SR2b medical firm started in Saudi Arabia

JEDDAH — The Saudi Council of Ministers has announced the establishment of a new medical company — National Company for Unified Purchase of Medicines and Medical Appliances. It will have a capital of SR2 billion and will sell 30 per cent of its shares in an initial public offering (IPO) after three years.

By Habib Shaikh

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Published: Tue 4 Sep 2007, 9:35 AM

Last updated: Sat 4 Apr 2015, 11:32 PM

Informed sources said that the company will be the sole supplier of medicines and medical appliances to government health institutions. It will also re-export medicines and medical appliances.

According to the sources, leading medical companies that dominate the market would not be invited to become founding members of the new firm. About 10 Saudi companies have captured 50 per cent of the Kingdom's medicine market estimated to be worth more than SR5 billion.

The average annual growth rate of the market is calculated at 10 per cent. There are nine Saudi pharmaceutical companies that supply less than 20 per cent of market requirements.

Some medicine importers in the Kingdom have expressed fears that the creation of the new firm would drive them out of business. Saudi medicine supply companies have made a combined investment of more than SR5 billion in building warehouses, establishing offices and purchasing refrigerated vehicles.

However, Saudis and expatriates welcomed the move hoping that it will bring down the skyrocketing prices of medicines and medical appliances in the country. They said that this will certainly improve health services in the Kingdom.

Medicine importers in the Kingdom currently cater to the needs of 65 per cent of private hospitals and polyclinics and 35 per cent of government hospitals. There are 200 hospitals under the ministry of health. Investments in the Kingdom's private and public health sectors are estimated at SR500 billion with an annual expenditure of some SR50 billion.

In a related development, the ministry of health signed a SR49 million contract with a pharmaceutical company to supply different types of vaccines for use across the Kingdom.

Mansoor Al Hawasi, deputy minister of health for executive affairs, signed the contract with GlaxoSmithKline's Riyadh-based office recently. The company markets 25 vaccines worldwide to prevent potentially life-threatening or crippling illnesses such as Hepatitis A, Hepatitis B, diphtheria, tetanus, whooping cough, measles, mumps, rubella, polio, typhoid, influenza and bacterial meningitis.

"The contract is an extension of purchases made by the Kingdom for vaccines from various local and international companies to fulfill the needs of the population," explained Al Hawasi, and added that the ministry has a separate department for preventive medicine.

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