Interview: Ayman Sahli
To what extent has the UAE’s health care industry been affected by the economic crisis? Where do you see the most potential for growth?
AYMAN SAHLI: The health care industry in the UAE was not that affected by the economic downturn and has continued to grow at a double-digit pace. Being a necessity, the health care industry is recession-proof and there is still a lot of potential for growth.
The UAE spends just 3.2% of GDP on health care and spending per capita is $1200 as compared to the US, where government spending on health care is close to 14% of GDP and expenditure per capita is $6000. Also, with the UAE’s population increasing rapidly and touching the 8m mark, and the rising prevalence of lifestyle diseases like obesity and diabetes, the health care industry is set to boom. More precisely, the UAE’s pharmaceuticals sector has enjoyed tremendous growth over the last few years, and projections put its compound annual growth rate at about 10% yearly.
We see a potential for growth in the generic drugs industry from the introduction of off-patent products in the region. Whenever there is a product that is off-patent, we try to manufacture it to bring it to this region and make it widely available. The advantage of locally produced generic medication is that the availability of first-class, quality medicines at affordable prices in the UAE and also across the globe is ensured.
What is currently being done to address the problem of regional preference for foreign-made patented pharmaceuticals?
SAHLI: Residents tend to prefer medicine brands from the US and Europe, which are still dominating the market while generic drugs are continuing to emerge. But generics will catch up in the future.
Today a significant percentage of pharmaceuticals in the UAE are imported, which can lead to high prices and critical shortages. To address this issue, Julphar will be the first Middle East insulin maker. Producing insulin in RAK would lower costs and ensure supply for the growing epidemic of diabetes in the region. In the UAE alone, one in four nationals have diabetes, according to government statistics. Insulin needs to be used regularly so lack of supply or a delayed shipment from overseas is potentially very concerning. More than 80% of the plant’s capacity will also be exported, with the biggest export market currently being Saudi Arabia.
What opportunities exist for private sector participation in the pharmaceuticals sector and is there room for greater industry development?
SAHLI: The UAE’s pharmaceuticals sector faces several challenges as the local manufacturing sector is relatively small and focuses on basic drugs. The market relies on imports for high-tech medicines. Though local manufacturers are taking initiative, imports of high-tech medicines are strengthened by the fact that the pace of regional innovation is still too slow. Opportunities are aplenty, but there is also stiff competition.
The GCC is among the fastest growing, richest markets in the world. Increasing the level of private health care investment is a priority across the UAE. Indeed, like many countries facing a surge in health care costs, the importance of bringing private health care providers and insurance agencies into the equation is paramount to controlling prices. Additionally, the UAE’s government agencies are focused on creating the right environment for public-private partnerships and foreign direct investment in the sector. Critical supply gaps have created direct investment opportunities for pharmaceuticals companies, and international firms are strongly encouraged to partner with local providers as they seek to enter this important and high-growth market.
Overall, the UAE has positioned itself as an attractive investment prospect for companies seeking to expand their footprint in the Gulf region. The country presents a substantial opportunity for growth within the framework of strong regulatory oversight as well as ambitious plans to expand and improve health care coverage for its growing population.
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