A growing population, new hospitals and advances in medical technology are set to grow the UAE's medical services market to a healthy Dh31 billion (US$8.4bn) this year.
The amount spent on health care in the UAE is forecast to grow 8.6 per cent this year, although that compares with a 9.3 per cent rise last year to Dh28.8bn, according to market research released last month by Business Monitor International (BMI).
"There are some short-term challenges, but in the long term, the UAE is still one of the most promising markets in the region," said Daniel Rosen, an analyst at BMI and head of the company's pharmaceuticals and healthcare coverage for the Middle East and Africa.
A record of about 3,000 companies will be competing for a slice of the industry's multibillion-dollar revenue pie when the Arab Health exhibition in Dubai opens tomorrow, in its 37th year. Of the [top 4,000 buyers at] the show last year, who mainly represented hospitals and government organisations, each spent an average of $5 million on healthcare products and services.
"There's huge potential, certainly, for a number of sectors," said Lisa Stephens, the executive director of the life sciences division at Informa Exhibitions, which organises Arab Health.
Technology manufacturers, as well as insurers, are expected to benefit from advancements in software and hardware devices, she said.
The rising prevalence of so-called lifestyle diseases, including obesity, diabetes and hypertension, is also increasing demand for care, while the need for additional hospital beds is also high. Generally, developed countries average three beds for every 1,000 people, while as of 2010, the UAE had fewer than two beds, "indicating a large room for future growth potential", according to a report from RNCOS, a market research company.
As local healthcare providers try to curb the number of UAE nationals and expatriates who visit other countries as so-called medical tourists, they have been agreeing partnerships with big brands elsewhere. "That's quite important [and is] hopefully going to help stop patients from going outside [the country]," said Dave Panther, a sales director with Informa Exhibitions.
The Cleveland Clinic Abu Dhabi, a multi-speciality hospital that is a partnership between the Cleveland Clinic in the US and Mubadala Healthcare, is scheduled to open on Sowwah Island next year with a facility that can expand from 360 to 490 beds.
Mubadala Development is a strategic investment company owened by the Abu Dhabi Government.
Later this quarter, Burjeel Hospital is slated to open in the capital, where it says it will be the largest private facility in Abu Dhabi at nearly 65,000 square metres. The hospital has tied up with Brussels University to offer services in reproductive treatments, while the Corniche Hospital has Johns Hopkins Medicine International managing its facility in the city.
Some private medical facilities are trying to take advantage of patients needs.
The American Hospital Dubai says it is rolling out a new facility of 240 beds within its private campus. This would bring its total capacity to more than 380 beds.
Yet certain sectors are expected to feel increased pain in their pockets.
Pharmaceutical retailers in particular are braced for a slowdown in growth amid sweeping price cuts on drugs. In November, the Government lowered the prices on 115 generic drugs for the treatment of chronic diseases by up to 30 per cent, according to BMI, and banned private pharmacies from offering discounts on medicines.
The introduction of more health insurance schemes is also expected to hit the pharmaceutical industry, as "insurers will put pressure on the drug companies to lower their prices", said Mr Rosen.
The end result is a projected Dh5.56bn in pharmaceutical sales this year, which is up just 0.8 per cent compared with a 3.4 per cent increase last year, according to data from BMI.
Drug distributors are being asked to absorb some of the price cuts, by lowering the commissions they take on medicines once they are imported into the Emirates. While bigger players are in better shape to withstand these lost revenues, "the little ones will struggle", said Mr Rosen.