Saudi drug bills down as Government takes a stand

Saudi Arabia's pharmaceutical market is braced for a sea change in the way drugs are priced, following the Ministry of Health's decision to slash the cost of licensed medications by 1% for each year of their registration.

An estimated 1,400 products will be affected by the first price cut, due next month, with some drugs losing between 3.5 to 27% of their market cost.

The government is hopeful the cost-cutting measures will kick-start growth in the country's generic market, and spur a move away from branded drugs.

Despite being the biggest pharmaceutical market in the Gulf, Saudi Arabia has some of the highest drug prices in the world. According to data firm Business Monitor International, ranitidine - the world's second most popular stomach ulcer drug - retails at US$18.05 in Saudi compared to $1.87 in India.

Generics account for only 5% of the market, while imports notch up 90% of sales.

Under the new pricing structure, the sale price of broad-spectrum antibiotic cefuroxime (Zinnat) is expected to drop from SR81.35 to SR67.50, while the betablocker atenolol (Tenormin) will retail at SR46.55 instead of SR57.8. Nifedipine (Adalat) is expected to sell at SR28.70.