Govt to Establish New Medicine Firm

The government announced earlier this week its plan to establish a new firm that is expected to play a major role in the health care sector in Saudi Arabia. The newly formed National Company for Unified Purchase of Medicines and Medical Appliances will have a capital of SR 2 bn, and will sell 30 percent of its shares in an IPO three years later.

It is an interesting move by the government to change the game in the medicine market this way. The market is currently dominated by 10 companies which have captured 50 percent of a market estimated to be worth more than SR 5 bn. Of course these companies are not happy about the creation of the new firm, claiming it would drive them out of business. Let’s wait and see.

However, there is one more thing I would liked to add here. It is common knowledge that the Ministry of Health is one of the largest areas in the government where corruption is very prevalent, and a large part of this corruption is related to the medicine market. I really hope that the newly formed company would be managed in a professional and transparent manner in order to cut back on the corruption that has been flourishing in MOH for the past few (many?) years. I mean one can hope, can’t one?

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