A GlaxoSmithKline research and development facility in Nashik, India. GSK says it is expecting its business to grow in the Gulf in the future. Image Credit: Bloomberg

Dubai: With the medical sector of keen interest to regional governments, the UK pharma group GlaxoSmithKline (GSK) has disclosed new details surrounding its planned expansion in the Gulf. This is set to include a new factory in the UAE that will begin production in early 2020, and an expanded facility in Saudi Arabia, both coming amid health challenges in the region with soaring numbers of diabetes, obesity, and heart disease.

“In the UAE, we are looking at options,” said Sally Storey, GSK’s general manager for the Gulf, adding that instead of building a facility from scratch, the drugmaker was leaning towards a partnership. “It may be that we don’t build something, we may look [to go] through a partnership.

“We are relatively advanced in that right now. We’re looking at about six products initially.”

 What we’re trying to do there is bring the process back to deeper manufact-uring... In the UAE, we’re at a much earlier stage, but we are committed to that journey.”

 - Sally Storey (left) | GSK’s regional manager for the Gulf

This is double the number of drugs that Storey’s predecessor, Andrew Miles, had initially said the factory would produce. Production lines at the factory will likely begin rolling in late 2019 or early 2020, according to Storey.

“We’re looking to get the first manufactured product out on the ground in about a year-and-a-half’s time. That one is definitely progressing,” she said, noting that the project was “very important” for the company and its government partner, forming a “key part of the UAE’s agenda”.

Storey declined to specify which products would be manufactured. GSK makes a range of consumer drugs such as Voltaren and Panadol, in addition to vaccines and prescription medicines.

Pharmaceuticals make up the majority of GSK’s revenue, accounting for £17.3 billion (Dh82.5 billion) of £30.2 billion in annual sales, with its medicines holding leading market positions in respiratory and infectious diseases. In the Gulf, GSK currently manufactures around 80 per cent of its products in Saudi Arabia, through its GSK Saudi Arabia Ltd. (GSAL) partnership.

“What we’re trying to do there is bring the process back to deeper manufacturing, rather than just the packaging,” Storey said. “In the UAE, we’re at a much earlier stage, but we are committed to that journey.”

Declining to disclose the investment on the UAE facility, Storey said that as “with all of these things, it’s a huge challenge and often a huge capital investment. For example, we have products such as antibiotics which need a sterile environment – you need to build a separate site for them.”

GSK says it is expecting its business to grow in the Gulf in the future, and will continue to invest in the region both financially and through attracting top talent. “From a government perspective, one of the key areas they’re looking at is bringing more and more knowhow in to the region.”

She said that GSK would be able to “protect prices for the longer term”.

Reflecting this growing relationship between the company and local governments, earlier this summer GSK signed an agreement with the UAE to provide strategic stock in the event of an emergency. The stockpile will include several products for the treatment of respiratory diseases, nervous system diseases, infections, and other “key communicable diseases”.

Public health officials in the UAE have increasingly sought to strengthen the country’s crisis contingency planning, while ramping up efforts to introduce preventative healthcare to a young population.

Storey, who moved from Croatia to Dubai in January 2018, said that one of the most noticeable differences between the two regions was the age demographic. “One of the things that is more unusual about this part of the world is the younger population. When you’re looking at the health needs of the population, then obviously it’s younger here and hugely expat. So that’s interesting.”

Lifestyle-related diseases in the Gulf, especially among women, have been described by researchers as a “ticking time bomb” if not tackled soon. The health effects of obesity and smoking cigarettes in later life will place a huge burden on public finances, studies suggest.

“What are we going to do in partnership [with the government] to support that? That’s hitting here later than in other parts of the world,” Storey asked.

Another unique factor to this region, she continued, was the consciousness and budget control, “because oil revenues have been shrinking, people are looking at different ways to manage costs.”

Storey said the focus on innovation stands out in this region. “There’s a real drive from governments to offer the best for their patient populations. That’s quite exciting, from patient and a partnership perspective,” she said.

“That is stronger here, and there’s a real drive to be first. That gives us an opportunity.”