Accounting for less than two percent of the global pharmaceutical market, the Middle East has long been somewhat overlooked by many drug makers, most of whom seemed more intent on chasing demand in the decidedly more populous Asian market space. But, with an estimated annual growth rate of 10 percent, the region is now consistently outpacing traditionally sought-after “pharmerging” heavyweights such as China and Brazil, and demanding a recalibration of life science companies’ emerging market strategies.
“While the IMF recently downgraded its overall outlook for the world economy, it’s perhaps pertinent that it has conversely been steadily raising its projections for the Gulf Cooperation Council (GCC) states with economic growth now anticipated to be sustained over the long-term on the back of increased government investment and an improved regulatory environment,” observes Mohamed Galal, Bayer’s vice president and head of Middle East, consumer health division.
Economic growth [in the GCC] is now anticipated to be sustained over the long-term on the back of increased government investment and an improved regulatory environment
At the centre of this newfound momentum sits the United Arab Emirates. Once considered predominantly as a reliable staging post for engagement and interaction with the greater region, the diminutive, but technologically astute and developmentally advanced Emirati market looks now set to assert its own credentials as a prospective destination for big-ticket foreign investment in healthcare. Not only is the country’s modest population set to expand from 9.4 million people today to over 11 million by the end of the decade, but annual healthcare spending is projected to account for 4.6 percent of the country’s GDP by 2026, rising to well over USD 20 billion as the Arab nation pursues its diversification away from dependency on oil and instead bets big on high-end technologies of the future.
Indeed, the UAE’s growing prowess in disruptive technologies – from artificial intelligence (AI) and the harnessing of big data to sophisticated robotics and 3D bio-printing – arguably renders it more enticing and relevant to the life science community than ever before. “We’ve discovered that profound changes are afoot in this region of the world and that especially the UAE is making immense effort to introduce and master disruptive innovation rapidly. It’s something to keep tabs on because new opportunities are unfolding for everyone,” counsels José Antonio Alas, general manager for South Asia, Middle East, Turkey and Africa (SAMETA) at American drug developer Lilly.
The UAE is making immense effort to introduce and master disruptive innovation rapidly
Certainly, no one can fault the Emiratis for lacking ambition. His Excellency Abdul Rahman bin Mohammed Al Owais, the Minister of Health and Prevention, has already set about drawing up a grandiose public health roadmap covering no less than the next half century. “We look forward to a brave new future in medicine whereby our health services will be steeped in innovation and machine learning utilization with almost no human intervention. We expect that the healthcare of tomorrow will operate through smart services that reach patients wherever they are, and through implanting smart devices that will predict proactively specific diseases or complications, which will help to allow clinicians or robots to intervene remotely without even the need to hospitalize patients,” he predicts.
A Regional Hub
Ever a reliable partner and safe haven, the UAE has been managing to consolidate its longstanding reputation as a bastion of stability and openness within a region of high volatility and unpredictability, rendering the Arab nation the obvious candidate from which to launch hub operations. Indeed, in an overwhelming display of confidence in the Emirates, no fewer than 24 of the largest 30 pharmaceutical multinationals worldwide are currently choosing to base their regional headquarters within the country.
The Emirati government has created the optimal conditions for positioning the country as an import/export platform and service centre for the region
An openness to western culture, ever greater integration with international market norms, and amendments to foreign ownership laws so that overseas firms may now own 100 percent of local pharmaceutical companies, in particular within so-called ‘free-zone’ clusters such as Health Care City and DuBiotech in Dubai or KIZAD in Abu Dhabi, will no doubt only serve to further strengthen this eminence. Conversely, the impetuous leadership style and recent notoriety of Saudi Arabia, as well as the partial ostracization of Qatar, will have done much to lessen the appeal of any potential credible rivals for the epithet of ‘regional hub.’
“The Emirati government has created the optimal conditions for positioning the country as an import/export platform and service centre for the region. Besides its undeniable international breadth, the UAE ranks as the most reliable, secure and predictable country within its region. It’s also frankly the most attractive place for your personnel to be based out of when you factor in the modern infrastructure, security, easy access and high standards of living so I would go as far as to say that it is uniquely positioned in comparison with its neighbours,” argues Merck’s head of Middle East, Africa, Russia and the CIS, Paolo Carli.
When reflecting upon where to open our regional office, it became pretty clear that the UAE offered the most viable proposition
“The facilities and incentives on offer – from the free zones to special tax codes – have certainly gotten the attention of multinational companies. The country is an outlier in adopting a contemporary approach to addressing 21st-century challenges,” agrees Bayer’s Mohamed Galal.
French midcap drug maker, Ipsen has made a similar calculation in rolling out its new Middle East & North Africa (MENA) strategy. “When reflecting upon where to open our regional office, it became pretty clear that the UAE offered the most viable proposition simply because of the overall comparative ease of doing business and maturity of the supporting infrastructure including the availability of qualified individuals that could assist us in expanding our presence out across the region,” confides Khaled Elrefae, the company’s Middle East and Africa specialty care operations head.
Cities like [Dubai and Abu Dhabi] offer a level of access to talent that one would frankly be rather hard-pressed to locate elsewhere else nearby
This ability to source expertise is, of course, a critical consideration in a region with precious little historical tradition in pharmaceuticals and where the talent pool remains shallow. “Competing with titans of the industry for skilled personnel is becoming a serious challenge as the regional pharma market takes off because, at the end of the day, people do not just join companies; more often than not, their joining simultaneously entails leaving another so there’s only a finite number of highly skilled individuals to go round,” explains Mundipharma’s Ashraf Allam, regional vice president for the Middle East, Turkey and Africa.
Possessing blossoming expat communities and standing as self-styled gateways and connectors not only to the Gulf, but also to the wider MENA region, Dubai and Abu Dhabi can nowadays offer a certain degree of relief from this cutthroat competition in sourcing and retaining skilled staff. “Cities like this offer a level of access to talent that one would frankly be rather hard-pressed to locate elsewhere else nearby,” candidly observes Carli. Dr Mahender Nayak, head of India, CIS, Middle East, Africa and Turkey at Takeda fully concurs. “One of the undoubted strengths of the UAE is the diversity of the talent pool. I come from Singapore, another established hub, and even I find the calibre and variety of expertise impressive,” he assures.
Innovation Recipient
The UAE’s distinctive willingness to embrace innovation and the ‘can-do’ spirit of authorities also marks the country out as worthy of attention as an initial product launch platform. “Along with fellow GCC members, Kuwait and Saudi Arabia, the UAE is notable for its accelerated regulatory pathways. Due to these mechanisms, we often find ourselves able to launch products swiftly after approval is granted from the US FDA or the EMA,” explains Vishnu Kalra, Janssen’s managing director for the GCC block.
The Emirates ranks amongst the top two to three countries globally from a market access perspective for many of our product categories
“As such, we possess an in-country portfolio that closely resembles our global offering of innovative therapies, and the Emirates ranks amongst the top two to three countries globally from a market access perspective for many of our product categories… in some cases, we have witnessed an adoption rate that is swifter than in many European markets,” reveals Karla. “Naturally it makes sense for us to utilize the UAE as one of our go-to markets for building and gaining launch expertise, especially in instances of highly-focused therapies tailor-made for consumption by Middle Eastern patient communities,” he elaborates.
“Some of the enlightened policy developments that we have witnessed being introduced in recent years include regulations pertaining to fast-track approval, international referencing models for pricing, as well as outcome-based reimbursement approaches,” enthuses Genpharm CEO, Karim Smaira. “The FDA and EMA are now automatically recognized as the benchmarks in terms of drug approvals so the region does not require any further clinical trials for approved products,” he points out.
We feel the government genuinely understands the needs and the requirements of innovation right along the spectrum
Over and above the fast-track approval schemes, other insiders highlight the sheer approachability and pragmatism of the Emirati authorities when it comes to adopting and integrating latest generation therapies. Dream Samir, secretary general of the Pharmaceutical Research and Manufacturers Association Gulf (PHRMAG) describes the situation thusly: “many of our members regard the UAE as one of the most favourable business environments to operate in worldwide because we feel the government genuinely understands the needs and the requirements of innovation right along the spectrum. This starts with the need to provide speedy registration, but also encompasses many other critical elements such as the establishment of fair pricing systems that attract early innovation.”
“The authorities’ sustained commitment to the industry is why companies like ours continue to invest so heavily in the country… time and time again they prove receptive of the needs of the drug developer when it comes to the market access process and crucially they remain open to the idea of making changes and adjustments as and when industry requires them,” reflects Rashed Assouma, CEO of Elis Pharmaceuticals, a specialty developer of urology and erectile dysfunction products originally hailing from the British Virgin Islands.
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Myriam Hakim, general manager for the GCC cluster at Japanese rare disease outfit Kyowa Kirin very much concurs. “I believe that the dialogue between the national authorities and multinational companies is significantly more fluid than is often the case in other parts of the world, such as the rigidly imposed regulatory frameworks of Western Europe. In the UAE, industry and state are listening to one another and collaborating in positively shaping the future marketplace,” she ventures. Carsten Cron, executive vice president for Emerging Markets at STADA supports such an assessment. “Through round tables and brainstorming sessions, it has become very clear to us that the country is proactively pushing for a very vigorous and collaborative dialogue with the industry,” he says.
“What makes specific emirates such as Dubai rather special is there tends to be a concerted effort among all stakeholders, but led by the authorities, to set the enabling conditions to make the place attractive and competitive for the pharma industry. We consider this strong innovation mind-set to be a perfect match for what companies like us are striving to accomplish,” concedes Magdy Fahmy, CEO of integrated drug maker LIFEPharma.
What really impresses me is, once a decision is made, the sheer speed and efficiency of subsequent implementation
Equally applauded is the timeliness with which decision-making can be taken and executed. “What really impresses me is, once a decision is made, the sheer speed and efficiency of subsequent implementation,” muses Expanscience’s managing director for the Middle East, Africa and India, Frédéric Le Moigne.
A case in point is perhaps the experience of Al Khayyat Investments (AKI), one of the leading distributors and service providers for the healthcare industry in the Middle East. “One particular client decided to entrust us with one of their most important products, a one-time gene therapy to restore functional vision for patients with an inherited eye mutation,” recalls Doaa Albarbari, head of AKI’s pharma division. “The treatment is expensive, coming in at around USD one million, and requires a complicated temperature-controlled supply chain strategy at minus 65 degrees Celsius… The Ministry of Health, led by Abdul Rahman Mohammed Al Owais, nevertheless immediately exhibited great interest in this breakthrough product. Registration was completed within two to three months, and the stock has already been delivered, with the first patients expecting to be treated imminently,” he proudly recounts.
Local Market Prospects
As for the dynamics of the UAE’s own domestic marketplace and corresponding sales opportunities for drug makers, Business Monitor International (BMI) is projecting that the value of pharmaceutical sales will surpass USD 4 billion during the course of 2020 and forecasting a healthy year-on-year compound annual growth rate of 8.5 percent for the foreseeable future.
Almost 99 percent of the population now has access to mandatory health insurance. We want to continue to add benefits for every insured member, add preventive screening programs, and provide an environment that supports the maturity of the health insurance sector
While some analysts are quick to point out that the country’s population of only 9.4 million, which is relatively small by global standards, risks inhibiting the profitability of those pharma firms that depend on scale, other observers highlight the fact that healthcare has been placed right towards the top of the Emirati governance agenda and that significant funding is currently being directed towards that purpose. “Healthcare ranks as a major priority for the UAE and reforms to health insurance are a testament to this endeavour. Ensuring quality care for its population has become a key deliverable the government is working towards and that means that the local life sciences sector most definitely constitutes a growth market,” argues AmCham director Cara Nazari.
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There is certainly some evidence to support this premise. The health insurance scenario in Dubai, for example, has manifestly come a long way since its initial inception in 2013. “Nowadays, we have a robust health insurance system in place, and we aim to keep enhancing it. We have achieved our goal of ensuring essential health coverage for all Dubai visa holders and almost 99 percent of the population now has access to mandatory health insurance. We want to continue to add benefits for every insured member, add preventive screening programs, and provide an environment that supports the maturity of the health insurance sector. Our aim is to focus on building an enhanced health insurance system and the provision of specialized services,” boldly confirms His Excellency Humaid Al Qutami, director general of the Dubai Health Authority.
The market has been traditionally dominated by branded medicines. Nowadays, there’s been a complete about-turn and the penetration rate of generics is surging
Interestingly, one by-product from the introduction of universal health insurance has been an upswing in the generics segment since more and more insurance companies are forcing payers, meaning employers for the most part, to opt for cheaper generic-ized versions of therapies. “It’s important to understand that barely a decade ago, UAE doctors were simply not accepting generic medicines because of their perceived poor quality, which is why the market has been traditionally dominated by branded medicines. Nowadays, there’s been a complete about-turn and the penetration rate of generics is surging,” claims Madhukar Tanna, CEO of local branded generic player, Pharmax.
“There are many projects underway where local manufacturing companies are teaming up with international pharmaceutical companies and branded generics to provide local and regional suppliers,” reflects Peter Harradine, president of the Swiss Business Council. “Julphar Gulf Pharmaceuticals is an example of a leading local manufacturer that has been successful in the UAE and the Gulf region with its branded generic products. On an international scale, Dubai based Global Pharma, joined Sanofi in a partnership to produce some of its generic medicines in the UAE. Abu Dhabi based Neopharma entered a deal with Pfizer to produce locally some of their pain management, cardiovascular diseases and women’s health. Furthermore, the number of generic pharmaceutical manufacturing plants in the UAE is expected to increase more than double in the next few years,” he elaborates.
Pharma companies also have to keep abreast of potentially seismic changes to the country’s procurement regime with the Gulf States increasingly banding together with a view to better supporting homegrown actors. “We aim to become the benchmark in the provision of standardized procurement services based on global procurement standards so are seeking to harmonize the directory of pharmaceuticals, devices and medical supplies through a Gulf Joint Procurement Program, with controls in place across GCC Member States,” explains Sulaiman Al-Dakheel, director of the Gulf Health Council for the Cooperation Council States. Conscious that a full 80 percent of the tenders are presently being awarded to foreign drug makers, the aspiration is that they can, through concerted action, begin to develop the local markets sufficiently enough to be able to start investing more in local players. Other common decisions may also have a significant impact such as the signing of a free trade agreement between the GCC and India that many analysts predict will likely result in further generic penetration into the Middle East market.
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On the retail side, changes in consumer habits are opening up new opportunities for those players flexible, bold and agile enough to grasp them. “Online pharmacies are growing in a big way taking our products to a wider demographic. In fact, this is becoming a clear regional trend with the Middle East now constituting one of the fastest-growing OTC markets and valued at more than EUR two billion (USD 2.17 billion), right after Latin America,” notes Bayer’s Mohamed Galal. “Independent reports and primary market research data about our customers’ evolving needs and perceptions indicate that we have the potential to outgrow the market. A brave new era is approaching, and the industry is seeing many FMCG giants like P&G and Unilever penetrating the consumer health market. The self-care industry meanwhile remains still in its infancy out here,” he opines.
A Proliferation of Lifestyle-Related Illness
In terms of the most ‘in-demand’ therapeutic areas, the country’s demographics, economic development and cultural proclivities mean the nation exhibits an epidemiological profile broadly similar to many mature economies, with some additional quirks thrown in. Incidence of infectious diseases, for instance, is very low with the majority of patients instead reporting non-communicable maladies.
Smoking, obesity and a sedentary lifestyle are rife with the consequence that heart disease has become the leading cause of death here
“Compared to most other countries in the world, the UAE registers a greater prevalence of cardiovascular risk factors: One in two people suffer from dyslipidaemia, one in three has hypertension and one in five is diabetic… Smoking, obesity and a sedentary lifestyle are rife with the consequence that heart disease has become the leading cause of death here,” observes Omar Hallak, head of the cardiovascular department at King’s College Hospital Dubai.
“In this part of the world, there’s considerable scope for pharma and healthcare groups to help in the mitigation and treatment of lifestyle-related conditions such as diabetes,” emphasizes Lilly’s José Antonio Alas. “While incidence of diabetes may not have reached the epidemic proportions encountered in Saudi Arabia and Pakistan, where as many as one in four patients display symptoms of the disease, the levels are nonetheless still very high.”
A case in point is Pfizer’s Upjohn division, which has been introducing a whole host of innovative approaches and programs aimed at driving positive outcomes for people living with NCDs. Their “Keep on Beating” campaign, in partnership with the Ministry of Health, constitutes a multi-channel initiative on the risks of cardiovascular disease that includes, free screening for blood cholesterol, sugar levels and blood pressure, as well as interactive vending machines that instead of taking money, require users to undertake an activity and accomplish a certain level of exercise which would determine the free snack that would be dispensed according to the burnt calories. “NCDs continue to be the leading cause of death and disability worldwide, representing 71 percent of the global mortality, moreover, in emerging markets like this, the number jumps to a staggering 85 percent so there’s a great deal of work to do,” notes general manager GCC, Iraq & Iran, Ayman Mokhtar. Another example is the launch of Pfizer’s “Health Matters with Dr. Adam”, a multifaceted patient education campaign that consists of animated videos designed to increase health literacy and public awareness.
NCDs continue to be the leading cause of death and disability worldwide, representing 71 percent of the global mortality, moreover, in emerging markets like this, the number jumps to a staggering 85 percent so there’s a great deal of work to do
“Oncology is also important, reminds Alas, “not so much because of the incidence per se, but because treatment and diagnosis tends to occur late, meaning that when you come across a cancer patient the disease is more often than not already at an advanced stage.”
Medtech developers have thus been working hard to address this gap. “We’re seeing increased demand and uptake for various devices for cancer screening: mammography for breast cancer, CT scanners for lung cancer, endoscopy products for stomach cancer, and so on,” says Chihiro Sasaki division manager for healthcare, at Fujifilm for Middle East & Africa. Moreover, the company has even established a training centre within the UAE to raise awareness and promote the concept of early screening. “One of our main thrusts of focus is actually on the educational side, not just selling products. We are keen that all healthcare workers who may use our products can understand their features to maximize their performance and that is one of the many ways in which we differentiate ourselves from other medical equipment providers,” he says.
We’re seeing increased demand and uptake for various devices for cancer screening
Furthermore, Sasaki believes that a national screening program is key to bringing down cancer fatalities and thus has been pushing hard for the concept locally. “In Saudi Arabia, for example, we launched a pilot program to detect colon cancer in patients for almost one year. The program demonstrated the big difference that screening programs can have, and the Saudi government has asked us to increase the magnitude of the program. We are now looking to replicate that sort of initiative other countries including the UAE and are already in discussions with the relevant authorities for the roll-out of such a program,” he affirms.
Elevated rates of consanguinity, meanwhile, result in the country and surrounding region recording an abnormally high prevalence and incidence of rare disease, especially those that are genetic and inherited. “Although the scientific data on rare disease tends to be patchy, there are nonetheless strong indications that the patient pool for rare disease is disproportionately large,” confides Kyowa Kirin’s Myriam Hakim. So too are conditions such as schizophrenia and immunology most commonly diagnosed in younger populations, which logically tallies with the Emirates’ existing demographics.
Early Technology Adopters
In some respects, is it perhaps the medtech sector that has most to be excited about in the UAE’s domestic market, given the country’s unrelenting enthusiasm for connected devices, the Internet of Things (IoT) and digital solutions. According to a recent study carried out by INSEAD in conjunction with the World Economic Forum, the UAE actually ranks as “the most high-tech and technologically astute country in the entire Middle East,” on the back of strong e-Government initiatives and a profound readiness on the part of the authorities to embrace ICT, robotics and machine learning.
“The UAE possesses the potential to become an important innovation hub,” reasons Merck’s Paolo Carli. “The local ICT sector is rapidly growing and digitalization requires a different style of infrastructure. Therefore, the UAE is certainly placing its efforts in the correct areas… If you cast your eyes around the world, the US can credibly lay claim to a perfect combination of brains, investments, and courage to innovate while Europe, to a certain extent, often does not project the requisite courage. However, at Merck we are calculating that the UAE is uniquely positioned to carve out its own niche in this part of the globe and set about riding the new wave of digitalization currently disrupting the life science industry,” he deduces.
The UAE is one of those rare places in the Middle East from where we will be able to procure data, at least in the near future, due to the country being so far advanced compared to any of its regional peers
Kyowa Kirin’s Myriam Hakim very much agrees. “In my opinion, the UAE is one of those rare places in the Middle East from where we will be able to procure data, at least in the near future, due to the country being so far advanced compared to any of its regional peers. The state not only boasts a strong and constantly evolving structure that is incredibly receptive to innovation, but you also get the impression that they’re well ahead of the game in the sense of realizing the value of sourcing local data and statistics within the region,” she believes.
Certainly, many examples abound of the Emirate’s enthusiastic absorption of disruptive technologies in healthcare from the use of AI to 3D bio-printing. Bayer, for example, recently announced a new collaboration with the Dubai Health Authority (DHA) to launch AI-powered health pods for full-body check-ups across government authorities in Dubai. “It’s a joint effort geared towards empowering citizens and residents by providing accessible solutions to take control of their own health and support their journey for better lifestyle, wellness and nutrition plans,” clarifies the company’s vice president Mohamed Galal.
This follows hot on the heels from the announcement of the successful completion of another AI-based proof of concept project that has generated considerable attention: namely the deployment of machine learning capabilities to swiftly and effectively detect diabetic retinopathy. The go-ahead has now been given to roll out the new tool to 13 primary healthcare centres and a number of state hospitals.
Meanwhile the DHA has raised eyebrows for establishing five smart pharmacies within healthcare institutions around the city: two in Rashid Hospital, one in Dubai Hospital, one in Latifa Hospital and one in Nadd Al Hamar primary health centre. “These smart pharmacies dispense and prescribe medication through a unified barcoding system. They are operated via a robot that can store up to 35,000 medicines, prepare 12 prescriptions in a minute and dispense 8,000 medicines in an hour,” discloses His Excellency Humaid Al Qutami. Needless to say, the results have been impressive. “Our data is telling us that the smart pharmacies reduced the waiting time 2.6 minutes on average and increased the time allocated for explaining medication instructions to an average of 5.65 minutes. Overall processing times were condensed from 22.5 minutes on average in 2016, to only 7.9 minutes last year with the help of these new tools,” he reports.
So too has there been a concerted effort to apply 3D printing technology to the life science space. “We have already implemented 3D printing across our dentistry services and have harnessed patient-centric 3D printed models for complex surgeries. We have joined forces with the private sector to develop 3D printed prosthetics and are opening a new lab dedicated to this technology located within the DHA’s Innovation Center that provides medical professionals with patient-specific anatomical models, allowing them to conduct detailed pre-operative analysis and to improve patient communication. All these initiatives are in line with the vision of Dubai’s strategy to become a global 3D printing technology hub by 2030,” proudly proclaims Al Qutami.
Medtech MNCs are therefore increasingly finding the UAE to be not just a viable platform for managing regional exports, but a growing local market in its own right for medical equipment sales and one in which they can potentially sign agreements to install and service their own medical devices, as GE Healthcare has done. At the same time, they are likely to encounter technologically adroit Emirati clients that are voraciously pursuing the latest advancements in healthcare information technology, tech integrators such as IBM Watson Health, 3M, and Honeywell can all well attest.
The Missing Piece: R&D
While the UAE may be doing very well in facilitating the import and adoption of the technology of other nations, there seems to be a noticeable lack of home-grown life science sector innovation. “In this country, we are fortunate to enjoy a high quality of life, well-equipped hospitals and high-level practitioners. However, if we genuinely want to improve the country’s healthcare over the long run, we need to start dedicating time and resources to support medical research and education. Unfortunately, medical research is not on the authorities’ radar. While countries like the UK and United States champion and invest heavily in medical universities and institutions because they understand the value of medical research, our policymakers are short-sighted in shortcutting this essential step,” laments Abdulkareem Sultan Al Olama, CEO of the Al Jalila Foundation, a global philanthropic organisation dedicated to transforming lives through medical research, education and treatment.
While countries like the UK and United States champion and invest heavily in medical universities and institutions because they understand the value of medical research, our policymakers are short-sighted in shortcutting this essential step
“This is most unfortunate because there is no lack of urgent research areas to explore, including the large diabetic patient population and our unique genetic makeup,” he adds. His organisation has therefore taken it upon itself to establish the UAE’s first medical research facility, where it aims to unite local and international scientists to address some of the most pressing healthcare questions.
Maryam Matar, founder and chairperson of the United Arab Emirates Genetic Diseases Association (UAEGDA) wholly agrees that the absence of localised research studies is proving detrimental to end outcomes in healthcare. “With a greater understanding of gene makeup, gene expression and pharmacogenomics we have realized that ethnicity plays an important role in mutation. There may be different types of mutations that have yet to be discovered. Moreover, a person’s response to medication depends on our genetic predisposition. For example, if we treat a man of African ethnicity then the best solution is a calcium channel blocker, whereas, a man that is Caucasian by decent will respond better to a Beta-blocker. Our challenge in the UAE is a lack of fair representation of our ethnicity in primary research samples and this needs to be urgently addressed if we are to be able to prevent the occurrence of common genetic disorders,” she insists.
Our challenge in the UAE is a lack of fair representation of our ethnicity in primary research samples and this needs to be urgently addressed if we are to be able to prevent the occurrence of common genetic disorders
Samir Khalil, executive director for the Middle East and Africa of the Pharmaceutical Research and Manufacturers of America (PhRMA) representing the country’s leading biopharmaceutical researchers and biotechnology also suggests that the Emiratis may be misguided in underestimating the fundamental importance of investing in in-country research capabilities. “Many governments in the region want the industry to bring manufacturing to their countries but I always tell them that the industry has transformed and that there simultaneously needs to be an increased focus needs on R&D,” he recounts. “I was able to live that transformation, where due to new technologies, companies rationalized their manufacturing and shifted from having manufacturing in almost every major country in the world to manufacturing in a few selected countries. The value we, as an industry, bring to the countries goes way beyond manufacturing jobs and the brute reality is that this region currently accounts for less than one percent of global clinical trials,” he warns.
That said, the authorities have, at least in theory, committed to developing a “competitive knowledge economy” as one of the main tenets of the country’s National Agenda with the stated key performance indicators including both the raising of research and development expenditure as a percentage of GDP and the scaling of the global innovation index. So too have there been a welter of partnerships signed with acclaimed international universities and academies. The government of Dubai, for example, has founded the Dubai Harvard Foundation for Medical Research specifically to support cutting-edge collaborative research and establish sustainable research and education programs focused on diseases relevant to the MENA region.
The value we, as an industry, bring goes way beyond manufacturing jobs and the brute reality is that this region currently accounts for less than one percent of global clinical trials
King’s College London has also been co-opted through the construction of a satellite King’s College Hospital on Emirati soil. “Through this institution, we import British expertise into the country, enabling UAE residents to access the know-how that has been built over 200 years. We follow UK patient pathway guidelines from National Institute for Health and Care Excellence (NICE) and apply evidence-based medicine that has proven time and time again to be efficient in the UK. More than 40 percent of our doctors are from the UK, having trained in the UK according to NICE guidelines. Importantly, it does not only apply to our doctors but also our nurses which helps elevate the level of nursing care in the country,” details the hospital’s CEO, Christian Schumacher.
Meanwhile, the Thumbay Group, the largest healthcare provider in the UAE has been energetic in striking partnerships with renowned medical schools from around the globe. “In the United States, we have formed tie-ups with the Mayo Clinic, Harvard Medical School, Johns Hopkins, the University of Arizona, among many others. Our students go there, and we conduct a staff exchange program, but our partnership network goes much deeper encompassing acclaimed institutions in Canada, the UK with the NHS, in Germany, Hungary and Poland,” reveals Thumbay Moideen, the group’s founder.
Boom & Bust in the Hospital Sector
In fact, what is most striking about the UAE’s healthcare provision apparatus is the sheer involvement of private, often international, actors. The private sector has been playing an increasingly significant role in the delivery of care with companies such as NMC Healthcare, Mediclinic Middle East, and VPS Healthcare all embarking on aggressive expansion plans. As such, the Ministry of Health and Prevention expects that the government’s share of total health expenditure will fall from 71.3 percent in 2015 to 60.7 percent by 2025. Dubai, in particular, has sought to promote the private sector, with the goal of 70 percent of healthcare funding ultimately coming from non-state actors.
“To really understand what’s been going on, you need to consider the macro factors. During the oil boom years between 2011 and 2014, many entrepreneurs decided to invest in hospitals because they thought that it was easy money. Following that logic, a lot of new providers came into the market but are not doing as well as they had expected. Already there is an oversupply of hospital beds across the Emirates and the local industry has witnessed four hospitals close in the past year with quite a few others still trying to sell up,” analyses David Hadley, CEO for the Mediclinic Middle East which operates seven hospitals and over 20 clinics with over 900 inpatient beds in the country.
Only the big groups are really surviving and will be able to compete in the long-term
While he predicts that, “only the big groups are really surviving and will be able to compete in the long-term,” there nonetheless still seems to be opportunities for the taking for international healthcare providers such as Cleveland Clinic (which chose to recreate institutions in-country) and Johns Hopkins Medicine International (which went down the alternative path of taking of the management of existing national hospitals). “The concept of a specialized hospital is not yet well established here, owing to the limited size of the population. Where I believe there is still space for growth, is in specialized services to treat rare and complex conditions. Looking at the landscape, there are some very big players, with large market shares, that are doing a fantastic job. Competition is healthy, but just as long as you clearly define your position and USP, you can definitely succeed in the UAE,” ventures King’s College Hospital’s Christian Schumacher.
Many providers are also hoping for relief by attempting to tap into the country’s fledgling health tourism market. “Medical tourism contains real prospects. There are certain target groups who are highly interested in this segment, including other Gulf Cooperation Council residents and African residents. Seeing how difficult it is to obtain a European visa, many patients in neighboring countries are resorting to cities like Dubai for their medical needs,” reasons Schumacher, pointing to the fact that the Dubai authorities have even been trying to facilitate such a model through the introduction of medical tourism visas.
Omar Hallak, head of the cardiovascular department, is of a similar opinion that a thriving medical tourism market is gradually taking root as the sophistication of Emirati hospitals rises. When I first arrived, many people would venture outside of the UAE for treatment, because the healthcare apparatus was immature. Nowadays, the situation has practically reversed, and I am seeing more and more patients coming her specifically for treatment,” he notes.
Others, however, are more sceptical and draw attention to what they detect and systemic limitations. “Mediclinic supports the government in their objective of developing medical tourism, but I have been quite outspoken in saying that we need to face the realities of what medical tourism really is,” declares Hadley. Patients opt for medical tourism for cost, quality or lack of access at home. The UAE has a GDP per capita of around USD 40,000, which means that the salaries are five times what they are in India or Thailand. We will never be able to compete with those countries in terms of cost because we have to pay significantly more for personnel. We do have high-quality standards, but if patients can afford to come here, they will also have the option to go to the UK, Switzerland or the United States. It going to be practically very difficult to attract large numbers of patients purely based on quality, though I do believe that should be our long-term goal,” he counsels.
Promising, But Not Necessarily Promised
What then, is the international life science community to make of the UAE with all its renewed promise and dynamism? “At the end of the day, this is a pharma market that is projected to reach almost USD four billion, according to the latest IQVIA figures. It’s a significant market, particularly when you consider investing in manufacturing for export as it’s the centrepiece of a greater region that’s exhibiting considerable growth potential,” evaluates Mundipharma’s Ashraf Allam. “But companies that want to succeed must be flexible enough to adapt and need to be in it for the long haul, with a well thought out long-term approach,” he counsels.
“The data shows that Middle Eastern markets contain immense potential, but experience demonstrates this potential is also subject to high levels of volatility. The real question is whether a company is ready and capable to deal with this volatility. These are two very different questions, as being ready and willing to engage, does not necessarily imply one is capable,” shrewdly observes Merck’s Paolo Carli, while strenuously pointing out that the UAE is the one country in the region that singularly bucks the trend and can be relied upon to offer continuity and a stable footing.
“For those who are prepared, bold enough and ready, the UAE certainly has much to offer: the response from policymakers and practitioners in welcoming genuine innovation is exceptional while the opportunities to play an active role in shaping the regulations is also quite special,” concludes Vishnu Karla.
