SAUDI ARABIA TO IMPLEMENT MANDATORY HEALTH INSURANCE FOR EMPLOYERS

Saudi Arabian regulators have given permission to 14 companies to provide health insurance services, ahead of plans to make health insurance mandatory in January 2006. Under the new laws, employers will be responsible for paying the insurance premiums of employees. In the initial stages only firms with over 500 workers will be forced to provide health coverage.

Health expenditure has risen rapidly in recent years in Saudi Arabia due to an expanding population and the growing prevalence of "Western" lifestyle-related illnesses such as obesity and diabetes. Healthcare expenditure is forecast to reach SAR6.4bn (US$1.7bn) by 2009.

As such the government has been increasingly attempting to shift the burden of healthcare to employers. However, a number of companies are reported to be unhappy with the new legislation, complaining that they are already suffering from higher costs, rising fuel prices and higher wages.

Further government cost-containment measures have included a 10% price reduction on drugs imported from Europe, which form a large part of the Saudi drug market.