German pharma company Boehringer Ingelheim expects to expand its portfolio in the diabetes segment as increased prevalence of lifestyle diseases in the Arabian Gulf becomes a growth driver.
The company launched its second type II diabetes medicine in the UAE last month, and will launch four diabetes medicines in Egypt this year.
Despite the UAE government’s cost-control measures on medicine prices to check runaway medical costs, the prevalence of lifestyle diseases make it an attractive growth segment for international drug companies.
In the Arabian Gulf, the pharma market was estimated to be US$8.5 billion in 2012, and is expected to grow at a rate of 6 per cent to 8 per cent a year until 2020, according to a 2013 report by Dubai-based investment bank Alpen Capital.
The prevalence rate of diabetes in the region is nearly double that of the global average, the report said.
“Even with the price controls by the government, because of the prevalence of the lifestyle diseases, this market will continue to grow and provide a driver for the international [companies] to continue to invest here,” said Karim El Alaoui, the managing director and head of prescription medicine at Boehringer Ingelheim Middle East, Turkey and Africa.
Last year, it recorded a 34 per cent growth in sales over 2014 in the Gulf. The company declined to provide the total sales in the region. Worldwide, it generated €14.8bn in net sales, an increase of 4.1 per cent from a year earlier. The company’s operating income rose 6 per cent to €2.3bn last year.
As revenues from the oil sector take a plunge, governments across the region are cutting back on their spending, including the health sector. Saudi Arabia, for instance, has cut its healthcare budget this year, providing a way for a greater play for the private sector investment.
“The Gulf pharmaceutical market is still new, and we will be looking at [the Saudi market], and we will try to capitalise it,” Mr El Alaoui said. “There is an unmet medical need in the region.”
Saudi Arabia followed by the UAE are expected to remain the largest pharma markets in the region, according to the Alpen report.
In 2014, Boehringer Ingelheim tied up with Jeddah-based Cigalah group and Riyadh-based Tabuk Pharmaceuticals for local production in Saudi Arabia. Last year, the German company launched the first med madmedicine in the country for the local market.
In Egypt, the German company expects to launch four medicines in diabetes.
“Egypt is the country of the largest diabetes population in the region,” Mr El Alaoui said. “It is considered a focus [for our] expansion.”
It also expects to start local production in Algeria this quarter.
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