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Saudi Arabian Pharmaceutical Market Is One Of Essay

¶ … Saudi Arabian pharmaceutical market is one of the largest in the Middle East. Within the Gulf Cooperation Council (GCC), Saudi Arabia represents 65%, or $1.7 billion, of the pharmaceutical market (EPSICOM, 2011). This work will analyze the unique opportunities within the Saudi pharmaceutical industry along with challenges, such as heavily regulated price controls and the barriers to access faced by international pharmaceutical companies. Through a better understanding of these factors, a more complete picture of the market can be obtained. Saudi Arabia is a unique pharmaceutical market. It is the largest consumer in the GCC, with more than 82% of the medicines utilized being imported (Baines, 2009). Also, the GCC is unique from nearly every other global region in that patients favor brand products over generics. This is despite that generics are the vast majority of the drugs produced in the Kingdom and the GCC. One study estimates the market share of generics in Saudi Arabia is just 5.8% versus 50% in many European countries (EPSICOM, 2011). Another unique aspect of the Saudi pharmaceutical market is that medications can be purchased from a pharmacy without a prescription. This allows consumers to easily exercise their brand preferences (Baines, 2009). In short, Saudi Arabia and larger GCC has extensive and unique differences which must be considered in any business decision in the region.

Most market analysts consider the region to be a tremendous opportunity. Saudi Arabia recently...

Furthermore, the Kingdom permits' manufacturing facilities to be 100% foreign owned and provides various low-cost loan and power programs to encourage investment (EPSICOM, 2011). In addition, as a new member of the WTO, Saudi Arabia has improved its protection of intellectual property and continues to liberalize its economy as it diversifies from oil. However, there are obstacles, including strict price controls and limits on distribution of pharmaceutical products produced abroad (Baines, 2009). In conclusion, there exists significant opportunity for investment in the Saudi pharmaceutical industry despite the challenges.
PEST Analysis:

Political -- Saudi Arabia has a stable government which offers significant political pros and cons. New legislation is being enacted to provide health insurance and significant government support exists in the form of loans and energy resources to encourage investment. However, negative government involvement exists leading to strict price controls and limits on distribution of products produced abroad.

Economic - Saudi Arabia is a growing economy with a 3.7% growth rate and significant secure foreign investment in non-pharmaceutical industries. Within the (GCC), Saudi Arabia represents 65%, or $1.7 billion, of the pharmaceutical market.

Social -- Saudi Arabia has extremely unique cultural factors,…

Sources used in this document:
Bains, E. (2009). Pharmaceuticals: Bringing in the Global Leaders. Middle East Econ. Dig. 53(33).

EPSICOM. (2011). The Pharmaceutical Market: Saudi Arabia. Last Modified 31 Oct 2011. URL: Http://www.espicom.com/prodcat2.nsf/Product_ID_Lookup/00000367?

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