|19 August, 2019

Mandatory health insurance in Oman to fuel investments in generic drugs

The launch of the mandatory health insurance scheme is expected to increase demand for medicines in the country

Midsection of doctor showing insurance form to patient. Image used for illustrative purpose

Midsection of doctor showing insurance form to patient. Image used for illustrative purpose

Getty Images

MUSCAT – The imminent introduction of mandatory health insurance in Oman is expected to drive up the domestic demand for pharmaceuticals, boding well for generic drugs investments in the Sultanate, according to a key report published by Fitch Solutions Macro Research, the primary distributor of Fitch Ratings. An estimated 2.1 million people Omanis and expatriates, as well as their dependents, working in the private sector are expected to be covered by the the Unified Health Insurance Policy (UHIP) also known as Dhamani when it is rolled out in stages starting from later this year.

The scheme, formally unveiled by the Capital Market Authority (CMA) in March this year, will make it mandatory for private companies to provide basic healthcare coverage to their employees a landmark move that also promises to unlock new investment and growth opportunities across the healthcare and related sectors in the Sultanate.

The launch of the mandatory health insurance scheme, coupled with a rapidly growing prevalence of non-communicable diseases in the MENA region, is expected to increase demand for medicines in the country, said Fitch Solutions in its recent report on Oman.

It noted however that highly profitable opportunities for drug-makers will remain limited due to the countrys aggressive pricing and reimbursement regime and the relatively small population.

Nonetheless, foreign drug-makers will still seek to capitalise on opportunities in the Omani medicines market, albeit most likely via imports and partnerships with domestic producers. The steady growth in both the pharmaceutical and healthcare market as well as the high income per capita in Oman will ensure the countrys attractiveness to international drug-makers, Fitch Solutions affirmed.

The Dhamani scheme offers maximum coverage of RO 3,000 towards inpatient treatment encompassing hospital stay, treatment, medicines, and so on. For outpatient treatment, the maximum coverage is RO 500, which will include consultation, diagnostics, medicines and lab fees.

The initiative has already spurred a strong uptick in investments in new private hospitals, polyclinics and diagnostic facilities, as well as an upsurge in insurance and third party service providers.
Side by side with these developments, Oman has also seen an exponential increase in investments in the pharmaceutical industry. Early last year, construction began on a mega pharmaceuticals manufacturing plant in Salalah Free Zone with an investment size of $365 million (RO 140 million). Felix Pharmaceuticals, set for launch in 2021, plans to produce around 100 different types of drugs.

In March this year, Thaiba Pharma announced the commencement of construction of a specialty drugs manufacturing plant at Rusayl in Muscat Governorate. Menagene Pharmaceutical Industries is due to be operational in 2021.

According to market experts, the generic drugs industry in the GCC was valued at $1.55 billion in 2016, following CAGR of 15 per cent between 2009 and 2016. Domestically produced generics account for around 45 per cent of drug consumption in the Middle East.

2019 © All right reserved for Oman Establishment for Press, Publication and Advertising (OEPPA) Provided by SyndiGate Media Inc. (Syndigate.info).

Disclaimer: The content of this article is syndicated or provided to this website from an external third party provider. We are not responsible for, and do not control, such external websites, entities, applications or media publishers. The body of the text is provided on an “as is” and “as available” basis and has not been edited in any way. Neither we nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this article. Read our full disclaimer policy here.

More From Legal