Health initiatives seek to expand access and improve quality of care in Saudi Arabia

Public and private sector investment in Saudi Arabia’s health care industry continues to be fuelled by the growing demands of a rising population and the increasing prevalence of lifestyle-related diseases. Although the 2016 health care budget was down on the historic high of 2015, industry players are confident of changes to enhance efficiency and promote better allocation of resources, as the rollout of government initiatives and projects already in the pipeline moves ahead. Moreover, what scale-backs are taking place are expected to open opportunities for more vigorous private sector involvement, as called for in the National Transformation Programme (NTP), released in June 2016.

Meanwhile, a greater focus on preventive care is being encouraged to tackle the rise of chronic and lifestyle-related diseases, and an increasing number of Saudis are enrolling in courses at the Kingdom’s medical colleges, which bodes well for a sector historically reliant on foreign expertise.

Vision 2030

The Kingdom’s economic development blueprint, Vision 2030, includes provisions for a major overhaul of the health sector in the coming years. According to the strategy document, “The public sector will focus on promoting preventive care, on reducing infectious diseases and in encouraging citizens to make use of primary care ... The public sector will focus on its planning, regulatory and supervisory roles ... We intend to provide our health care through public corporations both to enhance its quality and to prepare for the benefits of privatisation in the longer term. We will work towards developing private medical insurance to improve access to medical services and reduce waiting times ... doctors will be given better training to improve treatment for chronic diseases.”

Key Indicators

Life expectancy in Saudi Arabia was 74.2 years in 2014, exceeding the regional average by six years and the global average by four, with life expectancy at birth for both sexes rising by three years in the decade to 2012, according to the World Health Organisation (WHO). Vision 2030 aims to increase life expectancy to 80 by 2030.

Some 29.5% of the Kingdom’s population of around 29m was under the age of 15 in 2014. This is lower than the 34% in the eastern Mediterranean region but higher than the 27% reported globally. The crude birth rate was 22 per 1000 residents in 2014, below the regional and global averages of 31.4 and 24.3, respectively. The crude death rate was 3.9 per 1000 people, lower than the regional average of 6.3 and the global average of 7.9.

Infant mortality stood at 7.4 per 1000 live births in 2014, 83% less than the regional rate of 44 and 80% less than the global rate of 37. In line with global trends, the Kingdom’s under-five mortality rate has fallen considerably, dropping by 64% from 44 per 1000 live births in 1990 to 16 in 2013. Maternal mortality has seen a similar improvement, falling by 61% from 41 per 1000 live births to 16 over the same period. Ischaemic heart disease and strokes were responsible for a respective 22% and 16% of deaths in the Kingdom in 2012, an indication of the rising impact of lifestyle-related disease.

Hospital Care

In 2014, the latest year for which figures are available, there were 453 hospitals in the Kingdom, eight more than in 2013. The number of beds was 67,997, up 5.1% year-on-year. Of these, 40,300 (59%) were in hospitals run by the Ministry of Health (MoH). There were 22.1 beds per 10,000 residents, or one bed for every 452 people.

The number of physicians in Saudi Arabia, including dentists, reached 81,532 in 2014. Of these, 19,029, or 23%, were Saudi. The number of nurses rose to 165,324, of which 37% were nationals, while the number of pharmacists stood at 22,241 and allied health personnel numbered 94,960, of which 21% and 73%, respectively, were Saudi citizens.

Structure

The sector is governed and overseen by the MoH, with various other authorities responsible for different areas within the sector. The Saudi Commission for Health Specialties is responsible for supervising and evaluating training programmes, as well as setting the controls and standards for the licences of health professions.

The Saudi Food and Drug Authority (SFDA) monitors and controls the import and distribution of medical devices and pharmaceuticals in the Kingdom, as well as their prices, and ensures that drugs coming onto the market for humans and animals alike are safe and effective. The Saudi Arabian General Investment Authority (SAGIA) is the Kingdom’s foreign investment vehicle and is responsible for overseeing and facilitating all foreign investment in the health care sector.

Setting up a hospital in Saudi Arabia requires approval from the MoH and the Ministry of Commerce and Investment, and final authorisation is needed from the General Directorate of Health Affairs. If the applicant is a foreign national or entity, SAGIA approval is also required.

The Council of Cooperative Health Insurance (CCHI) was established in 1999 to oversee the private health insurance market. Health insurance is compulsory for foreigners living in Saudi Arabia, with expatriates representing the majority of policyholders in the SR25bn ($6.7bn) market.

Saudi Arabia’s health care system is divided into two tiers. The first comprises a network of primary health care centres and clinics that provide preventive, basic, prenatal and emergency services. This tier also includes mobile clinics, which serve the Kingdom’s more remote regions. The second tier is composed of hospitals, medical cities and specialised treatment centres, located primarily in more densely populated urban areas.

Budget

Government health care spending will remain significant in 2016, with health and social affairs spending making up 13% of the Kingdom’s budget. This gives the sector the third-largest spending allocation, behind military and security services (25%) and education (23%).

Although the health care budget was down 35% on its allocation of SR160bn ($42.7bn) in 2015, to SR104.9bn ($28bn) in 2016, it should be noted that the 2015 allocation represented an all-time high for the sector, up 48% on 2014, as the government planned for several big-ticket developments that year. “The steep increase in the health care budget was mainly for establishing new hospitals, medical centres and hospital cities around the Kingdom,” Faisal Bindail, deputy general manager at AJA Pharma, told OBG. In addition, the 2016 budget highlights that there are a number of ongoing capital investments in the sector that continue to be financed by previous budget surpluses.

However, the drop in spending, even coming on the back of a particularly high allocation the previous year, was also a reflection of the current economic environment and the push to enhance efficiencies. Deputy Crown Prince Mohammed bin Salman Al Saud said in an interview in April 2016 that in recent years there has been $80bn-100bn of inefficient spending in Saudi Arabia every year. As such, the budget has been widely interpreted as an effort to optimise allocation of resources. “The budget needs to be seen as a realignment of resources rather than a series of cutbacks,” Dr Sultan Al Sedairy, executive director of the research centre at King Faisal Specialist Hospital and Research Centre, told OBG. “In the past, hospitals tended to spend their budgets rather than try to save money and look for efficiencies. The new budget will ensure that this now takes place.”

Government Facilities

The Kingdom’s primary care services are largely delivered through the MoH’s network of 2281 primary care centres and mobile clinics (see analysis). The NTP sets a goal of increasing the number of primary care visits per capita from two to four by 2020. This would be ahead of the regional benchmark of 3.4, but still behind the international benchmark of seven.

Most of the government-run hospitals are operated by the MoH, which as of 2014 ran 270 hospitals across the country. State health facilities not managed by the MoH include university hospitals and health centres, as well as those run by the armed forces, the Ministry of National Guard, the Ministry of Interior, the Royal Commission for Jubail and Yanbu, and Saudi Aramco. In addition, King Faisal Specialist Hospital and Research Centre is run independently of the MoH. The total number of beds in non-MoH government facilities reached 12,032 in 2014. “Upgrading the standards and systems in the Kingdom’s hospitals is vital to improving the quality of patient care,” Omar Al Hajjaj, general manager at medical supplier Masimo Corporation, told OBG.

In The Pipeline

To this end, in 2010 the MoH embarked on a 10-year strategic plan that aims to combine 3500 health care facilities and more than 70,000 beds in one integrated network. Under the Integrated and Comprehensive Health Programme (ICHP), 61 new hospitals, 776 primary health care centres and nine specialised medical centres had been built in the four years to 2014. At the centre of the plan are a handful of new medical cities.

Additionally, Saudi Arabia’s largest ongoing health care development project – which is also the largest in the GCC – is the Security Forces Medical Complexes. The $6.8bn development, comprising two medical cities – one in Riyadh and the other in Jeddah – is being built for the Ministry of Interior and will serve the Kingdom’s security services and their families, as well as offer specialist care to the public. Each complex will comprise three hospital buildings, an academic and clinical centre, office buildings, service stations, villas, apartments, car parking and associated facilities.

Medical Cities

As a central pillar of the ICHP, the government is constructing several medical cities at a total cost of $4.3bn. The largest of these is the $1.2bn King Khalid Medical City in Dammam. Spread over 700,000 sq metres, the city will house a 1500-bed facility and seven chambers of excellence focusing on cardiac sciences, neurosciences, metabolic and genetic disease, oncology, multi-organ transplantation, rehabilitation and ophthalmology.

The $1bn King Abdullah Medical City in Makkah Province will contain three hospitals and 10 medical centres, with a total of 1500 beds, while the $1.1bn King Faisal Medical City in Abha, in the south, is expected to come on-line in 2021 and will feature a 500-bed main hospital, plus five specialty hospitals, bringing the total number of beds to 1350. King Abdulaziz Medical City in Riyadh – which falls under the Ministry of National Guard Health Affairs rather than the MoH – will have over 1000 beds, while King Fahad Medical City, also in Riyadh, is being expanded. Additionally, there are plans to build the new 1000-bed Prince Mohammed Medical City in Al Jouf, in the north of the country.

Education

In the 2014/15 academic year the total number of students enrolled in medical and associated health courses at the Kingdom’s universities stood at 61,421. Approximately 30% of these were enrolled at the country’s 23 medical colleges and university hospitals, while the remainder were enrolled across 20 applied science colleges (35.4%), 20 pharmacy colleges (14%), 16 dentistry colleges (8.2%) and 13 nursing colleges (1.9%).

Attracting greater numbers of Saudis to these courses will remain a priority as the authorities look to limit the sector’s dependence on foreign personnel. The MoH has an NTP goal of increasing the number of resident Saudi physicians enrolled in training programmes from 2200 to 4000 by 2020. Recent figures bode well in this regard, with the number of students enrolled in health care courses growing steadily in recent years (see analysis). Capitalising on the links already in place between universities and health facilities should further boost the number of nationals working in the sector.

“We can create jobs through university training programmes that are linked with hospitals,” Mohamed Al Mishari, board member at Dr Abdul Rahman Al Mishari Hospital, told OBG. “This is how you successfully Saudiise the health care industry.”

KACST

The King Abdullah Centre for Science and Technology (KACST) was established in 1977 to spearhead innovation in the Kingdom’s science and technology sector. Instrumental in this are KACST’s Joint Centres of Excellence Programmes (JCEPs). These work with some of the world’s leading universities, offering research positions at the graduate and post-graduate level to Saudi Arabia’s top students, driving the Kingdom’s strategy to diversify towards a more knowledge-based economy.

The JCEPs promise to deliver progress in various fields. The Centre of Excellence in Nanomedicine is being carried out in partnership with the Centre for Excellence in Nanomedicine and Engineering at University of California, San Diego (UCSD), with a team of 30 scientists, researchers and graduates. Ongoing projects include the development of light-responsive and bio-responsible materials, and research focused on regenerative medicine – specifically, the delivery of active growth factors to promote the healing of heart muscle after heart attacks and of retinal stem cells to treat multiple forms of retinal degeneration.

The centre has been granted patents for 11 products since it was established, and has produced and commercialised a liposuction technique known as NanoLipo. “By partnering with the world’s best universities we can share research capabilities,” Abdulaziz Al Malik, deputy director of KACST-UCSD Centre of Excellence in Nanomedicine, told OBG. “This way we can cover all of the areas that are of interest to the Kingdom and build up strong Saudi human resources in these areas.”

Private Sector

A conference for potential foreign investors in the sector is planned for the second half of 2016, with greater private sector involvement forming an increasingly significant tenet of the government’s plans for health care.

“Part of our strategy is ... an overhauling of all our regulations that govern how the private sector will participate,” Khalid Al Falih, then minister of health, said at the Ninth Global Competitiveness Forum in Riyadh in January 2016. Others involved in the sector, such as Dr Hussain Abdulghani, CEO of Al Dar Hospital, have highlighted a pressing need to restructure the MoH around privatisation to simplify a system that is burdened by bureaucracy in order to attract new investments in the health care sector. “This [burden] has been particularly evident in the bureaucratic regulations for investing in health care and in the delayed government payments for the patient transfer scheme to private hospitals,” Dr Abdulghani told OBG.

Steady Expansion

The number of privately operated health facilities has been growing steadily in recent years, in line with both regional trends and government initiatives to further embed private operators in an industry traditionally reliant on government support and resources. The launch of Vision 2030, which aims to further corporatise the sector, should boost private involvement going forward. Under the NTP, the MoH is aiming to increase the private sector’s contribution to total health care spending from 25% to 35% by 2020.

In 2014 the number of hospitals operated by the private sector was 141, with a total of 15,664 beds. This represents an increase of 22% since 2011, when private sector beds numbered 12,817. The majority of these hospitals were located in the Riyadh and Jeddah provinces. The former is home to the largest proportion of private hospitals, with its 34 making up 24% of the total. Jeddah had 33 hospitals, representing 23% of the total. In Riyadh Province there were 4554 private hospital beds, constituting 29% of the total, while Jeddah hosted 20%.

In all, the private sector currently accounts for approximately 30% of the local health care market. In January 2016 then-governor of SAGIA, Abdullatif Al Othman, told audience members at the Ninth Global Competitiveness Forum in Riyadh that near-term investment plans for the health care market are set to present investment opportunities valued at SR40m ($10.7m) for private sector players.

Meanwhile, efforts aimed at easing the entry process for international players have accelerated in recent years. Non-Saudis are now allowed to own hospitals in the Kingdom, while another measure allows for experienced health care professionals to move freely between institutions, helping companies attract qualified professionals.

Indeed, in early 2016 Dubai’s Aster DM Health-care Group announced that it has plans to build four new – or acquire existing – health care facilities in the Kingdom over the next four years at a total cost of Dh1bn. Such moves will help drive private health care expansion, which BMI Research has predicted will grow at a compound annual growth rate (CAGR) of 10.4% in the five years to 2018, reaching SR53.5bn ($14.3bn).

Growth Drivers

One of the most significant drivers of Saudi Arabia’s health care industry over the next 20 years will be the shifting demographic profile. According to a report by consultancy McKinsey, the population of Saudi nationals is set to reach 27m by 2030, an increase of 28% over 2014. The report forecasts that the number of people over the age of 65 could as much as double in the same period, reaching 2.5m. As such, a demand surge is expected for services catering to the elderly, particularly home health care services.

Take-up of such services in the Kingdom appears to bear this out, with the segment already having witnessed a dramatic increase in demand in recent years. Between 2009 and 2013, for example, the number of home health care patients rose from 100 to 28,000, according to MoH figures. Consultancy EY has also highlighted the segment’s significant growth potential, not just in the Kingdom, but across the GCC, with the region set to spend up to $4.8bn on home health care services by 2025.

Another area highlighted by EY, and one where the MoH will likely look to encourage the private sector, is the provision of long-term and post-acute care (LTPAC) services. According to a study on trauma care systems in Saudi Arabia, 20% of the beds in MoH hospitals are occupied by road traffic patients, many of whom have residual disabilities and require LTPAC services. “The current estimated bed gap for LTPAC patients in the GCC is between 2000 [and] 2400,” Ahmed Faiyaz, MENA health care transaction advisory services leader at EY, told local media in January 2016, noting that 50% of that capacity gap existed in Saudi Arabia.

Gap To Fill

Private players can also expect to have a significant role in the provision of specialised centres of excellence. “Among the most pressing needs of Saudi Arabia’s health care sector, cancer treatment facilities are top of the list,” said Momen Adnan Al Muslimani, founder and CEO of Advanced Systems Corporation. “The country needs to cover a gap of about 80% between the services available and the level required by citizens, creating opportunities for the private sector to fill the gaps.”

GCC governments spent approximately $12bn to send patients abroad for treatment related to cases of oncology, orthopaedics and trauma, rehabilitation and paediatric services in 2012, indicating the substantial growth potential for centres of excellence across the whole region. Dr Erfan and Bagedo General Hospital in Jeddah is one example of the private sector looking to capitalise on this opportunity and aims to have 20 centres of excellence set up by 2020, up from seven in 2016.

Non-Communicable Diseases

The rise in the number of patients suffering from chronic and lifestyle-related diseases has been a growing concern for the Kingdom’s health care authorities for a number of years. Economic and social factors associated with robust economic growth – namely, increased wealth and the prevalence of sedentary lifestyles – have contributed to the rise in diseases such as diabetes, heart disease and cancer. Under the NTP the MoH is aiming for a 1% reduction in the obesity rate in the Kingdom by 2020.

According to consultancy Accenture, chronic diseases typically constitute 30% of patients, but absorb 70-80% of health resources. “Bad eating habits represent a particular concern,” AJA Pharma’s Bindail, told OBG. “When we talk about rising rates of cholesterol or hypercholesterolemia, or diabetes or even hypertension, it is clear that food plays a very important contributing role.”

In 2012 the WHO reported that non-communicable diseases (NCDs) caused 78% of deaths in Saudi Arabia and Bahrain – the highest rate in the GCC. That year Saudi Arabia also had the top incidence of death caused by cardiovascular diseases in the GCC (46%) and the highest proportion of diabetics between the ages of 20 and 79 (20%).

Although these figures are alarming, they are still well below the rates recorded in more developed economies; the proportion of deaths linked to NCDs in Australia, the UK and Japan in 2012 stood at 91%, 89% and 79%, respectively.

As economies in the region continue to grow, the incidence of NCDs is likely to rise, with BMI Research indicating that NCDs will reach a cumulative 3.9m disability-adjusted life years lost by 2025 in the Gulf, and that cardiovascular disease will rank as the leading cause of death.

In an effort to curb these trends, Vision 2030 has laid out detailed plans for the authorities to cooperate with the private sector in launching initiatives that it hopes will enable citizens and residents to engage in a wide variety of sports and leisure pursuits that boost physical activity.

E-Health

Electronic health solutions have taken an increasingly prominent role globally in recent years, with integrated electronic filing systems in particular helping streamline processes and provide centralised databases of patient histories. In 2011 the MoH launched its e-health strategy, to deliver a “safe efficient health system, based on care centred on the patient and supported by e-health”. Under the NTP the MoH aims to increase the percentage of Saudi citizens that have a unified digital medical record from 0% to 70% by 2020.

Smartphones are also increasingly being used as platforms in the treatment and prevention of acute and chronic diseases. In 2014 the global mobile health market was valued at $10.5bn, and is expected to register a CAGR of 33.5% between 2015 and 2020, according to Allied Market Research. Mobile-based cardiac monitors, blood pressure monitors, respiratory monitors, sleep monitors and wearable fitness sensor devices are all addressing the need for regular assessment and treatment in these areas. With the mobile broadband penetration rate rising rapidly in the Kingdom – up to 106% in 2015 from 48% in 2013, according to the Communications and Information Technology Commission – mobile health is poised to become a major enabler of health care monitoring and service delivery, particularly to the more remote regions.

Smart Solutions

Smart health solutions are coming to the fore as authorities move towards an awareness-based preventive care model. The MoH has various health awareness campaigns under way that aim to educate citizens on health issues, with its mobile campaign sending subscribers updates in medicine, health and disease prevention via daily text messages that are carefully selected by a group of MoH specialists and consultants. “People need to be better educated on how best to manage their own health,” Riyadh Bajodah, CEO of health care IT solutions provider Waseel, told OBG. “A move towards self-managed health care will reduce costs and improve habits. Technology will be the key driver in this shift. We need to not just say ‘do this’, we need to explain benefits and downsides of actions and provide alternatives. Then people are more likely to make the right choices.”

Insurance

The CCHI was established in 1999 to oversee the Kingdom’s SR25bn ($6.7bn) private health insurance market, which currently comprises 28 operators. Health insurance was initially rolled out for expatriates, with a requirement that foreign employees must have medical insurance coverage phased in since 2001. This obligation was subsequently extended to their dependants. Since 2006 all private sector employers have been required to provide insurance coverage for their employees, both Saudi and foreign.

However, foreigners still form the bulk of those insured: the MoH announced in July 2014 that of the total of 9.7m people with coverage, 7m were expatriates, while only 2.7m were nationals. These figures suggest a 71% penetration rate for foreigners and 13% penetration for nationals, translating into overall penetration of 32%. This suggests there is significant room for growth, with the government currently exploring ways to shift the burden of care towards the private sector.

“There are some government employees for onto private health insurance plans,” Al Sedairy told OBG. “Indeed, this has already started, with many mall guards and office security personnel now covered by certified insurance companies. As time goes on the government will slowly retract itself from providing everything, allowing private insurers to carry more of the burden.”

Expanding Coverage

Since December 2015 everyone applying for a visa to enter Saudi Arabia is required to present valid insurance certificates for medical cover in the Kingdom. Seven insurance firms are licensed by the CCHI to sell such policies electronically. The measure does not apply to Hajj and Umrah pilgrims, however, or for holders of diplomatic or special passports, guests of the state or those travelling for medical treatment.

“A national health insurance programme would help with the implementation of the government’s privatisation aims because one of the key challenges will be the transition away from a system dominated by public hospitals for public sector employees,” Dr Abdulghani told OBG.

Pharmaceuticals

The Kingdom’s SR31.7bn ($8.5bn) pharmaceuticals market was the largest in the MENA region in 2015. According to BMI Research, the Saudi market will expand by a CAGR of 10% between 2015 and 2020 to reach SR51.2bn ($13.6bn). The Ministry of Energy, Industry and Mineral Resources has an NTP goal of raising local pharmaceuticals manufacturing’s contribution to total market value from 20% to 40% by 2020.

In a bid to deal with the budgetary cutbacks the health sector faces, authorities have encouraged government health institutions to review their pharmaceuticals purchases and find cheaper replacements where possible. As a result, industry players expect a demand surge at the cheaper end of the market. “Demand for pharmaceuticals will be restructured,” said Bindail. “Hospitals will go for generics rather than brands, and we will see a growing trend towards biotech products and biosimilars.” Added to this is the fact that many important drug patents are due to expire in the next few years, with a flood of cheaper generics expected to come onto the global market as a result.

Nonetheless, the Saudi market has historically been brand-driven, with imported branded pharmaceuticals products accounting for around 80% of the market in 2014. As such, demand for branded products is likely to remain strong, especially from the Kingdom’s private health care facilities.

Local Production 

With locally manufactured pharmaceuticals accounting for just 20% of the market, localising the drug and health care industries has been identified as a strategic priority for the Kingdom to achieve health care security. “We are seeing a rise in demand for medicines, particularly generics that are growing on an annual basis,” Aymen Haddallah, CFO of Banaja Holding, told OBG. “While imports rise, local manufacturing capacity is expanding to keep pace with demand.” To this end, several large international players have been working to set up manufacturing facilities in the Kingdom to satisfy expected demand growth.

Most international companies with a presence in Saudi Arabia work in partnership with local distribution firms. UK-Swedish pharmaceuticals multinational AstraZeneca, for example, has a long-running presence in the Kingdom. Its local partners – SITCO and Naghi – are responsible for distribution, while AstraZeneca restricts itself to a marketing role.

Incentives

Companies that package or manufacture their products locally can avoid having their prices reduced by the SFDA, leading many operators to open local manufacturing bases. Among the incentives are interest-free loans for up to 75% of the cost of capital, available via the Saudi Industrial Development Fund (SIDF). The SIDF was established in 1973, and by 2013 had issued $2.96bn in loans to 32 factories involved in the manufacturing of pharmaceuticals goods. Recent activity includes a SR54.1m ($14.4m) loan to Dammam Pharma, a subsidiary of Spimaco, for the development of a plant in the province of Dammam. A similar deal was inked with AJA Pharma, a subsidiary of Saudi Chemical, in February 2016 to help with the financing of a 120,000-sq-metre manufacturing facility in Hail.

Other incentives aimed at attracting more multinationals to the Kingdom to establish pharmaceuticals operations include 100% foreign ownership in the country’s economic free zones. According to BMI Research, King Abdullah Economic City (KAEC) is set to attract significant inward investment from international drug companies looking to penetrate the Saudi Arabian and neighbouring markets. US-based Pfizer and France’s Sanofi Aventis have already committed to establishing manufacturing bases in KAEC. Pfizer has a planned 32,000-sq-metre facility with a yearly production capacity of 18m packs, while Sanofi Aventis will have a 35,000-sq-metre facility with planned production spanning up to 20 products, including oral anti-diabetics and cardiovascular drugs. In January 2016 Indian pharmaceuticals manufacturer Aurobindo announced plans to build a facility in KAEC to manufacture medicines to treat chronic diseases such as diabetes, heart disease and hypertension. These will be distributed within the Kingdom and the Gulf in a bid to meet rising regional demand.

Regulation

Saudi Arabia’s pharmaceuticals industry is overseen by the SFDA, which is responsible for regulating a range of areas. These include licensing of the manufacturing, import, export, distribution, promotion and advertising of medications within the Kingdom; the assessment of the safety, efficacy and quality of medications; the issuing of marketing authorisation; and the inspection and surveillance of manufacturers, importers, wholesalers and dispensers of medications.

New drugs generally take 18 months to come to market from the time of submission to licensing. However, this can fluctuate between 15 and 21 months, depending on how responsive the submitting company is to SFDA queries during the process. Any product that a company wants to launch in Saudi Arabia must have passed, in addition to a quality assessment test, a zone-IV stability study to prove the product will be stable in Saudi Arabia’s physical environment, based on likely humidity and temperature. “There is scope to accelerate the licensing process,” Haddallah told OBG. “Medicines that have already been approved in the US and Europe should be fast-tracked here.”

Private Workforce

The rising number of private sector health care workers in recent years mirrors the sector’s overall expansion in the Kingdom. The private sector health care labour force grew from 70,688 in 2010 to 106,256 in 2014, with physicians totalling 28,746, nurses 41,768, pharmacists 17,266 and allied health personnel 18,476.

Although progress has not been as significant as in MoH hospitals, private sector hospitals have also been taking encouraging steps with regards to Saudiisation, boasting the largest relative increase of Saudi workers in recent years, with 97% growth between 2010 and 2014. However, this comes from a much lower baseline than MoH hospitals, with just 8206 Saudis working in the private health care sector in 2014, representing 7.7% of the total private health care workforce. These figures, which are below the level seen at public hospitals, typify Saudis’ preference for working in the public sector, which is historically seen as a more secure employer than private sector institutions.

Knowledge Transfer

With the Kingdom’s health care sector working hard to attract greater involvement from international players, there is huge potential for the sector to benefit from the technologies and know-how of foreign players entering the market, and in turn boost the skills of Saudi nationals. The SIDF, which works under the mandate of the Ministry of Commerce and Investment, is very active in this regard and encourages local companies to pursue joint ventures with international players in order to draw in new technology and expertise into the Kingdom.

“We want to always have a mix of local talent and expatriates in our workforce,” AJA Pharma’s Bindail, told OBG. “This helps expand local knowledge and expertise by mixing it with international experiences.” The government agrees, but is clear that the expertise international companies bring must be adapted to the local market. “The focus in the Kingdom is on best practices and deploying the aspects that can be applied here in Saudi Arabia,” Dr Basmah Al Buhairan, managing director of health care and life sciences at SAGIA, told OBG.

Outlook

Despite the cut in government spending, Saudi Arabia’s health care sector is expected to continue posting robust growth moving forward, underpinned by strong demand, greater prospects for private sector involvement and significant growth potential in some underserved segments. The reliance on foreign medical staff will remain a challenge, but the rising numbers of Saudi students enrolled at the Kingdom’s medical colleges indicates that progress is being made in this regard.

In the future the private sector is expected to play a major part as the MoH looks to restrict itself to a legislative, regulatory and supervisory role, as per Vision 2030. “The health care sector, in particular, through the various initiatives that are being worked on, will play a leading role in contributing to economic growth in the Kingdom as more and more international companies become involved in the rollout of new models of health care delivery,” Al Buhairan told OBG, illuminating the sector’s role in wellbeing of both the population and the economy.