Work starts on Dubai factory for Indian pharma business

• $54m site to make herbal tablets
• UAE Drug Corporation set up in October
• More pharma to move to Emirates

Construction has started on a $54 million factory in Dubai for Indian herbal pharmaceuticals company Himalaya Wellness, as analysts predict more international investment in the UAE healthcare sector.

The factory at Dubai Industrial City, supported by financing from Emirates Development Bank, will produce tablets, capsules, liquids and ointments.

The Bangalore-based company, founded in 1930, already operates a research and development centre in Dubai Science Park. 

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Analysts are predicting that more international pharma companies will be attracted to the Emirates thanks to the establishment of the UAE Drug Corporation last month. It will be the official authority for the regulation and licensing of medical and pharmaceutical products in the country. 

BMI, formerly Fitch, said in a research note that the creation of the drug corporation “follows recent major regulatory updates set to streamline UAE’s regulatory processes and further align with international standards”. 

Abdulrahman bin Mohamed Al Owais, the UAE’s health minister, said the authority would help establish a “comprehensive and sustainable” system for licensing and manufacturing.

BMI also pointed to the UAE’s “robust and transparent” regulatory framework, which has already attracted pharma giants Sanofi, AstraZeneca, Eli Lilly and AbbVie to the country. 

Himalaya Wellness plans to use Dubai as its sourcing hub for the GCC and wider Middle East, in addition to serving the US, Europe and selected Asia-Pacific countries. 

In 2022, around 2,500 medical products were produced in the UAE. There are now 23 pharmaceutical manufacturing centres in the country, according to the Abu Dhabi holding company ADQ, up from just four in 2010.

The medium-term picture for pharma imports

However, BMI’s analysts believe the UAE is likely to continue to rely on pharma imports in the near to medium term, because of a cultural preference for branded drugs and an underdeveloped generic manufacturing sector. 

By 2028, BMI expects the UAE’s reliance on imported pharmaceuticals to sit at 87 percent, just 2 percentage points lower than this year. Pharmaceutical sales in the Emirates are expected to reach nearly $6 billion in 2028, an annual growth rate of 6.5 percent.

Saudi Arabia’s market is expected to top $14 billion within five years.

One threat to growth is the drive to contain drug costs in countries across the Middle East and North Africa, according to BMI. While the UAE and Saudi Arabia want to become centres for innovative medicine, neighbouring markets have lower spending power and favour generic drugs.