The Pharmaceutical Industry in Saudi Arabia

The Pharmaceutical and Drug Production Industry in the Kingdom of Saudi Arabia is the process of manufacturing medical drugs and localizing its technologies. This industry has an annual growth rate of 5 percent, with exports exceeding SAR1.5 billion. The increase in local manufacturing growth contributes to the localization of pharmaceutical production and achieving drug security for the Kingdom, positioning it as a hub for pharmaceutical industries, with a market size estimated at SAR30 billion. There are forty registered pharmaceutical factories, covering 36 percent of the Saudi market's pharmaceutical needs, while government purchases account for 54 percent of the market.

The Saudi Pharmaceutical Industries and Medical Appliances Corporation (SPIMACO Addwaeih) was established as the foundation for the pharmaceutical industry in the Kingdom, following modern scientific and industrial standards. It was founded in 1986 as a Saudi joint-stock company with a capital of SAR1.2 billion. SPIMACO was listed on the Saudi Stock Exchange on January 20, 1986. Its headquarters are located in Buraydah City, in Qassim Province.

SPIMACO Addwaeih and its subsidiaries operate primarily in the pharmaceutical and medical production sector. This includes the manufacturing, production, development, marketing, sale, and distribution of raw pharmaceutical materials, medical and pharmaceutical preparations, production supplies, medical and pharmaceutical equipment, and the production of consumable medical supplies.

The Ministry of Industry and Mineral Resources has mobilized a network of sectors under its jurisdiction to localize the production of pharmaceuticals and medical products in the Kingdom. The Saudi Authority for Industrial Cities and Technology Zones (MODON) is working to localize pharmaceutical industries across thirty-six industrial cities, providing land and factories equipped with services.

The Royal Commission for Jubail and Yanbu operates four industrial cities with the infrastructure necessary for establishing projects. The National Industrial Development Center offers industrial expertise and regulations to attract investors, while the Saudi Export Development Authority offsets up to 90 percent of some costs and export services. Additionally, the Saudi Industrial Development Fund finances local factory projects, and the Saudi Export-Import Bank (Saudi EXIM Bank) supports local exports by providing financial solutions.

The Saudi Food and Drug Authority relies on a set of procedures and controls in accordance with international standards and approved specifications. It carries out several key tasks, including the registration and evaluation of pharmaceutical products and their companies, coordinating with the Ministry of Health and other government bodies providing health services to promote public health, encouraging and supporting the national pharmaceutical industry, providing scientifically based drug information from reliable sources to consumers, pricing pharmaceutical products, amending regulatory systems and laws, monitoring the quality of pharmaceutical products, evaluating product safety, tracking pharmaceuticals through the electronic RSD system, and representing the Kingdom in regional and international organizations related to pharmaceuticals.

The Saudi Food and Drug Authority established the RSD electronic tracking system to protect the community by enhancing oversight to ensure the safety of medications. The system was implemented in 2018 and aims to combat drug counterfeiting and enable consumers to access drug information. Using modern technologies, the system tracks registered and locally manufactured or imported drugs. All drugs at points of sale are subject to the system, with 100 percent coverage, facilitated through the registration of 4,800 establishments and the execution of 1.2 billion transactions since RSD’s launch in November 2018 through the end of 2020.

The Saudi Pharmaceutical Industries and Medical Appliances Corporation (SPIMACO Addwaeih) focuses on manufacturing, producing, developing, marketing, selling, and distributing pharmaceutical raw materials and medical products such as tablets, capsules, dry powder for suspensions, syrups, injection suspensions, creams, ointments, gels, suppositories, mouthwashes, and disinfectants.

The Saudi Vaccine Company (SAUDIVAX) is a technology company that specializes in developing vaccines and biopharmaceuticals, including the production of sterile injectable small-dose formulations and active biological components for biopharmaceutical products and vaccines. In April 2020, it signed an agreement with Merck Group and Virxnet to study the feasibility of localizing gene and cell therapies for treating genetic, cancerous, and infectious diseases, aiming to localize pharmaceutical industries and provide advanced treatments in the Kingdom.

Tabuk Pharmaceuticals, established in 1994, is a privately owned Saudi pharmaceutical company headquartered in the capital, Riyadh, with a presence in the Middle East and North Africa (MENA) markets. The company manufactures pharmaceutical products for global and regional companies at its facilities in the Kingdom, and grants licenses for manufacturing and marketing its products to its partners in the Kingdom and the region.

Tabuk Pharmaceuticals operates in several therapeutic areas, including cardiovascular diseases, central nervous system disorders, gastrointestinal diseases, respiratory diseases, musculoskeletal diseases, infectious diseases, pain management, and diabetes. The company produces over two billion basic units annually across seventeen countries in the MENA region.

The Tabuk Pharmaceuticals factory is located in Tabuk City, with an annual production capacity of approximately 1.6 billion units of solid formulations (tablets, capsules, and oral suspensions), in addition to liquid formulations, creams, ointments, and injectables. In 2015, the company launched its second factory in the Second Industrial City in Dammam City, with an annual production capacity of around fifty million units, including liquid injection bottles, dry injection bottles, and ampoules.

Jamjoom Pharmaceuticals Factory Company is one of the major pharmaceutical companies in the Kingdom. It specializes in the manufacturing and production of medicines and is headquartered in Jeddah Governorate.

"Sudair Pharma" is a Saudi company and one of the national factories specializing in pharmaceutical manufacturing. Located in Sudayr City in Riyadh Province, it was established in 2014. The company is one of the Saudi factories involved in the production of cancer drugs, contributing to the localization of this industry

The National Unified Procurement Company (NUPCO) manages the procurement of pharmaceuticals. It is a central company in providing medical procurement services, as well as the storage and distribution of medicines, devices, and medical supplies in the Kingdom. NUPCO was established in 2009 and is fully owned by the Public Investment Fund (PIF).

NUPCO introduced technological solutions in the field of pharmaceutical dispensing, including the "Wasfaty" service. This electronic service ensures the availability of medications by connecting hospitals and primary healthcare centers with community pharmacies. By June 2020, Wasfaty had facilitated the provision of 3.3 million prescriptions for more than 2.5 million patients across twenty-nine hospitals and 884 primary healthcare centers throughout the Kingdom. These prescriptions were dispensed through over 1,800 private pharmacies participating in the service, in addition to around 14,000 prescriptions delivered directly to homes, as of June 2020.

Glaxo Saudi Arabia Ltd., a subsidiary of GlaxoSmithKline, manufactures 80 percent of the medications consumed by patients in the Kingdom at its factories in Jeddah Governorate.

Pfizer Saudi Arabia, a global biopharmaceutical company involved in the discovery, development, and manufacturing of medicines and vaccines, established a factory in King Abdullah Economic City in 2011.

Another global company operating in the Kingdom is Sanofi Saudi Arabia, a leading company focusing on specialized healthcare and vaccines. It is a subsidiary of the French company Sanofi. The Ministry of Health has signed agreements with Sanofi to localize and transfer insulin manufacturing technology in the Kingdom, with the potential for export to Gulf countries and the Middle East region.

The Saudi Biomedicine Company (Saudi Bio) is working on transferring and localizing the production of biomedical technology. It began by establishing a factory to produce insulin, cancer medications, and treatments for blood diseases. The localization of insulin production started in 2019 with the signing of an agreement with "Novo Nordisk," a company specializing in insulin production.

On December 15, 2021, the Saudi Authority for Industrial Cities and Technology Zones (MODON) signed three contracts for the allocation of industrial lands to establish projects for the production and localization of generic drugs (medications similar to their well-known branded counterparts, serving as alternatives when the branded versions are unavailable), with a total investment of SAR90 million. These projects were located in Tabuk Industrial City and the Second and Third Industrial Cities in Riyadh.

These projects align with the goals of Saudi Vision 2030. The signed contracts included the allocation of an industrial land area of 11,000 m in Tabuk Industrial City for Ram Pharmaceutical Industries (Ram Pharma) to produce generic drugs. Additionally, two contracts were signed with MS Pharma to allocate five thousand m of industrial land in the Second Industrial City in Riyadh and three thousand m in the Second Industrial City in Riyadh for two projects to produce generic drugs for chronic diseases.

In an effort to meet the local market's demand for pharmaceutical products and various medical supplies, MODON successfully increased the number of medical factories in its industrial cities by 150 percent over the five years since the launch of Saudi Vision 2030. The number of factories grew from sixty-four at the end of 2016 to approximately 173, including operational factories and those under construction or in the establishment phase.

The Kingdom has expanded its pharmaceutical industry to meet its domestic drug needs. On March 1, 2022, the Council of Ministers approved the formation of the "Vaccines and Biopharmaceutical Industry Committee" chaired by the Minister of Industry and Mineral Resources. This committee is the authority responsible for regulating and developing the biopharmaceutical industry in the Kingdom.

In line with the Kingdom's goals to achieve pharmaceutical and health security, the expansion in the pharmaceutical sector included significant investments. On June 24, 2022, the Ministry of Industry and Mineral Resources launched a number of investment opportunities in the vaccine and biopharmaceutical manufacturing sector, valued at USD3.4 billion. This is part of the Kingdom's efforts to become a key hub for this promising industry. The biopharmaceutical sector enjoys the fastest growth rate among all pharmaceutical sectors, with an annual growth rate estimated at 17 percent.

In its first phase, the Vaccines and Biopharmaceutical Industry Committee will focus on localizing essential childhood vaccines, building self-reliance, and developing manufacturing platforms to combat future pandemics. This phase also includes insulin production to treat diabetes patients and supporting plasma collection centers by establishing a world-class plasma derivatives factory to achieve self-sufficiency. The second phase will focus on localizing technologies for immunotherapy and cancer treatments. The biopharmaceutical sector is estimated to be worth more than USD2 billion annually, with insulin alone accounting for about USD340 million.

On June 18, 2023, the Public Investment Fund (PIF) launched Lifera Pharmaceuticals, a company specializing in biopharmaceutical industries. It aims to enable the growth of the sector and enhance its resilience by producing biopharmaceuticals on a commercial scale in the Kingdom through pharmaceutical development and manufacturing platforms. This initiative strengthens the Kingdom’s position as a global hub for pharmaceutical production.

Lifera plans to focus on the production of essential and life-saving pharmaceutical products in the Kingdom, such as insulin, vaccines, plasma-based drugs, antibodies, cell and gene therapies, and innovative small molecules. The company also intends to establish partnerships with leading local and international companies to attract investments aimed at developing local capabilities, thereby boosting domestic manufacturing in this sector.

As part of the Local Content and Government Procurement Authority's initiatives to localize and transfer knowledge of vaccines and biopharmaceuticals to the Kingdom, the authority aims to contribute to enhancing national pharmaceutical and health security. The authority has identified a list of 206 pharmaceutical products targeted for localization.

The authority aims to maintain supply chains for the targeted products within the Kingdom, create new industries and sectors in the Kingdom, and develop local content in the healthcare sector.