UAE TARGETS REGIONAL LEADERSHIP IN PHARMACEUTICALS

The UAE is aiming to become the leading force in the Gulf Co-operation Council (GCC) trade bloc's drug market, with recent investment in eight production facilities totalling AED235mn (US$63.98mn). According to a local study, the UAE is currently the region's second largest investor in the drug sector, behind only Saudi Arabia.

Domestic firms account for roughly 20% of drug sales in the UAE. Market share held by local firms is similar in Saudi Arabia, which has recently invested AED2.2bn (US$1.68bn) in 27 drug plants, employing 3,128 staff. However, UAE-based firms have already successfully extended their generics-based output to markets as distant as Ecuador.

The expansion of the local manufacturing sector is testimony to the sales presence of locally based firms. The total number of drug manufacturing plants in the UAE has risen from just three in 1995 to eight in 2004. The industry's workforce has also grown by 40% to some 703 in the same period.

Elsewhere in the Gulf, Bahrain has invested US$6.3mn in eleven plants, Oman US$30.5mn in five plants, Qatar US$31.2mn in three plants and Kuwait US$42mn in one huge new plant. In total, there are 55 drug manufacturing plants in the GCC, representing a combined investment of US$793mn and a workforce of 4,592.

Nevertheless, in the Arab world as a whole, domestic production accounts for around 45% of the region's US$5.5bn market for pharmaceuticals. Yet this represents just 1.5% of the global drug market, despite the region's oil wealth. Many governments in the region are hoping that industrial diversification will provide the key to distributing wealth more equitably, as the region's average drug spending currently languishes at just US$51 per capita.