Pricing and Reimbursement in The United Arab Emirates

The healthcare sector in the emirates of Abu Dhabi and Dubai is undergoing drastic changes as a result of the structural and financing reforms that will impact all major actors in the healthcare sector.

Report Highlights
Reforms undertaken in the UAE will increase healthcare access to all expatriates, and improve the quality of care provided in both the public and private sector. With patients placed at the centre of the reforms, the focus will be on preventive care rather than curative treatment since the UAE is burdened by chronic diseases such as diabetes.

Greater involvement of private insurers through compulsory employer financed health insurance will mature the health insurance industry. Datamonitor believes that insurers will emerge as the dominant influencer of the healthcare industry as relationships between providers, payers and Pharma change as a result of the reforms.

With the implementation of tighter pricing and reimbursement controls, the pharmaceutical market is expected to evolve, driven by initiatives to increase the use of generics and stricter prescribing practices. However, consumer attitudes towards generic drugs will need to be changed for such cost-containment measures to be fully realized.
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CHAPTER 1 EXECUTIVE SUMMARY 4
Scope of the analysis 4
Datamonitor insight into P&R in the UAE 5
Key opinion leaders interviewed 7
Related reports 7
CHAPTER 2 OVERVIEW OF THE HEALTHCARE SYSTEM IN THE UAE 11
UAE healthcare reforms designed to support country's future needs 12
Access to healthcare is universal for nationals but varies for expatriates in the UAE 13
The Ministry of Health is becoming increasingly concerned about the UAE's ability to support its future healthcare needs 15
The Registration and Drug Control Department - responsible for approval and pricing of drugs 16
CHAPTER 3 HEALTHCARE REFORMS IN THE UAE 18
The need for international-standard healthcare in the UAE 19
Abu Dhabi and Dubai have adopted similar health reforms with subtle differences 20
Healthcare reforms in Abu Dhabi 24
The Abu Dhabi Health Insurance Bill 25
Insurance in Abu Dhabi 26
Basic health insurance policy (Abu Dhabi Plan) 27
Enhanced health insurance policy 28
Health insurance for nationals 28
The role of DAMAN in Abu Dhabi 29
The 2005 health insurance law requires private medical coverage for all expatriates working and residing in Abu Dhabi 30
Healthcare reforms in Dubai 32
Reforms undertaken by the Dubai Health Authority 34
Universal healthcare for nationals 34
Healthcare reforms for expatriates 35
Structural reforms - focus on primary healthcare 36
Financing healthcare reforms 38
Mechanism of the new system 39
Insurance in Dubai 42
Insurance coverage - greater cost for certain employers 43
The role of third party administrators 45
CHAPTER 4 PRICING AND REIMBURSEMENT IN THE UAE 47
Overview of P&R and cost-containment in the UAE 48
Controlling the cost of high priced drugs in the UAE 49
Price controls implemented in the UAE 50
Price cuts and profit controls in the UAE 50
Reference pricing in the UAE 54
Future strategies to control drug prices and healthcare costs 55
Reimbursement controls in the UAE 57
Insurers will introduce more patient co-payments for prescription drugs 58
Rx-to-OTC switching provides little benefit to payers in the UAE at present 59
Formulary lists are effective cost-containment tools that will be used widely in the UAE 60
A change of attitude and incentivization will be necessary to increase use of generics 61
Patient generic education is key 64
Managing expatriate healthcare expectations 66
Pharmacists in the UAE need to be empowered to substitute brands for generics 67
The need for fixed national treatment guidelines 67
The UAE should look to Japan for generic reform inspiration 68
CHAPTER 5 IMPACT OF HEALTHCARE REFORMS ON BUSINESSES 70
Health reforms will impact all companies operating in the UAE 71
Employers in the UAE are feeling the pressure of providing healthcare coverage for their employees 71
Reforms will promote the development of the health insurance industry 72
The government's role will be to ensure that the new health systems are sustainable 73
The UAE pharmaceutical market will open up to generics as the health insurance industry develops 74
Pharmaceutical importation for personal use is widespread due to the UAE's high drug prices 74
Product positioning will be critical for Big Pharma 75
Healthcare reforms will increase competition between both public and private providers, improving service quality 76
CHAPTER 6 BIBLIOGRAPHY 80
Datamonitor reports 83
Exchange rates 83
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Table 1: Health economics indicators in the UAE ($) 14
Table 2: Comparison of insurance reforms in Abu Dhabi and Dubai for nationals and expatriate residents, 2009 20
Table 3: Comparison of basic health insurance plan in Abu Dhabi with the basic health insurance package in Dubai for 2009. 23
Table 4: Abu Dhabi Plan - Basic health insurance policy, 2009 27
Table 5: Total number of Inpatient and outpatient claims details for Basic and Enhanced health insurance policies in Abu Dhabi, 2007 28
Table 6: DAMAN - comparison of health insurance products, 2009 29
Table 7: Price comparison of branded and generic drugs used to treat three major chronic illnesses in the UAE, 2009 62
Table 8: Exchange rates, 2009 83
Figure 1: Division of public and private expenditure on healthcare in the UAE, 2001-06 12
Figure 2: Breakdown of private healthcare expenditure in the UAE, 2006 13
Figure 3: Regulatory hierarchy of the principal regulators in the UAE, 2009 16
Figure 4: The main responsibilities of the Registration and Drug Control Department in the UAE, 2009 17
Figure 5: Healthcare objectives of Dubai Strategic Plan 2015 21
Figure 6: Relationships between payers, providers and the population, UAE, 2009 22
Figure 7: Health Authority of Abu Dhabi's (HAAD) vision for the healthcare system in Abu Dhabi 25
Figure 8: Percentage of population covered by the Basic product(Abu Dhabi Plan) versus the Enhanced policy, Abu Dhabi, 2007 26
Figure 9: Market share of health insurance by insurer, Abu Dhabi, 2009 30
Figure 10: Comparison of the effect of the reforms on Dubai residents seeking treatment at public and private providers 32
Figure 11: Dubai Health Authority's health model, focusing on primary care, Dubai, 2009 38
Figure 12: Dubai Health Authority's new health funding system for expatriate residents, Dubai, 2009 40
Figure 13: Dubai Healthcare Benefits Contribution (HBC) Basic insurance and top-ups, 2009 45
Figure 14: Drug prices in the UAE before the price reform of 2008 51
Figure 15: Chronology of drug price changes in the UAE, Q1 2004, Q2 2004 and 2008 53
Figure 16: Ministry of Health's proposed pharmaceutical pricing in the UAE 54
Figure 17: Recommendations made by the General Authority of Health Services (GAHS) following the survey on the price of drugs in Abu Dhabi 56
Figure 18: Comparison of drug prices for selected statins in the US and Abu Dhabi, 2006 63
Figure 19: Shift in relationships between providers, payers, pharmaceutical companies and patients in the UAE 78
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