Overview of the National Industrial Strategy: Strategic Pillar-Pharma and Bio

In our efforts to keep members informed on the progress of the Saudi Vision 2003, we are providing summaries of the sections of the “Delivery Plan for the National Industrial Development and Logistics Program (NIDLP)”.

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.3: Pharma and Bio

Overview

The Kingdom is well positioned to grow its Pharma and Bio-pharma 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. Currently, only 20 percent of the local demand is met through local production of oral solids, biologics/biosimilars, sterile injectables, vaccines, and API.

Products manufactured by local manufacturers in Saudi Arabia

Company	Size	Product
SPIMACO	$340 million	Antibiotics, analgesics, vitamins, anti-rheumatics and cough/cold preparations, and OTC.
Julphar	$388 million	Wound Care, Women Care, Adult Primary Care, Pediatric Primary Care, Cardiopulmonary Care, Gastro Care and Pain
Tabuk	$266 million	Cardiovascular, anti-infectives, respiratory, muscular disorders, and OTC drugs
Jamjoom	$201 million	Cardiovascular, Derma, Gastrointestinal, Ophthalmology, general medicine, and dietary supplements (OTC)
Hikma	$192 million	Anti-infectives, Cardiovascular and Diabetes, Central Nervous System, Gastro-intestinal, Oncology, Respiratory

Source NIDLP. Delivery Plan 2018-2020

There are three key reasons that make this sector attractive for development of local manufacturing:

1. Local demand: annual pharmaceutical sales are estimated to reach $8 billion (SR 30 billion) SAR by 2021, equivalent to approximately 25% of MENA sales
2. Proximity to countries in the MENA region, most of which have free trade agreements with the Kingdom
3. Presence of an ecosystem which enables development of the local pharmaceuticals manufacturing (regulatory system aligned with best practices internationally, stable economy with easy access to finance, existing manufacturing facilities for generics in the Kingdom.)

Challenges

The report identifies a number of obstacles facing the sector in the Kingdom, mainly organizational in nature. These include delayed disbursement by the authorities; multiple agencies entrusted with localization of pharma industries; extended registration procedures; limited and fragmented R& D capacities, need for talent and knowledge to diversify and move to more complex products; unpredictability of procurement 

Sectoral Strategy

The Kingdom needs to build new sources of competitiveness to meet its national security needs and reduce dependency on imports.  To do so the Kingdom will need to:

• Grow existing manufacturing activities in Generics and APIs by securing local market access and facilitating exports
• Secure local sales through volume commitments and off-take agreements
• Strengthen local workforce capabilities (e.g. doctors, engineers, technicians, etc.)
• Gradually build R&D capabilities in biologics through clinical trial facilities and R&D funding 

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.

The Kingdom aims to increase the local cluster value add while also transitioning into more complex products with the objective of becoming a leading manufacturer and innovator in the MENA region.  To achieve this objective, emphasis is being placed on five initiatives:

1. Vaccine “Bio-park”
2. Clinical trials & Lab development
3. Generics procurement & production support
4. Pharma local content policy
5. Plasma fractionation PPP. 

Segments identified as having strong potential for localization in the short, medium, and long term include:

• Oral solids and Sterile injectable: Grow manufacturing and expand Generics offering to become a regional supplier
• API : Focus on APIs with high local consumption through JV or CMO targeting MENA and EU markets in addition to the local market
• Vaccines: primarily for national security, such as niche vaccines needed in KSA & gradually expansion on the MENA region needs
• Other Biologics/ Biosimilars : long term potential to become an innovation hub
• Plasma: Build local capabilities through JV or CMO with international players to preserve national security, targeting KSA & gradually the MENA region

Current Initiatives

Several major efforts have been made toward developing the Kingdom’s Pharma sector in recent years including:

• Supporting the procurement and production of generic drugs by the Ministry of Health.
• PPP in plasma separation being led by the Public Investment Fund.
• Clinical trials and laboratories development (National Command Center) led by the National Guard Health Affairs
• Local content policy for the pharmaceutical industry driven by the Local Content and Private Sector Development Unit (Namaa)
• Biopharmaceuticals cluster, part of the National Industrial Clusters Development Program

To learn more about Saudi Arabia’s initiatives in the pharmaceuticals sector, we invite you to a roundtable discussion with the visiting delegation from the Economic Cities Authority on July 18^th in New Brunswick, New Jersey. For more information on the program and to register, click here.

For a copy of the NIDLP deliver plan, please visit https://vision2030.gov.sa/en/NIDLP