NIDLP aims to transform Saudi Arabia into a leading industrial powerhouse and a global logistics hub in promising growth sectors (with focus on Industry 4.0), which would generate ample job opportunities, enhance the trade balance and maximize local content.
The program focuses on four key sectors: Industry, Mining, Energy and Logistics, and enablers including the development of Policies and Regulations, Financial Enablement, Infrastructure, Industrial Lands, Special Economic Zones, Research, Development and Innovation.
Section 4.A.4: Medical Supplies
Overview
The Kingdom is well positioned to grow its medical supplies sectors to serve local and regional demand, leveraging the existing ecosystem as well as its proximity to the Middle East and North Africa (MENA) markets.
The majority of market demand is currently met through imports from countries such as the U.S., Germany, the Netherlands, Belgium, and China. Local manufacturing primarily consists of consumables. There are four key reasons that make this sector attractive for development of local manufacturing:
- Sizeable domestic market, estimated at $2.4 billion (SR9 billion) and growing at a rate of approximately 12% annually
- Export potential to countries in the MENA region, due to proximity and free trade agreements with Saudi Arabia
- Value chains are well developed in Saudi Arabia -e.g. plastics – and can support the development of the medical supply ecosystem
- Financial incentives offered by the Ministry of Health to enhance sector attractiveness to local and international industry players.
Challenges
The report identifies a number of obstacles facing the development of the sector in the Kingdom relative to:
- Financial issues related to limited access to finance, high costs, and delayed payments.
- Intense competition from cheap low-quality imports and low
- Regulatory aspects related to local content requirements, low preferential pricing, and contracting
Sectoral Strategy
The Kingdom aims to increase the local cluster value add while also transitioning to more complex products with the objective of becoming a leader and innovator in the MENA region. To achieve this objective, emphasis is being placed on four initiatives:
- Medical supplies local content policy
- Clinical trials & lab development
- Medical supplies standards enforcement
- Raw materials custom exemption portal
The Kingdom will also need to develop new sources of competitiveness to meet its goal of substituting imports in critical segments to avoid potential shortages. To do so the Kingdom will need to:
- Leverage existing players and local-global cooperation to develop economies of scale.
- Build a skilled workforce through technical and vocational training programs
- Leverage its regulatory framework to establish world class clinical testing facilities
The roadmap for manufacturing medical supplies in the Kingdom consists of:
- Short term (2017-2020):expansion of current manufacturing capabilitiessuch as consumables, hospital furniture, dental implants, simple capital equipment and prosthetics
- Medium term (2020-2025): contract manufacturing of complex products
- Long term (2025+): act as OEM owning brand and R&D
Products and services targeted for medium and long term include complex capital equipment (i.e renal dialysis machines), orthopedics, IVD, high tech medical supplies as well as talent and R&D development
Current Initiatives
Several major initiatives towards the development of the Kingdom’s medical supplies sector include:
- Application of standards for medical devices and supplies, led by the Saudi Food and Drug Authority.
- Exemption of raw materials from tariffs on the electronic customs exemption system, overseen by Ministry of Energy, Industry and Mineral Resources-Industrial Affairs Agency
- Development of laboratories and clinical trials centers, led by the Saudi Health Council
- Local content policy for the medical equipment and supplies sector, driven by the Local Content and Private Sector Development Unit (Namaa)
For a copy of the NIDLP deliver plan, please visit https://vision2030.gov.sa/en/NIDLP
