Bahrain Pharmaceuticals and Healthcare Report Q2 2008

The Bahraini pharmaceutical market - evenly split between the private and the public spheres - was worth an estimated US$58.3mn in 2007, which is small by both regional and global standards. Although the market is forecast to experience GDP-beating growth, driven by a growing non-communicable disease burden and a continued reliance on imported patented drugs, it remains a marginal target for foreign drugmakers, due to its small size. Nevertheless, its value will grow to a forecast US$83.8mn by 2012, illustrating opportunities for companies which decide to invest in the country and also to take advantage of the growing integration between members of the Gulf Co-operation Council (GCC).

Bahrain's business environment is ranked equal third out of 14 markets surveyed in the Middle East and Africa (MEA) region. Despite receiving the same overall score as in the previous period, Bahrain moved up one place due to the lowering of the score for Kuwait, rather than as a result of the improvement of operating conditions. Nevertheless, Bahrain has the second-best regulatory structure in the region - after the United Arab Emirates (UAE) - although its small market size is one of the key drawbacks in terms of potential returns.

On a positive note, the health status of the oil-rich nation is converging with that of Western nations, with chronic and long-term diseases, such as diabetes and cardiovascular disease, emerging as key public health problems. The government's investment in health awareness programmes will also support the growing demand for prescription treatments, as will GCC-wide initiatives to protect public health, as illustrated by the recently unveiled Heart Charter. The patented drugs sector will benefit the most, as the population seeks hi-tech and modern treatments in relevant therapeutic areas. In the meantime, the development of the over-the-counter (OTC) segment will remain patchy, especially in the light of a generous public coverage policy.

In light of the above, imports into the country will continue to represent the key avenue of foreign involvement in the pharmaceutical market. Local industry will remain underdeveloped, due to limited investment and the population's preference for high-tech treatments, which traditionally require too great an investment for the limited returns promised by the country's small drug market. However, some improvement in domestic production capacities can be expected in the coming years, as the government attempts to increase healthcare funding and modernise healthcare insurance by excluding expatriate workers.