UAE drug distributor building a $20M plant in Dubai

Both domestic and Western drugmakers have decided the time is right to have production in the Middle East, a market with growing demand that has been short on local drug manufacturing. Now, a distributor established there is jumping into the manufacturing fray.

United Arab Emirates-based Al Ittihad Drug Store (IDS), says it will build a $20 million manufacturing plant in the DuBiotech cluster in Dubai, the Gulf News reports. The plant will have the capacity to produce 25 generic drugs targeted at "lifestyle diseases." IDS says it expects the facility to be ready for production in the middle of 2016.

"It's not a rarity for a drug distribution company to venture into manufacturing," IDS Group CEO Ahmad Tabari tells the Gulf News, pointing to India's Dr. Reddy's Laboratories as an example. "From a local market perspective too, the move into production is a key requirement for our group," Tabari said. "The time required to get regulatory approval for an imported drug--even generic ones--can be anywhere between one to two years. Local production could mean that gets reduced to three to 6 months."

Raza Seddiqi, CEO of Arabian Healthcare Group, estimates that the current per capita spending on health care is $1,600 to $1,700 in the United Arab Emirates, an amount that could grow considerably. "There are many factors in play that should raise the spend patterns, including the provision of mandatory health cover for by some of the emirates, a growing population base and the fact that Dubai has ambitious plans to foster medical tourism," Seddiqi said.

Western drugmakers have taken notice of that growth. Sanofi ($SNY) last fall led an investor group that has acquired a 66% share in the Dubai-based Globalpharma from Dubai Investments. Sanofi will manage the decade-old company that sells generics in the Middle East and Gulf Coast markets. It will become the vehicle through which it will manufacture its branded generic drugs for the region.

Sanofi already has a plant in Saudi Arabia and Pfizer ($PFE) has a plant slated to come online there this year. A host of others, like Merck KGaA's Serono unit, Jordan-based Hikma and U.S.-based Merck ($MRK) all have production plans for the region.

- read the Gulf News story