business-data | Edakulathur Michael Johnson

United Arab Emirates Pharmaceuticals & Healthcare Report Q4 2004 © Business Monitor International Ltd Page 3 Executive Summary Market Summary The UAE is one of the most developed markets in the Middle East, with per capita expenditure at around US$120 in 2003. Market growth should be steady in the short term, with spending set to reach around US$575mn at consumer prices by 2007. Branded medicines dominate the fiercely competitive, highly priced market, and account for over 90% of spending. Market Forecast The UAE pharmaceutical market can be expected to continue to grow steadily in the short term, given the sector’s developed nature; high demand for modern, hi-tech healthcare; and high prices ensuring annual growth of around 8-10%. The market is likely to reach around US$575mn at consumer prices by 2007, equal to US$150per capita. Prescription and OTC Drugs Prescription drugs dominate the UAE’s pharmaceutical market, accounting for around 90% of expenditure, with high demand for modern treatments. This domination should continue in the future, with prescription spending forecast to increase starkly from US$378mn in 2003 to reach almost US$520mn in 2007. The OTC market is also expected to grow notably, albeit from a much smaller base, from US$42mn in 2003 to US$58mn in 2007. Generics The underdeveloped generics market is growing, largely as a result of local industry development, but still only accounts for approximately 5% of pharmaceutical spending. The generics market is expected to grow from US$21mn in 2003 to reach US$28.8mn in 2007. Competitive Environment Foreign investment in the UAE is following a steady upward trend, with UK-based drug giant GSK, Swiss drug major Novartis and US multinationals Wyeth and Johnson & Johnson all revealing expansion plans for the domestic market in 2004. Regulatory Developments The UAE and US government have recently initiated discussions over a possible US-UAE FTA. If an agreement is signed, it is likely to involve a notable tightening of domestic pharmaceutical legislation, a development that could spark an acceleration of foreign investment. Talks, however, are at a very early stage. The UAE’s WTO obligations, with reform due before 2005, should bring a more immediate improvement in conditions for foreign companies and should act as a catalyst for an increase in investment.