Pharmaceutical availability has long been an essential part of governments’ attempts to ensure health security. The Middle East is proving a “new epicenter of growth, a powerful engine driving the future of global health,” noted Drug Patent Watch, a research platform, in July. 

For Egypt, where locally produced medicines exceed domestic demand (The country enjoys over 91% medicine self-sufficiency, based on government data), there is a significant opportunity to export to the six GCC countries. 

The big markets are Saudi Arabia, the UAE, and Kuwait, noted a report from Ardent Advisory, a financial advice firm specializing in mergers and acquisitions. “Most [of their] domestic demand is met via imports.” In those three nations, foreign-made medicines meet between 80% and 90% of demand.

That export window could be closing as GCC governments are promoting local manufacturing. “The main idea [is] to decrease the cost of medications, which [has been] increasing rapidly,” said Abudelaziz Alsaddique, CEO of Qimat Taiba Pharmaceutical Biotechnology Factory in Saudi Arabia. 

Sanaya Pavri, director at the Dubai Office of APCO Worldwide, a consultancy, noted, “The pharmaceutical industry in the [GCC] has grown impressively in recent years.”

Fueling the market

The business case for investing in pharmaceutical production in GCC countries is compelling. “The MENA region’s pharmaceutical industry is undergoing significant transformation, driven by a complex interplay of factors,” said Pavri. “Those factors include rising health care demands and government reforms,” he added. 

Increased demand for medicines, particularly for non-communicable diseases, “has presented growth prospects,” Pavri said, citing aging populations and increasing urbanization. The GCC’s wealth also increases instances of “lifestyle-related diseases like diabetes and cardiovascular conditions,” according to IMAP.

Other demand growth factors include mandatory health insurance, medical tourism, and a robust project pipeline that caters to increasing interest from pharmaceutical investors. 

Accordingly, “Healthcare expenditure in the GCC is projected to reach $159 billion in 2029, an [average annual growth] of 7.8% from 2024 [until 2029],” IMAP said. “As a share of GDP, this expenditure is expected to increase from 5% in 2024 to 5.7% in 2029.” 

Tech’s the  fuel

The second factor fueling the GCC’s pharmaceutical sector is “technological advancements and improved supply chain management, [which] contributed to industry expansion,” Pavri said. “[GCC-based] pharmaceutical companies predominantly focus on generic drugs [where a pharma producer uses expired patents to make identical medicines to branded versions] or collaborate with foreign partners, benefiting from the region’s high number of pending patent expirations.”

Artificial intelligence (AI), ranging from “AI-based diagnostics to conversational AI,” has “vast … potential applications,” Pavri said. But Hein van Eck, CEO of Mediclinic Middle East, a GCC-based healthcare provider, told IMAP, “It is critically important that AI tools in the GCC are trained on regional, not generalized global, data.”

The third tech driver of the GCC’s pharmaceutical sector is telemedicine, fueled by “growing patient demand for convenient, remote healthcare options,” said IMAP. “The expansion of telemedicine services is part of a broader trend of digital transformation in the GCC healthcare sector, which also includes adoption of AI-powered diagnostic tools, predictive analytics, and healthcare data analytics.” 

Facilitating growth

Playing a significant role in attracting pharma investors is the GCC’s “improved regulatory environment with the establishment of government regulatory bodies, such as the Saudi Food and Drug Authority and the Emirates Drug Establishment, playing essential roles in ensuring drug safety and quality,” Pavri noted. “They [also] play a central role in streamlining drug registration processes and promoting local manufacturing.”

Pavri also said governments, especially Saudi Arabia, are “aggressively attempting to encourage generic consumption by limiting imported branded pharmaceuticals and encouraging local generic manufacturing, to reduce health care costs and diversify their economy.”

GCC governments are also signing “strategic partnerships [with] multinational pharmaceutical companies,” he said. “[They] facilitate knowledge exchange and investment,” aligning with “widespread regional plans for economic diversification … from oil [per] Vision 2030 strategies in … Saudi Arabia, the UAE and Qatar.”

Caveats to growth

Pavri warned that “successes hinge on factors like continued government funding and long-term strategic planning.” Meanwhile, IMAP stressed that “harmonizing healthcare regulatory reforms is essential” for the region to become a pharma hub.

One divisive topic is “price controls,” noted Pavri. “[They] have been a double-edged sword.” On the plus side, regulating prices has ensured medicines remain affordable, which reduces the financial burden GCC governments incur to treat patients. On the downside, Pavri said price controls “have raised concerns about their potential negative impact on innovation and investment.”

Further complicating price controls in the GCC is the price harmonization policy “implemented to address price variability among member states, [and showcase] the region’s increasing focus on health care cost containment,” Pavri said. “The long-term implications of this policy on the market, pharmaceutical companies, and health care in the GCC remain uncertain.”

IMAP highlighted challenges that emerge with fast sector growth. The first is “healthcare workforce challenges. [For one,] recruiting skilled professionals is difficult, reliant on expats, and requires investments in talent development.” 

There are also “limited specialized care facilities, [as there is] a focus on primary and secondary care, meaning there is a gap in [meeting] specialized care demand,” IMAP noted. 

Other growth-hindering factors include “rising healthcare cost management driven by geopolitical concerns and gloomy economic environment, coupled with lingering global supply chain disruptions and labor shortages,” added IMAP.

Lastly, the elephant in the room is the fact that over two-thirds of the GCC’s pharmaceutical needs still come from abroad, whether finished medicines or semi-finished components for local producers. “[That] high dependency on imports [means] the healthcare sector has high exposure to price fluctuations for pharmaceuticals, medical devices, and equipment,” Pavri said.

What comes next?

For pharma companies in the Gulf, “innovation is critical for success … The GCC is building self-reliance by incubating innovative ventures and creating a collaborative environment to scale research and expand its pool of skilled workers,” Mireille Azzam, head of strategic consulting at JLL Middle East and Africa, told Emirates Projects, a news platform. “Growing demand for purpose-built facilities will support groundbreaking research, advanced manufacturing and digital transformation, [and lays] a strong foundation for the future growth of the region’s evolving life sciences ecosystem.”

Those prospects will fuel a boom in “privatization initiatives and public-private partnerships, AI and automation … genomics and precision medicine advancements, R&D initiatives and pharmaceuticals manufacturing,” IMAP predicted.

Anther rising trend is the GCC’s “shift toward preventive care management, [fueled by the] growing number of specialized Centers of Excellence, and growth in aging population healthcare and specialized care services,” said IMAP.

Another is the merger between healthcare facilities and tourism. “The region’s ambition to become a medical tourism hub is also driving investment,” IMAP said. “Strong government-backed initiatives and strategic public-private partnerships will be key factors driving the future growth of the GCC’s healthcare industry.” 

According to forecasts, the GCC should witness noticeable growth in pharmaceutical investments and market size. “The GCC pharmaceutical market was valued at $23.7 billion in 2024,” said research firm IMRAC Group. “The market [will] reach $48.98 billion by 2033, exhibiting an [average annual growth rate] of 7.6% from 2025 to 2033.”

Realizing those targets requires commitment. “The future of the MENA pharmaceutical industry is promising, but it will require proactive measures and nurturing to address challenges and capitalize on opportunities,” Pavri of APCO Worldwide stressed. “Governments, regulators, and industry players must continue to work together to create a conducive environment for innovation, investment, and growth.”