Vision 2030 and the Opportunities it Represents in
Healthcare in Saudi Arabia
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On 25 April 2016 Saudi Arabia unveiled an ambitious plan called Saudi Vision 2030 (“Vision 2030”)
to transform its economy and diversify the country’s sources of income away from its current
dependence on oil. In addition to this the National Transformation Program 2020 (“NTP”) was
approved in June 2016 by the Saudi Cabinet as the interim medium for realising the goals laid down
in Saudi Vision 2030.
December 2016 – January 2017
Healthcare is one of the main focus areas of Vision 2030 and this article considers what is envisaged
and what this could entail for the sector and for the foreign investor.
Vision 2030
Vision 2030 is a comprehensive plan for reform of the entire economic structure of Saudi Arabia.
The main goals are to develop other industries and sectors to ensure that the economy is no longer
as dependent on oil as a source of income and to decrease public spending with a greater emphasis
and participation from the private sector. In order to ensure that these goals are met and the vision
of Vision 2030 becomes a reality the following targets have been set:
Reduction of the dependence of the economy on oil through the development of other
industries and sectors;
Reduction of public spending through more efficient use of current resources;
Greater participation of the private sector and an increase in its contribution to GDP;
Creation of an attractive environment for both local and foreign investors; and
Increased employment and participation of Saudi nationals in the workforce.
The targets are ambitious and require a comprehensive course of action to meet the targets laid
down in Vision 2030. To achieve this, the following initiatives have been proposed:
Entering into partnerships and joint ventures with large international companies;
Encouragement of public-private partnerships to facilitate the flow of private investment;
Enterprises to encourage privates sector investment in healthcare, municipal services,
housing, finance, energy and education;
The facilitation of foreign access to investing and trading in Saudi Arabia’s stock markets (this
will include the listing of private companies and state owned enterprises such as Aramco);
Support and promotion of leading national companies;
Regulatory reform with the strict adherence to international and commercial regulations;
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Facilitation of the movement of people and goods through streamlined licensing and
customs procedures;
Improved education and training initiatives for Saudi nationals.
The NTP is the interim action and development plan for Vision 2030 which sets out strategic
objectives to be met by a number of government bodies by 2020. It has identified common
national priorities and goals to be achieved through the following:
Contributing to Job Creation
Strengthening Partnerships with the Private Sector
Maximising Local Content
Digital Transformation
The following strategic objectives have been identified for the Saudi Arabian General Investment
Authority (“SAGIA”) to achieve:
Improve administrative and procedural environment to enable significant investments;
Improve infrastructure needed to ensure ease of doing business;
Excel in investor services and improve their level of satisfaction.
These objectives are based on the targets laid down in Vision 2030. The main aim being the
creation of an attractive environment for both local and international investors to enhance their
confidence in the Saudi economy.
The strategic objectives identified for the Ministry of Health and the Saudi Food & Drug Authority
(the regulatory authority for pharmaceuticals and medical devices) are discussed in more detail
below.
Focus on Healthcare
A target of Vision 2030 is greater participation of the private sector within the economy and this is
especially so of healthcare. There is a definite move towards privatisation with a stated objective in
the NTP of increasing private healthcare expenditure from the current 25 per cent to 35 per cent of
total expenditure by 2020. This represents a projected increase in revenue generated from 3 Billion
SAR to 4 Billion SAR. In addition to this, the Ministry of Health plans to spend over 23 Billion SAR on
new initiatives over the next 5 years.
The NTP has identified the following strategic objectives for the Ministry of Health and the Saudi
Food & Drug Authority (‘SFDA’):
Ministry of Health
Increase private sector share of spending through alternative financing methods and service
providers;
Increase the efficient utilisation of available resources;
Improve the efficiency and effectiveness of the healthcare sector through the use of
information technology and digital transformation;
Increase training and development both locally and internationally;
Increase the attractiveness of nursing and medical support staff as a preferred career path;
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Improve healthcare provision before hospitalisation and in the main hospitals (ER & ICU);
Improve integration and continuity in service provision by developing the primary care;
Improve the infrastructure, facility management and safety standards in healthcare facilities;
Attain acceptable waiting times across all stages of service delivery;
Improve governance in the health system in order to enhance accountability with regards to
quality issues and patient safety;
Adopt a national plan for emergency response to public threats in line with international
standards;
Identify additional sources of revenues;
Improve public health services with focus on obesity and smoking;
Improve the quality of life and healthcare service provided to patients outside hospitals;
Improve quality and safety principles as well as skills of service providers.
SFDA
Ensure sufficient supply of basic medicines.
These objectives are based on the targets laid down in Vision 2030. The main aims being the
improvement of the quality of healthcare services, the expansion of the privatisation of government
services and finally the creation of an attractive environment for both local and international
investors.
The strategic objectives stated for healthcare in the NTP are extensive and in order to successfully
meet them the initiatives will be launched this year at the following ministries and authorities:
Ministry of Health
Reform and restructuring of primary health care;
Encouraging the pursuit of nursing and clinical health professions through amendment of
some policies and the participation of such by all community segments;
Private-public partnership through the privatisation of one of the medical cities and
localisation of the pharmaceutical industry;
Increasing the capacity and quality of healthcare education (through partnership with the
Ministry of Education);
Health Insurance & medical services purchase schemes;
Increasing the number of trained health practitioners and improving their training
SAGIA
Development and execution of a plan for localising the healthcare industry and services
sector
SFDA
Establishment of a Centre for Standardisation of Medical Products and Equipment
Establishment of a Unified Electronic System
Opportunities for the Foreign Investor
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Vision 2030 offers many opportunities in healthcare for the foreign investor in key areas which can
be identified in the NTP as follows:
Additional private medical facilities;
Increased medical insurance;
Increased use of information technology;
Healthcare Education;
Provision of improved training facilities;
Enhanced professional development;
Local manufacture of pharmaceuticals.
Foreigners are able to own and manage hospitals in Saudi Arabia but are unable to own or manage
other healthcare institutions. It is envisaged that foreign participation and investment in new
hospitals will take place through public-private partnerships and joint ventures with Saudi owned
entities.
Medical insurance is already compulsory for expatriates and Saudi nationals (and their dependents)
working within the private sector. Citizens working within the public sector currently receive free
coverage in government health care centres and public hospitals. It is not known at this stage how
medical insurance will develop however as more public services are privatised and public-private
partnerships are entered into the provision of healthcare will naturally transfer to the private sector.
In anticipation of this, we understand that current medical insurance providers are developing
products that cater for public sector employees to meet future requirements.
Digital healthcare innovations are key for supporting Vision 2030 as the Ministry of Health is aiming
for at least 70 percent of Saudi citizens to have unified digital records by 2020. In addition
information technology solutions will improve the performance and productivity of healthcare
providers and will enable a better quality of service to be provided. Software that assists with the
treatment of medical issues such as the diagnostic process is considered a medical device whereas
other software used with the healthcare sector is not. We have assisted a number of healthcare
technology providers looking to carry out business in Saudi Arabia either directly or through a
distributor and expect this to continue as the opportunities for investment here are recognised
more and more. In addition, we are seeing an increasing interest in telemedicine which enables
providers to offer services within the country under the supervision of locally registered physicians
on a consultancy basis.
The NTP places a great deal of emphasis on healthcare education and training. There is a
recognised need for qualified Saudi healthcare practitioners and support staff as healthcare
requirements increase and currently the sector is mostly supported by expatriate workers. The
increased education and training needs will be catered for domestically and internationally
potentially with links to world renowned institutions and public-private partnerships. Furthermore,
this increased need could also be catered for through management and operational arrangements
with internationally recognised service providers.
Saudi Arabia is mostly dependent on imports for its pharmaceutical requirements and there is a
desired need for pharmaceuticals to be manufactured locally to ensure an adequate supply of
medicines. Foreign pharmaceutical manufacturers are being actively encouraged to establish plants
in Saudi Arabia through public-private partnerships and joint ventures with national entities.
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Incentives are being offered in the form of preferential treatment in future volume tenders. As an
additional incentive, foreign owned manufacturers within Saudi Arabia are able to distribute and sell
pharmaceuticals within the country whereas all imported pharmaceuticals can only be distributed
through a Saudi distributor.
The SAGIA website lists the manufacture of medical devices and equipment as an investment
opportunity for foreign investors. Currently the majority of medical devices and equipment are
manufactured abroad and are imported into the country. The Ministry of Health is supporting local
manufactures by partnering multinationals with Saudi companies with the incentive of guaranteed
volumes for Ministry of Health purchases and preferential treatment in future volume tenders.
Furthermore, foreign owned manufacturers within Saudi Arabia have the additional benefit of being
able to distribute and sell medical devices
