Focus: Generic Pharmaceuticals

Gulf GenericS

Sep. 12, 2018

The pharmaceutical industry in the UAE has grown rapidly over the last decade and is expected to reach a value of AED13 billion by 2020. Even with the rapid expansion and increasing competition in pharmaceutical manufacturing, the UAE has to import 80% of medicines to meet its needs.

The high cost of imported medicine is invariably passed on to the patient, leading the federal government to pass pharmaceutical pricing regulations in 2011 to contain drug prices. Under this legislation, the prices of over 8,500 pharmaceutical products have been cut to bring them in line with other countries in the region.
However, demand for medicine is continuing to surge as a result of exponential population growth and the introduction of universal health insurance in the country. Lifestyle-related health conditions, such as heart diseases, strokes, cancers, and diabetes are also on the rise.
As increased demand is likely to put medicine prices head-to-head against federal legislation, efforts aimed at bolstering the local pharmaceutical industry could provide much-needed relief.
The manufacturing of generic medicines, in particular, provides a means for reducing prices while meeting the demands of the growing population. Only 20% of medicines in the GCC today are classified as generic, while local firms have the capability of manufacturing generics at cutting-edge research and development facilitates. Experts estimate that prescribing generic medication could save UAE healthcare providers up to 30% on pharmaceuticals. There is also room for much-needed competition as there are relatively few pharmaceutical manufacturers in the UAE.
Based in Ras Al Khaimah, Julphar is one of the largest pharmaceutical manufacturers in the region. Manufacturing more than 1 million boxes of medicines per day, Julphar distributes its products to 50 countries with production in 16 internationally certified facilitates located around the globe.
Julphar remains the dominant manufacturer in the UAE and the only major manufacturer in Ras Al Khaimah. However, in response to growing regional demand, several manufacturers have begun operating out of Dubai and Abu Dhabi. Foreign firms are also seeking entry into the UAE through partnerships with local manufacturers.
Ittihad Drug Store (IDS) is an example of a local company that has successfully partnered with international pharmaceuticals. Based in the Dubai Biotechnology and Research Park, the company started out as a distributor of medication in 2016 working in partnership with GSK, Sanofi, and Beyer AG. IDS has since established Pharmax to develop, manufacture, and market branded generic pharmaceuticals—a decision indicative of the high potential of generic pharmaceutical manufacturing in the region.
Developing the pharmaceutical manufacturing industry requires a highly skilled workforce of biotechnologists, pharmacologists, and professors. The wealth of knowledge and experience available in Ras Al Khaimah sets it apart in its ability to meet these needs.
The Ras Al Khaimah Medical and Health Sciences University is the first in the UAE to offer a master of science degree in clinical pharmaceuticals and as well as a doctorate in pharmacy. Since its founding in 2006, the university has become a renowned facility for medical professionals in the UAE. Additionally, Julphar's presence, as the leading national manufacturing company since 1980, has contributed a wealth of know-how and technical skill to the Emirate of Ras Al Khaimah and the UAE.
Public awareness and education about the benefits of generic medicine is a significant hurdle that manufacturers must overcome. Only 4.4% of drugs prescribed in the UAE are generics as some consumers do not trust that generics will work as well as branded imports.
Despite this challenge, a patent cliff is approaching in which USD121 million worth of small-molecule patents will lose protection in developed markets between 2014 and 2018. In the next three years, USD48 million in biological products will also lose protection. Generics are estimated to contribute to 52% of global pharmaceutical growth—more than 15 percentage points above that of branded medicines—providing massive medium- and long-term investment opportunities in the generic pharmaceutical manufacturing market.