Abstract
In the Q409 BMI‘s Business Environment Ranking (BER) matrix for Middle
East and Africa
(MEA), Oman is placed seventh, having improved its
position by three places in relation to the
previous quarter. However, as
its score is unchanged, the shift can be explained as a result of the
worsening of the scores awarded to other markets surveyed by BMI. Globally,
Oman ranks 44th out
of the total of 71 markets profiled, with its small
population and strict price controls continuing to
represent major
barriers to investment in the market.
Nevertheless, Oman does offer
certain advantages over larger – but less developed – markets in
the
MEA region. Its preference for branded products, combined with a
low-cost manufacturing base and
an improving intellectual property (IP)
environment will conspire to increase the value of its market
at retail
prices from OMR44mn (US$117mn) in 2008 to OMR60mn (US$157mn) by 2013. The
compound annual growth rate (CAGR) of the pharmaceutical expenditure is penned
in at a steady yet
unspectacular 6.07% in both US dollar and local
currency terms, although the need for costcontainment,
especially given
current economic turbulence, will result in the falling market share of
patented products.
In fact, buoyed by rising oil production, the
government will continue to attempt to spend its way out
of recession,
seeking to boost non-oil sectors over the long term as well as reducing public
sector
expenditure. Revenues from crude oil have been falling in recent
months, with the slowdown
incentivising the government to devise a
long-term strategy for non-hydrocarbons growth. While
most of the
development will happen in the metals and the petrochemicals sectors,
pharmaceutical
production for domestic use may also receive a boost, in a
bid to reduce the overreliance on imports.
Prescription medicines will,
however, continue to benefit from the fact that Oman boasts one of the
most efficient healthcare systems in the region as well as from the rising
prominence of the private
sector – stimulated by the exclusion of
expatriate workers from public healthcare schemes and the
increased demand
for medical tourism. On the other hand, the demand for over-the-counter
(OTC)
products will remain limited, given the generous extent of the
public healthcare system, although
they are expected to increase their
share of the total from 11% in 2008 to 13% in 2013.
In the meantime,
continuing its modernisation plans, the Ministry of Health recently awarded
the
contract for the building of the OMR15mn (US$39mn) cardiac care centre
at the Sultan Qaboos
hospital in Salalah to Galfar Engineering &
Contracting. Authorities remain committed to public
healthcare provision
improvements, the latest announcement following reports that five new
health
centres will be built across Oman at a cost of OMR4mn.
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