SAUDI DRUG MANUFACTURERS FEAR WTO ACCESSION

Saudi Arabian drug firms are reported to be dreading the country's upcoming accession to the World Trade Organization (WTO). According to the local media, local manufacturers could pressure the government into demanding a 10-year transition period before full accession to the WTO's TRIPS patent treaty. Health ministries across the Gulf Cooperation Council (GCC) region are also examining options to prevent a likely rise in pharmaceutical prices following WTO accession.

The Saudi drug sector's origins lie in attempts to diversify regional economies away from petroleum, with the kingdom's 55 drug plants now accounting for the majority of pharmaceutical sector assets in the GCC. Fixed investment in Saudi drug companies -- which include major facilities in Jeddah and Qassim -- reportedly stands at US$619mn, or about 78% of the region's production assets.

The issue of patents is critical to the future of Saudi Arabia's drug manufacturers, as large multinationals are often unwilling to license production to local firms or concede intellectual property rights, preferring importation as an alternative. The kingdom's drug imports were estimated at roughly US$970mn in 2004, or about 85% of local market value, even though per capita consumption is languishing at just US$55 per head. Meanwhile, governments in the Arabian gulf are expected to step up cooperation on joint drug purchasing and other cost-cutting measures.