Middle Eastern Medical Device Markets: A Region of Opportunities
The Middle Eastern market, which is home to some of the world’s richest economies, offers unique opportunities and challenges to multinational companies operating in the medical devices sector. While there remains a large disparity between some economies in the Middle East, most countries have shown sustainable growth in numerous medtech therapy areas such as interventional cardiology. This growth is mainly driven by factors such as a significant rise in population, increase in healthcare expenditure, abundance of hydrocarbon-based wealth, a surge in per capita income, expanded insurance coverage, improved healthcare indicators, a larger base of middle class population, and an increasing burden of lifestyle-related diseases (e.g. type 2 diabetes, obesity, and cardiovascular disease).
Turkey, Saudi Arabia, and United Arab Emirates were the three largest Middle Eastern medical device markets in 2016, with a combined value of approximately $6 billion. This is largely attributed to the initiatives undertaken by the individual governments to drive healthcare markets which created new opportunities for businesses such as medical device companies, pharmaceutical companies, and others. In addition, Israel is also gaining widespread recognition in terms of the number of patents granted per capita in the medical technology arena, thereby increasing its share in the overall Middle Eastern medical device market. In a study conducted by Israel’s Ministry of Industry, Trade and Labor in 2012, there were more than 650 medical device companies operating within the country. Therefore, industry members think of Israel as one of the leading Middle Eastern countries for medical device innovation.
With respect to medical device regulations, most of the Middle Eastern countries have their own monitoring and approval systems in differing stages of development, which are primarily responsible for regulatory supervision. Regardless of commonalities in language, religion, and demographics, Middle Eastern countries have notable dissimilarities with respect to their legal, administrative, and economic performances, which is why the regulatory processes in these countries can be extremely challenging. As an example, while working on a Middle Eastern project I learned that most written legislation in these countries are not accessible to the public, and legislation that is available is only available in the local language, which makes comprehension difficult. Industry sources noted that volatility and non-transparency in the region’s political environment are other major hurdles faced by multinational companies entering into this market.
Despite some of the outlined challenges within the Middle Eastern medical devices market, recent years have shown significant development in terms of standardizing the regulations on par with global guidelines. The International Medical Devices Regulators Forum (IMDRF), which is established on the robust framework of the Global Harmonization Task Force (GHTF), is working toward the harmonization of device regulation to simplify the regulatory relationship between Middle Eastern countries and the stakeholders from international medical device companies. This will have a positive impact on the collaboration between these countries and foreign device makers.
Turkey is the largest Middle Eastern medical device market and presents an exciting opportunity for foreign device manufacturers, but the varying layers of regulation and reimbursement issues continue to remain a challenge within the country. While Turkey accepts CE marking and is therefore relatively easy to enter for a European company, Saudi Arabia represents a wholly different opportunity. To market a device in Saudi Arabia, MNCs must go through a specific Saudi Food and Drug Authority (SFDA) approval process. However, once this approval is granted, the company is able to market its device in numerous Middle Eastern markets, because SFDA approval is recognized throughout the region as a gold standard.
Local companies in the Middle East are predominantly engaged in manufacturing low-end consumables or working as distributors for foreign companies, while high-end medical devices are generally imported from the US, Europe, or East Asian multinational companies. Examples of some Middle East based medical device companies are Turkish Alvimedica, Israel’s Itamar Medical, Saudi Arabia’s Saudi Pharmaceutical Industries & Medical Appliances Corporation (SPIMACO), Alshifa Medical Syringes Manufacturing Co and Jamjoon Hospital Supply (JHS). Conventionally, country of origin, history of the company or its local distributor’s performance, and post-sales service play a big role in the success of any device in the Middle Eastern market. Devices from countries such as the US, Japan, Netherlands, Switzerland, France, and Germany are well accepted in the Middle Eastern markets, while devices from Eastern Europe, China, and Korea are purely marketed based on cost.
Foreign device makers are increasingly looking toward the Middle Eastern markets for new sales opportunities. In doing so, these firms should strongly consider the regional diversity, business culture, regulatory protocols and negotiation techniques of the different Middle Eastern countries. It is imperative for new entrants to understand that business is not done in the same manner across all Arab countries and therefore one strategy will not work effectively in all Arab countries. While Middle Eastern culture might look similar from a western point of view, the differences in culture and business practices between countries, religions, and ethnic groups cannot be understated.
And yes, last but not least, just like doing business in India, America or anywhere else in the world, business in the Middle East requires focus on building relationships. Being informed of cultural differences when conducting business in unfamiliar countries may seem like a customary practice, but vigilance toward these issues can prove key to victory in the Middle Eastern medical device markets.
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