There will be unparalleled growth opportunities for insurers and healthcare providers in Saudi Arabia once the new healthcare reforms are implemented in the Kingdom, a study by Datamonitor, a business intelligence firm, said on Thursday. “These reforms will not only increase the accessibility of healthcare services, but the expansion of private healthcare coverage will lead to significant growth of the healthcare and pharmaceutical sector, together with the emergence of new niches in the healthcare ecosystem,” it noted. The study, which involved regulators, insurers, pharmaceutical companies and the Saudi Arabian General Investment Authority, showed that the reforms will lead to a tremendous increase in private healthcare expenditure. Healthcare reforms in the Kingdom will also increase access to healthcare services and pharmaceuticals as the penetration of cooperative health insurance increases across the Kingdom, the study said. The Saudi healthcare market is set to grow tremendously as the CCHI begins the next phase of implementation - the extension of cooperative health insurance for all Saudi nationals. The advent of health insurance will mean that private healthcare will become accessible to a large proportion of its population. For private hospitals and pharmaceutical companies, the potential to maximize revenues is immense, Datamonitor MENA healthcare consulting analyst Ruch de Silva said. The value of gross written premiums in Saudi Arabia will surge to SR25 billion ($6.7 billion) from SR3 billion ($801 million) once reforms are fully implemented, he added. He further said the private retail pharmaceutical market will continue to see accelerated growth rates over the next five years. Datamonitor forecast this will result in a significant increase in overall expenditure on drugs, however there will be a greater shift toward generics use, it added. As competition increases, insurers will attempt to increase profits by implementing cost containment measures such as pharmacoeconomic drug evaluations, generic substitution and formulary lists, the study further said. However, strong underwriting policies, optimal pricing premiums, and delivering quality care to members will remain critical, it pointed out. “Increasingly westernized lifestyles have driven up levels of chronic disease, enhancing the need for drug intervention, with lifestyle products dominating the retail market. Many branded drugs despite their off patent status still command market leading sales and positive growth, underlining the preference for branded drugs in the Saudi market,” the report said. De Silva moreover said the health insurance reforms will take a significant burden off the Saudi government, since employers now finance healthcare for their employees in the private sector. “This does not mean that these individuals will be deprived of the healthcare they need,” he said, “as the basic health insurance package stipulated by the Council of Cooperative Health Insurance (CCHI) is the best of its kind in the region. “Cooperative health insurers are facing very stiff competition, as the primary differentiator between basic insurance packages is the price of the premium - disease and condition coverage is fairly homogenous.” CCHI Secretary General Dr Abdullah Al-Sharif said it has plans to develop a comprehensive healthcare management system centered around health economics and pharmacoeconomics in tieup with the Saudi Food and Drug Authority. Besides saving costs, the future healthcare management system will address the current problems faced by payers of healthcare: over-prescribing of pharmaceuticals by physicians, unauthorized dispensing of branded drugs over generics by pharmacists, and excessive treatment sought by consumers, he added. The director-general of the Health & Life Sciences Sector of the Saudi Arabia General Investment Authority Dr Manar Al-Moneef, expects growing interest from global pharmaceutical players in the Kingdom as a result of the world-class fiscal and regulatory incentive packages given for local manufacturing. “One challenge that most certainly remains across the healthcare ecosystem, for both new market entrants and existing participants alike will be negotiating their way through healthcare strategy, financing and structural issues that will occur as a result of healthcare reform,” de Silva added. __
