Overview       

Saudi Arabia is the region’s largest and most developed market for medical products and services, valued at $13.1 billion.  The introduction of compulsory healthcare in 2005 will further enhance investments in the healthcare sector.

Privatization and favorable government policies will also boost investments in this sector, especially for hospital services, medical equipment and pharmaceuticals.  Between 2008 and 2016, and based on a recent study, health expenditures are expected to increase dramatically, even faster than 20 percent, the rate of population growth.  Over the same period, demand for hospital beds is likely to grow from 51,000 to 70,000, demand for physicians is likely to rise from 40,000 to 54,000 - and the number of hospitals is likely to rise from 364 to 502.

The Saudi Government has, over the years, allocated an increasing amount of their budget to the healthcare sector.  The long-run trend is toward rapidly increasing expenditures for this vital sector in parallel with a growing population and rise in costs of treatment  Between 1999 and 2005, government saw a 7.2 percent annual compounded annual growth in its healthcare budget.  The Kingdom spent $13 billion on healthcare in 2005, and this spending is expected to grow to over $20 billion by 2016.

Best Prospects/Services                                                                  

The latest figures reveal the following:

24.7 percent of the Saudi population is diabetic, one of the highest percentage in the world ($1.1 billion for diabetes treatment)

22 percent of the population are regular smokers, a major cause of respiratory diseases

Heart diseases increasing at an average 5.3 percent annually (five new cardiac centers)

Other major diseases of concern include breast cancer, kidney diseases, and obesity

The Saudi healthcare sector should at the very least grow an average of six new hospitals (average 200 beds per hospital) per year to keep pace with the population growth, while demand for hospital beds to increase by 3.4 percent annually.

Opportunities                                                                        

The Saudi Government has allocated $11.84 billion for the healthcare sector in its 2008 budget, 11 percent more than in 2007.  The new budget ent building 250 Primary Healthcare Centers, eight new hospitals, a $1.68 billion Center for Tumors & liver Diseases, furnishing & equipping 79 existing hospitals, and installing a National Healthcare Information System.

There are also various opportunities for investments in generic drug manufacturing and medical devices, including a recently launched joint venture for GE healthcare with a local company. 

To cope with an increasing number of healthcare providers and patients, the MOH is envisaging the establishment of a national electronic records system for healthcare, which will create enormous opportunities for health systems integrators and specialists in this field.

A major regulatory development was enacted allowing foreign companies to invest in 150-bed Saudi hospitals, which may open the door for U.S. companies to set foot in this market and take advantage of the opportunities and growth prospects for this sector.

For more information please contact:

Maher Siblini at maher.siblini@N0SPAM.mail.doc.gov in Riyadh
Yousef Daqqaq at yousef.daqqaq@N0SPAM.mail.doc.gov in Jeddah
Mohammed Shujauddin at mohammed.shujauddin@N0SPAM.mail.doc.gov in Dhaharan