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Sun 21 Oct 2007 12:59 PM

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Saudi to take on Danes in insulin market

Islamic Development Bank to finance Saudi insulin plant to be built near Jeddah.

Two years back, the Danish newspaper Jyllands-Posten published 12 controversial cartoons of the Prophet Mohammed that led to a mass boycott of Danish products by Muslims in almost all Islamic countries.

The boycott, however, had opened the eyes of many Muslims to a new bitter reality: The major human insulin supplier to the Muslim world is a Danish company.

Two years later, a Saudi private company is trying to break the dominance of the Danish insulin maker, Novo Nordisk, over the Muslim country by introducing locally produced insulin.

The board of the Jeddah-based Islamic Development Bank (IDB) agreed to finance a Saudi insulin manufacturing plant that is to be built jointly with leading Brazilian biotechnology firm Biomm, the official Saudi Press Agency (SPA) reported on Saturday.

The IDB will provide 37.5 million Saudi riyals ($10 million) for the purpose of establishing the 207 million riyal ($55 million) plant, to be located in the Bahrah area 30 kilometres south of Jeddah.

SPA did not reveal the name of the Saudi company setting up the plant.

The plant is expected to use the Brazilian biotechnology to produce 400 kilograms of genetically purified insulin crystals annually. The Saudi company said that it will use part of the insulin crystals to produce local insulin phials to meet the local demand while the rest of the crystals will be exported as raw material.

Manufactured insulin is an expensive and crucial drug for the 246 million diabetics worldwide. Governments and individuals are spending heavily on treating diabetes and it is becoming a burden on developed as well as on developing countries.

In June, the Economist Intelligence Unit published a report that explored the economic cost of diabetes. Among the developed countries that were studied in the report, the US faces the biggest burden, with a cost equivalent to 1.3% of its GDP.

The report also found that India, the world’s largest country with people suffering from diabetes, is currently bearing the heaviest costs, with a cost equivalent of 2.1% of its GDP.

The International Diabetes Federation (IDF), a worldwide alliance of over 200 diabetes associations in more than 160 countries, estimates that the world will spend at least $232 billion to treat and prevent diabetes and its complications. By 2025, the estimate will exceed $302.5 billion.

The IDF reported that more than 80% of expenditures for medical care for diabetes are made in the world’s economically richest countries, which includes Gulf countries.

According to 2007 IDF statistics, the five countries with the highest diabetes prevalence in the adult population are Nauru (30.7%), the UAE (19.5%), Saudi Arabia (16.7%), Bahrain (15.2%), and Kuwait (14.4%).

The world market for insulin is dominated by two players, US firm Eli Lily and Novo Nordisk, the world’s biggest insulin maker. These two companies command about 80% of the world market.

Both companies have been subject to boycotts in Islamic countries. Novo Nordisk was hurt by Muslims’ reaction to cartoons of the Prophet Mohammed, while Lily faced difficulties in Egypt due to its support of Israel.

“There is always a substitute to any kind of medication, but when it comes to human insulin it is difficult to substitute for Novo Nordisk’s insulin,” said Mohammed Ahmad, an Egyptian pharmacy owner who was working as a pharmacist in Saudi Arabia during the Danish boycott.

“Sanofi-Aventis and Eli Lilly are leading insulin providers but the demand for Novo Nordisk’s insulin is more than the demand for the other two makers,” added Ahmad who asserted that many of his customers were boycotting Danish products except the human insulin.

“Many customers know that they are buying Danish insulin and they are giving it a blind eye” said Ahmad. “Novo has a long experience in producing human insulin and it is not easy for new companies to produce insulin with Novo’s quality,” concluded Ahmad.

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