The UAE's health depends upon drug reforms

If local manufacturers grasp the nettle of developing the pharmaceuticals market, a golden opportunity awaits.

Gulf Pharmaceuticals Julphar's facility in Ras al Khaimah. Domestic production of medication represents 15% of drugs sold in the UAE. Jeff Topping / The National

The combination of a fast-growing population and a surge in the level of heart disease, strokes, cancer and diabetes highlights the significant potential of UAE's pharmaceutical sector.

At only just over 40 years old, the exponential growth of our community has outstripped our ability to manufacture the required medicines locally and we have to import a staggering 80 per cent of medicines to just to keep up.

Domestic production of medication represents just 15 per cent of drugs sold in our pharmacies and instead we turn to Europe (64 per cent), North America (8 per cent) and the wider Middle East and North Africa region (8 per cent) to provide these vital medicines. Importing medicine is expensive and the cost is felt all along the supply chain, eventually being passed on to the patient.

In Dubai, the Ministry of Health addressed this issue by cutting the retail prices of more than 6,600 medicines up to 40 per cent to unify the cost of imported medicines and prevent a monopoly.

But I believe that if we were to place a concerted effort on boosting the level of pharmaceuticals manufactured locally, the price of medicine would come down, jobs in the industry would be created and the local economy boosted.

According to the GCC Pharmaceutical Industry Report 2013 issued by Alpen Capital, a leading investment bank in the region, the pharmaceutical market in the GCC was estimated to be worth US$8.5 billion last year and healthcare expenditure among GCC countries is expected to swell to $79bn by 2015.

Coupled with research by the Economist Intelligence Unit forecasting that the GCC population will reach 53 million by 2020 means we need to act now to make the most of this immense potential industry, for the good of the patients and the local economy.

Exploiting this opportunity would reduce the reliance on imports and keep medicine prices at a minimum. It would also reduce operational costs without requiring any government intervention to benefit consumers by ensuring access to vital medicine for thousands of people. Building this industry would also increase the overall number of customers and distributors, also creating a potential upside for the private sector.

We have an open door policy to attract international firms but it is the local manufacturers we need to encourage and harness to reduce the pressure on imports and boost the ability to manufacture our own medicines.

There are incentives in place to help, for example Dubai's Ministry of Health ensures all UAE-based applications for licences are fast-tracked to reduce the bureaucratic burden of starting a manufacturing plant. They offer first refusal on product tenders to UAE producers and award marketing privileges as a way of stimulating demand.

Indeed, DuBiotech works in close partnership with the Government to facilitate innovation, growth and development of the life sciences sector. Our free zone is home to a wide variety of companies in the life-science sector from some of the biggest international organisations in this sector such as Pfizer, Bristol-Myers Squibb, Amgen and International Flavors & Fragrances. But we also work in close partnership with a number of local companies such as Alliance Global, Genpharm, Epygen Labs and BioPharma Middle East.

At present there are only a scattering of life-science manufacturers based in UAE, but the market potential, as highlighted by the Alpen report, shows there is room for many more.

The rapidly approaching "patent cliff" presents local manufacturers with a golden opportunity.

Over the next six years, the patents on products with worldwide sales of $223bn are due to expire, so soon they will become "generic", meaning that local firms will be able to manufacture cheaper substitutes of branded medicines for public consumption.

Currently, only 20 per cent of medicine in the Arabian Gulf is classified as generic, whereas many of the more established markets have closer to 50 per cent generic medicines on the market.

With world-class, industry-specific infrastructure and cutting-edge research and development facilities available across the UAE through organisations such as DuBiotech, local firms are entirely capable of manufacturing generic products to a world-class standard. But the business case must be there.

Through our work in the industry, we have noticed an influx of international firms seeking a local UAE partner to manufacture their medicines on their behalf. By forming a partnership with a local manufacturer already based in the UAE, the "big pharma" company can reduce the operational cost of being based here while being able to rely on an incredibly high quality of production and excellent access to the wider Gulf region.

As there are very few local manufacturers operating at present, international firms are running out of options when searching for a local partner.

While we work with established local firms to facilitate their ability to manufacture generic medicines and partner with international firms, we must also strive to build a pharmaceutical industry that will provide for our future.

To do this, we must establish a highly skilled workforce so schools and universities have a major role to play in inspiring the next generation to consider a career in sciences.

By developing the biotechnologists, pharmacologists and professors of the future through partnerships with universities and engaging in a dialogue between industry and regulators, we can make this happen.

And we must: our country's health depends on it.

Marwan Abdulaziz is the executive director of DuBiotech