Medtech regulation in gcc

UNITED ARAB EMIRATES
And
Kingdom of Saudi Arabia
Medical Devices Report

The UAE and KSA are among the top 40 largest medical device markets in the world, and
ranks as the top countries in the Middle East & Africa (MEA) region. Manufacturing capability
are limited, therefore the market will continue to rely on imported medical devices. A changing
epidemiological profile, a growing medical tourism industry, continuous healthcare
infrastructure developments, an expanding health insurance and increasing health
expenditure are factors contributing to market growth.
The report begins with an executive summary, which provides an overview of the medical
device market in Saudi Arabia and UAE and the key factors driving its development. It also
includes a snapshot of Saudi Arabia’s demographic, regulatory and reimbursement
landscape, as well as its healthcare infrastructure.
KSA
1 Country Analysis
1.1 Political Environment
1.1.1 Political Structure
Since the formation of Saudi Arabia in 1932, it has been ruled by a monarchy assisted by the
Council of Ministers and the Consultative Council, also known as Shura. The political system
of Saudi Arabia is based on the rules and regulations laid down by the Holy Quran, which is
also the constitution of Saudi Arabia, and by the sayings and teachings of Prophet
Muhammad, which are known as Sunnah. The constitution is based on the Islamic laws,
Shari'ah, and the basic laws. The king is the Saudi head of state and the head of government,
who is also Saudi Arabia’s prime minister and commander-in-chief of the armed forces. All
agencies, government officials and ministers are accountable to the king, Salman bin Abdul
Aziz Al Saud, who is also known as the Custodian of the Two Holy Mosques. The crown
prince is Prince Mohammed bin Nayef bin Abdul Aziz Al Saud, who is the first deputy prime
minister and minister of interior. The deputy crown prince is Prince Mohammad bin Salman
bin Abdul Aziz Al Saud, who is also the second deputy prime minister and minister of defense.
The council of ministers, or cabinet, is an advisory body, advising the king and facilitating
Saudi Arabia’s development. The king or his deputy presides over the cabinet. The council
meets every week and represents 22 different government ministries. King Saud established
the council in 1953, and the cabinet was restructured by King Fahd in 1993. The cabinet
comprises the king, also called the prime minister, the deputy prime minister, who is currently
also the minister of interior, seven ministers of state and 21 other ministers with portfolio. The
ministry is responsible for the drafting and implementation of various policies and general
affairs of the state, including internal, external, economic, defense, financial and education
policies. The cabinet has the final call for financial, executive and administrative matters. Its
resolutions are non-binding unless agreed upon by a majority vote. If it is a tie, the king holds

the power to cast the tie-breaking vote. It functions according to the basic system of
governance and is advised by the Consultative Council (Majlis al-Shura).
The Consultative Council is a legislative body that advises the king on issues that are
important to Saudi Arabia. It is a modern version of a traditional Islamic concept. The members
of the council are appointed by the king. Currently, there are 150 members appointed for a
four-year term that is renewable. The members are assigned to committees based on their
experience. The council has 12 committees, which deal with foreign affairs, human rights,
education, culture, information, services and public utilities, security, administration, Islamic
affairs, health and social affairs, economy and industry, and finance. The scope of the
Consultative Council was broadened in 2004 to include amending existing laws and proposing
new legislation without prior submission to the king, unlike previously where it was restricted
to discussion of regulations and issues of national and public interest. It has always been able
to request that government officials apply for access to government documents and
participate in key meetings. On April 7, 2003, the Consultative Council became a full member
of the Inter-Parliamentary Union (Saudi embassy, 2016b).
1.1.2 Analysis of Current Political Environment
After the death of King Abdullah bin Abdul Aziz in January 2015, King Salman bin Abdul Aziz
Al Saud acceded to the throne. The king has made various reforms. Saudi Arabia’s first
municipal elections were held in 2005. The second and third were held in 2011 and 2015,
respectively. The municipal council elections are conducted every four years. The Municipal
and Rural System, issued by Royal Decree No. 5/M and dated February 21, 1976, stipulates
in its ninth article that half the municipal council members must be chosen by elections, and
the other half appointed by the Minister of Municipal and Rural Affairs, based on their
efficiency and eligibility. The 10th article of the system states that each municipal council shall
choose a chairman and its deputy from among council members through voting every two
years (Saudi National portal, 2016).
New municipal council regulations were issued on October 4, 2014. The most prominent
improvements approved by the new regulations are:
• The number of elected municipal council members will increase from half the total
number of members to two-thirds.
• The age of eligible voters was revised to 18, from 21.
• Women will be allowed to participate both as voters and candidates.
The third municipal elections were held on December 12, 2015, for 284 municipal councils.
Of the 3,159 council members, voters were allowed to elect two-thirds (2,106 members). The
remaining 1,053 members were appointed by the Ministry of Municipal and Rural Affairs.
Women were allowed for the first time to participate as candidates and won 20 municipal
councils in 2015.
Until June 2012, Prince Nayef bin Abdul Aziz al Saud was the crown prince of Saudi Arabia.
He was chosen as the successor to the Saudi throne in 2011 and was regarded as being
more socially conservative and less reform-minded than King Abdullah. After the death of
Prince Nayef bin Abdul Aziz, Prince Salman bin Abdul Aziz was appointed as the new crown
prince on June 18, 2012. After the death of King Abdullah bin Abdul Aziz in January 2015,

King Salman bin Abdul Aziz Al Saud acceded to the throne. King Salman appointed Prince
Mohammed bin Nayef bin Abdul Aziz Al Saud as first deputy prime minister and minister of
interior and his son Prince Mohammad bin Salman bin Abdul Aziz Al Saud as the deputy
crown prince.
Saudi Arabia does not allow people to protest. While there are no forums for expressing
dissatisfaction with the rulers, opposition does exist in Saudi Arabia. Large groups are working
clandestinely to bring about the changes that they believe will benefit society. The opposition
grows out of dissatisfaction with the total lack of democracy, as well as the harsh differences
in economic power between the social groups (Ottaway and Muasher, 2011).
1.1.3 Healthcare Policy Initiatives
The Saudi population has experienced a significant rise in HIV/AIDS, diabetes, malaria, and
tuberculosis. In order to improve the global competitiveness of Saudi Arabia, the government is
focusing on reducing the disease burden by introducing various policies for the early detection,
mitigation, proper treatment and prevention of various disease conditions. The government took
various initiatives in the Ninth Development Plan (2010–2014), which were relevant to the
millennium development goals undertaken by the Ministry of Economy and Planning, such as:
• To reduce the incidence of AIDS through the following measures
➢ Promoting awareness about AIDS; targeting high-risk groups; reducing risk through
check-up clinics and intensive deployment of counseling; ensuring safety of
transfused blood; and preventing infection through adoption of healthy practices
➢ Establishing 20 clinics for optional check-up and counseling; conducting relevant
surveys and establishing eight specialized treatment centers
➢ A preventive control system that includes regular surveying of groups at risk, ensuring
safety of transfused blood and performing medical tests for expatriate workers
➢ Providing training for relevant personnel and establishing clinics for optional check-
ups and advice in 20 provinces
➢ Opening eight specialized treatment centers, in Dammam, Medina, Jeddah, Hassa,
Jazan, Jouf, Aseer, and Riyadh
➢ Continuous development of the modern-medicine treatment system by recruitment of
experts
• Saudi Arabia implemented a National Tuberculosis Control Program for combating
tuberculosis. It aims to eradicate the disease through the adoption of the Directly
Observed Treatment System (DOTS) of tuberculosis, which commenced in 1999 and was
extended to almost the whole country in 2000. Incidence rates declined from 17 cases
per 100,000 people in 1990 to approximately 12 cases per 100,000 in 2014. Even after
the implementation of the DOTS program, the treatment success rate (62%) is below the
international target set by the WHO (85%). Saudi Arabia aims to reduce the rate of
tuberculosis to eight cases per 100,000 people by 2020 (Hajoj and Varghese, 2015;
WHO, 2015).
• The strategy for combating malaria is based on the following basic points:

➢ Taking effective preventive measures to stop the spread of the disease and also
timely diagnosis and treatment of cases displaying symptoms of malaria
➢ Launching prevention measures and awareness campaigns to ensure community
participation in the control of the disease
➢ Establishing an efficient monitoring network, mainly in susceptible areas
➢ Continuous, comprehensive control of malaria-carrying mosquitoes, through spraying
houses and lands and drying out wetlands and swamps where mosquitoes breed
➢ With these efforts, the indigenous cases of malaria decreased to 30 in 2014 from 34
in 2013.
Saudi Arabia’s 10th Development Plan (2015–2019) is focused on improving the private
sector and creating economic diversification. As part of the plan, the government aims to
spend $118.9 billion on health and social services.
The main objectives of the plan are:
• Opening general and specialized hospitals (approximately 15,000 beds in total)
• Constructing public and private hospitals (approximately 11,500 beds in total)
• Opening 750,000 Primary Healthcare Centers (PHCs), along with 86 reference
centers with integrated PHC services.
1.2 Economic Landscape
The economy expanded along with the establishment and development of Saudi Arabia
during the last 50 years. Saudi Arabia’s economy was mostly dependent on agriculture until
the 1930s (Library of Congress, 2012a).
Later, Saudi Arabia came into existence when a number of diverse areas of the peninsula
were unified to form Saudi Arabia in 1932. The major breakthrough in the economy came six
years later when oil was discovered in the eastern province in 1938. The formation of the
Arabian American Oil Company (Aramco) and the establishment of oil towns around the oil
fields brought about tremendous changes in the economy (Library of Congress, 2012a).
The discovery of oil brought about huge employment opportunities. Modern ports, roads,
housing, power plants and water systems were constructed. This opened new economic
opportunities on a greater scale, which was unexpected by the local merchants and
contractors. Aramco provided technical, financial, and logistical support to local entrepreneurs
to encourage their involvement in the oil industry. The discovery of oil ended Saudi Arabia’s
isolation and introduced various new ways to organize the production and distribution of goods
and services.
After World War II, Europe needed cheap and reliable sources of oil. Saudi Arabia provided
this. This greatly enhanced the position of Saudi Arabia, establishing it as a major source of
oil in the international market. These events formed the basis of the current scenario of the
Saudi economy (Library of Congress, 2012b).
In October 1973, the Organization of Petroleum Exporting Countries (OPEC), led by Saudi
Arabia and other Arab oil exporting countries, decided to impose an oil embargo on the US
because of its support for Israel. The Arab nations decided to cut back the monthly production
by 5%, causing oil and gasoline shortages in the US (JES, 2008).

In December 1973, OPEC increased the price of a single barrel of oil by up to four times as
much as the original price, to $11.65 per barrel. OPEC controlled the oil price and was
gradually increasing it. A barrel, which was priced approximately $2.8 in mid-1973, was priced
at $26 per barrel in 1979 and later increased to $38 per barrel in 1981. Prices were expected
to increase even further. During the 1973–1980 period, oil revenue jumped from $4.3 billion
to $101.8 billion, which gave Saudi officials the means to make major structural reforms and
changes in the economy (Library of Congress, 2012c).
During the early 1980s, the oil demand decreased globally while non-OPEC production
increased, due to which OPEC had to cut its output significantly to defend its official price.
This had a major effect on Saudi Arabia as it was a swing producer and had to bear most of
the production cuts from almost 10 million barrels per day (mmbd) to 2.3mmbd by August
1985. Saudi Arabia’s oil revenues fell by 75% as its market share dwindled. It warned other
OPEC and non-OPEC countries that it would not accept the loss of market share neither
would it tolerate increased production by the non-OPEC countries. But none of the warnings
by Saudi Arabia were paid heed to. Finally, Saudi Arabia decided to act. It increased
production, causing global oil prices to collapse in January 1986. The world oil price fell to
below $9 a barrel and caused turmoil in the oil industry (Brown, 2006).
The government started the five-year development plans to use its petroleum income to
transform its oil-based economy into a modern industrial state, while maintaining traditional
Islamic values and customs. In spite of this, it maintained its dependence on petroleum
revenue (Brown, 2006).
The first two development plans covered the 1970s and their target was to improve
infrastructure. The Third Development Plan (1980–1985) emphasized improving the
education, health and social service sectors. The Fourth Development Plan (1985–1990)
encouraged the setting up of private enterprises. Foreign investment in the form of joint
ventures with Saudi companies, whether public or private, was welcomed. The main objective
was to allow private firms to have 70–80% ownership in joint ventures.
The Fifth Development Plan (1990–95) focused on Saudi Arabia’s defenses and creating
employment opportunities in the private sector for Saudi nationals. The Sixth Development
Plan (1996–2000) and the Seventh Development Plan (2000–2004) emphasized diversifying
economic activity by focusing more on agriculture and industry and reducing Saudi Arabia’s
dependence on petroleum. It also aimed to have a GDP growth rate of 3.16% and focused on
increasing the Saudi workforce by creating around 800,000 new jobs.
The Eighth Development Plan (2005–2010) primarily focused on economic diversification.
New universities and colleges were also established. King Abdullah University of Science and
Technology (KAUST) was the first co-ed university. It was established in 2009 and hoped that
a mixed-gender center will help modernize the conservative society. In 2008, Saudi Arabia,
along with the rest of the world, was hit by the financial crisis. But Saudi Arabia was not
severely affected as it had a huge account surplus, by which it was able to adjust the fiscal
policy and provide stimulus to counter the effects of the recession. Due to these policies and
the stimulus provided by the government, Saudi Arabia was able to slowly recover and posted
a GDP growth of 0.6% in 2009, despite a sharp drop in oil prices. During the financial crisis,
the decline in exports restrained growth, but the internal oil demand increased in 2008 and
2009, indicating that the economy was still growing and not severely affected by the crisis.

In response to global financial uncertainty and the economic downturn in late-2008, the
government took many austerity measures to cushion the impact of the global financial crisis
on Saudi Arabia, which mainly involved lowering the reserve requirements, cutting policy rates
and providing liquidity and deposit guarantees. The banking system was not affected by the
global crisis and remained profitable (World Bank, 2010).
The stimulus packages and tax reliefs for various sectors resulted in increased demand and
public expenditure and helped create employment. Measures to enhance liquidity and
monetary policies have stabilized the economy, and the GDP growth reached approximately
4.76% in 2010 (IMF, 2016a).
The Ninth Development Plan (2010–2014) mainly focused on eliminating poverty and
increasing the development of infrastructure, medical services and education along with
residential housing. The plan also aimed at increasing the employment ratio of Saudis in the
private sector. The Hafiz Program, which gives a monthly allowance of SAR2,000 ($533.2) to
the unemployed, was started by the Saudi government to support unemployed youths.
One of the priorities of the government was diversifying the economy so as to decrease its
dependence on oil resources. The government planned to invest more on infrastructure and
manpower development along with non-oil sectors for increasing long-term growth. The most
prominent feature of the plan was that it is based on the principles of the market economy
while the private sector plays a major part in the national economy.
The main goals of the Ninth Development Plan were:
• Achieve an average annual GDP growth rate of 5.2%, which would result in an
increase in GDP per capita from $14,550 in 2009 to $23,519 in 2014
• Achieve an average annual growth of 10.4% in total investment in gross fixed capital
formation so as to increase its share in GDP to 39% by the end of the plan
• Increase the growth in exports of merchandises and services by up to 47.5% annually
by the end of the plan
• Increase merchandise and service imports at an average annual rate of 7.7%
• Increase non-oil exports at an average annual rate of 10%
• Increase the national labor force (Saudization) by creating nearly 1 million job
opportunities for Saudis (in 2013, the government introduced Nitaqat Law, according
to which, private organizations should reserve 10% of their jobs for Saudi nationals)
• Reduce the unemployment rate among indigenous Saudis from 9.6% in 2009 to 5.5%
in 2014
On December 26, 2011, the Ministry of Finance presented the deficit free budget for the
financial year 2012. The main focus areas of the budget were education, health, social
services, security services and the development of infrastructure.
The deficit free budget was mainly due to a decrease in inflation, an effective taxation system,
an increase in FDI and the consistent performance of the economy. In the light of improving
growth prospects and sound economic performance, major rating agencies upgraded their
ratings for Saudi Arabia. Standard and Poor’s gave Saudi Arabia a credit rating of A- (cutting
two notches from A+) and a stable outlook, pointing out Saudi Arabia’s financial stability (FT,
2016). Saudi Arabia’s credit rating was downgraded by Fitch after the plunge in oil prices and

was lowered by one level to AA- (FitchRatings, 2016). Moody’s gave Saudi Arabia an Aa3
rating and kept it on review for downgrade (Moody’s, 2016). This gives foreign investors a
clear perspective of Saudi Arabia, allowing them to measure it in terms of risk and revenue.
Oil revenue accounted for 73% of total revenue in 2015, compared with 87.5% in 2014, declining by
23% from $210.4 billion to $118.5 billion. The shale revolution (excess of oil production from the US),
the rising US dollar, OPEC’s decision not to cut production and Iran’s return to the oil market after
the lifting of nuclear sanctions caused oil prices to fall to below $30 per barrel in January 2016. This
was the lowest oil price recorded since December 2003. OPEC has the authority to control the
majority of the oil supply and tends to increase production when prices are high and decrease
production when prices are low. Even though US producers were hit by the crisis, they survived by
reducing costs. Another major reason for the decline in revenue was that production did not
translate into exports against rising rates of domestic consumption. Saudi Arabia thus witnessed a
huge drop in oil revenue in 2015, the largest after 1973 and 1980.
According to the International Energy Agency (IEA) Medium Term Market Report 2016, Saudi’s oil
exports to US declined from 1.191mmbd in 2014 to 1.045mmbd in 2015, and have continuously
declined since peaking in 2012 at 1.396mmbd. The decline in imports to China as a result of
competition from Russia, Oman and Iraq has also affected the Saudi economy. Even though Chinese
oil demand increased by 16.7% from 9.6 million in 2012 to 11.2 million in 2015, Saudi’s share of
imports dropped from 20% in 2012 to 15% in 2015.
Saudi Arabia, Venezuela, Qatar and Russia are in discussions to freeze oil production. Brent crude
was trading at $45.5 per barrel in May 2016, and the aim of these discussions is to achieve a price of
at least $50 per barrel in 2017. These discussions are in the initial stages, and Saudi Arabia is unlikely
to cut production, which is evident in the fact that Saudi Arabia produced 10.22mmbd in Q1 2016,
compared with 10.17mmbd in 2015. Increased output allowed Saudi to export more, and exports
thus peaked in Q4 2015 at 7.01mmbd. Along with exports, domestic demand also increased, from
3.27mmbd in 2015 to 3.31mmbd in 2016. Low oil prices created an optimistic market for importers.
The oil market is uncertain in 2016, although there is an increase in imports by Asian countries,
including India, South Korea and Indonesia, whereas imports have decreased in Brazil, Japan and
France due to reductions in subsidies and concerns about air pollution.
Saudi Arabia saw an economic downturn due to declined oil revenue from mid-2014.
Overdependence on oil has affected the country’s economy, and GDP declined by 13.3% in
2015 and is estimated to decline by 5.3% in 2016. GDP was $653.2 billion at current prices
in 2015 and is expected to reach $778.2 billion in 2020 (IMF, 2016b). The main reasons for
the decline are reduced oil prices and a decline in exports to the US and China.
In April 2016, Deputy Crown Prince Mohammed bin Salman announced Saudi Vision 2030, a
guide for the National Transformation Program. Saudi Vision 2030 is a 15-year blueprint
focusing on economic reforms. The main elements of the plan are:
• Selling about 5% of Aramco and investing the money in a public investment fund
• Privatizing sectors of the economy, including airports, education and healthcare
• Creating the world’s largest wealth fund to hold state assets, including Aramco and
real-estate
• Setting up a holding company by the end of 2017 for defense industries and
restructuring several contracts to reduce spending in the defense industry

• Increasing the contribution of small and medium enterprises to total revenue from the
current 20% to 35% and increasing non-oil revenue from the current SAR163 billion
($43.3 billion) to SAR1 trillion ($266.6 billion)
• Reducing unemployment from 11.6% to 7% among Saudis
• Reducing the subsidies on electricity and water, which are heavily subsidized for
domestic consumers
• Establishing councils for political and security affairs and economic and development
affairs
• Allowing expatriates to own property in selected areas and simplifying the visa
process
A green card system is to be launched within five years to allow expatriate Arabs and Muslims
to live and work in the country. Saudi Arabia also aims to raise the home ownership rate from
47% in 2015 to 52% by 2020.
The government is currently operating its 10th Development Plan (2015–2019), which aims
at increasing the contribution to GDP of the private sector and small and medium enterprises.
The main objectives of the 10th Development Plan are:
• Introducing new programs and projects to increase the value of oil and gas resources
in all production activities and promote industries through these resources
• Increasing the value of non-oil sectors by an average of 8.5% of GDP annually and
its share from 59.1% in 2014 to 66% in 2019
• Increasing the private sector share in GDP from 44.9% in 2014 to 50.6% in 2019
• Increasing the annual growth rate of the manufacturing industries sector from 8.36%
in 2014 to 10.58% in 2019 and of the mining and quarrying sector from 5.98% to
8.56%
• Increasing public investment by about SAR2.4 trillion ($639.8 billion) to finance
development projects in the major sectors, including human resources, economic
resources, social and health, and infrastructure
• Spending SAR372 billion ($99.1 billion) on infrastructure, which is about 76% more
than what was allocated in the previous five-year plan
In December 2014, the government announced its budget for 2015. It has given priority to
defense and national security and human resource development, allotting these sectors $80.7
billion and $55.7 billion, or 35.4% and 24.5% of the proposed budget, respectively. The
planned government expenditure on health services and social development was $20.8
billion, an increase of 10.1% over 2014. This was directed towards constructing new hospitals
and reference laboratories for blood banks, medical centers and polyclinics, as well as social
development projects, such as sport clubs and rehabilitation centers.
1.3 Economic Indicators
1.3.1 Gross Domestic Product
1.3.1.1 GDP per Capita

GDP refers to the market value of all goods and services produced within a country during a
given period. It is often considered as an indicator of the standard of living of a country. In
2008, Saudi Arabia recorded GDP per capita (at current price) of $20,157. It increased
steadily to $24,499 in 2014 and declined to $20,812 in 2015. Between 2008 and 2015, it
decreased at a CAGR of 0.46%. The International Monetary Fund (IMF) forecasts that GDP
per capita (at current prices) will reach $21,202 in 2017 and $21,823 in 2019 and, based on
this trend, increase further to an estimated $22,459 in 2020 (IMF, 2016c).
Figure 1: Economic Indicators, Saudi Arabia, Gross Domestic Product per Capita ($), 2008–2015
Table 1: Economic Indicators, Saudi Arabia, Gross Domestic Product per Capita ($), 2008–
2015
2008 2009 2010 2011 2012 2013 2014 2015
GDP per capita 20,157 16,095 19,113 23,594 25,139 24,816 24,499 20,812
Source: IMF, 2016c
Figure 2: Economic Indicators, Saudi Arabia, Gross Domestic Product per Capita ($), 2016–2020

Source: IMF, 2016c
Table 2: Economic Indicators, Saudi Arabia, Gross Domestic Product per Capita ($), 2016–
2020
2016 2017 2018 2019 2020
GDP per capita 19,313 20,202 21,006 21,823 22,459
Source: IMF, 2016c
1.3.1.2 Annual Change in GDP
The growth rate of GDP was 5.4% in 2012 and 3.4% in 2015. The reason for this decline was
the fall in oil revenue, which declined by 23% from $210.4billion in 2014 to $118.5 billion in
2015. In 2008, the annual growth rate of GDP (at constant price) was 6.3%. It declined in
2009 to a negative value of 2.1%. The decline in the annual growth rate was primarily due to
the global economic crisis. It recovered significantly and reached 4.8% in 2010, owing to a
rise in oil prices. It is estimated that the annual growth rate of GDP will reach 2.1% in 2020
(IMF, 2016b). The uncertainty in the growth of GDP is mainly due to the overdependence of
the economy on the oil industry and the high level of imports of essential items such as
machinery, vehicles, food products, pharmaceuticals and medical devices.

Figure 3: Economic Indicators, Saudi Arabia, Gross Domestic Product Annual Growth (%),
2008–2015
Source: IMF, 2016b
Table 3: Economic Indicators, Saudi Arabia, Gross Domestic Product Annual Growth (%),
2008–2015
2008 2009 2010 2011 2012 2013 2014 2015
GDP annual growth 6.3 -2.1 4.8 10.0 5.4 2.7 3.6 3.4
Source: IMF, 2016b
Figure 4: Economic Indicators, Saudi Arabia, Gross Domestic Product Annual Growth (%),
2016–2020

Source: IMF, 2016b
Table 4: Economic Indicators, Saudi Arabia, Gross Domestic Product Annual Growth (%),
2016–2020
2016 2017 2018 2019 2020
GDP annual growth 1.2 1.9 2.3 2.3 2.1
Source: IMF, 2016b
1.3.2 Gross National Income
Gross National Income (GNI) per capita is a key economic indicator and directly reflects the
economic prowess of a country. The GNI per capita (calculated by the Atlas method) of Saudi
Arabia increased from $18,380 in 2008 to $28,495 in 2015 at a CAGR of 6.5% (World Bank,
2015c).
Figure 5: Economic Indicators, Saudi Arabia, Gross National Income per Capita ($), 2008–
2015

Source: World Bank, 2015c
Table 5: Economic Indicators, Saudi Arabia, Gross National Income per Capita ($), 2008–
2015
2008 2009 2010 2011 2012 2013 2014 2015
GNI per capita 18,380 17,940 18,470 20,450 23,690 25,140 26,765 28,495
Source: World Bank, 2015c
1.3.3 Inflation
1.3.3.1 Consumer Price Index
The Consumer Price Index (CPI) is defined as the changes measured in the price level of
consumer goods and services purchased by households. The annual percentage change in
CPI is used as a measure of inflation. In 2008, Saudi Arabia reported annual CPI of 106.1.
The CPI for 2013 averaged 126.7, and for 2015 it averaged 132.9. The continuous increase
in CPI indicates the acceleration of prices for goods and services (IMF, 2016d).
The IMF forecasts that the CPI will reach 139.9 in 2017 and 148.0 in 2019 and, based on this
trend, increase further to an estimated 152.3 in 2020.

Figure 6: Economic Indicators, Saudi Arabia, Average Consumer Price Index, 2008–2015
Source: IMF, 2016d
Table 6: Economic Indicators, Saudi Arabia, Average Consumer Price Index, 2008–2015
2008 2009 2010 2011 2012 2013 2014 2015
Average CPI 106.1 110.5 114.7 119 122.4 126.7 130.1 132.9
Source: IMF, 2016d
Figure 7: Economic Indicators, Saudi Arabia, Average Consumer Price Index, 2016–2020

Source: IMF, 2016d
Table 7: Economic Indicators, Saudi Arabia, Average Consumer Price Index, 2016–2020
2016 2017 2018 2019 2020
Average CPI 136.0 139.9 143.9 148.0 152.3
Source: IMF, 2016d
1.3.3.2 Annual Change in Consumer Price
The annual change in average consumer price was 2.1% in 2015 (IMF, 2016e). The global
recession of 2008–2009 was primarily responsible for the slowdown in the growth of prices
as it resulted in a contraction in consumer demand.

Figure 8: Economic Indicators, Saudi Arabia, Consumer Price Annual Change (%), 2008–
2015
Source: IMF, 2016e
Table 8: Economic Indicators, Saudi Arabia, Consumer Price Annual Change (%), 2008–2015
2008 2009 2010 2011 2012 2013 2014 2015
Price change 6.1 4.1 3.8 3.7 2.9 3.5 2.7 2.1
Source: IMF, 2016e
1.3.4 Currency Exchange Rate
The currency exchange rate is one of the most important determinants for Saudi Arabia’s
relative level of economic health. Exchange rates play an important role in Saudi Arabia’s
level of trade, and because of this exchange rates are the most watched and analyzed
economic measures. The Saudi Arabian Riyal (SAR) was valued 3.5 per US dollar in 2008.
From 2008 to 2015, the average value of SAR1 was $3.75053.

Figure 9: Economic Indicators, Saudi Arabia, Currency Exchange Rate (SAR/$), 2008–2015
Source: OANDA, 2016
Table 9: Economic Indicators, Saudi Arabia, Currency Exchange Rate (SAR/$), 2008–2015
2008 2009 2010 2011 2012 2013 2014 2015
Currency exchange
rate
3.7513 3.7504 3.7503 3.7503 3.7502 3.7503 3.7509 3.7512
Source: OANDA, 2016
1.3.5 Foreign Direct Investment
Saudi Arabia reported FDI of $39.5 billion in 2008. It declined to $29.2 billion in 2010 and later
fell drastically to $8 billion in 2014 (World Bank, 2015d). The decline in 2010 was due to the
global economic crisis, and FDI is still falling. Political changes, reduced access to credit and
the Saudization policy, which was introduced in 2011, have favored the domestic labor force
and acted as an obstacle to FDI.
The sharp fall in oil prices in mid-2014 have had an impact on foreign investment, mainly in
construction and the oil and gas sectors. Aramco suspended its plan to build a $2 billion clean
fuel plant at its largest oil refinery in Ras Tanura, January 2015, and Saudi Arabia cut its
capital expenditure by 25% in the 2015 budget (UNCTAD, 2015).

Figure 10: Economic Indicators, Saudi Arabia, Foreign Direct Investment ($bn), 2008–2014
Source: World Bank, 2015d
Table 10: Economic Indicators, Saudi Arabia, Foreign Direct Investment ($bn), 2008–2014
2008 2009 2010 2011 2012 2013 2014
FDI 39.5 36.5 29.2 16.3 12.2 8.9 8.0
Source: World Bank, 2015d
1.3.6 Foreign Exchange Reserves
Foreign exchanges (forex) reserves are foreign currency deposits held by the central bank
and monitory authorities, including gold and special drawing rights. Forex reserves are used
to back a country’s liabilities. The foreign exchange reserves of Saudi Arabia were $744.4
billion in 2014. In 2008, the foreign exchange reserves of Saudi Arabia were $451.3 billion.
They increased to $459.3 billion in 2010. However, in 2009, Saudi Arabia reported a slight
decline in forex reserves to approximately $420 billion, mainly due to the global economic
crisis, but they had increased to $673.7 billion by the end of 2012. The increase in forex
reserves is an indicator of the country’s ability to repay external debt and control the currency
rate (World Bank, 2015e).

Figure 11: Economic Indicators, Saudi Arabia, Foreign Exchange Reserves ($bn), 2008–2014
Source: World Bank, 2015e
Table 11: Economic Indicators, Saudi Arabia, Foreign Exchange Reserves ($bn), 2008–2014
2008 2009 2010 2011 2012 2013 2014
Forex reserves 451.3 420.1 459.3 556.6 673.7 737.7 744.4
Source: World Bank, 2015e
1.3.7 Trade Balance
1.3.7.1 Imports of Goods and Services
In 2008, imports amounted to $176.7 billion. They fell to $162 billion in 2009 but later rose to
$215.2 billion in 2012. In 2014, they were estimated at $255.4 billion. The major import trading
partners were China, Japan, Germany, France and the US. The commodities imported were
mainly machinery, equipment, vehicles, medicines, chemicals, cigarettes and meat (World
Bank, 2015f).

Figure 12: Economic Indicators, Saudi Arabia, Imports of Goods and Services ($bn), 2008–
2014
Source: World Bank, 2015f
Table 12: Economic Indicators, Saudi Arabia, Imports of Goods and Services ($bn), 2008–
2014
2008 2009 2010 2011 2012 2013 2014
Imports 176.8 162.1 174.2 197.9 215.2 230.0 255.4
Source: World Bank, 2015f
1.3.7.2 Exports of Goods and Services
In 2008, exports were valued at $322.8 billion. In 2009, they declined significantly to $202
billion. They were valued at $262 billion in 2010. They rose continuously and reached $399.4
billion at the end of 2012. They were estimated to be $354.5 billion in 2014. Saudi Arabia’s
major export trading partners were Japan, China, the US, Canada and Spain. Exports from
Saudi Arabia are mainly oil and mineral products, chemicals and plastics (World Bank,
2015g).

Figure 13: Economic Indicators, Saudi Arabia, Exports of Goods and Services ($bn), 2008–
2014
Source: World Bank, 2015g
Table 13: Economic Indicators, Saudi Arabia, Exports of Goods and Services ($bn), 2008–
2014
2008 2009 2010 2011 2012 2013 2014
Exports 322.8 202.1 261.9 376.2 399.4 387.6 354.5
Source: World Bank, 2015g
1.3.8 Fiscal Surplus/Deficit
The budget surplus of the government was $180.4 billion in 2012, having decreased to $155.1
billion in 2008.
Figure 14: Economic Indicators, Saudi Arabia, Budget Surplus/Deficit ($bn), 2008–2014

Source: SAMA, 2015
Table 14: Economic Indicators, Saudi Arabia, Budget Surplus/Deficit ($bn), 2008–2014
2008 2009 2010 2011 2012 2013 2014
Budget surplus/deficit 35.1 -5.2 5.3 65.7 84.5 40.8 -14.8
Source: SAMA, 2015
1.3.9 General Government Gross Debt
The general government gross debt was 5.8% of GDP in 2015, having decreased by 10% of
GDP from 2008 (IMF, 2016f).
Figure 15: Economic Indicators, Saudi Arabia, General Government Gross Debt (% of GDP),
2008–2015

Source: IMF, 2016f
Table 15: Economic Indicators, Saudi Arabia, General Government Gross Debt (% of GDP),
2008–2015
2008 2009 2010 2011 2012 2013 2014 2015
Gross debt 12.1 14.0 8.4 5.4 3.6 2.2 1.6 5.8
Source: IMF, 2016f
1.3.10 Major Industries
Industrialization is a relatively recent event in Saudi Arabia but is developing steadily due to
the initiatives being taken by the government to achieve its strategic and economic goals.
The major industrial sectors in 2015 were mining and quarrying, manufacturing, finance,
insurance, real estate and business services, wholesale and retail trade, restaurants and
hotels and construction (CDSI, 2016).
Mining and quarrying is the industry that has contributed the most to the growth of the
economy. It includes crude oil and natural gas mining and quarrying activities. The GDP of
mining and quarrying was $169.1 billion in 2015, having decreased from $301.3 billion in
2014.

The GDP of the manufacturing sector was $79.9 billion in 2015, having increased from $81.6
billion in 2014.
Oil is the most important export item and has a major impact on the economy. Any change in
oil prices and production affects the current account of Saudi Arabia. The oil revenue of the
country declined by 23% from $210.4billion in 2014 to $118.5 billion in 2015.
The OPEC is a permanent, intergovernmental organization whose objective is to co-ordinate
and unify the petroleum policies of member countries, in order to secure fair and stable prices
for petroleum producers; an efficient, economic and regular supply of petroleum to consuming
nations; and a fair return on capital to those investing in the industry. Saudi Arabia was among
the founding members of OPEC in 1960, along with Iraq, Iran, Venezuela and Kuwait.
Saudi Arabia is making efforts to diversify the economy and reduce its dependence on oil
exports.
Figure 16: Economic Indicators, Saudi Arabia, GDP of Major Industrial Sectors ($bn), 2014–
2015
Source: CDSI, 2016

Table 16: Economic Indicators, Saudi Arabia, GDP of Major Industrial Sectors ($bn), 2014–
2015
Sector 2014 2015
Mining and quarrying 301.3 169.1
Manufacturing 81.6 79.9
Finance, business, real estate, insurance 78.1 82.1
Wholesale and retail trade: restaurants and hotels 71.1 75.3
Construction 40.8 44.7
Source: CDSI, 2016
1.4 Demographics
1.4.1 Population
The population of Saudi Arabia was estimated at 31.5 million in 2015, having grown at an annual rate
of 3%. Some 32.1% of the population are non-Saudi people. The non-Saudi nationals are mostly
immigrant workers from South Asia and other Muslim countries. The population density was 14.3 per
square kilometer in 2014 (World Bank, 2015h). The total population is expected to reach 34.9 million
in 2020, growing at a CAGR of 3% (MoH, 2008; MoH, 2009; MoH, 2010; MoH, 2011; MoH, 2012;
MoH, 2013; MoH, 2014)
Figure 17: Demographics, Saudi Arabia, Population (million), 2008–2015

Source: MoH, 2008; MoH, 2009; MoH, 2010; MoH, 2011; MoH, 2012; MoH, 2013; MoH, 2014
Table 17: Demographics, Saudi Arabia, Population (million), 2008–2015
2008 2009 2010 2011 2012 2013 2014 2015
Population 24.8 25.3 27.1 28.3 29.2 30.0 30.8 31.5
Figure 18: Demographics, Saudi Arabia, Population (million), 2016–2020

Table 18: Demographics, Saudi Arabia, Population (million), 2016–2020
2016 2017 2018 2019 2020
Population 32.2 32.9 33.7 34.3 34.9
1.4.1.1 Urban-Rural Share
An estimated 81.9% of the population was urbanized in 2015. The urbanization rate grew at a CAGR
of 0.3% from 2008 to 2015. It is estimated that the share of the urban population will reach 83% by
2020. The major urban cities of Saudi Arabia are Riyadh, Jeddah, Mecca, Medina, Dammam and Taif.
The major reasons for urbanization are high-employment opportunities and good standard of living
in urban areas and rapid development in peripheral areas surrounding metropolitan and large cities.
Figure 19: Demographics, Saudi Arabia, Urban and Rural Population Share (%), 2008–2015
Source: World Bank, 2015i; World Bank, 2015j

Table 19: Demographics, Saudi Arabia, Urban and Rural Population Share (%), 2008–2015
Population 2008 2009 2010 2011 2012 2013 2014 2015
Urban 81.6 81.9 82.1 82.3 82.5 82.7 82.9 81.9
Rural 18.4 18.1 17.9 17.7 17.5 17.3 17.1 18.1
Figure 20: Demographics, Saudi Arabia, Urban and Rural Population Share (%), 2016–2020

Table 20: Demographics, Saudi Arabia, Urban and Rural Population Share (%), 2016–2020
Population 2016 2017 2018 2019 2020
Urban 82.1 82.3 82.5 82.7 82.9
Rural 17.9 17.7 17.5 17.3 17.1
1.4.1.2 Distribution by Age Groups
Age distribution differs among the countries mainly because of the variation in birth rate and
life expectancy. Due to a decrease in the birth rate since the last decade and increasing life
expectancy, Saudi Arabia reported a steady increase in the working age population. Children
below 15 and elderly people aged 65 years or above come under the group of dependants.
Approximately 2.9% of the total population belonged to the elderly group in 2015. It is
estimated that the percentage of the working age population will reach 70.4% by 2020 (MoH,
2014). In Saudi Arabia, the working age population represents a greater part of the total
population than in the US and Japan. To capitalize on this, the government is currently
focusing on the development of human capital by spending on health and education.
Figure 21: Demographics, Saudi Arabia, Population Distribution by Age Group (%), 2008–
2015

Table 21: Demographics, Saudi Arabia, Population Distribution by Age Group (%), 2008–2015
Age group 2008 2009 2010 2011 2012 2013 2014 2015
0–14 32.3 32.0 31.7 31.4 30.4 30.8 29.5 29.1
15–64 65.0 65.2 65.5 65.7 66.9 66.2 67.6 68.1
> 64 2.8 2.8 2.8 2.9 2.7 3.0 2.9 2.9
Figure 22: Demographics, Saudi Arabia, Population Distribution by Age Group (%), 2016–
2020

Table 22: Demographics, Saudi Arabia, Population Distribution by Age Group (%), 2016–2020
Age group 2016 2017 2018 2019 2020
0–14 28.6 28.2 27.8 27.4 27.0
15–64 68.5 69.0 69.5 69.9 70.4
> 64 2.9 3.0 3.0 3.0 3.0
1.4.1.3 Birth Rate
The birth rate gives the average annual number of births during a particular reference year,
also known as the crude birth rate, and the result is generally expressed per 1,000 population.
The birth rate is usually the dominant factor in determining the rate of population growth. The
birth rate has decreased from 24.1 per 1,000 population in 2008 to an estimated 22.0 per
1,000 population in 2014 at a CAGR of 1.8%.
Figure 23: Demographics, Saudi Arabia, Births (per 1,000 population), 2008–2014

Table 23: Demographics, Saudi Arabia, Births (per 1,000 population), 2008–2014
2008 2009 2010 2011 2012 2013 2014
Births 24.1 23.7 23.3 22.9 22.5 22.0 22.0
1.4.1.4 Mortality
Mortality is defined as the number of deaths in a particular geography in a given time period.
The mortality rate was 3.9 per 1,000 population in 2008 and 2014. The decrease in the
mortality rate indicates the gradual improvements of healthcare facilities and standards of
living.
Figure 24: Demographics, Saudi Arabia, Mortality (per 1,000 population), 2008–2014

Table 24: Demographics, Saudi Arabia, Mortality (per 1,000 population), 2008–2014
2008 2009 2010 2011 2012 2013 2014
Mortality 3.9 3.9 3.9 3.9 3.8 3.8 3.9
1.4.1.5 Causes of Mortality
The major causes of death in 2013 were diseases of the circulatory system, injury, poisoning and
external causes and neoplasms. The number of deaths caused by diseases of the circulatory system
was due to the sedentary lifestyle and lack of physical activity, along with the high intake of food that
is rich in cholesterol (MoH, 2014).
Figure 25: Demographics, Saudi Arabia, Major Causes of Mortality, 2013
Source: MoH, 2014

Table 25: Demographics, Saudi Arabia, Major Causes of Mortality, 2013
Disease Mortality
Diseases of circulatory system 15,621
Injury, poisoning and external causes 9,890
Neoplasms 4,023
Diseases of respiratory system 3,388
Conditions originating in the prenatal period 3,110
Diseases of genitourinary system 2,920
Infectious and parasitic diseases 2,902
Congenital anomalies 2,088
Endocrine nutrition metabolic diseases 1,963
Disease of digestive system 1,891
Source: MoH, 2014
1.4.1.6 Health Status by Gender and Age
Mortality Rate of Children under Five
The under-five mortality rate is defined as the probability per 1,000 that a newborn baby will
die before reaching the age of five, if subjected to the current age-specific mortality rates. In
2008, the mortality rate of children under five years of age was 12.9 per 1,000 live births, but
at the end of 2013 the mortality rate fell to 8.6 per 1,000 live births (MoH, 2014). The maternal
mortality rate was 14 per 100,000 live births in 2012 (MoH, 2014).
Figure 26: Demographics, Saudi Arabia, Mortality Rate of Children under Five (per 1,000 live
births), 2008–2014

Source: MoH, 2014
Table 26: Demographics, Saudi Arabia, Mortality Rate of Children under Five (per 1,000 live
births), 2008–2014
2008 2009 2010 2011 2012 2013 2014
Mortality 12.9 11.8 10.8 9.9 9.2 8.6 7.9
Source: MoH, 2014
Immunization
Immunization provides people with protection against serious diseases. The vaccination rate
for Diphtheria, Pertussis and Tetanus (DPT) and measles in the population aged 12 to 23
months was 98.1% and 97.1%, respectively, in 2014 (MoH, 2014).
Figure 27: Demographics, Saudi Arabia, Immunization Rate (%), 2008–2014

Source: MoH, 2014
Table 27: Demographics, Saudi Arabia, Immunization Rate (%), 2008–2014
2008 2009 2010 2011 2012 2013 2014
DPT 97.6 98 98 98 98.1 98.3 98.1
Measles 97.8 97.9 98.2 98.2 98.3 98.5 97.1
Source: MoH, 2014
Causes of Mortality in Males
Ischemic heart disease, hypertensive heart disease and road traffic accidents were the major
causes of deaths in males in 2008. The total number of male deaths due to ischemic heart
disease was approximately 16,000.
Figure 28: Demographics, Saudi Arabia, Major Causes of Male Mortality (‘000), 2008

Source: WHO, 2011
Table 28: Demographics, Saudi Arabia, Major Causes of Male Mortality (‘000), 2008
Causes of mortality Mortality
Ischemic heart disease 16
Hypertensive heart disease 6
Road traffic accidents 4.2
Other unintentional injuries 3.4
Cerebrovascular disease 2.9
Lower respiratory infections 2.4
Prematurity and low birth weight 2.2
Nephritis and nephrosis 1.5
Drowning 1.3
Self-inflicted injuries 1.3
Source: WHO, 2011
Causes of Mortality in Females
Ischemic heart disease is the leading cause of death in females. In 2008, 4,900 women died
due to ischemic heart disease. Hypertensive heart disease was the second-leading cause of

death for females, accounting for 4,700 deaths in 2008. The other major causes of mortality
were cerebrovascular disease and lower respiratory infections, with 1,900 and 1,800 deaths,
respectively (WHO, 2011).
Figure 29: Demographics, Saudi Arabia, Major Causes of Female Mortality (‘000), 2008
Source: WHO, 2011

Table 29: Demographics, Saudi Arabia, Major Causes of Female Mortality (‘000), 2008
Causes of mortality Mortality
Ischemic heart disease 4.9
Hypertensive heart disease 4.7
Cerebrovascular disease 1.9
Lower respiratory infections 1.8
Prematurity and low birth weight 1.7
Nephritis and nephrosis 1.1
Road traffic accidents 1.0
Breast cancer 0.7
COPD 0.5
Source: WHO, 2011
1.4.1.7 Gender Ratio
The male population is higher than the female population, but the trend indicates a slight
decrease in the gender ratio, from 1.23 in 2008 to 1.20 in 2014.
Figure 30: Demographics, Saudi Arabia, Gender Ratio (M/F), 2008–2014

Source: MoH, 2013
Table 30: Demographics, Saudi Arabia, Gender Ratio (M/F), 2008–2014
2008 2009 2010 2011 2012 2013 2014
Gender ratio 1.23 1.22 1.22 1.21 1.21 1.20 1.20
Source: MoH, 2013
1.4.1.8 Life Expectancy
Life expectancy at birth is defined as the average equivalent number of years of full health a
newborn is expected to live. The life expectancy of females in Saudi Arabia is higher than that
of males. Life expectancy has increased with the improvement in healthcare services. The
average life expectancy at birth for men was 73.1 years in 2014, and for women it was 75.6
years (MoH, 2014). The average life expectancy at birth for men and women is forecast to
reach 73.7 and 76.5 years, respectively, by 2020. The gradual increase in life expectancy is
one of the key contributing factors to the increasing elderly population and may be due to:
• Increasing standards of living
• Use of antibiotics and novel medicines to control the infant and child mortality rate
• Improved nutrition and housing facilities

• Increasing general awareness of health issues and support by the government
Figure 31: Demographics, Saudi Arabia, Life Expectancy at Birth (years), 2008–2014
Source: MoH, 2014
Table 31: Demographics, Saudi Arabia, Life Expectancy at Birth (years), 2008–2014
2008 2009 2010 2011 2012 2013 2014
Males 72.4 72.5 72.6 72.7 72.8 72.9 73.1
Females 74.5 74.7 74.9 75.1 75.2 75.4 75.6
Source: MoH, 2014
Figure 32: Demographics, Saudi Arabia, Life Expectancy at Birth (years), 2016–2020

Source: MoH, 2014
Table 32: Demographics, Saudi Arabia, Life Expectancy at Birth (years), 2016–2020
2016 2017 2018 2019 2020
Males 73.2 73.3 73.5 73.6 73.7
Females 75.8 76.0 76.2 76.3 76.5
Source: MoH, 2014
1.4.2 Education and Literacy
Literacy here can be defined as the ability to read, write and understand simple and short
sentences. The literacy rate in people aged 15 or above was 94.4% in 2013 (World Bank,
2015k). In 2008, approximately 6.2 million students were enrolled in school at the primary,
secondary or intermediate level. In 2014, it was 6.7 million, and approximately 1.5 million
students were enrolled in higher education (SAMA, 2010; SAMA, 2011; SAMA, 2012; SAMA,
2013; SAMA, 2014b)
Figure 33: Demographics, Saudi Arabia, Student Enrollment by Level of Education (million),
2008–2014

Source: SAMA, 2010; SAMA, 2011; SAMA, 2012; SAMA, 2013; SAMA, 2014b
Table 33: Demographics, Saudi Arabia, Student Enrollment by Level of Education (million),
2008–2014
2008 2009 2010 2011 2012 2013 2014
Primary 3.3 3.3 3.4 3.3 3.4 3.4 3.5
Intermediate 1.5 1.5 1.6 1.6 1.6 1.6 1.7
Secondary 1.4 1.4 1.5 1.5 1.2 1.4 1.5
Source: SAMA, 2010; SAMA, 2011; SAMA, 2012; SAMA, 2013; SAMA, 2014b
1.4.3 Employment
The unemployment rate increased from 5.2% in 2008 to 5.5% in 2014 (IMF, 2016g). The
unemployment rate of the indigenous population was 11.5% in 2013.
The number of non-Saudis working in the public sector was 73,827 at the end of 2013, the
majority of which were working in the healthcare sector. A large number of non-Saudis also
work in the education sector.

Figure 34: Demographics, Saudi Arabia, Unemployment Rate (%), 2008–2014
Source: IMF, 2016g
Table 34: Demographics, Saudi Arabia, Unemployment Rate (%), 2008–2014
2008 2009 2010 2011 2012 2013 2014
Unemployment rate 5.2 5.4 5.5 5.8 5.5 5.6 5.5
Source: IMF, 2016g
1.4.4 Disease Burden
In 2011, 10.3 million, 2.1 million and 1.9 million patients visited health centers for upper respiratory
tract infections, diseases of the musculoskeletal system and diabetes mellitus, respectively (MoH,
2012b).

Figure 35: Demographics, Saudi Arabia, Health Center Visits by Major Diseases (million),
2011
Source: MoH, 2012b
Table 35: Demographics, Saudi Arabia, Health Center Visits by Major Diseases (million), 2011
Major disease Health center visits
Upper respiratory tract infections 10.3
Diseases of the musculoskeletal system 2.1
Diabetes mellitus 1.9
Dental and gum diseases 1.5
Diseases of stomach, esophagus and intestine 1.5
Hypertension 1.3
Source: MoH, 2012b
Disability-Adjusted Life Years

Disability-Adjusted Life Years (DALY) is an integrated health measure used to express the
overall burden of a disease. DALYs provide information on quality and quantity of life. It gives
an indication of the potential number of healthy life years lost in a population due to premature
mortality or morbidity, the latter being weighted for the severity of the disorder. If everyone
were to live in full health throughout their maximum potential lifespan, the loss of DALYs would
be zero. According to the WHO DALY report for 2009, the highest rates of DALY per 1,000
population were for unintentional injuries and road traffic injuries (WHO, 2009).
Figure 36: Demographics, Saudi Arabia, DALYs by Major Diseases (per 1,000 population),
2009
Source: WHO, 2009
* Unintentional injuries excludes poisonings, falls, fires, road traffic accidents and drowning

Table 36: Demographics, Saudi Arabia, DALYs by Major Diseases (per 1,000 population),
2009
Disease DALYs
Road traffic injuries 4.1
Diarrhea 3.7
Cardiovascular diseases 3.1
Respiratory infections 1.8
Neuropsychiatric conditions 1.6
Other cancers 1.1
Asthma 0.8
Intentional injuries 0.7
Musculoskeletal diseases 0.6
COPD 0.3
Lung cancer 0.1
Source: WHO, 2009
* Unintentional injuries excludes poisonings, falls, fires, road traffic accidents and drowning
1.5 Healthcare Infrastructure
1.5.1 Healthcare Facilities
The government has given priority to the healthcare industry, and during the last decade there has
been a vast improvement in healthcare facilities and the quality of services. In 1925, the first public
health department was established in Mecca. It is responsible for monitoring free healthcare for the
population. The MoH is responsible for the maintenance and regulation of the healthcare
departments and monitored 259 hospitals (35,828 beds) and 2,259 PHCs in 2012 (MoH, 2013).
1.5.1.1 Public and Private Hospitals
In 2008, there were 393 hospitals in total, of which 270 were public and 123 were private. The
number of hospitals increased steadily, and, in 2013, 445 hospitals were reported, of which
259 were MoH hospitals and 39 hospitals were other governmental hospitals. In 2014, the
number of public hospitals was 312, and the number of private hospitals was 141 (MoH,
2013).
Figure 37: Healthcare Infrastructure, Saudi Arabia, Hospitals, 2008–2014

Source: MoH, 2013
Table 37: Healthcare Infrastructure, Saudi Arabia, Hospitals, 2008–2014
2008 2009 2010 2011 2012 2013 2014
Public 270 283 288 290 298 309 312
Private 123 125 127 130 137 136 141
Source: MoH, 2013
1.5.1.2 Hospitals by Standard of Care
The number of general hospitals was 214 in 2014. Of the specialty hospitals in Saudi Arabia,
most were psychiatric/convalescence hospitals (18), followed by Obstetric (OBS) and
pediatric hospitals (15) and convalescence hospitals (6) (MoH, 2013).
Figure 38: Healthcare Infrastructure, Saudi Arabia, Hospitals by Type of Care, 2014

Source: MoH, 2013
ENT: Ear, Nose and Throat
Table 38: Healthcare Infrastructure, Saudi Arabia, Hospitals by Type of Care, 2014
Hospitals by type of care Number
General 214
Psychiatric 18
OBS and gyn. and pediatric 15
Chest 4
Convalescence 6
Eye/ENT 4
Rehabilitation 3
Pediatric 3
OBS and gyn. 3
Source: MoH, 2013
1.5.1.3 Healthcare Centers
A PHC is the health unit of a district or the municipal health office for carrying out integrated
health programs. The main aim of the primary health center is to provide primary care services
that are both preventive and curative and refer cases that require more advanced care to

public hospitals. The number of PHCs was 1,986 in 2008 and gradually increased to 2,396 in
2014. The city of Riyadh had the highest number of PHCs, at 435 in 2012 (MoH, 2013).
Figure 39: Healthcare Infrastructure, Saudi Arabia, Primary Healthcare Centers, 2008–2014
Source: MoH, 2013
Table 39: Healthcare Infrastructure, Saudi Arabia, Primary Healthcare Centers, 2008–2014
2008 2009 2010 2011 2012 2013 2014
PHC 1,986 2,037 2,094 2,109 2,259 2,333 2.396
Source: MoH, 2013
1.5.2 Healthcare Parameters
1.5.2.1 Hospital-Beds-to-Population Ratio
Saudi Arabia had approximately 22.1 hospital beds per 10,000 population in 2014, a slight
increase from 21.7 per 1,000 population in 2008.

Figure 40: Healthcare Infrastructure, Saudi Arabia, Hospital Beds (per 10,000 population),
2008–2014
Source: MoH, 2013
Table 40: Healthcare Infrastructure, Saudi Arabia, Hospital Beds (per 10,000 population),
2008–2014
2008 2009 2010 2011 2012 2013 2014
Beds 21.7 22.0 21.4 20.7 20.9 21.4 22.1
Source: MoH, 2013
1.5.2.2 Doctors-to-Population Ratio
The number of physicians per 10,000 population was 26.5 in 2014, having increased from
21.5 per 10,000 population in 2008 at a CAGR of 3.5%.

Figure 41: Healthcare Infrastructure, Saudi Arabia, Doctors (per 10,000 population), 2008–
2014
Source: MoH, 2013
Table 41: Healthcare Infrastructure, Saudi Arabia, Doctors (per 10,000 population), 2008–
2014
2008 2009 2010 2011 2012 2013 2014
Physicians 21.5 21.8 24.3 24.4 24.4 26.8 26.5
Source: MoH, 2013
1.5.3 Environmental Health
The major constituent of air pollution is CO2. Air pollution is measured by CO2 emissions
(metric tons per capita). CO2 emissions are those stemming from the burning of fossil fuels
and the manufacture of cement. They include CO2 produced during the consumption of solid,
liquid and gas fuels and gas flaring.
The CO2 emissions of Saudi Arabia were approximately 422 million metric tons in 2008 and
increased steadily to 685 million metric tons at the end of 2014.
PM2.5 is particulate matter and is defined as the mass of the particles in the atmosphere that
are less than 2.5 micrometers in diameter. There are several sources of these particles,

including fuel burning, industrial emissions, dust from roads and soil. As with NO2, PM2.5
concentrations tend to cluster in major urban and road areas. The PM2.5 concentration in
Saudi Arabia was 54.2 micrograms per cubic meter (µgm/m³) in 2014, having increased from
53.9µgm/m³ in 2010 (World Bank, 2013l).
Figure 42: Environmental Health, Saudi Arabia, CO2 Emissions (million metric tons), 2008–
2014
Source: World Bank, 2015l
Table 42: Environmental Health, Saudi Arabia, CO2 Emissions (million tons), 2008–2014
2008 2009 2010 2011 2012 2013 2014
CO2 emissions 422 438 507 551 583 632 685
Source: World Bank, 2015l
Figure 43: Environmental Health, Saudi Arabia, PM2.5 (µgm/m³), 2008–2014

Source: World Bank, 2015m
Table 43: Environmental Health, Saudi Arabia, PM2.5 (µgm/m³), 2008–2014
2008 2009 2010 2011 2012 2013 2014
PM2.5 53.7 53.8 53.9 53.9 54.0 54.1 54.2
Source: World Bank, 2015m
1.5.3.1 Carbon Credits
The increased emission of CO2 and other greenhouse gases has resulted in global warming.
In order to reduce global warming and cope with the inevitable temperature rise, the United
Nations Framework Convention on Climate Change (UNFCCC) introduced the concept of
carbon trading (Kyoto Protocol). The protocol was signed by 180 countries in December 1997,
at Kyoto, Japan. The number of signatory countries to the Kyoto Protocol has increased to
191. The main aim of the Kyoto Protocol is to reduce the greenhouse gas emissions of the 38
highly industrialized countries.
Under the Kyoto Protocol, countries that have been emitting more carbon and other gases
(greenhouse gases include ozone, CO2, methane, NO2 and even water vapor) have
voluntarily decided that they will bring down the level of carbon in the atmosphere (UNFCCC,

2011). Due to the Kyoto Protocol, the concept of carbon credits came into existence as part
of international emission trading norms. Carbon credit incentivizes companies or countries to
emit less carbon. The total annual emissions are monitored and the market allocates a
monetary value to any deficit through trading. Businesses can exchange, buy or sell carbon
credits in the international market at the prevailing market price. The need for carbon credits
in Europe has been continuously increasing over the last decade due to increased
industrialization. Therefore, Europe has been the biggest buyer of carbon credits while
developing countries such as India and China have emerged as the biggest sellers.
The Kyoto Protocol is the only legal tool in force to combat climate change globally. The first
commitment period expired in 2012. Before this, developing countries were continuously
demanding to extend the Kyoto Protocol’s first term period. In December 2011, a meeting was
held in Durban on the Kyoto Protocol. In this meeting, the developing countries sought the
extension of the Kyoto Protocol for a second term from 2013 to 2017. In order to avoid the
fragmentation of the international carbon market, the EU wanted the new market mechanism
to reduce greenhouse gas emissions. The new mechanism was established in December
2012.
The major changes proposed in Durban were:
• Common legal framework for developed and developing countries
• The US, India and China will be on board and have legal emission commitments after
2020
• A new Green Climate Fund will be established to help developing countries reduce
emissions
Saudi Arabia was ratified in the Kyoto Protocol on January 31, 2005, and it came into force
on May 1, 2005. Since then it has been an active member of the Kyoto Protocol.
During the meeting at Durban, Saudi Arabia’s demand to include CO2 Capture and Storage
(CCS) under the Clean Development Mechanism (CDM) was accepted. The CDM allows a
country with emission reductions under the Kyoto Protocol to implement an emission
reduction project in developing countries and earn certified emission reductions. Currently,
nearly 2,000 CDM projects have been registered by the CDM executive board of Saudi Arabia,
which is expected to yield volumes of more than 1.7 billion certified emission reductions until
the end of 2012 (CDMDNA, 2013).
Saudi Arabia strongly supported the decision at Cancun to make CCS storage eligible under
the CDM. Studies proved that CCS reduces the emission of greenhouse gas. CCS can reduce
45% of the total global emission and has been used in various projects in different countries
for many years. Results show that CCS is the most effective technology in combating
greenhouse gas emissions, reducing carbon emissions and reducing its impact on developing
countries.
There are numerous bodies that work for the CCS under the CDM, among which the
Intergovernmental Panel on Climate Change (IPCC) is a major body that has done significant
work for many research institutions (UNFCCC, 2011).
1.5.4 Healthcare Personnel

There were approximately 40.8 nurses per 10,000 population in 2008 and 53.7 per 10,000
population by 2014, while the number of pharmacists per 1,000 population increased from 6.4
to 7.2.
Figure 44: Healthcare Personnel, Saudi Arabia, Healthcare Personnel (per 10,000
population), 2008–2014
Source: MoH, 2013
Table 44: Healthcare Personnel, Saudi Arabia, Healthcare Personnel (per 10,000 population),
2008–2014
2008 2009 2010 2011 2012 2013 2014
Nurses 40.8 43.7 48.0 47.4 47.8 51.5 53.7
Dentists 2.6 2.9 3.4 3.5 3.4 4.2 4.1
Pharmacists 6.4 5.9 5.5 5.1 5.3 7.3 7.2
Source: MoH, 2013
1.6 Healthcare Expenditure
1.6.1 Overview

Health expenditure is the sum total of public and private health expenditure. Healthcare
expenditure in Saudi Arabia was estimated at 4.7% of the total GDP in 2014. The healthcare
market is growing at a rapid pace because of government reforms (World Bank, 2015a).
Figure 45: Healthcare Expenditure, Saudi Arabia, Healthcare Expenditure (% of GDP), 2008–
2014
Source: World Bank, 2015a
Table 45: Healthcare Expenditure, Saudi Arabia, Healthcare Expenditure (% of GDP), 2008–
2014
2008 2009 2010 2011 2012 2013 2014
Expenditure (% of GDP) 2.9 4.1 3.5 3.6 3.9 4.2 4.7
Source: World Bank, 2015a
1.6.2 Share of Public and Private Sector
Health expenditure is the sum of public and private sector health expenditure. Public sector
expenditure consists of national government, local government and social health insurance
funds. Public healthcare expenditure was 63.8% of total healthcare expenditure in 2014, down
from 66.3% in 2008 (World Bank, 2015n).

Figure 46: Healthcare Expenditure, Saudi Arabia, Public-Private Share (%), 2008–2014
Source: World Bank, 2015n
Table 46: Healthcare Expenditure, Saudi Arabia, Public-Private Share (%), 2008–2014
2008 2009 2010 2011 2012 2013 2014
Public 66.3 68.7 65.5 70.7 72.0 64.2 63.8
Private 33.7 31.3 34.5 29.3 28.0 35.8 36.2
Source: World Bank, 2015n
1.7 Trade Associations
1.7.1 Saudi Pharmaceutical Society
The Saudi Pharmaceutical Society (SPS) is a non-profit professional organization that
represents all the pharmacists of Saudi Arabia. It was founded in 2008 and contributes to the
planning and development of the pharmacy profession. The President of SPS is Prince Fahad
Bin Sultan bin Abdulaziz (the governor of Tabuk region). The SPS was able to achieve several
accomplishments, including the establishment of the Saudi board under the umbrella of the
Saudi Commission for Health Specialties as well as the Saudi Clinical Pharmacy and Hospital
Pharmacy Clubs. The SPS educational program is recognized by the American Council for

Pharmacy Education (ACPE). Its mission is educating medical practitioners and the wider
community (SPS, 2016).
1.7.2 Saudi Dental Society
The Saudi Dental Society was established in 1981 and is headquartered in King Saud
University, Riyadh. It holds monthly scientific activities in Riyadh and the Western and Eastern
provinces of Saudi Arabia on topics such as current trends in dental science. It also holds the
annual International Dental Meeting.
1.7.3 Gulf Pharmaceutical Industries Association
The Gulf Pharmaceutical Industries Association (GPIA) is an initiative taken by the Gulf
Organization for Industrial Consulting (GOIC). It is a new establishment whose operations are
controlled by the GOIC. The objective of the association is to promote pharmaceutical
industries in GCC and Yemen and create a favorable economic, regulatory and political
environment. GPIA will work according to the interests of its members and enhance the
performance and efficiency of this sector.
1.7.4 Middle East Medical Devices and Diagnostics Trade Association
The Middle East Medical Devices and Diagnostics Trade Association (MECOMED) was
founded in March 2007 from its European counterpart Eucomed. Its mission is to help
healthcare professionals achieve the most innovative, cost-effective and reliable medical
technologies and services.
1.7.5 Middle East Generic Association
The association is expected to function as a common platform among regulatory bodies and
the pharmaceutical industry across the MENA region. It will help ensure sustainable
healthcare. It aims to support the use of cost-effective medicines without compromising the
safety of patients.
1.8 Trade Fairs
A trade fair is an exhibition organized by companies in a specific industry to showcase and
demonstrate their latest products and services and examine recent market trends and
opportunities. Unlike consumer fairs, only some trade fairs are open to the public. Those that
are not are mainly attended by company representatives or professionals. Trade fairs provide
a common platform to promote business and share recent advances and innovations.
Examples of trade fairs organized by different sponsors in Saudi Arabia are given in the
following table.

Table 47: Major Healthcare Trade Fairs, Saudi Arabia, 2016
S.
No.
Name Location Exhibit Organizer Date
1 Saudi Health Riyadh
International
Conference &
Exhibition
Center,
Riyadh
Latest developments, trends, products and
services in healthcare
REC Riyadh
Exhibitions
Company
May
16–18,
2016
Source: Trade Fairs Dates, 2016
1.9 Medical Device Market
1.9.1 Market Overview
In 2008, the medical device market in Saudi Arabia was valued at $1.31 billion. Its value
increased steadily at a CAGR of 4.6% to reach approximately $1.8 billion in 2015. The major
market segments that are expected to experience high growth between 2014 and 2020 are
In Vitro Diagnostics (IVD), diagnostic imaging, ophthalmic devices, cardiovascular devices
and nephrology and urology devices. The medical device market is projected to grow at a
CAGR of 4.6% from approximately $1.8 billion in 2015 to $2.3 billion in 2020.
Figure 47: Medical Device Market, Saudi Arabia, Revenue ($bn), 2008–2015

Table 48: Medical Device Market, Saudi Arabia, Revenue ($bn), 2008–2015
2008 2009 2010 2011 2012 2013 2014 2015
Revenue 1.31 1.36 1.42 1.52 1.59 1.65 1.72 1.80
Figure 48: Medical Device Market, Saudi Arabia, Revenue ($bn), 2016–2020
Table 49: Medical Device Market, Saudi Arabia, Revenue ($bn), 2016–2020
2016 2017 2018 2019 2020
Revenue 1.9 2.0 2.1 2.2 2.3
1.9.2 Overview of the Top Five Segments
The major segments of the medical device market in 2015 were IVDs (21.2%), diagnostic imaging
(16.8%), ophthalmic devices (11%), cardiovascular devices (9.1%), and nephrology and urology
devices (6.8%).

Figure 49: Medical Device Market, Saudi Arabia, Revenue by Major Segment ($m), 2015

Table 50: Medical Device Market, Saudi Arabia, Revenue ($m) and Share (%) of Major
Segments, 2015
Device segment Revenue Share
IVD 380.7 21.2
Diagnostic imaging 302.6 16.8
Ophthalmic devices 197.7 11.0
Cardiovascular devices 163.2 9.1
Nephrology and urology devices 123.0 6.8
1.9.2.1 In Vitro Diagnostics
The value of the IVD device market increased from $257.8m to $380.7m, at a CAGR of 5.7%, between
2008 and 2015. The growth in the IVD devices market is being driven by increasing awareness of the
benefits of early detection and diagnosis of diseases, increased automation, demand for self-testing
technology, and the advancement of new technology. The key market categories driving the
diagnostic imaging market in 2015 were immuno-chemistry and hematology, with revenue of
$111.1m and $62.9m, respectively.
Figure 50: Medical Device Market, Saudi Arabia, In Vitro Diagnostic Revenue ($m), 2008–2015

Table 51: Medical Device Market, Saudi Arabia, In Vitro Diagnostic Revenue ($m), 2008–2015
2008 2009 2010 2011 2012 2013 2014 2015
Revenue 257.8 270.9 284.4 299.6 316.6 336.4 357.9 380.7
Source: GlobalData
1.9.2.2 Diagnostic Imaging
The Saudi Arabian diagnostic imaging market was valued at $302.6m in 2015, having grown from
$202.8m in 2008, at a CAGR of 5.9%. The key market categories driving the diagnostic imaging
market were Computed Tomography (CT) and Magnetic Resonance Imaging (MRI) systems, with
revenue of $90.9m and $80.6m, respectively.
Figure 51: Medical Device Market, Saudi Arabia, Diagnostic Imaging Revenue ($m), 2008–
2015
Table 52: Medical Device Market, Saudi Arabia, Diagnostic Imaging Revenue ($m), 2008–2015
2008 2009 2010 2011 2012 2013 2014 2015
Revenue 202.8 204.8 217.7 253.1 273.2 278.9 288.5 302.6

GE Healthcare and Siemens Healthcare are the leading companies in the diagnostics imaging
market in Saudi Arabia, with a combined share of 48.3%. GE Healthcare led the diagnostics
imaging market in 2011, with a 24.3% share, followed by Siemens Healthcare, with a 23.9%
share. The other key companies in the diagnostics imaging devices market were Philips
Healthcare, Toshiba Medical Systems Corporation and Hitachi Medical Corporation.
Figure 52: Medical Device Market, Saudi Arabia, Sales Trends for Major Diagnostic Imaging
Players (%), 2011
Table 53: Medical Device Market, Saudi Arabia, Sales Trends for Major Diagnostic Imaging
Players (%), 2011
Company Revenue ($m) Share (%)
GE Healthcare 61.5 24.3
Siemens Healthcare 60.6 23.9
Philips Healthcare 48.0 19.0
Toshiba Medical Systems 16.3 6.4
Hitachi Medical 12.1 4.8
Others 54.5 21.5

1.9.2.3 Ophthalmic Devices
The Saudi Arabian ophthalmic device market was valued at $197.7m in 2015, having grown
from $175m in 2008, at a CAGR of 1.8%. The key category driving the market is vision care,
which accounted for 89% of the ophthalmic device market in 2015, with a value of
approximately $175.9m. The refractive surgery devices market was valued at approximately
$6.79m.
Figure 53: Medical Device Market, Saudi Arabia, Ophthalmic Device Revenue ($m), 2008–
2015
Table 54: Medical Device Market, Saudi Arabia, Ophthalmic Device Revenue ($m), 2008–2015
2008 2009 2010 2011 2012 2013 2014 2015
Revenue 175.0 179.0 182.6 184.7 187.8 190.7 194.0 197.7
Johnson & Johnson is the leading company in the ophthalmic devices market, with a share of
15.6% and total revenue of $29.2m, followed by Alcon, which had 7.2% of the market share
and total revenue of $13.5m in 2012.
Figure 54: Medical Device Market, Saudi Arabia, Sales Trends for Major Ophthalmic Device
Players (%), 2012

Table 55: Medical Device Market, Saudi Arabia, Sales Trends for Major Ophthalmic Device
Players, 2012
Johnson & Johnson Vision Care 29.2 15.6
Alcon 13.5 7.2
Essilor International 8.5 4.6
Carl Zeiss 7.3 3.9
CooperVision 7.2 3.8
Others 122.1 64.9
1.9.2.4 Cardiovascular Devices
The cardiovascular device market was valued at $163.2m in 2015, having grown from
$138.8m in 2008, at a CAGR of 2.3%. It has been driven by an increasing incidence of
cardiovascular diseases, owing to a sedentary lifestyle, obesity and diabetes, and is
dominated by interventional cardiology and cardiac rhythm management.
The interventional cardiology category was valued at $78.3m in 2015, while the cardiac
rhythm management category was valued at $39.2m.

Figure 55: Medical Device Market, Saudi Arabia, Cardiovascular Device Revenue ($m), 2008–
2015
Table 56: Medical Device Market, Saudi Arabia, Cardiovascular Device Revenue ($m), 2008–
2015
2008 2009 2010 2011 2012 2013 2014 2015
Revenue 138.8 143.0 146.4 149.5 152.9 156.0 159.5 163.2
Boston Scientific Corporation and Medtronic are the leading companies in the cardiovascular
devices market, with a combined share of 39%. Boston Scientific Corporation led the market
in 2011, with revenue of $30m and a 20.1% market share, followed by Medtronic, with revenue
of $28.4m and a 19% market share.

Figure 56: Medical Device Market, Saudi Arabia, Sales Trends for Major Cardiovascular
Device Players (%), 2011
Table 57: Medical Device Market, Saudi Arabia, Sales Trends for Major Cardiovascular
Device Players, 2011
Boston Scientific Corporation 30.0 20.1
Medtronic 28.4 19.0
St. Jude Medical 15.0 10.0
Abbott 14.4 9.6
Cordis Corporation 5.6 3.7
Others 56.2 37.6
Source: GlobalData
* Based on 2011 sales
1.9.2.5 Nephrology and Urology Devices
The nephrology and urology devices market was valued at $123m in 2015, having grown at a CAGR of
6.3% from 2008. It is dominated by renal dialysis equipment and lithotripters, with revenue of
$91.5m and $20m, respectively, in 2015.

Figure 57: Medical Device Market, Saudi Arabia, Nephrology and Urology Device Revenue
($m), 2008–2015
Table 58: Medical Device Market, Saudi Arabia, Nephrology and Urology Device Revenue
($m), 2008–2015
2008 2009 2010 2011 2012 2013 2014 2015
Revenue 80.1 83.0 85.8 104.7 108.8 113.2 118.0 123.0
Source: GlobalData
Baxter International and Fresenius Medical Care are the leading companies in the nephrology
and urology device markets, with a combined share of 55.5% and annual revenue of $33.4m
and $27m, respectively, in 2012. Other major companies were Dornier MedTech, B. Braun
Melsungen and Siemens Healthcare, with a combined market share of 19.9%.

Figure 58: Medical Device Market, Saudi Arabia, Sales Trends for Major Nephrology and
Urology Device Players (%), 2012
Table 59: Medical Device Market, Saudi Arabia, Sales Trends for Major Nephrology and
Urology Device Players, 2012
Baxter International 33.4 30.7
Fresenius Medical Care 27.0 24.8
Dornier MedTech 10.4 9.6
B. Braun Melsungen 6.0 5.5
Others 26.8 24.6
1.9.3 Major Players

The leading companies in the medical device sector in 2015 were GE Healthcare (6.5%),
Siemens Healthcare (4.7%), Roche (2.8%), Philips Healthcare (1.5%) and Abbott
Laboratories (1.1%).
Figure 59: Medical Device Market, Saudi Arabia, Revenue of Major Players ($m), 2015
Table 60: Medical Device Market, Saudi Arabia, Revenue ($m) and Share (%) of Major
Players, 2015
GE Healthcare 117.4 6.5
F. Hoffmann-La Roche 49.5 2.8
Philips Healthcare 27.3 1.5
Abbott Laboratories 20.4 1.1
1.9.3.1 Siemens Healthcare
Overview
Siemens Healthcare (formerly Siemens Medical Solutions) is engaged in the design,
development, manufacture and distribution of medical devices and technologies for the

diagnostic markets. The company offers imaging equipment, healthcare information systems,
and management consulting and support services and is a business segment of Siemens. It
operates through three divisions, Imaging and Therapy Systems, Clinical Products, and
Diagnostics. It offers a comprehensive portfolio of medical solutions, ranging from medical
imaging, IVD, and interventional systems to clinical IT. The company has a presence in North
America, Africa, Europe, Asia and Australia and has headquarters in Erlangen, Germany.
The company reported revenue of €75.6 billion ($85.4 billion) in 2015 (Siemens, 2015). The
healthcare revenue of Siemens increased from $3.2 billion in Q1 2015 to $3.7billion in Q1
2016, at a CAGR of 15% (Siemens, 2016).
Product Portfolio
The imaging and clinical division offers a complete portfolio of medical solutions, including X-
rays, CT, MRI, molecular imaging and ultrasound and clinical software. The diagnostic
division’s product set includes a complete line of diagnostic testing systems, such as clinical
chemistry and immunodiagnostics, molecular diagnostics, hematology, hemostasis, point-of-
care testing and clinical laboratory automation solutions. Siemens’ main products include
angiography, CT, fluoroscopy, magnetic resonance, mammography, molecular imaging,
radiography, surgical C-arms and navigation and ultrasound.
Table 61: Siemens Healthcare, Global, Major Products, 2015
Product name Device class
Angiography, CT, fluoroscopy, magnetic resonance, mammography, ultrasound,
molecular imaging and radiography
Imaging and IT
Care laboratories, diagnostics IT, disease states and condition, molecular
diagnostics point-of-care equipment
Diagnostics
Research and Development
For more than 130 years, Siemens Healthcare has been a recognized leader in medical
innovation. Siemens reported R&D expenses of €4.5 billion ($4.9 billion) in 2015, compared
with €4.0 billion ($4.33 billion) in 2014. The resulting R&D intensity (ratio of R&D expenses
and revenue) was 5.9% in 2015, above the R&D intensity of 5.6% in 2014. The company has
many products in the pipeline related to class II medical devices. There were approximately
83 products in the pipeline, covering cardiovascular devices (1), diagnostic imaging (11), IVD
(68), specialized sectors (2) and wound care management (1) (Siemens, 2015).
SWOT Analysis
Siemens Healthcare is a division of Siemens – a global electronics and engineering company.
Siemens Healthcare is a provider of diagnostic and therapeutic systems and devices such as
CT, MRI, molecular imaging, ultrasound, and radiography devices, besides IT systems for
clinical and administrative purposes. It provides products in diagnostic, therapeutic, patient
care and laboratory diagnostics areas, along with healthcare IT and clinical specialties such
as cardiology, neurology, orthopedics, radiology and women’s health. A broad product
portfolio ensures that the company is in a position to withstand any market-specific downturn.
However, non-compliance by the company with applicable laws and regulations, or a failure

to maintain, renew or obtain necessary permits and licenses, could have an adverse effect on
its results of operations and financial performance.
Strengths
• Dominant Market Position
The achievement of its objectives, such as profitable growth, efficient performance and
successful expansion of its product portfolio, has enabled Siemens Healthcare to attain a
leading position in its existing and emerging businesses.
Its rigorous cost management and market-oriented innovations have made Siemens
Healthcare a leading company in the healthcare industry. The company had a 21% share of
the global diagnostic imaging market. Its major IVD product offerings include a broad
spectrum of immunoassay, clinical chemistry, hematology, drug testing, molecular
diagnostics, microbiology testing, point-of-care testing, urinalysis, and blood gas testing
systems. According to in-house research, the company had a 7.9% share of the global IVD
market. The company has the world’s largest installed base of imaging devices, including X-
ray units, CT scanners and MRI systems, besides laboratory devices for clinical diagnostics.
In Germany, every second CT scanner used in clinics is from Siemens. A strong market
position enhances the reputation of the company and attracts new customers.
• Diversified Product Portfolio
The company provides a wide range of products in the healthcare sector, covering different
types of patients. A diverse product portfolio ensures that the company is in a position to
withstand any market-specific downturn. Siemens Healthcare is a provider of IVD and
therapeutic devices and instruments. It offers products in areas such as detection and
diagnosis, IT, therapy, clinical specialties, laboratory diagnosis and patient care. Siemens
Healthcare is the only supplier that offers a comprehensive range of diagnostic products,
services and solutions to the healthcare industry.
The company’s operations are classified into three segments, imaging and therapy systems,
clinical products, and diagnostics. The products it offers through its imaging and therapy
systems division include medical imaging systems, such as X-ray, MRI, CT, molecular
imaging and ultrasound systems and computer-based workstations. The clinical products
division offers X-ray imaging systems for mammography, surgery applications and urology
systems, cancer care systems, and audiology products (such as hearing aids), as well as
related products and supplies for use in the fields of cardiology, women’s health, surgery,
oncology, urology and audiology.
The diagnostics division offers a comprehensive range of diagnostic testing systems and
consumables, such as clinical chemistry and immunodiagnostics, hematology, molecular
diagnostics (such as testing for nucleic acids), microbiology, point-of-care testing, hemostasis
and clinical laboratory automation solutions. Such diversified product offerings help the
company reduce the impact of market volatility in any particular product line and ensure
economic stability.

• Innovation and R&D
Siemens Healthcare’s innovations combine state-of-the-art imaging, laboratory diagnostics,
and IT solutions for early prevention and more specific diagnosis, which help improve patient
care. Its dedication to innovation remains strong, with increasing R&D expenses in 2015. Its
strong R&D segment gives the company an edge over its competitors and helps the company
in developing more advanced and innovative products and technologies. Siemens Healthcare
spent €4.5 billion ($4.8 billion) on R&D in 2015, or 9% of its annual revenue. In addition to in-
house R&D, the company has R&D and original-equipment-manufacturer collaborations with
several companies, including Toshiba, Mochida, National Semiconductor and Biosense
Webster, in ultrasound, and Toshiba, in MRI. The company’s strong R&D activities provide it
with a competitive advantage and drive its product portfolio, helping it to gain a larger market
share.
• Geographical Diversity
Siemens Healthcare is a global medical and healthcare IT company with around 52,000
employees. By spreading its business across the world, the company managed to minimize
risks associated with operating in a limited number of specific geographical regions. Its global
presence, together with its strong product portfolio, gives Siemens Healthcare a significant
advantage over its competitors, enabling it to increase its market share across the world.
Siemens Healthcare has a presence in most of the geographies in North America, Europe,
Africa, the Middle East and Asia-Pacific. It sells its products and solutions through its own
sales personnel, and the low-end products are sold specifically through dealers in some
countries. The company’s geographical segments are classified into three regions, the
Americas, Europe, the Commonwealth of Independent States, Africa, the Middle East, Asia,
and Australia. The company has about 40 production facilities throughout the world. Siemens
Healthcare’s diversified manufacturing presence ensures that the company remains shielded
from any material business interruption, if any of these sites is affected by a natural disaster
or plant shutdown.
Weaknesses
• Product Recalls
Product recalls have an impact on the company’s projected sales and profits and result in
negative publicity. The following are some of the product recalls made by Siemens
Healthcare:
• In January 2016, the company initiated a class 2 recall of 3,575 automated blood
coagulation analyzer systems due to a false short clotting time for PT testing on BCS
and BCS XP with Dade Innovin.
• In the same month, it recalled 55,754 kits of Advia Centaur prostrate-specific antigen
assays, as they did not meet the high-dose hook-effect expectation stated in the
instructions for use.
• In the same month, it recalled several ADVIA chemistry XPT systems due to multiple
software issues.

• In December 2015, Siemens Healthcare recalled 264 Dimension integrated chemistry
systems, as some of the reagent management system refrigeration compressors were
missing the safety cover on the electrical termination block.
• Litigation Claims
The company has been beset by a variety of lawsuits and regulatory investigations in
connection with its operations. Lawsuits, including regulatory actions, may seek the recovery
of large and indeterminate amounts, or otherwise limit the company’s operations. The
magnitude of a lawsuit or regulatory action may remain unknown for a long time.
In the past, Siemens Healthcare was involved in patent infringement, personal injury, product
liability and other lawsuits with several individuals, companies and organizations, including
the Denver Health and Hospital Authority, the CT Center of Flint, BSA Hospital, Sarif
Biomedical, Claims Servicing of America, Crystal Photonics, Madison County Hospital, the
Wisconsin Alumni Research Foundation, the Conrad Corporation, Kuhlman Technologies,
Bosch Packaging Technology, Robert Bosch Packaging Technology and Enzo Life Sciences.
The defense of such lawsuits diverts the company’s focus and leads to considerable
expenses. Siemens Healthcare may also be required to pay damages and could be subject
to equitable remedies that adversely affect its financial performance and results of operations.
Opportunities
• Growing Medical Imaging Information Market
Siemens Healthcare is a leading provider of IT solutions, including enterprise and
departmental IT products, and could benefit from the rapidly growing medical imaging
information systems market, the value of which is expected to reach $7,896.3m in 2020.
Picture Archiving and Communication Systems (PACS) and Radiology Information Systems
(RIS) are the major categories in the market for medical imaging information systems. The
global markets for PACS and RIS are expected to reach $6,182.1m and $1,215.8m by 2020,
respectively.
Global Diagnostic Imaging Market and Growing IVD Market
The company could benefit from the rapidly growing diagnostic imaging and IVD markets. The
diagnostic imaging market is expected to reach $46.4 billion in 2020, and the IVD market is
expected to reach $58.9 billion by 2021.
Threats
• Competitive Environment
The company’s performance could be affected by the competitive environment prevailing in
the healthcare sector and customer preferences. In the medical imaging arena, Siemens
Healthcare competes with General Electric, Philips, Toshiba, Hitachi and Hologic. Its principal
competitors in healthcare IT systems include McKesson and Cerner. In the IVD area, the
company faces competition from Roche, Abbott and Beckman Coulter. Its other competitors
are Elekta and Varian Medical, for oncology care systems, and Sonova, William Demant and

GN Resound, for hearing aids. The demand for its products depends on the competitive
atmosphere, including the timely development and introduction of new and competitive
products and the company’s response to downward pricing to sustain competition. Changes
in customer order patterns, changing incentive programs and competitors’ new products could
all impact the company’s competitiveness.
• Stringent Government Regulations
Siemens Healthcare’s products, R&D activities and manufacturing processes are subject to
various local, state, federal, foreign and transnational laws and regulations. In the US, the
FDA regulates the introduction of new medical products, manufacturing and labeling and
record-keeping procedures for such products. Receiving marketing approval for new medical
devices from the US FDA is time-consuming and expensive. Products distributed outside the
US are also subject to government regulations, which vary from country to country. The
company has to comply with rules and regulations governing product standards, packaging
and labeling requirements, import restrictions, tariff regulations and tax requirements. Non-
compliance by the company with applicable laws and regulations, or failure to maintain, renew
or obtain necessary permits and licenses could have an adverse effect on the company's
results of operations and financial performance.
• Rapid Technological Changes
The healthcare industry is subject to various significant technological advances and product
innovation and development. To meet its customers’ demands, the company must
continuously design new products, update existing products and develop new technologies.
The launch of new products and technologies involves significant commitment to R&D and
investment. The company’s profits may suffer if they are not accepted in the marketplace as
anticipated. Additionally, its competitors may develop innovative technologies and products,
which might render the technology and products it has under development obsolete or
uncompetitive.
1.9.3.2 GE Healthcare
Overview
GE Healthcare, formerly known as GE Medical Systems, is a global medical device company
that carries out the design, development, manufacture and distribution of medical systems in
the field of medical imaging and IT, medical diagnostics, patient monitoring, drug discovery,
and biopharmaceutical manufacturing technologies. The company conducts its operations in
five divisions, surgery, healthcare systems, life sciences, medical diagnostics and healthcare
IT. GE Healthcare also provides performance improvement and performance solutions
services, computerized data management and remote diagnostic and repair services for
medical equipment. The company conducts its operations across the world through

subsidiaries and affiliates. GE Healthcare is a business unit of the General Electric Company
and has headquarters in Buckinghamshire, the UK.
GE Healthcare is focused towards providing improved and affordable healthcare facilities
across geographies. The company envisages maintaining its position through the
development of new products and the improvement of existing ones, internal development,
strong partner relationships, strategic alliances, and acquisitions.
GE Healthcare’s revenue in 2015 amounted to $117.4 billion, of which the healthcare segment
accounted for $17.6 billion (GE Healthcare, 2015).
Product Portfolio
The company’s product portfolio is divided into five segments: surgery, healthcare systems,
life sciences, medical diagnostics and healthcare IT.
• The company’s surgery imaging products are used in several fields, including general
surgery, orthopedics, neurosurgery, urology, gastrointestinal diseases and cardiology
and for specialized procedures such as pain management.
• GE Healthcare’s life sciences segment harnesses improvements in drug discovery,
biopharmaceutical manufacturing and cellular technologies. It helps scientists and
specialists find new ways to predict, diagnose and treat diseases.
• GE Healthcare products include diagnostic imaging systems such as MRI, CT and
Positron Emission Tomography (PET) scanners; X-ray; nuclear imaging; digital
mammography; and molecular imaging technologies.
• GE Healthcare-manufactured technologies include patient and resident monitoring,
diagnostic cardiology, ultrasound, bone densitometry, anesthesiology and oxygen
therapy, and neonatal and critical care devices. Related services include equipment
monitoring and repair and IT and customer productivity services. Its products also
include diagnostic imaging agents used in medical scanning procedures, drug discovery,
biopharmaceutical manufacturing and purification, and tools for protein and cellular
analysis for pharmaceutical and academic research, including a pipeline of precision
molecular diagnostics in development for neurology, cardiology and oncology
applications.
• In CT, Discovery CT750 HD Freedom, a high-end scanner, was launched in 2012 and
can greatly reduce radiation doses.
The company’s healthcare IT segment offers comprehensive clinical and financial information
technology solutions, along with enterprise and departmental IT products, RIS/PACS and
cardiovascular imaging systems, revenue cycle management and practice applications. Products and
services are sold worldwide to hospitals, medical facilities, pharmaceutical and biotechnology
companies and the life science research market.
Research and Development
GE Healthcare’s R&D expenditure amounted to $5.2 billion in 2015 (GE Healthcare, 2015).
The medical diagnostics segment is engaged in the research, manufacture and marketing of
innovative imaging agents, which are used in medical scanning procedures to highlight
organs, tissues and functions inside the human body. These agents help physicians in the
early detection, diagnosis and management of diseases.

SWOT Analysis
GE Healthcare is a business unit of the General Electric Company. It is a provider of
transformational medical technologies and services for better patient care. It serves
healthcare professionals and their patients in over 100 countries, worldwide. The company’s
broad range of products and services helps in improving the diagnosis and treatment of
cancer, heart disease, neurological disease and other conditions. A diverse product portfolio,
and its use in different market segments, further enhances GE Healthcare’s market presence.
However, increased regulation of the medical device market is expected to increase the
company’s costs and reduce revenue, as introducing new devices in the market becomes a
longer and more expensive process.
Strengths
• Broad Product Portfolio
GE Healthcare caters to the needs of diverse markets through its vast product portfolio. It
offers transformational medical technologies and services, as well as professional consulting
services. The company operates in five business segments: surgery, healthcare systems, life
sciences, medical diagnostics and healthcare IT. Through these five business segments, it
provides a broad range of products, services and expertise in medical imaging and IT, medical
diagnostics, patient monitoring systems, disease research, drug discovery, and
biopharmaceutical manufacturing technologies. The company’s broad range of products and
services allows healthcare providers to improve diagnosis and treatment for cancer, heart
diseases, neurological diseases and other conditions.
The company’s diagnostic imaging systems include MRI, CT and PET scanners, X-rays,
nuclear imaging, digital mammography, and molecular imaging technologies. It also provides
patient monitoring, diagnostic cardiology, ultrasound, bone densitometry, anesthesia, oxygen
therapy, and neonatal and critical care devices. Medical diagnostics and the life sciences
products offered by the company include diagnostic imaging agents – for use in medical
scanning procedures – drug discovery, biopharmaceutical manufacturing and purification, as
well as tools for protein and cellular analysis for pharmaceutical and academic research,
which includes a pipeline of precision molecular diagnostics in development for neurology,
cardiology and oncology applications. The company also offers related services, such as
equipment monitoring and repair, IT and customer productivity services. GE Healthcare’s
products and services are marketed and sold to hospitals, medical facilities, pharmaceutical
and biotechnology companies and life science research markets. A diverse product portfolio,
and its uses across different market segments, will further enhance GE Healthcare’s market
presence.
• Innovation, Research and Development
The company is committed to meeting the needs of healthcare professionals and its other
partners. With a strong technological foundation and a deep understanding of its clients, the
company is well-positioned to deliver unparalleled value through innovative products and
solutions across the healthcare industry. The company is a pioneer in developing and applying
new technologies and groundbreaking innovations. GE Healthcare has incurred significant
expenditure on R&D, funded principally by its parent company, General Electric. It
continuously innovates with a focus on minimizing costs, increasing access, and enhancing
quality and efficiency throughout the world. Research and product development is an

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