**Oman**: The Sultanate is rapidly expanding its pharmaceutical manufacturing capabilities through major investments, government incentives, and international collaborations, aiming to reduce import dependency and establish a regional export hub while addressing challenges in R&D and skilled workforce development.
The pharmaceutical sector in Oman is emerging as a vital component of the nation’s development strategy, aligning with the broader goals of public health security, economic diversification, and industrial resilience. Historically reliant on substantial pharmaceutical imports, Oman is now paving the way for a new era focused on boosting local manufacturing and integrating into global supply chains.
As recently as 2020, Oman had only five domestic pharmaceutical manufacturers, supplying a mere 8 per cent of market demand. The majority of medicines, particularly generics and injectables, were imported at a significant annual cost exceeding $500 million. However, substantial shifts are taking place; companies like National Pharmaceutical Industries (NPI), established in 2001, are making strides internationally, exporting to over 50 countries and registering more than 600 products, thereby setting benchmarks for domestic operations.
In recognition of the strategic importance of this sector, the Omani government has implemented a comprehensive framework of incentives aimed at bolstering pharmaceutical manufacturing. These include five-year tax exemptions, customs waivers on raw materials and machinery, and a 10 per cent price preference for Omani products in public tenders. Such measures seek to stimulate investment and secure a baseline demand for domestically produced medicines.
Free zones, notably Salalah and Suhar, have emerged as key locations for pharmaceutical development. With modern infrastructure and easy access to port facilities, these zones are strategically positioned for growth. In 2023, Philex Pharmaceuticals inaugurated a significant facility in Salalah, investing $150 million. This factory is set to produce one billion capsules and tablets annually, marking a significant leap into high-volume pharmaceutical manufacturing for Oman.
Additionally, in Raysut, Dhofar Pharma commenced operations in late 2024, marking a historic first for local production of intravenous solutions and dialysis fluids. Designed to international standards, this facility aims to meet domestic demand, with plans for future exports to regional markets such as the Gulf Cooperation Council (GCC) and North Africa. The factory is expected to produce 15 million IV bags and over 2 million dialysis units each year, highlighting the ambitious vision to reduce reliance on imports.
Suhar Free Zone is also witnessing developments with Penicillin General Integrated establishing a factory aimed at producing antibiotic raw materials, such as Penicillin-G and 6-APA. If successful, this facility has the potential to satisfy up to 10 per cent of global demand for these critical substances, positioning Oman as a notable player in the global antimicrobial supply chain.
In early 2025, the Ministry of Health signed advance purchase agreements with six emerging Omani pharmaceutical firms to supply a variety of products, including gene therapies and biologics. This initiative not only ensures financial stability for these manufacturers but also aligns with national aspirations for greater self-sufficiency in medicine production.
Despite these advancements, the sector faces significant challenges. Oman continues to depend heavily on imported raw materials and finished pharmaceuticals from countries like India, China, and Europe. This reliance exposes the nation to vulnerabilities against global supply chain disruptions—a reality made evident by the COVID-19 pandemic. Additionally, the local research and development ecosystem remains underdeveloped, limiting the country’s capacity to innovate and produce proprietary medicines.
The need for qualified human capital presents another critical challenge. The industry requires highly specialised professionals, including pharmacists, chemists, and engineers. While Omanisation aims for increased local employment, many essential roles are still filled by expatriates. Companies like Dhofar Pharma aspire to achieve 80 per cent local employment within five years, necessitating enhanced collaboration between educational institutions and the pharmaceutical industry.
Moreover, the costs associated with local manufacturing pose competitiveness dilemmas. International firms benefit from economies of scale that help minimise costs—an area where Oman is still striving to catch up. Ongoing government support and incentives will be crucial for local manufacturers to effectively compete in both domestic and export markets.
Nonetheless, opportunities abound. The GCC region spends substantial amounts on pharmaceutical imports annually, and Oman’s strategic geographical position, coupled with free trade agreements and advanced port infrastructure, offers logistical advantages. By fostering more integrated and efficient supply chains, Oman aims to establish itself as a manufacturing and re-export hub for the region.
International collaborations are vital for accelerating Oman’s progress. Recent discussions with Algeria, a nation achieving 75 per cent pharmaceutical self-sufficiency, have opened avenues for joint ventures and technology transfers. These partnerships can serve as critical pathways to enhancing local capabilities and credibility in the pharmaceutical landscape.
While Oman’s ambitions in the pharmaceutical sector are accompanied by challenges, the foundations for success are solid. With a conducive policy environment, increasing industrial investment, and demonstrated political will, Oman is poised to develop this sector into a cornerstone of its future economy. Continued focus on investment in human capital, research, and international partnerships will be essential for transforming these aspirations into tangible outcomes, potentially establishing Oman as a regional leader in pharmaceutical production within the next decade.
Source: Noah Wire Services
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