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Qatar Pharmaceuticals and Healthcare Report Q1 2011
Business Monitor International, Nov 2010, Pages: 72
The Qatar Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Qatar's pharmaceuticals and healthcare industry.
The development of the Qatar pharmaceutical market will be shaped by the recent decision made by the Supreme Council of Health (SCH) to abolish government controls over the pricing of medicines and also to end the monopoly that a small number of importing agents have held in the Emirate, which had produced high pharmaceutical prices. The regulations previously dictated that it was in the interests of retailers to only stock the most expensive drugs in order to maximise their profit margins. The new system is an opportunity for lower-priced branded drugs and generics to move into the Qatar market. However, the market’s value at consumer prices will result from both upward (including healthcare modernisation and high per capita GDP) and downward pressures. The main downward pressure is the fact that open market competition on drug prices, and the availability of cheaper alternative drugs, should drive down artificially inflated prices, though this is unlikely to happen rapidly. In fact, the Qatari SCH has stated that drugmakers will still need to obtain import licences by meeting stringent regulatory conditions, and that current retailers and distributors are unlikely to slash prices or move onto cheaper drugs if they think it will hurt their businesses' profitability. There is also likely to be a degree of consumer loyalty to branded drugs, particularly among those with high incomes and private doctors. At this juncture, we expect the country’s pharmaceutical market to post a compound annual growth rate (CAGR) of 16.07% in the 2009-2014 period, to reach QAR2.61bn (US$716mn) in value, boosted by strong economy.
In light of the above, BMI’s Q111 Business Environment Ratings (BER) for the Middle East and Africa (MEA) region, Qatar is second out of 19 countries. Only a handful of other markets score higher for the Risks category, which demonstrates Qatar’s favourable market and country structure, including a predictable operating environment and a sound economic base. On the other hand, its score for the Rewards category is dragged down by a small and a relatively young population, despite high per-capita spending on pharmaceuticals. Nevertheless, Qatar’s high level of urbanisation and rapid population growth create an environment in which there is strong potential for market growth.
In the meantime, the Qatar government is not just concentrating on turning the state into a centre for healthcare, but also for education and knowledge-based specialisms including biomedical science, publishing, public relations, renewable energy and robotics. Qatar and the wider Gulf Cooperation Council (GCC) region will continue to attract healthcare investments as demand for medical services continues to grow. Shortly after launching its new healthcare platform, by purchasing the majority stake in United Arab Emirates (UAE)-based Al Noor Medical Company, Qatar First Investment Bank (QFIB) announced its second investment in the Middle Eastern healthcare sector. In conjunction with Argus Capital, a London based private equity house, the Qatari bank has acquired a 40% minority stake in Memorial Health Group (MHG), one of the leading healthcare providers in Turkey.
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