Saudi Arabia Pharmaceutical Drugs Market Estimated to Witness High Growth Owing to Increasing Healthcare Expenditure
The pharmaceutical drugs industry plays a vital role in Saudi Arabia's healthcare sector. Pharmaceutical drugs include medicines produced by pharmaceutical drug manufacturers and sold through various distribution channels. Prescription drugs, over-the-counter drugs, generic drugs, and biologics are some common types of pharmaceutical drugs. These drugs are used to treat and prevent various chronic and acute diseases. The rising prevalence of chronic conditions like cancer, cardiovascular diseases and diabetes has boosted the demand for pharmaceutical drugs in the country.
The Saudi Arabia Pharmaceutical Drugs Market is estimated to be valued at US$ 528.47 Bn in 2023 and is expected to exhibit a CAGR of 7.4% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
One of the key drivers for the growth of the Saudi Arabia Pharmaceutical Drugs Market is the increasing healthcare expenditure in the country. Saudi Arabia has one of the highest government spends on healthcare globally. As per the government figures, the country's healthcare expenditure rose from SAR 120 billion (US$ 32 billion) in 2017 to SAR 147 billion (US$ 39.2 billion) in 2020, indicating an annual increase of 22%. This rising investment in the healthcare sector has enhanced accessibility to medicines and treatment options. Furthermore, favorable government policies supporting the local production of drugs have attracted major international pharmaceutical companies to set up manufacturing facilities in Saudi Arabia. For instance, in 2016, AstraZeneca inaugurated a new biologics manufacturing plant in Saudi Arabia. Such initiatives are expected to significantly drive the demand for pharmaceutical drugs, thereby propelling the market growth over the forecast period.
SWOT Analysis
Strength: The Saudi Arabia Pharmaceutical Drugs Market Size has a large domestic population that is growing rapidly which increases the demand for pharmaceutical drugs. It has strategic partnerships and collaborations between foreign pharma companies and local manufacturers which boost research and development. The government is increasingly investing in the healthcare sector through various initiatives which stimulates market growth.
Weakness: Heavy reliance on foreign imports of active pharmaceutical ingredients increases the overall manufacturing and production costs. Limited local availability and high prices of quality raw materials is a challenge for domestic manufacturers. Lack of skilled workforce and limited knowledge about recent advancements hampers research and new drug development activities.
Opportunity: Growing incidence of chronic diseases such as cancer, diabetes and cardiovascular disorders escalates the demand for drugs. Rapid urbanization, lifestyle changes and rising healthcare expenditure propels the market. Partnerships with international players helps technology transfer and access to new markets. Investment incentives and favourable regulations by the government attracts more investors in the sector.
Threats: Stiff competition from international and domestic players intensifies pricing pressures. Stringent regulations and lengthy product approval procedures delays product launches. Uncertainty caused due to political instability and global economic slowdown adversely impacts the market. Rising cost of compliance with quality and safety standards increases operational expenses.
Key Takeaways
The Saudi Arabia pharmaceutical drugs market is expected to witness high growth backed by rising healthcare needs of the growing population. The market size for 2024 is estimated at US$ 528.47 billion registering a CAGR of 7.4% during the forecast period of 2023 to 2030.
Regional analysis: The Western region dominates the market and is the fastest growing region accounting for over 35% of the total market share. Riyadh metro is the key revenue generator due to its large consumer base and presence of major industry players. Eastern province also has a significant market size owing to massive infrastructure spending for hospitals and clinics in Dammam and Al-Khobar.
Key players: Key players operating in the Saudi Arabia pharmaceutical drugs market include AbbVie, Mylan Pharmaceuticals, Gedeon Richter, HRA Pharma, Cipla Ltd, Aurobindo Pharma Ltd, Dr. Reddy's Laboratories Ltd, Sun Pharmaceutical Industries Ltd, Torrent Pharmaceuticals Ltd, Mankind Pharma Ltd. These major players are focusing on expanding their domestic manufacturing capabilities and boosting research collaborations to gain market share.
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