NO SHORTAGE IN INVESTMENT OPPORTUNITIES IN SAUDI HEALTHCARE

Saudi Arabia’s expanding demand for healthcare has made it a strong area of growth for the world’s healthcare service providers and ancillary industries.

According to Invest Saudi, a unit of the Saudi Arabian General Investment Authority (SAGIA), the government is expected to spend USD 180 billion on healthcare over the next five years to address the country’s rising public health requirements.

“As such, investors will find significant opportunities across the entire sector including hospital and healthcare services, pharmaceuticals, and medical devices,” Invest Saudi said in a new report.

Invest Saudi is a key initiative of the National Transformation Program, and was created by SAGIA to lead the kingdom’s national investment promotion brand.

The investment promotion agency’s latest report noted that the country will need at least 43,000 Ministry of Health hospital beds, more than 17,000 private hospital beds, and 2,000 primary healthcare centres by 2021.

To meet the needs of rising population, the country will have to spend USD 11 billion on medical devices, including USD 1.1 billion on capital equipment, USD 600 million on consumables and USD 200 million on patient aids.

Meanwhile, the kingdom will need to spend USD 42 billion on pharmaceuticals until 2021.

“Localising the pharmaceutical industry is a key priority for the Saudi government as part of Vision 2030,” Invest Saudi stated. “Today, only 30% of pharmaceutical products are manufactured locally. The pharmaceutical market is worth approximately USD 8 billion, making it the largest pharmaceutical market in the GCC.

“To decrease the burden of chronic diseases and to increase life expectancy further, Saudi Arabia will make significant investments in preventative care and wellness ecosystem worth USD 130 billion in: primary care centres, medical imaging, laboratories, hospitals and hospital commissioning, long-term care, rehabilitation, and home care,” the report noted.

This would lead to public private partnerships in the areas of radiology, primary healthcare, medical cities, hospitals, and laboratories. The contribution of the private sector in raising healthcare standards are vital, as the government aims to take a step back and reduce its budget burden.

To accelerate growth in the sector, the Saudi Council of Ministers liberalised the healthcare and allow foreign investors to fully own, operate and manage all types of private healthcare institutions, including general health centres, specialised healthcare centres, radiology centres, medical laboratories, outpatient surgical facilities; and supporting medical services facilities.

The decision to open up the healthcare sector to participation from foreign companies, with strong incentives, has become a unique proposition.

This is especially attractive to companies, as demand for healthcare in the country is set to increase due to rising population and surge in affluence-related illnesses. To withstand the growth in the population, policymakers are encouraging the development of the private sector. This development will create tremendous opportunities for foreign healthcare companies to take part in the largest healthcare market in the Middle East.

The Ministry of Health has been moving swiftly to encourage foreign and private domestic companies. In May alone, the ministry awarded eligibility to nine companies for hospital ICU establishment, equipment, and development projects, five for service centres, and three for operation and consultation services project in the Northern Region.

“The first quarter of the year also saw important milestones in the healthcare sector, such as Hassana Investment Company, the investment arm of the General Organization for Social Insurance, forming a joint venture with UAE-based NMC Healthcare to acquire and develop a pan-Saudi network of healthcare facilities with a capacity of up to 3,000 beds and total investments up to SAR 6 billion over the next five years,” according to SAGIA.

Earlier in the year, Abdullah Economic City (KAEC) and Jeddah-based Jamjoom Pharma agreed to develop a specialised destination hospital on 100,000 square meters of land, comprising 150 beds, with the ability to expand to 500 beds over multiple phases.

The project will begin construction mid-2021 with a completion date set for the end of 2024. The development will create 500 jobs during its first few years of operation and more than 800 jobs after completion of the various development phases.

The rapid investment and upgrade of the sector dovetails with rising needs, especially as the Saudi Invest study predicts that by 2030, the population of the 50-year-old age group will increase by 201% to approximately 12.5 million, out of a total population of around 39.7 million.

Private firms and international healthcare companies that position themselves early in the kingdom will be the ones to meet the rising needs for expensive treatment, and participate in creating a robust healthcare system in the country.