The Story of How the Pharmaceutical Industry Grew in Saudi Arabia

Dear reader, the history of the pharmaceutical industry in the Kingdom is a remarkable story of transformation. It began with a society that relied on traditional healers, herbal mixtures, and “attareen,” and has moved to a modern pharmaceutical sector with dozens of factories, partnerships with major global companies, and a clear ambition to enter the era of biotechnology and advanced vaccines. In the early 20th century, the first turning point came with the opening of the first modern pharmacy in Jeddah in 1922 by Dr. Mohammed Saeed Tamer. This was not just a place to sell medicine; it was a new window for Saudi society to access imported pharmaceuticals and the latest treatments coming from Europe, India, and beyond. Over the years, that small pharmacy became the seed of Tamer Group, which later grew into one of the most critical players in medicine distribution and healthcare in Saudi Arabia and across the region. It was the first organized step toward a more professionalized pharmaceutical trade in a country undergoingsignificant political and economic changes.

In the 1930s, with the discovery of oil and the growth of its revenues, our country, may God protect it, began to place greater importance on the health sector. The Ministry of Health was founded, and a network of government hospitals and health centers spread across the Kingdom. Yet, despite this expansion, Saudi Arabia still relied mainly on imported medicines from Europe, the United States, Egypt, and India, through local agents and companies. Large pharmacies and distributors, such as Tamer Group, served as intermediaries between multinational drug companies on one side and hospitals and patients on the other. Local “manufacturing” at that time was minimal: it was mostly simple compounding and formula preparation in hospital pharmacies or small labs, not a real industry built to international standards. Then came the oil boom of the 1970s, and with the expansion of free healthcare, the state quickly realized that relying entirely on imported medicines posed a challenge to national medical security, especially during crises or disruptions to global supply chains. This awareness created a real need for a national pharmaceutical industry.

In this context, the Saudi Pharmaceutical Industries and Medical Appliances Corporation (SPIMACO) was founded in 1986 as a national joint-stock company to build an advanced pharmaceutical industry based on modern scientific and industrial standards. The Qassim region was chosen as the location for its main industrial complex, and the first products rolled off its production lines in the early 1990s. SPIMACO became the first Saudi pharmaceutical company to be listed on the stock market and a base for partnerships with multinational firms such as SmithKline Beecham (later GlaxoSmithKline), enabling the local, licensed manufacturing of well-known medicines within the Kingdom. In the 1990s, other strong national companies appeared as well. One of the most notable is Tabuk Pharmaceuticals, established in 1994, which grew rapidly to become one of the largest private pharmaceutical companies in Saudi Arabia and a major player in the generic medicines market in the region. Alongside it came companies such as Jamjoom Pharma, Hikma, and AJA Pharma (part of Saudi Chemical Company), and others. These companies strengthened the culture of licensed manufacturing for global brands and expanded the list of locally produced drugs to include antibiotics, cardiovascular medicines, gastrointestinal drugs, and treatments for many chronic diseases.

With the start of the new millennium, dear reader, the idea of “localizing the pharmaceutical industry” began to take on a clearly strategic dimension. Saudi Arabia became the largest pharmaceutical market in the Middle East and North Africa, representing almost one-third of the region’s market. The value of the local drug market reached tens of billions of riyals, with expectations of continued growth in the coming years. At the same time, the number of registered pharmaceutical factories in the Kingdom increased, surpassing 40 factories by the beginning of the third decade of this century. These factories now cover a large portion of local demand, by some estimates around one-third of market value and more than 40% in volume, with annual exports exceeding one billion riyals to Gulf countries and to markets in the wider Middle East and North Africa. This means that Saudi Arabia has become not only a big consumer market for medicines, but also an important manufacturing base for generics and some specialized products.

Then came the COVID-19 pandemic and put this whole system to a real test. The crisis clearly showed the importance of local production capacity for essential medicines and hospital supplies. Saudi factories played a key role in securing antibiotics, intensive care drugs, IV nutrition solutions, and many other critical items. Local companies also took part in licensing and distribution agreements for COVID-19 vaccines; for example, Tabuk was authorized to market the Moderna vaccine in the Kingdom. All this strengthened the conviction among decision-makers that the pharmaceutical industry is not just an economic activity, but a core pillar of national health security. Under Vision 2030, the Ministry of Industry and Mineral Resources, the Ministry of Health, the Saudi Food and Drug Authority (SFDA), and investment bodies such as the Saudi Industrial Development Fund and the Public Investment Fund are working together to increase the share of locally produced medicines. The focus is expanding from traditional chemical generics to high-tech products such as biologicals, vaccines, and drugs for rare diseases, supported by an advanced research ecosystem that includes universities, the National Institute for Health Research (Saudi NIH), and specialized research centers.

Dear reader, what we are seeing today is the beginning of a new stage in which the Kingdom aims to move from “licensed and generic manufacturing” to local innovation and development. Global companies are starting to establish production lines, filling and packaging centers inside Saudi Arabia or sign local manufacturing agreements with Saudi firms, taking advantage of the Kingdom’s position as a gateway to a large regional market and of the regulatory and investment incentives designed to make it a regional hub for pharmaceutical manufacturing and biotechnology, especially after His Royal Highness Crown Prince Mohammed bin Salman launched the National Biotechnology Strategy. At the same time, major healthcare players such as Tamer Group, which began with a single pharmacy almost a century ago, are now expanding into manufacturing and investing in research and development. This is a clear sign that the market has matured and that all parts of the value chain, importing, distribution, manufacturing, and exporting, are becoming more integrated.

Of course, challenges still exist, especially in the area of locally originated innovative medicines and in the level of R&D spending. But the size of the local market, the strategic location of the Kingdom, and the clear national direction toward supporting high-value industries all give Saudi pharma a historic opportunity: not only to remain the largest medicines market in the region, but also to become a source of new treatments developed in its own labs and universities. In other words, the story of the pharmaceutical industry in Saudi Arabia is still being written, and the next chapters may well be about Saudi-made innovations reaching patients across the world.