By Karen Leigh
Industry growth rate of 7% forecast
The GCC’s pharmaceuticals industry will grow at a rate of 7 percent in the next decade, according to a new report from Alpen Capital Projects.
In its GCC Pharmaceuticals Industry Report, it forecast that industry sales would be worth $10.8bn in 2020, up from $5.6bn in 2010. It said the rise would be fueled by factors including long life expectancy, sharp jumps in population growth, increasing healthcare awareness coupled with a rise in lifestyle diseases, conducive government policies and mandatory medical insurance for employees.
The study “highlights the opportunity for private sector participation especially as local manufacturing is limited and not enough to meet the growing demand,” said managing director Sanjay Vig. “Private equity and venture capital are the most suitable investment vehicles for investors looking at opportunities in the sector considering the limited pharmaceuticals stocks listed on the capital markets.”
However, pharmaceuticals sales as a percentage of healthcare expenditure in the GCC are projected to decline. Alpen estimated a fall from 14.3 percent in 2010 to 12.4 percent in 2020.
The industry will also be helped along by a rise in poor overall health, caused largely by new couch-potato lifestyles and poor eating habits.
According to Alpen’s report, “urbanization and rising per capita income have led to the consumption of unbalanced diets and a more sedentary lifestyle in the GCC, thereby aggravating the prevalence of lifestyle ailments such as diabetes and cardiovascular diseases. The average treatment cost in the case of lifestyle-related ailments is higher than treating communicable diseases.”