Ismail Shehada

What is the structure of the pharmaceuticals industry in Saudi Arabia, and how does it align with Saudi Chemical’s holding companies?

The pharmaceuticals sector in Saudi Chemical consists of three companies: AJA, the manufacturing arm where our factory in Hail produces most of our products; Saudi International Trading Company (SITCO), the second-largest distributor in KSA with a market share of around 11.3% according to the 2021 IQVIA Rx report, distributing to around 30 international and multinational companies in different therapy areas and focusing on the cold chain as a supply chain; and the Chemical Commercial Investment Company (CCCI), which focuses on distributing baby nutrition and medical equipment. The total revenue of those companies in 2021 is almost SAR3.2 billion.

What specific actions did the pharmaceutical industry take in the beginning of the pandemic, and how has Saudi Pharma contributed to the fight against COVID-19?

There are three forms of interaction. The first is internal interactions, where we follow the country’s guidelines to ensure we take the precautionary measures for our employees and guarantee a safe and healthy environment. Second, we took external actions to ensure the continuity of the business without any disruptions of medicine supply to end users in KSA and distribute medication, vaccines, and injectable products. As the second-largest distributor in KSA, our major task is to ensure a continuity plan to avoid any disruptions of medicine delivery to patients. Based on this, we communicated with the Saudi Food and Drug Authority (SFDA) to receive permission to deliver medicine during the pandemic. The third focus is a continuous engagement with key stakeholders, the government, and the authorities during COVID-19, facilitating an understanding of the Kingdom’s priority therapy areas and shifting focus on more important types of medicine; for example, we ensured enough stock and production of Vitamin C during the pandemic. We started to produce sanitizers in our factory, which was not part of our strategy, but it was our social responsibility to the Kingdom and its people. As we move forward, focusing on the continuity of medicine and vaccine supply during the pandemic, we developed our digital platform to maximize our reach to healthcare providers and customers. I want as well to highlight the key role the authorities had in supporting us during such uncertain period. We have noticed acceleration in the payments from NUPCO and MOH which reflected positively on our financial performance. Also, SFDA acceletrated registration (fast track) for essential products was a key in bringing medicines and vaccines as early as possible to the market.

In June 2021, Saudi Chemical signed an agreement with GlaxoSmithKline. How does this contribute to the health and pharmaceutical industry of Saudi Arabia?

The GSK agreement is confidential, and we cannot go into details. We have signed many similar agreements with different multinational companies, such as Abbott, Novartis, and Servier. One of the strategic pillars for the pharmaceutical sector of Saudi Chemical is to be a trusted partner of multinational companies. We have to meet international standards to meet the multinational companies’ criteria, and we have to pass their due diligence and technical evaluation processes to manufacture their products. The whole process is key to meeting global manufacturing standards. It is not only about raising our capacity but also about working together with multinational companies to localize their products in Saudi Arabia as a part of the country Vision 2030. We work hand-in-hand to transfer the know-how to Saudi Arabia. We are proud to have been selected by many multinational companies as their strategic partners in Saudi. Collaboration with more multinational companies is also our key priority because it transfers the expertise to our people, which will create more jobs for Saudis.

How would you evaluate the Saudi pharmaceutical industry’s performance, and what are the challenges to take it to the next level?

After 23 years of experience in the Saudi pharmaceutical industry and witnessing the industry’s success and improvement, the next step is to unify the process of procurement in the pharma industry under one umbrella. Take NUPCO as an example; since it was established in 2009, it has served as the main body for procurement and logistic services for pharmaceutical and medical devices, and today it coordinates all the procurement processes to boost government efficiency. Before, there were many different terms and conditions, timelines, supply agreements, and contracts that now have been unified under one contract condition. This has had a positive impact on multinational companies and distributors, as well as on the industry itself, as it improves communications with the government to discuss supply challenges and improve the supply cycle. Understanding the cycle time of procurement in Saudi Arabia will enhance the pricing and will reflect positively on the collection, because we currently only have to submit documents to one authority. NUPCO changed its strategy recently and opened its doors to multinational companies, the private sector, and distributors to listen to their suggestions and feedback. I have attended several meetings with NUPCO, where we shared our thoughts on improving the services, supply, and procurement. Now, NUPCO has published a tender to encourage investment in the Saudi pharma industry. There is a major effort towards encouraging investments in healthcare services and industry localization by the government and different authorities such as the Ministry of Investment. The localization can be achieved either by partnering with multinational companies or local players willing to discuss the limits and push boundaries toward achieving this goal.

What are your goals and priorities for next year?

In mid 2020, we started a new transformation journey that included the entire Saudi Chemical group and the pharma sector within Saudi Chemical. The transformation includes our process, the services we provide to our customers, and leveraging people and infrastructure capabilities. We have several priorities to continue to be the selected partner for multinational companies. Our first priority is the manufacturing arm, where we aim to launch new products in AJA for different therapy areas. Today, we are capable of manufacturing solids, semi-solid, liquids and in 2022 we will be able to manufacture injectables through our sterile suite. We have to focus on bringing new molecules like biosimilars, vaccines and injectable products to the market by siginig multiple developmental agreements with leading companies, also we are in extensive discussions with multinational companies to transfer to AJA the marketing authorization for key molecules and to be the local producer for such products. Additionally, we want to contribute to the industry beyond KSA by exporting products internationally and expanding our presence not only in the region but also to have a global footprint and penetrating new international markets. The second priority is distribution and logistics; we want to uplift our capacity by partnering with well-known companies in this industry. The third priority is digitalization, as COVID-19 has accelerated the digital platform. We improve our system internally so customers can use our system to place an order, do inventory, refill orders, report, and do marketing and promotional activities. We use a multichannel platform to reach out to healthcare providers and deliver information and updates on our products. Finally, human capital is important in the pharma sector. As a result, in 2021 we signed an MoU with King Saud University. Fresh pharmacy graduates will receive training in our pharma sector in different areas and distribution and manufacturing to equip them with the required training and expertise for the future.