RATIONAL

The Medical Devices industry is expected to benefit from the ambitious healthcare transformation program and the government’s commitment to support local capabilities through local content policies. The industry represents a highly attractive domestic opportunity, as there is a high potential to cater to the Kingdom serving the increasing domestic demand and largest medical devices market in the region. In addition, proximity to and free trade agreements with countries in the region with much higher Medical Devices spend per capita than the global average and promising market growth forecasts create ideal conditions for investment in this industry. The Medical Devices manufacturing skill set, and value chain capabilities have similarities with other sectors, promising cross-pollination of industrial know-how and value chain capabilities. Finally, the industry has become more strategically important amid the COVID-19 pandemic to ensure self-sufficiency for essential medical products and secure national resilience of healthcare supply chains.

Value Proposition

• MEA market is expected to grow at a higher pace than global market driven by economic prosperity, growing medical awareness, aging populations, and wider healthcare coverage and subsequent expenditures.

• The Medical Devices industry is expected to benefit from the ambitious healthcare transformation program and the government’s commitment to support local capabilities through local content policies.

• KSA’s Medical Devices industry remains the biggest market in the region and is expected to grow at more than 5% from 2020 to 2023.

• In 2020, Covid-19 outbreak drove a greater spending on health personnel, infrastructure, administration, medical equipment and consumables; which is expected to continue in decreasing amounts until the pandemic is over.

• As healthcare budgets and resources are redirected to the fight against Covid-19, spending on high margin products has decreased.

• Different regions in the world will have similar growth rates in medical devices spending in the next years.

• MEA is forecasted to be among the highest growth regions for Medical Devices, driven by wider healthcare coverage and subsequent expenditures.

• KSA is forecasted to remain the largest regional market for Medical Devices, despite the large market drop impact in 2015-16 due to oil market crises.

• Developments in global commodity prices in the next years and outlook of Covid-19 pandemic can impact Medical Devices spend significantly.

Key insights:

• KSA is the biggest importer in GCC, with almost half of the imports.

• UAE imports constitute more than one-fourth of regional imports although UAE’s population is less than one-fifth of total regional population.

Key insight:

• Despite being the biggest importer, exports of KSA to the region are minimal; which highlights significant room for improvement.

• USA covers around one-third of the exports, with remaining share covered by countries around the world.

• 5.2% healthcare expenditure as share of GDP

• 4.8% medical devices market size as share of healthcare expenditure

• Covid-19 had a strong positive impact on specific areas (e.g. consumables, ventilators), while most other devices were negatively affected due to pressure placed on healthcare resources priorities’.

• Government is considered main market driver with over ~66% market share, however, an ambitious healthcare transformation plan promises higher private-sector participation.

KSA manufacturing scene is expected to be supplying ~6% of total market demand, with predominant focus on Consumables.

• ~80% of the opportunities prove to be highly attractiveness and localizable.

• Majority of High feasibility opportunities are localized to some degree and need support for expansion.

• Medium feasibility opportunities is the largest segment and will need concerted efforts of tech transfer by JV or acquisition.

• Low feasibility opportunities are majorly strategic in nature with intricate assembly steps, thus needing long term effort to additionally establish an OEM ecosystem to localize manufacturing.