New Market Research Report: United Arab Emirates Pharmaceuticals & Healthcare Report Q4 2013

A regional leader in terms of healthcare provision, there are changes ahead in the UAE as the Gulf Cooperation Council introduces a unified pricing system. This is likely to generate a reduction in drug prices to bring the cost of pharmaceuticals in line with larger market, such as Saudi Arabia, and this may change the dynamics of the market - changing the role that more expensive, branded and patented drugs play. Price cuts are already affecting the market, with multinationals aware that this is eating into their margins. Other changes affect expatriate residents, which account for a large proportion of the population. The introduction of a health card will give foreigners the right to discounts on the cost of public healthcare. The UAE has a growing burden of non-communicable diseases, and a thriving medical tourism industry. This combined with relative political stability means that it offers considerable opportunities for investors in healthcare.

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Headline Expenditure Projections:

* Pharmaceuticals: AED6.67bn (US$1.81bn) in 2012 to AED7.25bn (US$1.98bn) in 2013; +8.8% in local currency and +8.9% in US dollar terms. Forecast revised down from Q313 because of macroeconomic conditions.
* Healthcare: AED53.35bn (US$15.07bn) in 2012 to AED55.35bn (US$16.87bn) in 2013; +11.9% in local currency terms and +12.0% in US dollar terms. Forecast raised from Q313 on account of new historical data.

Business Environment Rating: UAE fell to one place in our Pharmaceutical Risk/Reward Rating (RRR). In Q413 it ranked fourth out of a total of 30 markets in the Middle East and African region, with a score of 57.0.

Key Trends & Developments:

A decree introduced in August 2013 stipulates that expatriate workers in the UAE will have to pay an annual fee of AED500 (US$136) to renew their health card; the card enables foreign workers in the country to obtain a 50% discount at state-run healthcare facilities.

Julphar signed a deal with Italian drugmaker BMG Pharma in September 2014, which grants Julphar the exclusive rights to register and commercialise BMG's gynaecology products under its Ginoxil brand in the MENA region. Julphar plans to launch these products in 2014.

Health ministries in the Gulf Cooperation Council member countries are aiming to publish a mechanism to standardise medicine prices across the region in November 2013. The complete process of medicine price standardisation will take around four years to implement.

BMI Economic View: We forecast that real GDP will grow by 3.2% in 2013 and 3.8% in 2014, with nonoil sectors contributing to this growth.

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