Kuwait’s pharmaceutical plan may need a shot in the arm

• Plans to improve pharma sector
• Medicine shortages fairly common
• GCC neighbours’ sectors stronger

Kuwait will continue to lag behind its GCC neighbours in attracting investment into its pharmaceutical sector despite new government measures, say experts.

The Ministry of Health announced plans last month to set up warehouses across health districts, adding new facilities to improve medication storage and delivery.

It said it is also developing a guide for managing risks and crises in the pharmaceutical and medical supply sectors, prioritising regional purchases and local contracts to maintain supply stability during emergencies.

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Analysts at BMI said that although the plan is likely to strengthen Kuwait’s pharmaceutical resilience and prevent medicine shortages, ongoing political instability will continue to deter investments in the sector. 

There was a shortage of 210 medicines in 2022, representing 7.5 percent of all medications listed in Kuwait. 

Health minister Ahmed Al-Awadi’s new strategy aims to address sector shortcomings, including inadequate storage capacity and insufficient monitoring of drug consumption and demand. 

BMI said Kuwait is the latest government in the Middle East to identify the importance of enhancing its domestic pharmaceutical industry and working to reduce import dependency for essential medicines. 

“However, Kuwait trails far behind neighbouring markets in the development of its pharmaceutical sector,” analysts noted. 

In 2023, the Kuwait Direct Investment Promotion Authority reported that the Kuwait Saudi Pharmaceutical Industries Company is the sole local manufacturer. It has a limited portfolio of generic painkillers and antibiotics. 

In contrast, Saudi Arabia and the UAE have several multinational pharmaceutical companies partnering with local drug makers, enhancing domestic manufacturing infrastructure and expertise. 

Because of its underdeveloped pharmaceutical industry, Kuwait is one of the Mena markets most reliant on imported pharmaceuticals, with imports accounting for 90 percent of the market, BMI analysts calculated.

“We foresee Kuwait’s pharmaceutical market size to grow at a much slower rate compared to the rest of the Mena and GCC markets,” they added. 

By 2027, BMI forecasts Kuwait’s pharmaceutical industry to reach $2.9 billion, posting a five-year annual growth rate of 3.5 percent. 

In contrast, the GCC’s pharmaceutical industry will grow at 4.9 percent.

BMI also said that while the government has tried to boost non-oil sectors under the Kuwait Vision 2035 roadmap, diversification efforts have also lagged. 

Non-oil sectors including the pharma sector have been stifled by Kuwait’s inefficient political scene, it added. 

Bureaucratic hurdles and slow approval of projects has consistently limited the extent to which public funds are utilised, BMI said.

In October it was reported that Kuwait had used just 10 percent of its budgeted expenditure for public projects in the first half of the last fiscal year.

Kuwait also struggles to attract foreign direct investment, which totalled just $758 million in 2022. This compares with the UAE ($22.7 billion), Saudi Arabia ($7.8 billion) and Oman ($3.7 billion), according to the UN Conference on Trade and Development. 

“To boost the expansion of vital non-oil sectors, including the pharmaceutical industry, Kuwait must concentrate on establishing a more conducive environment for foreign direct investment and international industry collaborations,” BMI said.