Saudi Arabia’s Vision 2030 Drives Growth in the Pharmaceutical Sector

According to the Kingdom’s Vision 20230 initiative, Saudi Arabia has taken significant steps to incentivize local manufacturing

There is a significant increase in demand for pharmaceuticals as the Saudi government makes substantial investments in healthcare infrastructure.

The pharmaceuticals market in the Saudi Arabia Kingdom is expected to reach a revenue of $5.53 billion by 2024, according to Statista.

The major factor in this growth is the increase in localization of the pharmaceutical industry, which fits with the Saudi Arabia‘s economic diversification strategy, Vision 2030.

Matthew Lawrence, director of Pharma and Life Sciences and Operations Transformation Lead at PWC Middle East, says that due to localization actions, the pharmaceutical industry in Saudi Arabia is seeing a major change towards economic impact, quality, and accessibility.

Regarding accessibility, he told that local production is reducing dependence on imports, therefore providing a stable supply of medications and a quicker response time during medical emergencies.

As for quality, he clarified that the Saudi Food and Drug Authority ensures that locally produced drugs are of high quality, which enhances healthcare services.

About economic impact, he noted that industry growth has created more job opportunities and attracted investments.

According to the Kingdom’s Vision 2030 initiative, Saudi Arabia has taken significant steps to incentivize local manufacturing.

Some of the incentives that Saudi Arabia has offered to pharma companies include reduced minimum capital, tax incentives, exemptions from customs duties, etc. It has also taken steps to improve the regulatory system for drugs by implementing simplified verification and registration procedures, says Basumatary.  

The government is playing a pivotal role in increasing localization, and it is expected to enhance market accessibility, support for localization, and strong intellectual property protections for the pharma industry. The impact of Saudi Arabia’s support can be seen in the recent pharma localization projects. Since there is fierce competition both globally and regionally, it is important to continue to innovate on that front.

According to Lawrence of PwC Middle East, some government efforts include tax benefits and labor laws to support R&D and manufacturing. 

To promote the expansion of the science industry, they also require supportive IP laws like patent protection and mutual recognition agreements to ease market access and competition regulations.

Other initiatives include public finance in the form of subsidies or incentives to support the long-term growth of healthcare, and not-for-profit funding to encourage more research.

In recent years, Saudi Arabia has aligned itself with Vision 2030 goals by making significant advancements in focusing more on life sciences.

This involved initiatives to increase the overall health of individuals, promote economic growth and diversity, strengthen the Kingdom’s leadership in the sector, promote innovation, and improve the quality of life.

Other significant players include the Local Content and Government Procurement Authority, which aims to increase awareness and participation in local content and provide knowledge-based policies. The Saudi Food Administration is helping to improve the regulatory frameworks to accelerate approval processes for new medicines and encourage invention in the local manufacturing of pharmaceuticals.

Vision 2030 in the Pharmaceutical industry

The pharmaceutical industry strategy is closely aligned with Vision 2030 goals, which include job creation, economic diversification, innovation, self-sufficiency, and tech transfer.

According to Lawrence, expanding the life science sector will help to grow thousands of jobs and reduce unemployment in Saudi Arabia, especially in highly skilled areas.

Regarding self-sufficiency, PwC’s partner pointed out that localizing pharma production guarantees a stable supply of essential drugs and reduces the vulnerability of the health sector to disruptions in the global supply chain.

Lawrence stated that by localizing the pharma industry and growing these initiatives, Saudi Arabia can further improve access to healthcare, lower healthcare costs, and sustainably meet the growing demands of increasing populations.  has context menu