Key Takeaways:

1. Saudi Arabia aims for a significant overhaul of its healthcare system under Vision 2030, with a focus on restructuring, privatisation, and technological advancement. Investments exceeding $65 billion are earmarked for this transformation.
2. India’s expertise in pharmaceuticals, coupled with Saudi Arabia’s investment potential and strategic market access, creates a mutually beneficial partnership opportunity. The recent collaboration during the COVID-19 pandemic highlights the potential for further cooperation.
3. While there are regulatory challenges in accessing the Saudi market, streamlining approval processes and addressing pricing issues could facilitate increased investment from India. 

The recent open forum hosted by the World Economic Forum in Riyadh, in partnership with the Ministry of Economy and Planning of the Kingdom of Saudi Arabia, underscored Saudi Arabia’s ambitious vision for healthcare and tourism, emphasising the anticipated substantial economic impact and job generation by 2030. Despite advancements in the tourism sector, the health sector remains comparatively underdeveloped. It is crucial to examine India’s potential role in this domain and the investment prospects it presents.

Under Vision 2030, Saudi Arabia looks for a sweeping transformation of its healthcare system, backed by investments exceeding $65 billion. The blueprint entails a multifaceted strategy encompassing the restructuring and privatisation of healthcare services, the establishment of 21 “health clusters” nationwide, and the expansion of e-health initiatives. Overarching goals aim to elevate private sector involvement from 40% to 65% by 2030, entailing the privatisation of numerous hospitals and health centres. Priorities also include preventive care, combating non-communicable diseases like diabetes and obesity, and enhancing IP protections in the pharmaceutical sector.

Furthermore, Saudi Arabia aspires to position itself as a global hub for pharmaceutical manufacturing with an $8.9 billion pharmaceutical market (as of 2022), generating demand for both patented and generic medicines. Shortages of drugs were a significant problem, adversely affecting patients’ health and requiring urgent intervention from healthcare authorities. Local pharmaceutical companies in Saudi Arabia manufacture approximately 16% of the country’s medicines. Nonetheless, Saudi Arabia accounts for roughly 59.4% of pharmaceutical purchases across the Gulf region. Despite a notable increase in local pharmaceutical production over the last ten years, certain estimates suggest that domestic manufacturers only meet approximately 20 to 25% of the demand for prescribed medications, despite there being over thirty-two registered and twenty-seven operational pharmaceutical industries.

India, renowned for its robust pharmaceutical industry and status as the leading producer of generic medicines worldwide, stands ready to support Saudi Arabia in achieving its ambitious healthcare objectives outlined in Vision 2030. With nearly 17% of Saudi Arabia’s public budget earmarked for healthcare and life sciences, there exists a strong foundation for collaboration. Central to this vision is the goal of providing free medicines to Saudi citizens by 2030, a goal in which India can play a pivotal role by supplying affordable and high-quality therapies. The COVID-19 pandemic underscored the significance of this partnership, exemplified by India’s contribution of over 10 million doses of the AstraZeneca-Oxford vaccine to Saudi Arabia, showcasing India’s stature as the “pharmacy of the world.” India’s extensive pool of scientific talent, cost-effective research and development capabilities, and globally acclaimed pharmaceutical industry serve as valuable assets in this endeavour. In turn, Saudi Arabia, equipped with significant investment potential, modern research infrastructure, and strategic access to the markets of West Asia and North Africa, complements India’s strengths perfectly.

Indian pharmaceutical companies are already making significant progress in the Kingdom of Saudi Arabia (KSA). For instance, Venus Remedies obtained approval from the Saudi Food and Drug Authority (SFDA) for its manufacturing facilities in 2023. The company intends to introduce multiple drugs into the KSA market, capitalising on the rigorous regulatory standards set by the SFDA. Currently, the KSA contributes to 12-15 percent of Venus Remedies’ exports, with anticipated expansion in the future. Moreover, other prominent Indian pharmaceutical firms, such as Glenmark Pharmaceuticals, are eager to tap into the KSA market. Glenmark recently unveiled its first branded specialty product in the KSA, aiming to enhance its footprint in the region.

Despite the potential, only 3-4 percent of India’s $25-26 billion total pharmaceutical exports currently go to KSA. The regulatory authorities in the KSA market are strict, resulting in delays in drug approvals. The SFDA’s requirements cover a wide range of aspects, including data submission, stability, labelling, packaging, and more, tailored to different categories of drugs. This specificity means that companies need to ensure compliance with a diverse set of regulations, which can be challenging. Also, the internal evaluation process involves multiple departments assessing various aspects of the drug application. This rigorous evaluation ensures that only safe and effective products are approved for the market, but it can also prolong the approval timeline and increase the workload for applicants. Simplifying this tedious process and making it a single window channel has the potential to bring in more investments from India.

However, there is an opportunity for Indian companies to establish full-scale local production of complex generics in the KSA. India’s vast pool of USFDA-approved sites positions it well to become a significant supplier to KSA. Gaining access to the Saudi market would also offer significant value to Indian pharmaceutical companies, as it would also unlock opportunities in the 57 countries of the Organisation of Islamic Cooperation, with a combined market size of US$130 billion. Streamlining site approvals and addressing pricing issues could further facilitate this partnership, as KSA is now more open to offering competitive prices for quality drugs. India has the opportunity to invest in the Saudi healthcare sector, leveraging its expertise in pharmaceutical manufacturing and compliance with stringent regulatory standards. Collaborations between Indian and Saudi companies could lead to mutual benefits and further growth in the healthcare industry.

Views expressed by the author are personal and need not reflect or represent the views of the Centre for Public Policy Research.

Neelima A

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Neelima completed her Post Graduation in MA Geopolitics and International Relations from Manipal Academy of Higher Education. While pursuing her masters she has done her 3 months Internship from the Middle East Institute, New Delhi. After completion of the course she worked for 2 months as IR project Intern at Centre for Public Policy Research, Kochi. She is passionate about research and writing in the field of International Relations. Her Interest areas include West Asia, Indo-pacific, Multilateralism, Global and National Security.

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