The Evolving GCC Healthcare Landscape

The Gulf Cooperation Council (GCC) healthcare sector is undergoing rapid transformation, driven by population growth, rising rates of non-communicable diseases (NCDs), and evolving policy priorities. In response, governments are making significant investments to expand healthcare infrastructure, enhance quality of care, and adopt innovative delivery models, while simultaneously introducing cost-containment measures and implementing policies designed to shift more of the financial burden to the private sector.

For healthcare companies operating in the GCC, these shifts present both challenges and opportunities. A strategic, forward-looking approach to government engagement is now more critical than ever.

Below, we outline key trends shaping the GCC healthcare landscape in the near and long term, along with their bottom-line impact on multinational healthcare companies. For deeper insights, see our full Healthcare Trends Report. In the coming months, we will release shorter-form pieces spotlighting individual trends and offering practical recommendations for how industry can respond.

Albright Stonebridge Group, part of DGA Group, is the industry leader in government affairs and policy solutions for the healthcare sector. We have helped a broad range of multinational healthcare companies understand and navigate the fast-changing landscape in the GCC and effectively engage with government and private sector stakeholders.

• Growing Healthcare Needs: Rapid population growth and the high prevalence of NCD are driving demand for healthcare services. In response, Gulf governments are increasing health spending and investing in expanding healthcare infrastructure, creating substantial market expansion and investment opportunities across the region.

• Private Sector Expansion: In an effort to contain spiraling healthcare budgets and shift more of the burden to the private sector, GCC countries are easing restrictions on private sector healthcare investment, supporting public-private partnerships (PPPs), and opening new segments for investment. While the long-term policy direction is clear, most GCC countries are still in the early stages of defining their PPP frameworks, creating uncertainty for investors in the short term.

• Digital Transformation: Gulf governments increasingly recognize the opportunities that digitization presents in the healthcare sector. They are actively investing in priority areas such as AI integration, electronic health records, telemedicine, and remote patient monitoring. Government support for digital health initiatives will intensify alongside global technological advancements and companies should proactively explain how their efforts can complement government objectives.

• Localization Pressure: Foreign healthcare companies are facing growing pressure to localize operations, manufacturing, employment, and data. Saudi Arabia is introducing an increasingly complex and sophisticated system of local content policies, including Saudization requirements, various forms of local content preferences, a mandate to establish regional headquarters in the Kingdom, and new Economic Participation rules. Companies should anticipate stricter localization requirements and develop strategies to comply with evolving requirements while maximizing the value of available localization incentives.

• Local Champions: GCC governments are fostering local healthcare champions, such as Lifera in Saudi Arabia and M42 in the UAE, as they look to build local capabilities and supply chains in strategic areas and reduce reliance on imports. While these national champions will increasingly compete with multinational companies, their need for investment, talent, and services also creates opportunities for global firms to form strategic partnerships. Global healthcare companies should pursue collaboration where potential synergies exist and differentiate their value in competitive areas.

• Pricing and Procurement: In response to rising costs and competing demands on public finances, Gulf countries are taking steps to contain healthcare spending. Saudi Arabia, in particular, continues to implement policies aimed at lowering pharmaceutical list prices while leveraging centralized procurement to negotiate lower prices directly with healthcare companies. Companies should highlight the long-term system-wide cost savings their products offer through prevention and improved healthcare outcomes, while also leveraging available local content incentives to relieve pressure on margins.

• Restructuring Healthcare Provision and Reimbursement: Gulf governments are transitioning to semi-privatized, insurance-based healthcare models, driven by new universal health insurance laws. This shift is exemplified by Saudi Arabia’s interim transition to regional healthcare clusters and the UAE’s nationwide standardization of health insurance. Healthcare companies should adapt by aligning their strategies with new insurance frameworks, building partnerships with local insurers, and tailoring their offerings to meet the needs of privatizing markets.

• IP Advancements: Gulf countries are making strides in addressing long-standing industry concerns around inconsistent IP enforcement, with the establishment of dedicated IP authorities and the reinforcement of existing legal frameworks to better safeguard IP rights. However, gaps remain in consistently aligning with international standards.

• China’s Rising Role: Since the Covid-19 pandemic, Chinese-made healthcare products have become more competitive due to cost efficiency, improved perceptions of reliability, and stronger bilateral ties with Gulf countries. To retain their status as preferred technology partners, Western multinationals should emphasize innovation, quality, patient outcomes, and a commitment to advancing national development goals, including localization.

About DGA Group

DGA Group is a global advisory firm that helps clients protect – and grow – what they have built in today’s complex business environment. We understand the challenges and opportunities in an increasingly regulated and interconnected world. Leveraging the expertise and experience of our team at Albright Stonebridge Group, a leader in global strategy and commercial diplomacy, and a deep bench of communications, public affairs, government relations and business intelligence consultants, we help clients navigate and shape global policy, reputational and financial issues. To learn more, visit dgagroup.com.

For additional information or to arrange a follow-up, please contact Michael.Bessey@dgagroup.com.