Regulatory, Pricing and Reimbursement Overview: Saudi Arabia
An insight into regulatory, pricing and reimbursement overview in Saudi Arabia. Prepared in association with STA, an international law firm, this is an extract from The Pharma Legal Handbook: Saudi Arabia, available to purchase here for GBP 99.
1. What are the regulatory authorities with jurisdiction over drugs, biologicals, and medical devices in your country?
The Saudi Food & Drug Authority (SFDA) is the government agency that regulates drugs and medical devices in Saudi Arabia. It is also in charge of biological and chemical substances in Saudi Arabia.
2. What is the regulatory framework for the authorization, pricing, and reimbursement of drugs, biologicals, and medical devices?
The Saudi Food and Drug Authority (SFDA), the Drug Track and Trace System (RDS) track all human registered drugs that are manufactured in Saudi Arabia or imported to the country. RDS is a standardized identification system that tracks drugs from the manufacturer to the patient. It adopts GS1 standards and applies to all pharmaceutical products on the Saudi market, including over-the-counter (OTC) medicines. According to GS1, the Saudi Food and Drug Authority (SFDA) is working on similar requirements for medical devices. Saudi regulations stipulate that all drugs must be marked with a GS1 Data Matrix barcode that contains, at minimum, the GS1 Global Trade Identification Number (GTIN), the expiry date, and the batch/lot number. This information must also be printed on labels. All transactions for drug packages must be reported to a national Drug Track & Trace System (DTTS), and all manufacturers licensed by the SFDA must acquire a Global Location Number (GLN).
According to the new SFDA pricing guidelines, pharmaceutical products are to be priced taking into account:
- Therapeutic Value Add for the product (Value Add);
- Price of alternative products registered in KSA (Comparators);
- Ex-factory Price of the Manufacturer and Ex-factory to the countries where the product is marketed (Ex-f in its local currency);
- Wholesaler price in the COO (WSP in its local currency);
- Price to Public in the COO and the countries where the product is marketed (PP);
- Proposed Price to KSA (Cost, Insurance & Freight price i.e. CIF price in COO currency); CIF price to all countries where the product is marketed according to the official price certificate template. The price certificate validity has to be 6 months from the date of issuance;
- The price of the product is in the adopted price references.
The Ministry of Health (MOH) is the major government agency entrusted with the provision of preventive, curative and rehabilitative healthcare for the Kingdom’s population. The Ministry provides primary healthcare (PHC) services through a network of healthcare centres throughout the Kingdom. It also utilizes a referral system that provides curative care for all members of society from the level of general practitioners at health centres to advanced technology specialist/curative services through a broad base of general and specialist hospitals. The MOH also undertakes the overall supervision and follow-up of healthcare-related activities carried out by the private sector. Therefore, the MOH can be viewed as a national health service (NHS) for the entire population.
3. What are the steps to obtaining authorization to develop, test, and market a product?
Before being sold in the Kingdom of Saudi Arabia (KSA), medical devices must receive marketing authorization from the Saudi Food and Drug Authority (SFDA) under the Medical Devices Interim Regulation (MDIR), Decree No. 1-8-1429/2008.
Appoint a Saudi Authorized Representative (AR) to manage your device registration in the KSA. Your representative must be licensed with the SFDA. Further, the SFDA must authorize the contract between you and your AR.
Your Saudi AR must present the authenticated AR contract to the SFDA for review and obtain a license to represent you in the KSA. The AR contract and license may be valid for 1-10 years; however, the AR license cannot be valid longer than the contract.
Prepare the Medical Device Marketing Authorization (MDMA) application and submit it through your AR. The application includes device labelling, IFU, promotional materials, proof of regulatory approval in your reference market and quality system certification (if applicable). Labelling, promotional materials, and IFU must be in English and Arabic; English only is acceptable for professional-use devices.
The SFDA reviews the MDMA application for completeness. Then a third-party Conformity Assessment Body (CAB) performs a detailed technical review upon payment of the application fee.
The SFDA makes the final decision based on recommendations of the CAB. Once the device is approved, the SFDA issues an MDMA certificate that you may provide to your distributor/importer for market entry.
Device registrations are valid for three years, or the remaining validity is in the reference country you have chosen (if less than three years).
4. What are the approximate fees for each authorization?
The SFDA will charge fees for Regulatory Services of Pharmaceutical Products, according to the following:
- Issuing a Certificate of Pharmaceutical Product (CPP) or a Free Sale Certificate – 200 Saudi riyal
- Issuing a certificate for Good Manufacturing Practice (GMP) – 500 Saudi riyal
- Issuing a price list of company products – 500 Saudi riyal
- Evaluating product advertisement application – 14,000 Saudi riyal
- Inspecting a pharmaceutical consulting centre to issue a license – 1,000 Saudi riyal
- Inspecting a scientific office to issue a license – 5,000 Saudi riyal
- Pre-registration price estimation – 20,000 Saudi riyal.
5. For how long are marketing authorizations/registrations valid? How are marketing authorizations/registrations renewed?
Once the device is approved, the SFDA issues an MDMA certificate that you may provide to your distributor/importer for market entry. Device registrations are valid for three years, or the remaining validity is in the reference country you have chosen (if less than three years).
6. How does the authorization process differ between brandname products and generic products? Are there differences for local manufacturers versus foreign-owned manufacturers?
Marketing authorization for generic products is subject to the same legal process as brand-name products. Market authorizations from foreign jurisdictions are not recognized in Saudi Arabia, as all products are independently evaluated by the Saudi Food & Drug Authority (SFDA). However, importers or their agents must supply and sell pharmaceutical products from and to entities that have the applicable authorisation to deal in pharmaceutical products.
7. How are combination products (drug + drug, drug + biologic, drug + device, biologic + device, drug + biologic + device) regulated?
A product consists of two or more items that are subject to different SFDA’s jurisdictions in terms of regulatory path, marketing and/or manufacturing. It includes:
- Integrated combination product:
A product consists of two or more regulated components that are combined/ integrated as a single product.
- Non-integrated combination product:
A product consists of two or more separate items that are contained in the same package. [Co-packaged combination product].
Any regulated product packaged separately where the labelling information refers to be used with another specific regulated product where both are required to achieve the intended purpose of use. [Cross-labeled combination product].
8. How is compliance with regulations monitored and evaluated? Is the regulatory regime comparable with the U.S. Food and Drug Administration or the European Medicines Agency expectations and requirements?
For medical devices, the SFDA is fully authorised to ensure compliance with the advertisement provisions, failing which the SFDA may withdraw or restrict the medical devices including taking any of the following actions:
- Suspending the licence.
- Terminating the licence.
- Recalling the product from the market.
- Withdrawing the marketing authorisation.
Yes, the regulatory regime is comparable with the US Food and Drug Administration and European Medicines Agency. Under the Registration of Products According to Verification and Abridged Process, if a drug is already licensed, SFDA will only accept it if the drug is approved by the US Food and Drug Administration (FDA) and/or the European Medicines Agency (EMA). There are two processes:
- Verification registration: a process where a product has been approved and marketed by both the FDA and EMA. The timeline is within 30 working days.
- Abridged registration: a process where a product has been approved and marketed by either the FDA or EMA. The timeline is within 60 working days.
9. What is the potential range of penalties for noncompliance?
Article 37 of the Regulations provides that the SFDA may impose the following penalties in respect of violations of the Regulations:
- A fine not exceeding SAR 100,000/-;
- Closure of the medical establishment for up to 60 days; and/or
- Cancelling the licence of the establishment.
10. Is there a national healthcare system? If so, how is it administered and funded?
“Health Care” in Saudi Arabia is a national health care system in which the government provides free health care services through several government agencies. There is also a growing role and increased participation from the private sector in the provision of health care services. The Ministry of Health is the major government agency entrusted with the provision of preventive, curative and rehabilitative health care for the Kingdom’s population.
11. How does the government (or public) healthcare system function with private sector healthcare?
Healthcare in Saudi Arabia is currently provided free of charge to all Saudi citizens and expatriates working in the public sector, primarily through the Ministry of Health and augmented by other governmental health facilities. The government requires that expatriates working in the private sector have some level of healthcare coverage paid by their employers. Healthcare has been seen as a “right”. Healthcare in Saudi Arabia has been funded primarily by the public (75%) or out-of-pocket expenditures (about 25%). What has been distinctive has been the low level of private insurance involved in the provision of healthcare. Almost all of the private expenditures have been out-of-pocket payments for services in private hospitals and clinics. Governmental funding is allocated through annual budgets to individual ministries and programs.
Health services in Saudi Arabia are provided through three main sectors: the MOH network of hospitals and primary healthcare centres that are distributed throughout the country, other governmental institutions, and the private sector. The MOH is the largest provider of healthcare services in the Kingdom, providing over 62% of inpatient care. Although the MOH is charged with the healthcare of the entire population, other governmental and private facilities are also important healthcare providers and provide over 20% and 17% of the inpatient facilities health services, respectively.
12. Are prices of drugs and devices regulated and, if so, how?
Saudi Arabia’s pharmaceutical market was valued at USD 8.3bn in 2019. Forecasts show by that by 2024 the market will clock USD 10.89 Billion with a CAGR of 5.4% Sales of patented drug consumption are supported by the population’s wealth and the preference for branded drugs among both consumers and prescribers, with patented drug spending accounting for 54.4% of the country’s drug market. It is the largest regional pharmaceutical market in overall value, but by drug per capita expenditure with USD242, it ranks seventh in the region. Saudi hospitals are among the best in the Middle East, while specialized tertiary facilities bear comparison with facilities in Western Europe. Large-scale plans for infrastructure developments exist, including new hospitals and health centres. Saudi Arabia’s epidemiological profile represents that of a developed country, with non-communicable diseases accounting for 84% of deaths, according to the WHO. Cardiovascular diseases (49%), ischemic heart disease (24%), and strokes (16%) are the three most prevalent chronic diseases by death.
13. How are the drugs and devices used by patients paid for? What roles do public and private payers play?
The Saudi health care sector is the largest in the Near East. Saudi Arabia’s health and social affairs budget for 2019 outlines an 8% increase to $46 billion as compared to $42.4 billion in 2018. This equates to about 15% of total government spending, budgeted at $260 million. Healthcare is the third-largest beneficiary behind education and the military.
Saudi Arabia’s healthcare landscape will continue to evolve as the government pursues reforms in the sector. Boosting health privatization initiatives will be a central part of Saudi’s economic diversification efforts, intended to reduce its dependence on the public sector. The healthcare sector contributed 4.7% to Saudi’s Gross Domestic Product (GDP) in 2018. The sector is projected to grow 13.7% by 2025. Recently, the government decided to privatize all its public hospitals and introduce a comprehensive insurance system for Saudi citizens as well as Public-Private Partnership (PPP) programs
The Kingdom of Saudi Arabia seeks to expand the private sector’s role in providing healthcare services under its ambitious Vision 2030 and its National Transformation Program. Saudi Arabia’s deteriorating environment for intellectual property protections in pharmaceuticals, however, dampens the positive signals sent to entrepreneurs, investors, and innovators in the private sector. In recent years, the Saudi Arabia Food and Drug Authority (SFDA), which the Minister of Health oversees, has authorized domestic companies to produce generic versions of pharmaceutical products that are under patent protection either in Saudi Arabia or the Gulf Cooperation Council (GCC).
14. Who dispenses drugs and devices to patients and how are those dispensers compensated?
A public health service provides coverage for medicines that are on the Saudi National Formulary for inpatients and outpatients. Under Saudi law, there is no limit for medical benefits, in other words, citizens have the right to access all kinds of medicines. Private health insurance schemes provide medicines coverage. They are required to provide at least partial coverage for medicines that are on the Saudi National Formulary.
15. What are the professional and legal responsibilities of those who dispense drugs and devices? What role do they play in providing patient care, information, and safety?
Co-payments or fee requirements for consultations are not levied at the point of delivery. Furthermore, there are no co-payments or fee requirements imposed for medicines. In Saudi Arabia, there are legal or regulatory provisions affecting the pricing of medicines. These provisions are aimed at the level of manufacturers, wholesalers and retailers. They affect: Innovated Patented Products, Generic Products, Under License Locally Manufactured Products, Products with Different Package Sizes or Strengths, Products that have Specific Advantages, Fixed Combination Drug Product. The government runs an active national medicines price monitoring system for retail prices. Regulations exist mandating that retail medicine price information should be publicly accessible. The retail price is published on the SFDA website, or the price can be printed on the outer packaging of the medicine.