The MENA healthcare industry is expected to grow at a compounded annual growth rate (CAGR) of more than 7% between 2020 and 2025. This will be mainly reflected in the hospitals, pharmaceuticals, biotechnology, and medical devices sectors which are expected to witness higher demand and growth opportunities in the coming years, on the back of the coronavirus (COVID-19) impact, in addition to:
- The spread of non-communicable diseases;
- Rapid urbanization;
- Aging and growing population growth;
- Increasing importance of public-private partnerships (PPP);
- Adoption of mandatory health insurance;
- Opportunities in specialized care;
- Rising interest in rehabilitation and long-term care areas;
- Government focus on medical tourism as part of diversification plans; and
- Rapid adoption of new technologies and digital solutions;
- Adoption of integrated care models.
Historically, government authorities in the MENA region functioned as both investors in and operators of healthcare facilities. However, as their roles are changing towards policymakers and regulators, and in an attempt to diversify their economies and reduce reliance on specific sectors like oil in the Arab countries, many public-private partnerships (PPP) are forming for hospital-based clinical and non-clinical care, in addition to a significant increase in participation by the private sector to reduce costs and improve efficiency with new private healthcare facilities emerging in the region, in addition to private health insurance schemes that are being developed, and primary healthcare services that are being outsourced. The shockwave of the COVID-19 pandemic reiterated the need for governments to diversify, introduce new reforms, and encourage healthcare privatization in the coming years.
Various National Transformation Plans (NTPs) and policy programs, such as the UAE Vision 2021 and the Saudi Vision 2030, are outlining long-term strategies by governments to expand the role of the private healthcare sector and create additional capacity for their developing markets. Increasing investments by the private sector are expected to create a strong demand for medical equipment and supplies, pharmaceutical products, healthcare professionals, and hospital services, thereby, easing the demand in the public sector. For example, as part of the Saudi Vision 2030, Saudi Arabia has assigned the Industrial Clusters to develop the following high potential opportunities in the pharmaceuticals industry:
Separately, and in line with the COVID-19 impact, the medical tourism sector will be the major attraction and government focus in the MENA region as an integral part of the economic diversification plans, with major developments in technology, an influx of medical tourists, and changing patient needs being the major drivers. For example, The United Arab Emirates is one of the fastest-growing medical tourism hubs worldwide and was aiming to receive 500 these tourists by the end of 2021, mainly by relaxing visa procedures, however, these objectives were extended due to COVID-19. Prior to the pandemic, the Dubai Health Tourism Council welcomed 327 these medical tourists, out of which 33% were from Arab countries, 30% from Asian countries, and 16% from Europe, among others. In the global Medical Tourism Index (MTI) the MENA rankings for 2020-2021 stood as follows:
|MENA Countries/Cities||-Global Ranking 2020-2021||-Global Ranking 2016-2017|
COVID-19 has exposed the different structures of the healthcare systems in the MENA region, some of which are particularly weak and overcrowded. The region’s wealthier nations have been able to rapidly upskill and upscale their systems to combat the widespread pandemic and managed to limit the spread, for example, virtual doctors and sanitizing robots have been introduced in the United Arab Emirates, mask production has increased in Egypt and Morocco and during the peak of the pandemic, GCC countries like Saudi Arabia have developed field hospitals to cater to the increased demand for hospital beds, and in terms of vaccines, The United Arab Emirates, Saudi Arabia, and Bahrain are leading the developments efforts in the MENA region.
On the other hand, vulnerable and conflicted developing economies, such as Lebanon, Syria, Iraq, the Gaza Strip, Yemen, and Libya, fell short in limiting the spread of Covid-19 due to the lack of hospital beds, limited testing capacities, doctors’ immigration, economic distress, and rising internal issues and conflicts.
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While the Covid-19 disrupted primary healthcare services, telemedicine has played an essential role in providing healthcare consulting services, minimizing virus spread, and effectively utilizing the time of healthcare professionals. The telemedicine market in the MENA region is expected to more than double in size in the next five years. Healthcare delivery has also changed in uneven ways through the diverse region. For instance, while UAE is developing the first virtual hospital in the region, expanding beyond telemedicine to advanced services (such as telesurgery), in countries such as Syria and Jordan, virtual healthcare has not found a place due to the resistance of patients and doctors to telehealth, coupled with a lack of infrastructure and funding.
In the GCC, Saudi Arabia and the United Arab Emirates are leading local manufacturing initiatives and continue to invest in new ventures, especially in the biosimilars segment. Favorable policies (e.g., scrutiny of high-priced, exported branded drugs) and incentives towards R&D-intensive local manufacturing of monoclonal antibodies-based biosimilar drugs will further boost the localization agenda in the next couple of years.
The Saudi Government's vision is to become the leading manufacturer and innovator in the MENA region, by increasing the growth of the local manufacturing sector, focusing on products that are important for national security, and transitioning into products with higher complexity. The pharmaceutical market is expected to be one of the fastest-growing markets, with strong export potential to serve MENA and the OIC (Organization of Islamic Countries).
Saudi Arabia accounts for around 60% of the pharmaceutical products purchased in the Gulf, and in coming years, it will remain a key market for many leading multinational pharmaceutical companies. One of the major growth opportunities for Saudi pharmaceutical companies lies in the biotechnology sector. The branch of biologics/biosimilars in Saudi Arabia has continued to be the fastest-growing segment, with a growth rate reaching 17% (the highest in the MENA regions), due to the growth of oncology and increase in cancer diseases. Cell and gene therapies are among the trending new approaches, and they have shown very promising results to prevent and treat a series of diseases.
As a long-term strategy, with COVID-19 generating tremendous financial burdens on payers, hospitals, and patients, the government is looking for ways to minimize healthcare costs and decrease out-of-pocket costs for patients. As such, regulatory reforms promoting the biosimilar segment are likely to drive a rise in the number of local contract development and manufacturing organizations (CDMOs) and domestic manufacturing plants catering to the biosimilars market.