The hospital revenues in the GCC region which was highly affected by the COVID-19 driven drop in outpatient visits and elective surgery volumes are expected to rebound, with a growth in 2021, according to reports.
The healthcare sector of the GCC region is poised to grow in the light of a rise in medical devices, an increasing branded generics market and high investment in infrastructure and innovation.
The report from Mashreq, one of the leading financial institutions in the UAE, and the research firm Frost & Sullivan revealed that the strength of the current rebound signals that the healthcare sector’s growth is on track to reach a pre-pandemic level and the hospital revenues are projected to bounce back in Q1 and Q2 of 2021 in most of the GCC countries.
As per industry experts at the Arab Health 2020, the Middle East region’s leading healthcare conference and trade show, the pre-pandemic healthcare market in the GCC region was estimated to be worth $70 billion and is foreseen to expand at a compound annual growth rate (CAGR) of five percent.
Karim Amer, head of Healthcare and Education, Mashreq Bank, says the GCC healthcare sector is at the edge of a promising recovery, with the growth in domestic drug manufacturing to reduce the volume of imported medicines, and currently, there is a huge scope for investment in artificial intelligence (AI), analytics, electronic health records and robotics.
“For investors and innovators within the healthcare ecosystem, the Gulf is unquestionably full of opportunity. Increasingly digital opportunities are driving new trends, for example, soaring demand for eCommerce services will most likely result in a doubling of eCommerce providers by 2030. This shift to digital health will only continue to emerge in prominence moving forward.”
However, the region’s healthcare sector confronts a major challenge of dependency on imports of drugs and medical devices, which significantly hindered spending in the industry last year. While in the US 70 percent of drugs in use are generics, it is only 30 percent in the GCC. Additionally, healthcare digitization is still limited in the region, with most applications still at an initial stage.
This year the UAE is expected to gain high self-reliance on locally manufactured pharmaceuticals. Even though, the nation imports products from about 72 countries, 10 countries account for 80 percent of the supply. In 2017, there were only 18 UAE-based companies and this is expected to rise to 30 by 2021.
Pharmaceutical manufacturing is expected to become an $8 billion to $10 billion worth market in the GCC within the next few years and nearly 25 percent of multinational manufacturers have already started discussions with local companies to collaborate and develop drugs in the region.
According to the report, digital infrastructure will be high on the agenda of both the public and private sectors, and virtual care, remote patient monitoring, and artificial intelligence (AI) are likely to account for 30 percent of hospital investments from 2023 to 2030.
“While the UAE focuses on domestic pharmaceutical manufacturing and innovation, Saudi Arabia will spend big on nationwide infrastructure, and Bahrain will seek to attract large numbers of medical personnel to meet its growing demand for high-quality medical services,” said Mr. Amer.