The pharmaceutical industry sector in Saudi Arabia is witnessing rapid transformation driven by the goals of Vision 2030, which places pharmaceutical security among its strategic priorities by boosting local manufacturing, localizing advanced technologies, and building an industrial system capable of securing medical needs and reducing reliance on imports, alongside raising the efficiency of health spending, reducing drug waste, and leveraging artificial intelligence.

A promising sector

Market indicators reflect the scale of opportunities this sector offers. Estimates by Fitch Solutions indicate that the value of the pharmaceutical market in the Kingdom was about $11.72 billion (SAR 44 billion) in 2022, with expectations of it rising to $15.09 billion (SAR 56.6 billion) by 2027, at a compound annual growth rate of 5.2%, underscoring the importance of investment to build a national industrial base capable of meeting local demand and expanding into regional markets simultaneously.

Manufacturing capabilities and advanced steps

In an interview with Al-Arabiya.net, Dr. Yasser Al-Obaida, CEO of Sudair Pharma, confirmed that the Kingdom has made significant strides in enhancing its pharmaceutical security, benefiting from the lessons of the COVID-19 pandemic, which highlighted the importance of possessing local manufacturing capabilities to ensure continuity of drug supplies during crises.

Raising the percentage of local manufacturing

He points out that pharmaceutical security has now become part of the national security system. The Kingdom is working to raise the local manufacturing percentage for essential medicines, diversify sources of raw materials, and build a strategic stockpile of vital drugs, thereby reducing risks associated with global supply chain fluctuations.

Raising the localization percentage

Al-Obaida continues: "Despite continued reliance on imports for some specialized drugs and active ingredients, the Kingdom has made notable progress in localizing the pharmaceutical industry, supported by clear targets under Vision 2030 to increase this sector's contribution to the national economy and enhance its resilience."

Stimulating local and foreign investment

The CEO of Sudair Pharma believes that building a competitive national pharmaceutical industry depends on several integrated axes, most notably stimulating local and foreign investments, forging partnerships with global companies to transfer technology, in addition to expanding the manufacturing of biologics, oncology drugs, vaccines, and plasma derivatives.

Advanced industrial base

He adds in his remarks that developing the research and development ecosystem, linking it with universities and innovation centers, alongside speeding up regulatory procedures while maintaining the highest quality standards, and supporting local content and government procurement, are key factors for building an advanced industrial base.

Attractive features

In a related context, Dr. Yasser Al-Obaida, CEO of Sudair Pharma, asserts that the Kingdom now possesses features qualifying it to become a regional hub for pharmaceutical industries, given its advanced industrial infrastructure, strategic logistics location, and continuous government support. He believes that localizing the pharmaceutical industry is no longer just an economic option but has become a strategic necessity to enhance national readiness in facing global health crises.

Reducing risks of supply disruption

He considered that having national factories capable of producing essential medicines and vital products enables rapid response to health emergencies, reduces risks of supply disruptions, maintains price stability, and ensures continued availability of medicines for hospitals and patients, in addition to enhancing supply chain flexibility and strengthening national health security.

The challenge of drug waste

In a related context, Al-Obaida notes that drug waste represents a global health and economic challenge, attributing its causes to dispensing quantities exceeding actual need, poor inventory management, expiry of medicines, non-adherence of some patients to treatment plans, in addition to repeated prescription dispensing from multiple sources.

Unifying pharmaceutical records

Al-Obaida suggests that addressing this phenomenon requires an integrated system including unifying electronic pharmaceutical records, implementing smart inventory management systems, improving drug dispensing mechanisms according to actual need, promoting a culture of rational drug use, leveraging data analytics to predict consumption, and redistributing inventory among health facilities before medicines expire, in accordance with regulatory controls. He envisions that reducing drug waste not only cuts costs but also frees up financial resources that can be redirected to scientific research, innovation, and the development of national pharmaceutical industries.

Artificial intelligence... an enabler

The CEO of Sudair Pharma explained that artificial intelligence will be one of the most prominent enablers reshaping the pharmaceutical sector in the coming years, through demand forecasting based on demographic and epidemiological data, real-time inventory management, and issuing early warnings when a shortage or surplus of medicines is anticipated.

Technologies and supply chain efficiency

He stated that digital technologies will also contribute to improving supply chain efficiency, tracking pharmaceutical products from manufacturing stages to patient delivery, supporting procurement and distribution decisions, as well as enhancing industrial process efficiency and reducing waste during production.

An interconnected national system

The digital transformation witnessed by the Kingdom will enable the building of an interconnected national system, bringing together the factory, warehouse, hospital, and pharmacy within a unified platform based on data and artificial intelligence, thereby enhancing the efficiency of managing the entire pharmaceutical sector.

An industry driven by innovation

According to Al-Obaida, the Kingdom is moving toward building a pharmaceutical industry based on innovation and advanced technologies, not just traditional manufacturing. He indicated that the next phase aims to increase the local manufacturing percentage of strategic drugs, localize biotech industries, attract global investments, enhance research and development, increase the competitiveness of Saudi products in foreign markets, and expand exports to the Middle East, Africa, and Asia.

Building an export-oriented industry

The goal is not to achieve full self-sufficiency in all pharmaceutical products—something even major economies do not accomplish—but to reach high levels of sufficiency in priority and strategically important medicines, alongside building an export-oriented industry capable of competing regionally and globally.

A phase of transformation

Al-Obaida firmly states that the pharmaceutical industry sector in the Kingdom is undergoing a historic transformation, supported by investments, innovation, biotechnology, artificial intelligence, and the development of national talents. This puts Saudi Arabia on the path to becoming one of the most prominent pharmaceutical industry hubs in the region in the coming years, enhancing health security, supporting economic diversification, and aligning with the goals of Saudi Vision 2030.

A national strategy

From an investment perspective, pharmaceutical sector investor Omar Al-Kharashi reveals that the Kingdom has made significant strides in enhancing its pharmaceutical security, benefiting from a clear national strategy aimed at localizing pharmaceutical industries and raising the level of self-sufficiency, in line with the targets of Saudi Vision 2030 and the National Industrial Strategy.

Notable transformations