How to become successful in Middle East Medical Device Markets
With roughly 450 million people, MENA region (Middle East/North Africa) offers good opportunities for medical device manufacturers from the United States, Europe and Asia. While organizations such as the World Bank, IMF and UN may disagree on which countries are included in MENA, there is no disputing the fact that MENA countries differ more substantially than you might assume.
Before you start exporting to the Middle East, it’s good to understand that the Middle East countries vary significantly in population and the amount they spend on healthcare per capita. More populous countries like Iran and Egypt spend relatively little on healthcare while less populated countries like Qatar, Kuwait, Bahrain and the UAE spend considerably more.
*Based on 2019 data from the World Bank
Understanding the Middle East medical device markets
The local medical device manufacturing industry is very small in size mainly focusing on low-tech products such as consumables, surgical instruments and dental products. As a result, most medical devices and In Vitro Diagnostics (IVD) are imported.
The most commercially interesting markets in the region are Saudi Arabia, UAE, Egypt, Israel and Iran. The choice what regional market(s) to start exporting to is an important one to make. The differences between the individual countries in economic development and healthcare spending per capita are often reflected in the demand (or absence of demand) for certain medical devices. For instance, the GCC or Gulf Cooperation Council (which includes Bahrain, Kuwait, Oman, Qatar, UAE and Saudi Arabia), is a group of very well-developed markets with a highly developed economic infrastructure including the world’s most modern healthcare facilities. This fuels the demand for innovative, high standard medical devices and (software) solutions.
Another important aspect to consider when exporting to the region is the regulatory process. Both CE Marking and FDA clearance/approval will fast track your registration, with the exception of KSA that has implemented its own TFA (technical file assessment) registration requirement. Depending on the medical device class, the process can be lengthy in a country like KSA (where registration with the SFDA is required) as compared to Qatar and Bahrain and other countries.
The MENA healthcare market is growing! The MENA region (Middle East/North Africa) is quite diverse in size, population and economic development. As a region, it is expected that overall economic growth will be around 5% in 2022 (which is the highest growth since 2016). However, COVID-19 and the uncertain global political and economic situation will have an impact on the region and the individual countries. The compound annual growth rate (CAGR) of the regional healthcare market is around 10% which is more than double of the global market.
Growth drivers or Middle East medical device markets
Over the past years, we have seen several developments which have fueled the demand in the Middle East for innovative medical devices and solutions. The most important ones are:
More demand for high-tech - Growth in demand for high quality medical devices and (technology powered) digital health services. This growth is driven by several reasons like an increase in spending on healthcare by a larger population but also an increasing awareness on the importance of prevention (among others on NCD’s) and the adoption of new technologies to manage your own health;
Evolution of insurance - Mandatory insurance has resulted in a larger population having access to affordable and quality healthcare services. Government spending on healthcare as a percentage of total spending has increased over the past years which has among others resulted in an increase in hospital and clinic projects and increased demand in medical devices;
Growth of medical tourism – Some countries have developed a high level healthcare infrastructure catering to the region and beyond. An example of this is Dubai Healthcare City in the UAE which has become a specialty healthcare hub with world-class facilities.
Entering the medical device and IVD market in the Middle East
The process of successfully commercializing your products in the Middle East market involves different steps. After having decided which market (or markets) to enter, you need to ascertain whether product registration will be required. Depending on the market, it may also be beneficial to recruit a local Key Opinion Leader (KOL) to endorse your products. This can be critical in some markets, especially when a new technology is being introduced.
Of course, there is the challenge of how to find qualified distributors. How do you go about doing this if you don't speak Arabic and are located thousands of miles away? Yes, you can (and should) attend once-per-year tradeshows such as Arab Health but with literally thousands of exhibitors and many distributors visiting, it’s a huge challenge to find the right one. Online searches are an option but the information is often outdated or simply not available in English! Plus, you’ll still face language and cultural issues if you try to reach potential partners via email or phone. And even when you have made contact, how can you assess that what the distributor is telling you is correct and that they will be the logic choice to represent your brand in the market versus simply adding it to their catalog as a defensive measure against other regional distributors?
It’s key that you start understanding the local market and its players and, even more important, build a long-term personal relationship with your partners. Without that relationship, it’s very difficult to have long term success so you should spend time in establishing it.
Hire a local distribution expert in the Middle East
Whether you have a question on product registration, reimbursement, your go-to-market strategy or finding a reputable distributor or KOL, the best option is to hire a local distribution expert that knows the market and understands the business culture. These consultants have spent years cultivating distributor relationships, typically during their past roles as senior sales executives for device companies. Unlike you, their emails will get opened and read by their contacts and, as is the case in any business, warm introductions always produce better results than cold inquiries. Some examples of client cases we have done in the Middle East in the past:
Supporting a US company active in sterilization of surgical instruments to successfully set-up a distribution infrastructure in the region by appointing distributors in 10 different markets. Meetings were organized to meet with potential distributors to establish commercial partnerships;
Coordinating the UAE medical device product registration process for a European company and ensure that the contract with the assigned distribution partner meets the local requirements and gives opportunity for future changes in local representation;
Advising a medical device manufacturer on the preferred distribution structure in KSA given its size and infrastructure;
Helping to connect customers with KOL’s in markets like Iran or Kuwait where the local relationship is critical for future business success.
Luctor Medical has the right expertise in the Middle East market
With more than 850 medical device distributor searches and over 250 market research projects completed so far, we know exactly how to support you with your entrance into the Middle East market. Whether it’s a market entry strategy, registration or a distributor search, our native local experts in the region have deep connections in the industry and know what is required to be successful. Contact us today to talk more about how we operate and how we can help you enter the Middle East market for the first time, or replace an underperforming distributor.