SGIE 2022 Report: Halal pharmaceuticals
Muslim spend on pharmaceuticals increased 6.5% in 2021 to $100 billion and is expected to reach $129 billion by 2025.
The COVID-19 pandemic brought into stark reality the shortcomings and inequalities present in global healthcare provision, particularly obvious in the poorer Organisation of Islamic Cooperation (OIC) countries.
These regions were not only impacted by the pandemic, but also by delays in rolling out national inoculation campaigns for other endemic diseases. Wealthier OIC countries have attempted to fill the vacuum by donating millions of doses of COVID-19 vaccines and providing other support.
However, there is a potential silver lining for low-income countries with bilateral agreements ensuring more vaccines are being produced in OIC countries including Turkey, the United Arab Emirates (UAE), Egypt and Saudi Arabia, than before.
A further upside is that the local manufacturing of COVID-19 vaccines will bolster development of other vaccines, potentially halal-certified, for export. Two vaccine production initiatives in Morocco and Senegal are particularly promising for Africa where the continent has had to import 99% of vaccines.
DinarStandard’s State of the Global Islamic Economy Report 2022 estimates Muslim spend on pharmaceuticals increased 6.5% in 2021 to $100 billion; a figure it will sustain in the current year and expect to grow at a four-year compound annual growth rate (CAGR) of 6.7% to reach $129 billion in 2025 at a four-year compound annual growth rate (CAGR) of 6.7%. Pharmaceuticals are the one of the most import dependent sectors in the OIC (after food) with $34 billion trade deficit (exports less imports) in 2020.
See - Infographic SGIE 2022: Halal pharmaceuticals
“Preventive healthcare and supplements have become big since the pandemic as people seek to bolster their immunity. Nations and brands can use this opportunity to increase awareness for halal-certified neutraceuticals and vitamins that will definitely capture a larger untapped market globally,” said Iman Ali, Research Analyst at DinarStandard.
“Investments in digital health are growing, especially in the Middle East and North Africa. Countries are focusing on building national healthcare strategies to support e-health start-ups and ease regulations in this space.”
While healthcare news has naturally focused on the pandemic, dynamics have shifted over the past year. Initially there was a major growth spurt for neutraceuticals and other preventative medicines, witnessed in the number of products getting halal-certified, but this has tapered off.
However, Ali said the demand has remained strong as people continue wanting to be as healthy as possible – a trend expected to continue as demonstrated in Malaysian-based Duopharma Biotech’s rebranding and strong marketing of its halal-certified neutraceuticals.
The pandemic has also spurred innovation in the halal segment with a halal-certified COVID-19 detection kit developed in the UK and a face mask halal-certified in Singapore. The lack of universally accepted halal standards has hindered the potential for halal-certified vaccines, although pharmaceutical companies are seeking to produce a halal COVID-19 vaccine as soon as possible.
The OIC continues to work on halal pharmaceutical standards, while there are growing calls for both the private and public sectors to spread awareness about halal healthcare in Muslim-majority markets.
The pandemic has also driven investment in healthcare with notable investments in digital health in the Middle East and North Africa. Countries are supporting start-ups and amending regulations to bolster digital health, now a core focus of national healthcare strategies.
This has led to increased attention from private equity and venture capital investors in the digital health segment. With the pandemic pushing investment in healthcare and the public increasingly health conscious, Ali said the halal pharmaceutical sector and wider ecosystem was poised for major growth.
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