How quickly can a country truly transform its healthcare system, while making it sustainable for the future? The mindset of Emiratis is that anything that is feasible and beneficial for the country should and will be done, regardless of the cost. This is why health authorities have been moving at record speed to build new infrastructure and shape regulatory frameworks worthy of a first-class healthcare system.
Amin Al Amiri, undersecretary for medical practice and license at the UAE’s Ministry of Health (MOH), augurs that “the UAE is different from all other Arab countries. Certainly we are moving to improve harmonization with GCC countries and other Arab countries, but the UAE has a different situation. Our business opportunities are unique, the system of governmental procedure and regulations implemented here in the Emirates are completely different. We do everything as a fast-track process, we support foreign investment and we consider them as strategic partners. The UAE does not have difficulties with regulations because we are used to high transparency in our work and are moving to digitalize our services so that they are available online.”
While the transparency of the country’s government is generally lauded as exceptional in the world, particularly for the Middle East region, some inefficiencies regarding health authorities do exist. Most notably is the tripartite split of regulatory agencies, consisting of the MOH, Health Authority Abu Dhabi (HAAD) and Dubai Health Authority (DHA). Similar to the American system of governance, where states are responsible for the laws specific to their geographies, the UAE is composed of seven emirates, each with its own government.
The MOH is responsible for country-wide regulations, including product registration, import/export processes and pricing, as well as overseeing healthcare provision in the less fortunate emirates. In parallel, HAAD and the DHA each establish independent regulations for reimbursement and the distribution of products in their respective emirates. Despite this unusual set up, the common goal of bringing innovation as speedily as possible does seem to unite all three parties. Executives in other parts of the world believe that innovation comes late to the Middle East, but nothing could be further from the truth. Whereas in the past the region was slow to bring innovation, doctors today are very eager to use new products and to have access to them. Now with the Internet and all the available media, practitioners learn about the latest treatments and immediately start searching for ways to use these new products for their patients.
Having arrived in Dubai only a few months ago to head Takeda’s Middle East operations, Giles Platford provides his first impressions of the GCC markets. “The UAE and KSA are markets where you have very professional healthcare institutions. Your private hospitals are like five-star hotels, you’ve got public hospitals that are like private hospitals in other countries. Definitely the standard of care here is good. The willingness to receive innovation is very high. An efficient approval process is reflecting that. Typically, companies will foresee that the UAE will be the first market to launch in the region. I think the perception of the UAE is very positive in the least.”
Almost unanimously, the UAE is considered the fastest adopter of innovation in the Middle East, allowing for the registration of products immediately after they have been approved by the US FDA or the European Medicines Agency (EMA). This process can take as little as 3-4 months, which has led some companies to designate the UAE as a priority launch country ahead of any other emerging market.
AstraZeneca’s president for the Gulf, Samer Al Hallaq, recounts that “generally the challenges in the Gulf region are related to the fast pace of the market, which demands the introduction of new products into these markets. I would say these are positive challenges and we are lucky to be considered early launch markets within the Middle East, because the healthcare system here allows for speedy approvals and registration. We can bring innovation very quickly to this part of the world because of this support to bring breakthrough and innovative medications.”
“The real challenge then becomes ensuring access to the medication for all patients in the market and in all parts of the country. Given that we have to deal with both private and public sectors, and each one has a different timeframe and approval process, bridging those two is our priority. The advantage is that the private sector generally has a quick uptake of innovative products, and governments sup-port the fast entry of those products into the market to benefit those patients who can afford them.” This is particularly true for specialty and rare disease pharmaceuticals whose patient populations are tiny in a country as small as the UAE.
Until June 2013, the pricing of pharmaceutical products was entirely unregulated and companies were allowed to set prices according to the general laws of market demand. On average, the UAE had some of the highest prices in the region for innovative products given that healthcare is free for all Emiratis, and the majority of expatriates (about 90 percent of the population) are insured by their employers. Furthermore, 80 percent of all pharmaceutical products are imported from the US and Europe, which inherently makes them more ex-pensive than locally manufactured drugs. European products in particular experienced drastic markups given that they were purchased in Euros, while the local currency is pegged to the dollar, which exposed those products to currency exchange fluctuations.
In a move to stabilize such oscillations, this past June the government implemented a round of price cuts that affected over 6,600 pharmaceutical products out of a total 7,500 registered. Beyond simple price slashing and price capping, the new regulation mandates that all pharmaceutical products be priced according to their dollar value. As such, many products experienced price decreases between 1-40 percent, while some products actually saw small increases. Nevertheless, the move has generally been welcomed by the industry as it allows for improved forecasting now that prices will remain constant. Furthermore, as the GCC countries move towards greater harmonization of regulation and pricing, these lower prices are better referenced with those of neighboring countries.
“Some markets like UAE and Kuwait are willing to pay premium prices for innovation, but then when those products enter lower-income neighboring countries, there needs to be an alignment in terms of prices. Typically this means that initially we have to set lower prices in the higher-priced markets, so that they are comparable to prices in other countries”, elaborates AstraZeneca’s Al Hallaq.
Bayer Healthcare’s Abdallah explains that “at Bayer we have established a policy of referencing prices across the entire region. Eventually there might be some variations in the final price to consumers, but this is due to markups imposed by agents and distributors, which of course vary from country to country. Currently there are efforts to unify prices across all the GCC countries, including Saudi Arabia, with the aim of protecting the final consumer.”
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