SAUDI ARABIA EDGING TOWARDS MARKET REFORM

Foreign drug firms attracted by Saudi Arabia's wealthy market are finding that market conditions are slowly improving. Improvements are especially obvious in patent law, but the small domestic sector and foreign generics firms are also on an expansion drive.

In March 2005, plans were announced for a major new pharmaceuticals plant in Jeddah, with a Saudi businessman reportedly courting Indian generics producers to participate in a joint venture. This came with renewed Saudi efforts to open up the market up to more Indian drugs, indicating that the government was more interested in cutting costs than establishing the Kingdom as a hub for advanced medicine and research.

Meanwhile, US trade officials have noted that cases of patent infringement have been scarce, but it remains to be seen whether the regional Gulf Co-operation Council's intellectual property rules will lead the patenting outlook to deteriorate. These concerns aside, a further problem is the Saudi patent office's backlog; the agency hopes to clear this by the end of 2006, suggesting that copy products will continue to exist at least until that time. In general, progress on patent law reform is likely to be an important consideration in the Kingdom's negotiations to join the WTO.