- Healthcare expenditures in the UAE are expected to rise to $21.3 billion by 2021 and is projected to account for 4.6% of the country’s GDP by 2026.
- Government commitment to increasing local manufacturing of pharmaceutical goods
- Tax free zones across the country representing hubs for the pharmaceutical industry
A key sector in the UAE
The pharmaceutical industry has been a longstanding key sector for the UAE, prior to the coronavirus pandemic The UAE’s pharmaceutical market was predicted to grow to $4bn in 2020, representing a CAGR of 8.5 percent from 2019. Despite the uncertainty surrounding the world in this time the UAE has been one of the fastest countries to recover from the virus and remains a highly sought-after location for foreign investors. Moreover, healthcare expenditures in the UAE are expected to rise to $21.3 billion by 2021 and is projected to account for 4.6% of the country’s GDP by 2026.
To achieve sustainable growth for the healthcare and pharmaceutical industry the U.A.E. government has adopted a series of long-term plans. The Dubai Industrial Strategy 2030 and the Abu Dhabi vision 2030, for instance, consider the pharmaceutical industry as one of the main priority sub sectors to develop due to its future growth prospects, export potential and mid-term to long-term economic impact.
A key long-term focus for the UAE government has been to reduce their reliance on imported pharmaceuticals. A report by the Dubai Chamber of Commerce and Industry estimated the volume of UAE imports of pharmaceutical products at AED 14.9bn in 2018. Contrastingly, companies in the UAE exported AED 1.2bn worth of pharmaceutical products and re-exported the value of AED 3.8bn during the same year. As a result, the local manufacture of pharmaceuticals has become a primary goal for the government, the ministry of health and legislating authorities.
A country that welcomes business
One huge incentive for international companies looking to expand is the ease of doing business. This is something that the UAE excels in. To bolster their infrastructure the UAE has created several free zones across the country that have become hubs for the pharmaceutical industry such as Dubai Healthcare City, Dubai Science Park and Jebel Ali Free Zone.
“The facilities and incentives on offer – from the free zones to special tax codes – have certainly gotten the attention of multinational companies. The country is an outlier in adopting a contemporary approach to addressing 21st-century challenges,” Mohamed Galal, VP, Head of Middle East – Bayer Consumer Health.
French midcap drug maker, Ipsen has echoes this sentiment in rolling out its new Middle East & North Africa (MENA) strategy:
“When reflecting upon where to open our regional office, it became pretty clear that the UAE offered the most viable proposition simply because of the overall comparative ease of doing business and maturity of the supporting infrastructure including the availability of qualified individuals that could assist us in expanding our presence out across the region” Khaled Elrefae, the company’s Middle East and Africa specialty care operations head.
With a consistently growing pharmaceutical sector, an efficient infrastructure, business friendly tax system, and a government that is committed to enticing foreign companies to establish and expand their presence in the country the UAE market represents a huge opportunity for international pharmaceutical companies.
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