Saudi Arabia’s healthcare system currently relies heavily on government funding, which accounts for 65% healthcare spending in the country. Healthcare trends in Saudi Arabia's, e.g. demographic shifts, high incidence rates of lifestyle related diseases, growing demand for private healthcare services, and strategic investments made by the government have driven demands for in vitro diagnostic (IVD) devices. Solidiance co-developed this exclusive white paper with Kind Abdulaziz Medical City and Abbott Diagnostics, highlighting the contribution, value and future of in vitro diagnostics in Saudi Arabia’s healthcare system. According to the report, the future looks bright for IVD in Saudi Arabia, however it depends on how fast it can be adopted and implemented in order to benefit the government, healthcare players seeking to improve and invest on the sector, and also the people.

1. The Role of In Vitro Diagnostics (IVD)
in Saudi Arabia’s Healthcare System
The Laboratory Test in Saudi Arabia:
King Abdul-Aziz Medical City-Riyadh
National Guard Health Affairs
Ministry Of National Guard
Kingdom Of Saudi Arabia

2. Department of Pathology and
Laboratory Medicine,
King Abdulaziz Medical City,
Riyadh
Clinical Scientist, Molecular
Microbiology, King Abdulaziz
Medical City, Riyadh
Dr. Abdulaziz Al Ajlan, MD
Dr. Javed Akhter, Ph.D
Chairman
Head of Laboratory Quality
Management and Health &
Safety
| Authors
KingAbdulazizMedicalCity,Riyadhprovidesprimary,secondaryandtertiaryservice
with a capacity of 2,000 beds and approximately 3 million outpatient visits a year.
It has established itself as a center of excellence as it has the largest Emergency
Care Center in the Middle East, a state of the art Hepatobiliary Sciences and Liver
Transplant Center, a state of the art Cardiac facility, Long Term and Extended
Care Services for patients requiring long-term nursing care, and the recently
commissioned Oncology Unit. Other newly commissioned projects include: The
King Abdullah Specialist Children’s Hospital, which is the first children’s medical
referralinstituteinSaudiArabia,theKingAbdullah’sInternationalMedicalResearch
Center and the new 23,000 sqm Central Laboratory. The Department of Pathology
& Laboratory Medicine is a large and modern medical laboratory accredited by
the College of American Pathologists (CAP) and the American Association of Blood
Banks (AABB).
Abbott Diagnostics provides in vitro diagnostics, and instrument systems and tests
for hospitals, reference labs, blood banks, physician offices, and clinics worldwide.
It offers automation, hematology, immunochemistry, and transfusion instruments;
and reagents/tests for applications in the fields of cancer, cardiac, drugs of abuse/
toxicology, fertility/pregnancy, general chemistry, infectious disease, congenitals,
hepatitis, retrovirus, metabolic, renal, specific proteins, therapeutic drug
monitoring, thyroid, and transplant. Abbott Diagnostics was founded in 1972, has
72,000 employees, operates in over 130 countries worldwide and is based in Santa
Clara, California.
Solidiance is an established Asia-focused management consulting firm entrusted
by Fortune 500s and conglomerates to support growth across emerging and
developing markets in Asia. Solidiance works side-by-side with clients delivering
and implementing comprehensive growth strategies across Asia from our 10
offices between Turkey and Japan. Solidiance supported the development of this
white paper by providing a third-party verification and validation of the market
data, interviewing stakeholders across the Saudi healthcare landscape, and playing
the role of Editor to deliver a finished product.
| About King Abdulaziz Medical City
| About Abbott Diagnostics
| About Solidiance
2
Abbott Diagnostics
Solidiance
Dr. Ashraf Sami, PhD
Erika Masako Welch
Market Access Manager, Africa,
Middle East and Turkey
Director of Business
Development Middle East
| Co-AuthorE
| Co-Author

3. 3
The Contribution, Value and Future of In Vitro Diagnostics (IVD)
in Saudi Arabia’s Healthcare System
I. An Introduction to in vitro diagnostics (IVD) 5
Comprehensive Role of Diagnostics 5
Spotlight on IVD Applications 6
Benefits of IVD 6
IVD Demand is Growing Globally 7
II. Healthcare in the Middle East & North Africa 8
Regional Pressure Points 8
III. KSA Healthcare Trends 10
Demographic Shifts in Saudi Arabia 10
High Incidence Rates of Lifestyle Related Diseases 11
Growing Demand for Private Healthcare Services 15
Strategic Healthcare Investments by Government 17
IV. The Role of IVD in Saudi Arabia 19
V. Conclusions 20
VI. References 21
Table of
Contents

4. 4

5. 5
The Contribution, Value and Future of In Vitro Diagnostics (IVD)
in Saudi Arabia’s Healthcare System
An Introduction
to in vitro diagnostics (IVD)
With increasing cases of new strains of viruses, epidemic and pandemic diseases,
healthcare professionals are innovating healthcare solutions to improve the
combat of, and cure for, diseases worldwide. Among these innovations is in vitro
diagnostics (IVD). IVD plays a significant role in saving people’s lives by providing
accurate diagnosis and prognosis, which enables improved monitoring and
treatment. Both public and private healthcare officials consistently rate quality
care and value-for-money as key priorities in health care; as such, there is a strong
need to have high quality laboratory testing.
IVD, more universally known as ‘laboratory tests’, can be defined as a test
performed in a controlled environment outside a living organism to help and
support a diagnosis. IVDs are medical devices and accessories used to perform
tests on samples, (e.g. blood, urine, tissue and other body fluids from the human
body) in order to help detect infection, diagnose a medical condition, prevent
disease, and monitor drug therapies. It can be used to detect complex virus strains
and infectious diseases such as Ebola and MERs at hospitals with sophisticated
molecular technology including reagents, instrumentation and software, or it can
be as simple as performing a pregnancy test at home.
Risk
Assessment
Screening Diagnosis Staging and
Prognosis
Therapy
Selection
Monitoring
Diagnostic
test to
complement
traditional
risk factors
Diagnostics help clinicians optimally manage patients through the continuum of care.
Implement
wellness
program
proactively
Applied to
high-risk
patient to
identify
disease early
Nip disease
in the bud
with early
treatment
Use for
definitive
diagnosis
and general
typing
Refer to the
appropriate
specialist
Assess
severity and/
or risk of
recurrence
Inform
adjuvent
therapy
decision
Determine
whether
treatmet is
necessary
Used to
predict
efficacy
or safety
response
to specific
treatments
Do not waste
unproductive
therapy
Recurrence
monitoring
Momonitoring
for treatment
efficacy
Control
disease
progression
with changes
in treatment
Description
Comprehensive Role of Diagnostics
Clinical
Implications
Source: DxInsights White Paper January 2012

6. 6
IVD can be classified into 3 main types:
(a) clinical laboratory testing, (b) point of care testing, and (c) self-testing.
The IVD market is also distributed by laboratory specializations (e.g. anatomic pathology, immunology, molecular diagnostics,
hematology and microbiology), or by product-type (e.g. instruments and reagents), or by applications to diseases (which
comprise mainly of, but are not limited to, diabetes, oncology, cardiology, HIV/AIDS, autoimmune disease and nephrology).
Benefits of IVD
Spotlight on IVD Applications
IVD enables timely and accurate diagnosis, enables reduction in the
incidence rate of diseases, and provides significant cost-savings. Research
has shown that IVD adoption can bring significant benefits to healthcare,
including reduction of Staph infection incidence rates by ~70%, cervical
cancer rates by ~75%, and cancer reoccurrence rates and death by ~50%.
In the USA, the use of regular screening, such as Pap Tests for women,
has contributed to the significant reduction in incidence rate and mortality
from cervical cancer – by up to 75-80%. The diagnostic laboratory uses
more than 1,600 different tests today, mostly provided by the in vitro
diagnostic industry.
Diagnostics represent only ~2% of global healthcare spending, but are
critical to medical decision-making. A research in North America has found
that approximately 60% of all medical decisions are based on IVD tests
for its ability to deliver accurate diagnosis, prognosis and monitoring. This
signifies a huge potential for relatively low cost tests, which will, in turn,
greatly reduce the burden of diseases that cost healthcare ecosystems
billions of dollars every year.
HIV/AIDS remains a prominent disease being tackled at the highest levels; at the end of 2013, 35 million people were living
with HIV worldwide.
The UN Millenium Development Goals (MDG) has sought to provide universal access to HIV/AIDS treatment, while
simultaneously implementing initiatives in hopes to eradicate the disease. Back in 2001, the WHO estimated that inadequate
blood screening had resulted in 1 million new HIV infections worldwide, stressing the importance of HIV diagnostic adoption.
WHO has been working with countries to implement the Global Health Sector Strategy on HIV/AIDS for 2011-2015.
Source: AdvamedDx
By Applications (2014)
1. AUTOIMMUNE
DISEASES
Infectious
diseases
Highest Revenue
Generating Segments
USD 21.23 billion in
2020
5. NEPHROLOGY
2. CANCER/
ONCOLOGY
6. CARDIOLOGY
3. DRUG TESTING
7. DIABETES
4. HIV/AIDS
8. OTHERS
Global IVD Market
Approximately
60% of all
medical decisions
are based on
IVD tests for
its ability to
deliver accurate
diagnosis,
prognosis and
monitoring.
Source: AdvaMedX

7. 7
The Contribution, Value and Future of In Vitro Diagnostics (IVD)
in Saudi Arabia’s Healthcare System
IVD Demand is Growing Globally
Incidence reduction rate globally due to the use of IVD Economic benefits of using IVD
Owing to its benefits, there is steady growth in
IVD adoption and usage worldwide. Increasing
incidence rates of infectious diseases, and the
rising incidence of cancer are just some of the
key external factors driving IVD demand globally,
especially in the Molecular Diagnostics and
Immunochemistry segments. The current global
IVD market size was over USD 55 billion in 2014,
and is expected to reach USD 75 billion by 2020.
North America is still the largest market, comprising
40% of the total IVD industry globally. Meanwhile,
Asia is the fastest growing region, with China and
India leading the charge. The main driving forces
for the increased uptake in IVD in these emerging
economies is increased government funding and
improved healthcare facilities.
Average Staph infection treatment cost of USD
19,000 can be reduced by early detection of the
disease.
Diagnosis, prognosis and early treatment of
tuberculosis enables the reduction of treatment cost
by ~20% by identifying underlying case quickly.
IVD enables early and rapid detection of the Sepsis
and reduce the length of stay by average of ~7 days
which translate to average cost saving of over USD
15,000 per person with severe Sepsis.
Usage of hs Troponin have allowed for physicians to
confidently rule out 40% of patients suspected to
have acute coronary syndrome; BNP biomarkers have
shown 10% decrease in admission rates in patients
with cardiovascular diseases (CVD); and Galectin-3
have assisted physicians in identifying heart failure
patients with increased risk of hospital re-admission.
Reduction of Staph infection rate
Reduction of cervical cancer rate
Reduction of cancer reoccurrence rate and death rate
0
0
0
70 %
75 %
50 %
100
100
100
Global
IVD
market
by value (2014)
Emerging
countries
Developed
countries
North
America
Immunochemistry
Point of care diagnostics
Molecular diagnostics and self
monitoring blood glucose
Hematology, tissue
diagnostics and hemostastis
Point of Care (POC) diagnostics now leads the
global IVD market in terms of IVD classification;
POC includes tests used by healthcare
professionals in hospitals, physician office
labs, and health clinics. Molecular diagnostics
follows POC IVD, and is the fastest growing IVD
sector globally; molecular diagnostics includes
products used to directly analyze nucleic
acids for the detection of genetic disorders or
infectious pathogens such as HIV or hepatitis
viruses, virology, bacteriology, molecular blood
donor screening, and genetic testing.
28%
25%
40%
35%
30%
15%
27%
Global
IVD
market
by classification ( 2014)
Source: Advameddx, Emediicine, the European Diagnostic Manufacturers Association
Source: Reuters
Source: Reuters

8. 8
Healthcarein the Middle East & North Africa
Regional Pressure Points
Healthcare expenditure
per capita
Healthcare expenditure
per capita
• Average life expectancy : ~72 years
• Average life expectancy : 80 years
• Average incidence of diabetes: ~11%
• Average incidence of diabetes: 6.9%
• Average mortality rate of CVD: 45%
• Average mortality rate of CVD is < 30%
Healthcare expenditure
as a percentage of GDP
Healthcare expenditure
as a percentage of GDP
Comparison of the Highest Healthcare Expenditures in MENA vs OECD countries (2014)
Health Average Across Gulf Region:
Health Average across OECD countries:
~USD 2,043
USD 9,146
~2.2%
~17.1%
~USD 1,067
USD 5,718
~5%
~11.3%
~USD 1,569
USD 5,006
~3.2%
~10.9%
~USD 808
~5%
Qatar
USA
Bahrain
Canada
UAE
Germany
Saudi Arabia
MENA
countries
OECD
countries
The increasing population growth and the rising incidences of lifestyle diseases have
put strains on the healthcare systems in the Middle East and North Africa (MENA)
region. Although significant strides have been made in the healthcare sector
over the years, the regional healthcare ecosystem suffers from low healthcare
spending, low penetration of healthcare insurance, and relatively low levels of
private healthcare involvement in comparison to countries in the Organisation for
Economic Co-operation and Development (OECD).
Source: Solidiance Interviews and Analysis, Worldbank,OECD healthcare indicators, US National Library of Medicine

9. 9
The Contribution, Value and Future of In Vitro Diagnostics (IVD)
in Saudi Arabia’s Healthcare System
Benefitting from being one of the world’s wealthiest countries coupled with having to
cater to a small population under 2.2 million people, Qatar leads the MENA region in
healthcare expenditure per capita (USD 2,043 per person). Despite Saudi Arabia having
invested amongst the highest percentage of national GDP on healthcare in the region
(approximately 5%), the Kingdom of Saudi Arabia (KSA) only ranks 4th in the region on
healthcare expenditure (KSA: USD 808 per person). When comparing the top Middle
Eastern countries against top OECD countries in healthcare expenditures, there is a
significantgap.TheUSAinvestsover11timesthatofSaudiArabia’shealthcareexpenditure
per capita, while Canada and Germany invests over 7 times and 6 times, respectively.
The low incidence rates of disease and mortality, and longer life expectancies found in
the OECD countries are attributed to the higher levels of healthcare expenditures. OECD
countries also put an emphasis on primary healthcare - which involves early diagnosis
and prevention.
A report found that in a sample GCC country, less than ~5% of patients with diabetes have
their blood sugar levels controlled, highlighting the strong need for primary healthcare
care, including health screening and diagnostics in the region.

10. 10
Healthcare
trends in
Saudi Arabia
Demographic Shifts in Saudi Arabia
Total population of KSA in million
Total population of KSA in million
Fertility rate of KSA (Child born/woman)
Saudi Arabia’s healthcare system is facing significant pressures driven by a growing
aging population, which can be attributed to increased national life expectancy and
a decreasing national fertility rate. Life expectancy has increased nearly 35 years
over the past half-century, from an average 42 years in 1950 to 76 years in 2014.
Medical care services used by adults rises with age, and per capita expenditures on
healthcare are relatively high among older age groups worldwide.
In addition, while Saudi nationals have started to live much longer lives, families
have shrunk considerably in size, from an average 7 children per woman in 1950 to
2.17 in 2014. This has put some distress on the societal fabric of Saudi Arabia, where
the financial responsibility and burden of caring for aging parents has significantly
increased, yet distributed across fewer family members than in the past. All things
considered, Saudi Arabia still has amongst the fastest growing populations in the
world.
2010
2005
0
1
2
3
4
5
2010
2011
2006
2015
2012
2007
2020e
2013
2008
2025e
2014
2009
2030e
2015e
2010
2035e
2016e
2011
2040e
2017e
2012
2045e
2018e
2013
2050e
2019e
2014
2020e
27.56
5%
28.38
7%
29.2
8%
29.99
10%
30.77
12%
31.39
15%
32.01
17%
32.65
20%
33.31
23%
33.97 34.65
Total population of KSA in million
% Share of
population over
60 years old
Fertility rate of KSA ( Child born/woman)
Source: Solidiance interviews and Analysis ,Statista, United Nations, index Mundi

11. 11
The Contribution, Value and Future of In Vitro Diagnostics (IVD)
in Saudi Arabia’s Healthcare System
Lebanon
23%
Jordan
16.3%
Egypt
26.3%
Saudi Arabia
24%
UAE
37.3%
Kuwait
23%
Saudi Arabia
26.1%
Qatar
24%
With >6.9 million diabetics in the Kingdom of Saudi Arabia, the country has the highest incidence rates of diabetes in the
MENA region, at 24%. KSA also has the second-highest incidence rates of cardiovascular diseases (CVDs) at 26.1%. This high
incidence rate can be attributed to increasingly sedentary lifestyles, unhealthy high-in-sugar diets, and the rising consumption
of tobacco.
High Incidence Rates of Lifestyle Related Diseases
Countries with highest hypertension prevalence rate in MENA region (2014)
Countries with highest diabetes prevalence rate in MENA region (2014)
Source: Solidiance Interviews and Analysis

12. 12
It has been reported that an estimated 30% of all diabetics in Saudi Arabia
are unaware of having the disease. Saudi Arabia’s healthcare expenditure
for diabetes per person is USD 800 per person. Taking into account the 24%
prevalence rate in the Kingdom, diabetes accounts for nearly 1/4th of the
country’s total healthcare expenditures.
A hospital-based study in Saudi Arabia reported that there are lengthy stays
of ~45 days for stroke rehabilitation programs, attesting to the economic and
resource drain on the healthcare system in responding to and managing a
population that is susceptible to stroke.
It is therefore not unusual that the Saudi Government has started to invest
in disease prevention programs in an effort to curb the incidence rate of
these lifestyle diseases, which carry a significant burden on the Kingdom’s
healthcare and financial resources. Tobacco is one such pressure-point for the
country. In 2012, Saudi Arabia was reported to be the 4th largest importer of
tobacco in the world. The Saudi Ministry of Health (MOH) reports between 35-
45% of all adult males and 24% of preparatory school students in Saudi Arabia
are tobacco smokers. It is estimated that the social, health and economic
burden of tobacco use in Saudi Arabia costs the Kingdom up to SAR 5 billion
(USD ~1.3 billion) each year. In an effort towards national smoking cessation,
the government ordered a royal ban on smoking in all government facilities,
and most indoor public spaces in 2012. More recently, at the end of 2014,
all forms of smoking were banned within the city limits of Saudi’s two most
holiest cities: Mecca and Medina. The ban also prohibits the sale of tobacco
products within city limits.
Diabetes
accounts
for nearly
1/4th of the
country’s total
healthcare
expenditures.

13. 13
The Contribution, Value and Future of In Vitro Diagnostics (IVD)
in Saudi Arabia’s Healthcare System
[Saudi Arabia] has adopted a
religiously inspired and radical
policy approach to strengthening
tobacco control.
“-
World Health Organization (WHO) Report 2014, A Smoke-Free City
Case Study: Mecca and Medina, Saudi Arabia

14. 14
The increasing economic burdens of lifestyle diseases in Saudi Arabia make the case clear for enhanced IVD usage in the
Kingdom. Enhanced prevention programs, integrated healthcare systems, and most importantly regular diagnostics for early
detection of disease can significantly reduce the burdens on both the healthcare system and the patient.
3.6
2.52.6
3
2010
2011
2012
2013
Rising
cigar
import
value in billions
in SAR
Rising cigar import value in billions SAR
Though Saudi Arabia currently has a
relatively low cancer incidence rate,
the country must also be ready to face
thechallengeofaforeseeableincrease
in cancer cases, mainly attributed
to the aging population. Dr. Ashwaq
Al Olayyan, the Head of the Adult
Tumor Department at King Abdulaziz
Medical City has issued warnings to
the public that though incidence rates
are still low in comparison to Western
societies, a rise in cases in Saudi
is being witnessed. Currently, the
treatment of a cancer patient in the
Kingdom costs nearly SAR 1 million per
year (USD ~267,000), placing another
financial burden on the country.
Though cancer incidence rates
are still low in comparison to
Western societies, a rise in cases in
Saudi, especially in cases of colon
cancer, is being witnessed. It is
important to establish preventative
mechanisms to combat the disease,
most especially through advanced
diagnostics for early detection.
“
-
Dr. Ashwaq Al Olayyan, Head of the Adult Tumor Department at King Abdulaziz Medical City
Source: Euromonitor

15. 15
The Contribution, Value and Future of In Vitro Diagnostics (IVD)
in Saudi Arabia’s Healthcare System
Government facilities tend
to be of higher quality
than private healthcare
facilities in Saudi Arabia;
the private healthcare
ecosystem has significant
variability in the service
and quality of healthcare
provided.
“
-
Dr. Ahmed El Eisa, Supervisor General, Department of Medical
Services, Ministry of Interior
In order to meet the demands being placed on the current Saudi Healthcare infrastructure, expansion of overall healthcare
services and laboratory facilities are required. The pressure for growth are particularly great in the private healthcare system,
due to the manner in which Saudi’s overall healthcare system provides different access based on employment; either in the
private sector or public sector.
The MOH and other government-affiliated hospitals (i.e. military hospitals or public-private hospitals such as those run by
the state-owned oil and gas giant, Saudi Aramco) make up 77% of Saudi’s available healthcare infrastructure. These hospitals
and facilities are constructed specifically to provide free healthcare to government and government-affiliated employees and
their families.
Growing Demand for Private Healthcare Services
Ministry of
Health
Public labs Private labsOther
government
hospitals
Private
healthcare
60%
40%
60%
17%
23%
%
split of
healthcare
service
in KSA
2014
%
split of
laboratory
factory
in KSA
2014
Source: Solidiance Analysis and Interviews, International Journal of Business
and Economic Development, The Economist intelligence 2014

16. 16
Private healthcare, on the other hand, only makes up 23% of the
country’s available healthcare infrastructure, but caters to the lion’s
share of the population. Expatriates (~30% of the population) and
private sector employees (~35% of the population) and their families
only have access to the private healthcare sector. Laboratories have
a similar imbalance, with 60% of laboratories in Saudi Arabia being
government-affiliated, while only 40% are privately-run.
In Saudi Arabia, contrary to findings in many other developing nations,
publicly-run hospitals are perceived to have higher quality healthcare
than the private sector. In the Kingdom, this seems to be due to
investments made by the government and better standardization
across public hospitals. Dr. Ahmed El Eisa, a Supervisor General of
the Department of Medical Services at the Ministry of Interior notes
that, “the private healthcare ecosystem (in contrast to the public
healthcare facilities) has significant variability in the service and quality
of healthcare provided.”
The Saudi Arabian Government has already rolled out plans to expand
public healthcare facilities across the country, but has also begun to
encourage the development of the private healthcare sector to support
the government and shoulder public demand by means of offering
financial aid for expansion of both private hospitals and private labs.
Dr. M. Iqbal Musani, the Chairman
of the Department of Laboratory
Medicine from the Al Jedaani Group
of Hospitals highlighted the demands
being placed on the Saudi healthcare
infrastructure by saying, “due to
government hospitals often running at
full capacity, there is some spillage that
is graciously offered to some private
sector healthcare players, such as Al
Jedaani Group of Hospitals.” Despite
the private healthcare sector helping
to alleviate pressures in the public
healthcare system, the same does not
seem to apply for laboratory work.
Dr. Iqbal continues, “laboratories in
the public sector are fully equipped,
while the private sector is still playing
catch-up. There are times when
the private laboratories require the
assistance of the government-run labs
to run diagnostics on special cases,
due to lack of sophisticated laboratory
infrastructure in the private labs.”
There is definitely an upward
trend of IVD adoption in Saudi
Arabia, and it is expected
to continue as increased
funding and support is being
graciously provided by the
government. There is an
emphasis on improving the
private healthcare sector, and
this should help to address
the current gap between the
sophistication of public versus
private laboratories in the
country.
“
-
Dr. M. Iqbal Musani, Chairman, Department of Laboratory
Medicine at Al Jedaani Group of Hospitals

17. 17
The Contribution, Value and Future of In Vitro Diagnostics (IVD)
in Saudi Arabia’s Healthcare System
SHI
In order to bolster private-sector
participation in the healthcare sector,
the government is offering loans to build
healthcare infrastructure at favorable
rates; this is also being applied to smaller
loanstoattractinvestorsforsmallerclinics
in rural and ‘underserved’ towns. Despite
these efforts, progress is slow – and
challenges abound. Challenges include a
shortage of available land to procure for
the construction of healthcare facilities.
Some experts have also expressed
concern that the rapid expansion plans
of Saudi’s healthcare infrastructure may
compromise on quality; in 2014, 33
private healthcare facilities were shut
down by the authorities for violating
health rules.
strategic healthcare investments by Government
The Saudi Government is not taking its healthcare challenges lightly; in 2015, Saudi Arabia increased its healthcare budget
by 49% from SAR 107 billion (approx. USD 28.5 billion) in 2014 to SAR 160 billion (approx. USD 42.7 billion) in 2015. This
significant healthcare budget increase is ear-marked for (a) the expansion of healthcare facilities, (b) the development of an
integrated e-healthcare system, and (c) enhancing primary healthcare centers and diagnostic laboratories across the country.
The government has announced plans to construct over 100 new public and private hospitals to meet current demands in the
coming years. The government is also pushing the uptake of integrated e-health systems, which will ensure that medical files
including diagnostics results are linked across all hospitals. By the end of 2015, the government aims to achieve a hospital
beds-to-population ratio of 3.50 beds per 1,000. The five medical cities under construction will add 6,200 new hospital beds
in the country alone; and the Ministry of Health has reported an expected 21% increase in the number of primary healthcare
centers from the 2,279 in 2013 to 2,750 centers by 2020.
Primary healthcare centers in Saudi Arabia
2010 2011 2012 2013 2014 2015 2016e 2017e 2018e 2019e 2020e
0
2000
4000
Primary healthcare centers Linier (Primary healthcare centers)
Saudi Arabia
increased its
healthcare budget by
49% from SAR 107
billion (approx. USD
28.5 billion) in 2014
to SAR 160 billion
(approx. USD 42.7
billion) in 2015.
Source: Solidiance Interviews and Analysis, Ministry of Health KSA

18. 18
Finally, the government’s e-health initiative seeks to install a data center at the Saudi Ministry of Health, linking 22 regional
health directorates, 166 hospitals, and more than 40 hospital management centers across the region. In order to implement
this large-scale project, significant investments in healthcare IT across the country’s healthcare infrastructure can be seen.
The Kingdom’s IT expenditures reached SAR 15 billion in 2014 (USD 4 billion).
In addition, the government has been working towards universal health insurance, and hopes to have all Saudi Nationals and
expats covered by private health insurance by 2016. Though the government has required all expats working for the private
sector be covered by private health coverage since 2001, it has only been in the past 12 months that the same program
has been extended to public-sector employees. This strategic move by the government should drive up demand for private
healthcare services, in turn potentially attracting private-sector investment in the healthcare sector. This initiative has shown
a significant growth in the Saudi Insurance Market, having grown from SAR 3 million (approx. USD 800,000) in 2007, to SAR
21 million (approx. USD 5.6 million) in 2015. The Saudi Arabian insurance industry has remained one of the fastest growing
insurance industries across the world.
KSA Insurance Market (in SAR Million)
2007 2008 2009 2010 2011 2012 2013 2014 2015
0.0
5.0
10.0
15.0
20.0
25.0
3.0
5.0
7.5
9.0
10.5
12.0
14.5
17.5
21.0
~19%
~41%
Source: Solidiance Interviews and Analysis, Analyst Report, Saudi Arabian monetary agency

19. 19
The Contribution, Value and Future of In Vitro Diagnostics (IVD)
in Saudi Arabia’s Healthcare System
By 2018, Saudi Arabia’s population is forecasted to increase by 2 million, while the aging population (persons >60 years of
age) will grow from 7% to 8%. The prevalence of diabetes is expected to continue to increase from its current 24%, and other
lifestyle diseases are expected to grow and add pressure to the current healthcare infrastructure.
IVD will play a critical role in the integrated healthcare system proposed by the Saudi Government, enabling operation
efficiency and cost-savings across public and private healthcare ecosystems. IVD reduces unnecessary inpatient stays by
enabling early detection of diseases and hence allowing provision of timely treatment to patients.
It is clear that Saudi Arabia is expected to continue facing sharp increases in healthcare needs, which will in turn result in the
rapid growth of the IVD market. Currently, only 1% of the overall healthcare expenditure in Saudi Arabia is spent on IVD, and
is expected to grow to 1.5% by 2020. Despite this growth, 1.5% is still comparatively lower than the global average (i.e. 2%
of global healthcare expenditure is spent towards IVD), indicating further that there is room for significant growth in Saudi’s
IVD market.
In response to the growing demands being placed on the Kingdom’s healthcare system, the government has set-out to
implement key initiatives, including increasing insurance coverage towards a “universal coverage” system, the construction
of 30-50 major hospitals by 2016, and increasing private-sector involvement and investment in healthcare services. All of
these initiatives also point to a clear demand and forecasted growth for IVD in the Kingdom.
The Role of
IVD in Saudi
Arabia
Universal healthcare insurance means that more and
more people in Saudi Arabia will be able to get IVD
tests as part of the insurance coverage. Government
initiatives to enhance private sector involvement in
the healthcare industry will translate to faster growth
in hospital and laboratory infrastructure. Currently,
70% of the laboratory infrastructure in the Kingdom
is considered basic labs, and this infrastructure is
expected to see dramatic improvement by 2018.
All things considered, the Saudi Arabia IVD market is
growing at a CAGR of 6.5% and is projected to reach
USD ~500 million by 2018. Meanwhile, the greatest
growth in IVD will be seen in the private sector, as
private infrastructure growth will be emphasized
over the course of the next 3-5 years. Moreover,
current private laboratory infrastructure remains
less equipped in comparison to public laboratories.
Private Labs are growing at a rate of 10% CAGR, and
is projected to cater to 45% of the market by 2018.
IVD in Saudi Arabia
is a technology
definitely worth
investing in.
Referrals on IVD are
growing as there are
more laboratories
and physicians.
“
-
Dr. Ahmed El Eisa, Supervisor General, Department
of Medical Services, Ministry of Interior

20. 20
Conclusion
It is clear that the Saudi government has made strides to increase healthcare
spending in recent years. Further increase in spending will be needed in
order to bridge the gap between the quality of healthcare that is evident in
OECD countries in comparison to Middle East countries such as Saudi Arabia.
GCC countries, including Saudi Arabia, currently rely heavily on government
funding; the Saudi government accounts for 65% healthcare spending in the
country. Saudi Arabia has also been heavily subsidizing private healthcare
institutions and have aggressively promoted expanded health insurance to
promote the development of the private healthcare ecosystem. Increased
private-public partnerships for the development of hospitals, clinics and
laboratories are required in order to develop the sustainable healthcare
ecosystem Saudi Arabia needs.
Furthermore, due to the growing demands and higher expectations from
patients, many more laboratories are also seeking to become internationally
and nationally accredited to ensure better quality of laboratory services;
for the same reasons, a significant trend of outsourcing in vitro diagnostics
to the private sector is also emerging in Saudi Arabia. There is no question
that the Kingdom is geared for growth in the healthcare sector. IVD is one
healthcare segment that is expected to see significant increases over the
coming 5 to 10 years. In the short-term, IVD will provide the much needed
operational efficiencies and provide some level of relief to the currently
strained and over-stretched healthcare system.
In the medium-term, IVD offers significant cost reduction opportunities
for the government, and further provides higher-quality healthcare to
Saudi’s population, which is increasing in demand. IVD will deliver efficient
preventative care through integrated screening programs, offering early
detection and in turn reducing disease incidence rates and mortality rates.
In the medium to longer-term, we should expect to see innovative medical
technologies, infrastructure and approaches being adopted by Saudi
Arabia in order to bring greater efficiency, optimized services, and lead
to significant cost-cutting. Rather than duplicate prohibitively expensive
laboratory services and complex test algorithms, many hospitals and
healthcare organizations will be looking to consolidate services and utilize
expertise available in the region – and cross-regional collaborations may also
increase. Saudi Arabian healthcare providers may also begin to assess digital
technologies and digital laboratories in order to offer better test menus for
patients, cut-down on response times for second opinions, and offer more
sophisticated testing through alignment with larger, well-established, and
internationally accredited institutions.
The future looks bright for IVD in Saudi Arabia, it is only a question of how
fast it can be adopted and implemented in order to provide the benefits
the country – both in terms of the government and its people – needs and
desires.

21. 21
The Contribution, Value and Future of In Vitro Diagnostics (IVD)
in Saudi Arabia’s Healthcare System
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22. King Abdul-Aziz Medical City-Riyadh
National Guard Health Affairs
Ministry Of National Guard
Kingdom Of Saudi Arabia