, recognised brands over local generics.
Resident manufacturing companies also face stiff competition from international firms, forcing them to target export markets such as Southeast Asia and Africa.
In the GCC, prescription drugs account for an average 89 percent of the region’s pharmaceutical sales. Within prescription drugs sales, patented products account for 90 percent.
Among other favourable trends in the region are continually improving healthcare standards; increasing governments’ investments in technological advancements and health awareness; the growth of smaller healthcare clinics and ambulatory centres; and a strong medical tourism industry.
“In 2013, the life sciences sector was less impacted by the recent global economic uncertainty than other sectors. However, it is facing reimbursement pressure from escalating costs and overwhelmed health systems across the world. Still, an overview of recent sector performance shows that it is favourably positioned to achieve success in the next few years through increased innovation and value delivery,” said Jaber.
The Peninsula
