The Saudi Arabia pharmaceutical drugs market has witnessed significant growth over the past few years due to growing prevalence of chronic diseases and increasing government focus on the healthcare sector. Pharmaceutical drugs help improve quality of life by providing relief from various health conditions. The industry is characterized by continuous innovation in drug formulation and delivery to provide more effective treatment options.
The Global Saudi Arabia Pharmaceutical Drugs Market is estimated to be valued at US$ 608.8 Bn in 2024 and is expected to exhibit a CAGR of 7.4% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the Saudi Arabia pharmaceutical drugs are AbbVie,Mylan Pharmaceuticals,Gedeon Richter,HRA Pharma,Cipla Ltd,Aurobindo Pharma Ltd,Dr. Reddy’s Laboratories Ltd,Sun Pharmaceutical Industries Ltd,Torrent Pharmaceuticals Ltd,Mankind Pharma Ltd. These companies offer a wide range of drugs covering various therapeutic areas meeting the rising healthcare demands of the population.
The demand for pharmaceutical drugs in Saudi Arabia is growing significantly driven by the increasing incidence of chronic conditions such as cardiovascular diseases, diabetes, cancer, and respiratory disorders. As per the estimates of the WHO, non-communicable diseases account for over 70% of deaths in Saudi Arabia each year. This growing disease burden is pushing the demand for pharmaceutical products in the country.
With initiatives like Vision 2030 focusing on transforming the Kingdom into a global investment powerhouse, international pharmaceutical companies are also looking at the Saudi market for global expansion. Several foreign drug makers are tying up with local players and setting up manufacturing units in the country to gain a larger share of the Saudi pharmaceutical pie. This is encouraging technology transfers and boosting the availability of innovative treatment options.
Market Key Trends
One of the key trends in the Saudi Arabia Pharmaceutical Market Demand is the growth of specialty medicines. These are high-cost drugs used for treating complex medical conditions like autoimmune diseases, cancer, and rare genetic disorders. Several blockbuster specialty drugs have lost patent protection leading international pharmaceutical companies to focus on the development and launch of innovative specialty products. This is driving significant growth in the specialty medicines segment of the Saudi drug market.
Porter’s Analysis
Threat of new entrants: Regulations in the pharmaceutical industry create barriers for new companies to enter the market such as patent protection, licensing requirements, and high manufacturing costs.
Bargaining power of buyers: Buyers have growing purchasing power due to rise in generic drugs and increased transparency in drug pricing. However, high treatment costs limits switching between brands.
Bargaining power of suppliers: Large pharmaceutical companies possess strong negotiating power over suppliers of raw materials and production machinery due to their international presence and dominant market share.
Threat of new substitutes: New drugs are constantly replacing existing medicines, but development and approval process is long, limiting imminent threats.
Competitive rivalry: Intense as large players compete for market share through extensive R&D investments and mergers.
Geographical Concentration
The Saudi Arabian pharmaceutical drugs market is concentrated in major cities like Riyadh, Jeddah, and Dammam which account for over 60% of the total market value. Proximity to healthcare facilities and larger patient pools make these urban centers lucrative markets for pharmaceutical companies. The capital city Riyadh alone contributes to almost 30% of national sales, driven by presence of large hospitals and healthcare infrastructure.
Fastest Growing Region
The central region of Saudi Arabia comprising cities like Qassim and Buraydah is expected to be the fastest growing market for pharmaceutical drugs over the forecast period. This is owing to ongoing government investments towards improving regional healthcare facilities and expanding medical insurance coverage in these areas. Localized production by key players is also boosting supply and access to medicines in the central provinces.