Economic View

On the ongoing evolution of health care technology and provision 

How has the outbreak of Covid-19 impacted supply chains in the global pharmaceutical industry? What long-term effects will these disruptions have on the Saudi market?

AYMAN TAMER: Covid-19 has impacted the supply chain industry at large. This is true not only for finished products, but raw materials as well. We have noticed interruptions in the supply of both pharma and medical supplies related to Covid-19; however, the latter has been impacted more. If the crisis persists for a longer period, accompanied by longer lockdowns, further interruptions to global supply and delays in deliveries may occur. 

Logistics services are the primary reason for this delay. As such, Saudi Arabia is looking to foster localisation and encourage local production, and continue sourcing products from various countries to reduce the impact of any disruptions. Inventory levels will go up for the same purpose. Production and availability of local materials will need to increase in the future to overcome such disruptions.

To what extent is the pharmaceuticals industry adapting to the needs of Saudi Arabia’s population? 

TAMER: The pharmaceuticals industry in Saudi Arabia is undergoing a major reform on all fronts driven by Saudi Vision 2030 and the Vision Realisation Programmes. With a substantial trade deficit, government bodies and the industry regulator, the Saudi Food and Drug Authority (SFDA), are improving the investment climate by expediting the registration process from an average of between 12 and 18 months to less than six months, with an aspiration to achieve 60 days. At the same time, the SFDA is applying stringent inspection measures to bring high-quality products to patients in Saudi Arabia. Other government agencies are joining forces to ensure that the Saudi market is a level playing field and offers a fair, competitive landscape. 

Multinationals and local manufacturers are responding to the growing industry by increasing their footprint in Saudi Arabia and expanding their product portfolio respectively. The industry’s size is estimated at $8.5bn, with around 78% of needs imported and the remaining 22% produced locally. The industry is steadily expanding, with a compound annual growth rate of 5.6%. We predict that this will continue, driven by population growth, the epidemiology shift to an aging population, the increased incidence of non-communicable diseases, higher government spending and the adoption of new technologies, such as e-dispensing and e-commerce.

Which areas are seeing the most impact from technological and innovative advances?

TAMER: Technology is leading a global disruption in the health care industry, which will eventually change the market landscape. Non-conventional players such as Amazon, and other tech giants like Google and Apple, are leading these changes. In Saudi Arabia the government’s emphasis on digitalisation and the adoption of technology is reflected in developments such as the Saudi eHealth Analytics Platform, the Central Appointment System, the electronic prescription service Wasfaty and the implementation of unified electronic medical records. In addition, telemedicine and telehealth are emerging trends with high adoption rates in Saudi Arabia. Looking ahead, personalised medicine, precision medicine, regenerative medicine, robotics and remote health management systems such as wearable devices will transform the way health care is being conducted.

At the forefront of this transformation is artificial intelligence (AI), which will take advantage of the wealth of information in our database that has previously not been utilised. By building the necessary algorithms and data analytics, AI will help bridge current health care gaps by complementing and possibly competing with human abilities. 

How can retail players in the Kingdom best evolve their strategies to ensure they capitalise on digital trends and the growth of e-commerce? 

TAMER: New regulations will change the market landscape in the retail sector and retailers will have to rethink their strategy by adapting to emerging trends. Retail pharmacies can now extend their service offerings to include patient education, urgent care services like vaccinations and vital sign monitoring for private patients.  

In what ways can public-private partnerships (PPPs) be leveraged to greater benefit of the health care sector?

TAMER: In line with Vision 2030, the government is launching many PPPs in the health sector, from the dispensing of pharmaceutical products to health care provision. The public sector will move from simply providing health care to collaborating with the private sector in order to provide precision medicine and reportable testing.

I believe that in the near future PPPs will encourage further investment in health care, with the aim of exporting finished products to neighbouring countries. The first step in these partnerships will be to allow the private sector to be part of the value chain of government services. These programmes will bring many benefits to the Kingdom and will result in the construction of new hospitals, primary care centres and laboratories. Private companies will then charge patients on a price-per-therapy basis.