Burgeoning UAE market Closed to Low-Cost Drugmakers

The drug sector in the United Arab Emirates (UAE) continues to expand, and the country has the Arab world's highest per capita drug spending of some US$130 in 2004. Although the market remains comparatively small, the UAE is increasingly positioning itself as the Middle East's healthcare hub, with the recent construction of the Dubai Healthcare City aiming to concentrate the country's manufacturing and R&D activity within a single centre.

However, the traditional dominance of the multinationals and a strong preference for branded drugs has effectively closed the market to low-cost drugmakers. Many Indian generics producers complain that they are being denied access to a region in which pent-up demand could push total Middle Eastern drug spending to US$80bn annually. Specifically within the UAE, the country's unofficial diabetes incidence rate of 25% is proving a significant, if frustrating, lure for Indian firms, which are eager to diversify sales beyond reliance on markets in the US and European Union (EU).

Regulatory conditions are stringent in the wealthy UAE market, with adherence to GMP manufacturing standards virtually mandatory for any firm seeking to register a drug. Although some leading Indian companies have succeeded in carrying out very limited product launches in the UAE, mainly due to strong local connections, the country's authorities are clearly not eager to open the wealth-creating local sector to low-cost generics.