United Arab Emirates Pharmaceuticals and Healthcare Report Q2 2009

United Arab Emirates Pharmaceuticals and Healthcare Report Q2 2009

The United Arab Emirates (UAE) has retained its pole position in BMI’s Q209 Business Environment
Rankings for the 17 key markets within the Middle East and Africa (MEA) region. Globally, the UAE is
ranked eighteenth, and is thus comparable to some developed European markets. This high ranking
illustrates its capacity to compete with mature markets in terms of the attractiveness of the business
environment, especially given UAE’s forecast compound annual growth rate (CAGR) of 9.97% through
to 2013. By the end of the forecast period, the market is expected to be valued at AED5.04bn
(US$1.37bn) at consumer prices, increasing from AED3.42bn (US$0.85bn) in 2008. Unfavourable
fluctuation in the exchange rate of the dirham against the euro already resulted in an increase in drug
expenditure during late 2008, which is likely to result in the authorities looking to import cheaper
generics and/or to boost local production.
Generally speaking, key drivers of overall market growth will remain the Emirates’ wealthy and urban
population, strong preference for branded drugs, rising demand for chronic and long-term diseases
treatment and continued investment in health infrastructure. Additionally, the opening of the first
pharmacy in a grocery retail store in February 2009 by local pharmacy chain BinSina, on behalf of the
global retailer Carrefour, should set the trend for future development of UAE’s over-the-counter (OTC)
medicines market, which presently accounts for 17% of the overall market. Over the period 2009-13,
OTCs are forcast to post a CAGR of 10.59%, to reach AED912mn (US$248mn) at consumer prices.
Indeed, the opening of the hypermarket pharmacy indicates the Ministry of Health’s willingness to
encourage improvements of the healthcare sector through innovative solutions.
The government is making concerted efforts to crack down on the trade of counterfeit medicines. Plans
unveiled in February 2009 seek to boost the number of customs inspectors and portable drug detectors,
especially in the super-busy port of Dubai. By June 2009, unregistered pharmaceutical and healthcare
products – as the recent addition of well medical devices and nutritional supplements to the list - will not
be permitted to enter or pass through the UAE. In a related development, Tawan Hospital became the first
healthcare institution in the Emirates to launch a patient safety programme. The changes also complement
the Federal Medical Liability Law, which stipulates that all health professionals – including
complementary and alternative medicine (CAM) practitioners – must be insured against medical.
In a worrying development, in January 2009, the UAE dramatically altered laws concerning research and
development to prevent human cloning, while also further regulating fertility treatments with regard to
implantation and abortion. BMI cautions that, while ethical concerns must be considered, the impact of
this law may hinder the development of life sciences in the country, which now includes major global
biotechnology players such as Amgen and Genzyne. On the other hand, the government is aiming to
rectify the presently unnatural sex distribution, with the population consisting of more than twice as many
males as females.

Executive Summary 6
United Arab Emirates Pharmaceuticals And Healthcare Industry SWOT 7
United Arab Emirates Political SWOT 8
United Arab Emirates Economic SWOT 9
United Arab Emirates Business Environment SWOT 10
Pharmaceutical Business Environment Ratings 11
Table: Middle East And Africa Pharmaceutical Business Environment Ratings for Q209 11
Limits To Potential Returns 12
Risks To Realisation Of Returns 12
UAE - Market Summary 14
Regulatory Environment 16
Recent Regulatory Developments 16
Pharmaceutical Advertising 18
Intellectual Property Regime 18
Counterfeit Medicines 19
Pricing And Reimbursement Regime 21
Table: Profit Margins For Medicines In The UAE 22
Price Cuts 22
Recent Pricing And Reimbursement Developments 23
Regional Harmonisation 25
Free Trade Agreements 27
Industry Trends and Developments 28
Epidemiology 28
Healthcare Sector 30
Healthcare Funding 31
Healthcare Sector Reforms 31
Recent Healthcare Sector Developments 32
Hospital Sector Developments 34
Health Insurance 35
Table: DHA Healthcarre System Implementation Timeline 36
Expatriate Worker Insurance 37
Table: National Health Insurance Company – Available Plans 37
Recent Health Insurance Industry Developments 38
Health Tourism 39
Prescribing Practices 40
Domestic Pharmaceutical Sector 41
Foreign Companies 42
Company Developments 43
Pharmaceutical Distribution and Retail 44
Recent Developments in Pharmaceutical Distribution and Retail 47
Research and Development 48
DuBiotech 49
Table: Incentives For Companies To Move To DuBiotech 49
Complementary and Traditional Medicine 50
Medical Devices 51
Recent Developments in the Medical Devices Market 53
Industry Forecast Scenario 54
Overall Market Forecast 54
Table: UAE - Drug Expenditure Indicators, Historical Data and Forecasts 55
Key Growth Factors – Industry 56
Table: UAE - Health Expenditure Indicators, Historical Data and Forecasts 57
Macroeconomic Scenario 58
Growth Outlook Weakening 58
Table: United Arab Emirates - Economic Activity 60
Prescription Market Forecasts 61
Table: UAE - Prescription Market Indicators, Historical Data and Forecasts (AEDmn unless otherwise stated) 62
Patented Market Forecasts 63
Patented Market Forecasts 63
Table: UAE - Patented Drug Market Indicators, Historical Data and Forecasts 63
Generics Market Forecast 64
Table: UAE- Generics Drug Market Indicators, Historical Data and Forecasts 65
OTC Market Forecast 66
Table: UAE - OTC Drug Market Indicators, Historical Data and Forecasts (AEDmn unless otherwise stated) 67
Pharmaceutical Trade Forecasts 68
Pharmaceutical Trade Forecasts 68
Table: UAE - Pharmaceutical Trade Indicators, Historical Data and Forecasts (US$mn) 69
Medical Devices 70
Table: UAE - Medical Device Market Indicators, Historical Data and Forecasts (US$mn unless otherwise stated) 70
Other Healthcare Forecasts 71
Table: UAE - Other Healthcare Indicators, Historical Data and Forecasts 72
Key Risks To BMI’s Forecast Scenario 73
Competitive Landscape 74
Company Profiles 75
Leading Foreign Companies 75
GlaxoSmithKline 75
Pfizer 77
Novartis 79
Johnson & Johnson (J&J) 82
Sanofi-Aventis 84
Abbott Laboratories 86
Merck & Co 88
Indigenous Manufacturers 90
Gulf Pharmaceutical Industries (Julphar) 90
Globalpharma 94
Modern Pharmaceutical Company (MPC) 96
NeoPharma 97
Country Snapshot: UAE Demographic Data 99
Section 1: Population 99
Table: Demographic Indicators, 2005-2030 99
Table: Rural/Urban Breakdown, 2005-2030 100
Section 2: Education And Healthcare 100
Table: Education, 2002-2005 100
Table: Vital Statistics, 2005-2030 100
Section 3: Labour Market And Spending Power 101
Table: Employment Indicators, 2000-2004 101
Table: Consumer Expenditure, 2000-2012 (US$) 101
BMI Forecast Modelling 102
How We Generate Our Pharmaceutical Industry Forecasts 102
Pharmaceutical Business Environment Ratings Methodology 103
Ratings Overview 103
Table: Pharmaceutical Business Environment Indicators 104
Weighting 105
Table: Weighting Of Components 105
Sources 105