The healthcare industry in Bahrain is primarily funded by the government with public finance contributing around 70% of the total healthcare expenditure every year. The government provides healthcare services to the local population through public hospitals and dispensaries free of cost, while the services for expatriates are subsidized. The pharmaceutical industry was worth $260 million in 2012, compared to $240 million in the previous year. Although size of the pharmaceutical market in Bahrain is smallest in the GCC in absolute terms, the sector’s contribution to GDP is largest among all the regional counterparts. The country also ranked second in the region in terms of pharmaceutical sales per capita, which was $226 in 2012, according to Alpen Capital’s report on GCC Pharmaceutical Sector, released on Sunday.
Between 2009 and 2011, imports of pharmaceutical products in Bahrain expanded at a CAGR of 12.6% to US$ 192.0 million (see Exhibit 9). In contrast, exports and re-exports, which were collectively worth a modest US$ 0.3 million in 2011, experienced a negative growth during the same period.
Except for the small size, general characteristics of the pharmaceutical industry in Bahrain are similar to other parts of the Gulf. Domestic production of drugs is small and market demand is almost entirely met through imported pharmaceutical products. While Bahrain did not have a single mainstream pharmaceutical manufacturer operating in 201016, the country is gradually witnessing some development within the local manufacturing segment. In the later part of 2011, Bahrain Pharma (previously known as Bahrain International Medicine Manufacturing Company) announced its plans to construct the nation’s first pharmaceutical factory at Bahrain International Investment Park. The company operates as a contract manufacturer of nutraceutical and pharmaceutical products with equipment and technology provided by the US-based Vanguard Pharmaceutical Machinery. In order to reduce its reliance on imported medicines and boost growth of the local pharmaceutical manufacturing industry, the government of Bahrain is encouraging foreign capital flow and private sector investments into the industry. SBI Pharmaceuticals, a part of the Japanese conglomerate group, SBI Holdings, was reported to be planning to open a manufacturing facility in the country17. The company identified Bahrain as its research and development base in the MENA region and also set up a representative office in the country recently. Bahraini companies such as Innovest and Bahrain International Medicine Manufacturing Company are also establishing their presence in the domestic manufacturing segment.
Consumers are generally inclined to purchase branded medication thanks to a strong spending power and a general perception that branded drugs are superior to the generics. However, traditional medicines are also still in demand in the country, and there are a number of companies making herbal pseudo-pharmaceuticals. A large part of the Bahraini pharmaceutical market is composed of prescription drugs. However, a strong buying power and increasing health awareness have created a growing market for OTC products and pseudo-pharmaceuticals like weight loss products, vitamins, and probiotics. Suppliers of OTC drugs, especially branded products, benefit from wide availability of these products at pharmacies, supermarkets, and specialist stores.
The government is increasingly encouraging the use of generic medicines among the doctors and patients. Patients are allowed to claim reimbursements on prescriptions of generic products. Moreover, the import of generic drugs into the Bahraini market should increase once the free trade agreement between the GCC and India is signed.