Gulf companies looking to compete in contract manufacturing

By Kirsty Barnes

- Last updated on GMT

Related tags: Contract manufacturing, United arab emirates

Oman Pharmaceutical Products (OPP) has entered its first
outsourcing partnership in Europe with Finnish company
Dragenopharm, providing the first step in its strategy to offer
contract manufacturing services globally.

The company manufactures a wide range of pharmaceuticals, however, it specialises in the production of hormones, which it will produce for Dragenopharm..

"We have a dedicated hormone production plant and we are the number one producer of hormones in the Middle East,"​ Prakash Mallya, OPP, told Outsourcing-pharma.com.

The company is seeking to aggressively market its products worldwide in a phased program, and has initiated registration proceedings with the UK's Medicines and Healthcare products regulatory agency (MHRA) and the US Food and Drug Administration (FDA).

The company is now also actively looking to compete at an international level and expand its contract manufacturing services to multinational corporations and large pharmaceutical companies, beginning in Europe.

The contract manufacturing market in Europe differs from the North American market with respect to its business model. The core client base of European contract manufacturers comprise of generic drug companies as compared to the branded pharmaceuticals in North America.

With more than a dozen drugs having annual sales of more than $500m (€427m) expected to go off patent between 2004 and 2009, the demand for generic products in Europe is likely to receive a major boost.

Asian countries, especially India and China, are continuing to draw a significant share of outsourced work from developed nations and the region is expected to show strong growth owing to a large manufacturing capacity and competitive cost proposition.

However, according to Mallya, Gulf Cooperation Council (GCC) pharmaceutical companies are undergoing a period of rapid self-expansion and are well placed to become the next generation of competitors in the contract manufacturing and generics market.

"We can offer a cost-effective price while still producing a high quality product that is on par with the world's best pharmaceutical producers because within the GCC the rules for drug manufacturing and registration are more stringent than places such as India and the Middle East and are as strict as in the EU and US,"​ said Mallya.

With around 30 pharmaceutical companies, the GCC pharmaceutical industry is still evolving and is currently dominated by Saudi Arabia, who hold 65 per cent of the GCC pharmaceutical market share.

However, the industry is rapidly expanding and demand for pharmaceutical products in GCC countries is expected to increase in coming years, due to such factors as increased population, standards of living and the emergence of lifestyle diseases.

The GCC comprises of Bahrain, Kuwait, Quatar, Oman, Saudi Arabia, and the United Arab Emirates.

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