3 major regulations for distribution of pharmaceuticals in the GCC region

Introduction

The GCC healthcare market in one of the fastest growing industry in the region and still have enough potential for future growth at the same or higher rate considering various ongoing mega projects supported by the respective Governments as part of their long-term strategy to streamline the issues related to health care of the residents. Further, GCC population is expected to grow by an annualized rate of 3% between 2015 and 2020. The increasing population, rising affluence of residents in the region and prevalence of lifestyle diseases are expected to create a larger demand of healthcare facilities in the region. Therefore, lots of private players are seeking access to reach the healthcare markets in the GCC to take advantage from the opportunities available. This article aims to highlight major regulations for distribution of pharmaceuticals in the regions.

Establishing the Presence

A foreign manufacturer or distributor of healthcare and pharmaceutical products can access the countries by two ways, either by establishing a local presence in the relevant country for trading and distributing the products or appointing a local agent in the relevant country for this purpose. It is understandable that both the options would have their own pros and cons. Appointing a local agent will definitely be a simpler option in comparison to establishing a presence, but specific recommendation shall depend only upon the preference of the foreign manufacturer.

Regulation in United Arab Emirates (UAE)

As mentioned above, both the growing population and rising standard of living of residents shall result in higher demand for pharmaceutical products. Therefore, many of the worlds’ largest players have already entered in UAE markets to utilize the opportunities the country offers and many other are in the process of doing so.

1. 1. As per the provisions of federal laws of UAE no pharmaceutical or medical product can be distributed in UAE before their registration with Ministry of Health and Prevention of UAE. The application for registration of the product should be filed jointly by the foreign manufacturer and its local authorized representative. He shall be legally authorized to act on behalf of manufacturer in the UAE and shall have legal obligations and responsibilities of manufacturers.
   2. In case of distribution of pharmaceuticals is being done through a local agent, the importing party should be an individual or entity established in the UAE and should possess a valid license to import medical products. The companies, which are wholly owned by foreign nationals are not allowed to import medical products, however, the entities registered with local and foreign shareholders can obtain a license of importing medicines and pharmaceuticals subject to foreign ownership restrictions.
   3. The entities wholly owned by UAE nationals can register their agreements with the Ministry of Economy of UAE (MoE) to take advantage of benefits and protection offered by MoE for agreements registered under agency law of the country.

Commercial Agency in GCC

The commercial agencies in GCC are established to protect the rights of their nationals like blocking imports of specified pharmaceuticals by third parties. Qatar allows its register commercial agent to submit a request to ban the importation of products from a foreign manufacturer without any notice to the foreign manufacturer if he terminates or not renew the agency agreement. Therefore, it is important for a foreign manufacturer to take advice from qualified law practitioner about the local laws before entering into an agreement for distribution if his products in a particular GCC country.
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