Looking to diversify its economy while simultaneously improving its healthcare system, Saudi Arabia has been rolling out incentives for international companies to invest in local manufacturing. Here are three trends that the Kingdom hopes will catch the attention of global biopharma and generics investors.


With the aim of creating a “comprehensive, effective and integrated health system,” Saudi Arabia launched its newly established Health Sector Transformation Program in 2021 as part of the Kingdom’s Vision 2030. The program, according to the Saudi government, depends on the principle of value-based care, which ensures transparency and financial sustainability by promoting public health and preventing diseases.

In the medium term, Saudi Arabia has committed to provide “inclusive health services” to at least 88 percent of the population and have 100 percent covered by the unified digital medical records system by 2025. And it is putting the money where their mouth is; the 2019 budget allocated more than USD 45.86 billion for health and social development.

The program’s strong financial backing has renewed the interest of international companies in the country, after all, Saudi Arabia is the largest pharma market in the Middle East & North Africa (MENA) region with an estimated size of USD 8.2 billion. For now, it appears to be a promising mutually beneficial relationship.

33-year pharma industry veteran Georg Schroeckenfuchs, president for Novartis’ Middle East and Africa cluster, explained to PharmaBoardroom that the Swiss company has many collaborations and partnership models with the Saudi government. “It is good to see a proper ground for innovation in Saudi Arabia and a renewed focus on the healthcare sector,” he said.

However, the government is aiming to go beyond obtaining the latest innovation coming from the industry and searching for ways to attract investment in local manufacturing in order to coincide with its overall ambition of economic diversification.


Here are three market trends that the country’s officials believe will grab the attention of companies looking for investment destinations:


A steady expansion of the patient population

Saudi Arabia is the largest spender on healthcare across the MENA region; the 2019 budget allocated more than USD 45.86 billion for health and social development. And if the expected increase in the number of patients is any indication, the budget will only increase.

It is expected that 250,000 Saudi citizens will need home healthcare services by 2030. There will be an increasing need for chronic healthcare, especially to tackle Alzheimer’s, Dementia, Parkinson’s and Multiple Sclerosis conditions among the growing elderly population (the 65+ years-old population will go from 3.4 percent in 2019 to 17.2 percent by 2050).


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Total dependence of imported biological molecules

As of today, Saudi Arabia imports all its biological molecules, making it 100 percent dependent on outside products. To address this, the National Transformation Plan aims to localize 40 percent of the pharmaceutical sector and reduce its import dependency.

The objective makes sense considering the size of the Saudi biologics market, USD 1.28 billion, which is by far the largest in the region.

According to Invest in Saudi, the country’s pharma manufacturing is in the early stages of development and is characterized by the absence of any local or global manufacturer in the biopharma sector. The products with the highest demand are human insulins and sclerosis products.


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High demand for locally produced generics

Saudi Arabia imports over 81 percent of the generic drugs consumed locally and there is currently only one large API manufacturer in the country. According to Invest in Saudi, the Kingdom’s objective is to “accelerate the growth of the local manufacturing cluster and transition into products with higher complexity, with focus on products that are important for national security, to become the leading manufacturer and innovator in MENA region.”

In 2020, the generics market in the Kingdom rose to USD 763 million, representing 72 percent of the Middle East and North Africa (MENA) market, according to Invest in Saudi. However, the MENA market is expected to increase 7.8 percent by 2030, significantly outperforming the forecast for Saudi Arabia.

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