Bahrain’s drug market is relatively small by regional standards, worth only US$49.2mn in 2005, although growth is expected to be strong in the coming years, with the market size expected to almost double by 2010. Branded medicines will continue to account for the bulk of the pharmaceutical market, although they will slowly lose share to generics, from the present 96%. Over-the-counter (OTC) medicines generate a fraction of the total market value, at 5% in 2005, with the percentage forecast to remain static throughout the forecast period.
Overall, however, solid economic growth and a rapidly expanding population are two macro factors that are helping to pull the market upwards. The healthcare system is undergoing rapid modernisation, with the government focusing on improving primary care. It has announced a scheme that will see all expatriate workers covered by private health insurance by 2013. This will reduce public health expenditure and is part of a government strategy to offload more of the burden of health spending to the private sector. The emergence of more civilisation-type and chronic diseases will accelerate this process but also encourage the use of more expensive and novel medicines.
BMI’s adjusted Business Environment Rankings for the Middle East reveal that Bahrain is in 2nd place behind only the UAE. This is primarily due to forecasts of high market growth, coupled with the country’s world class intellectual property (IP) regime. Bahrain’s limited domestic manufacturing industry and lack of technological capabilities have also made the country an excellent investment opportunity for foreign drugmakers, although the outlook is tempered somewhat by the small overall market size.
Bahrain’s recent free trade agreement (FTA) with the US should also have a beneficial impact on multinational presence in the country, which exclusively comprises imports. As well as making USproduced drugs more available, the FTA has significantly tightened Bahrain’s intellectual property laws, which will in turn encourage foreign investment in the market. The domestic manufacturing sector is small, comprising just four companies producing basic drugs. However, Bahrain Industrial Pharmaceutical (Bidapharm), currently a pharmaceuticals importer, is in the process of building a manufacturing plant, which will make it the country’s fifth producer.
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