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Healthcare Resource Guide: Oman

Oman

Statistics

Summary

Market Entry

Current Market Trends

Main Competitors

Current Demand

Registration Process

Reimbursement

Barriers

Procurement & Tenders

Trade Events

CS Contacts

Capital: Muscat

Population: 4.4 million

GDP*:$66 billion (nominal GDP 2016)

Currency: Omani Riyals

Language English, Arabic

Summary

Over the last 40 years, Oman has invested heavily in the health sector and succeeded in creating a relatively modern health care system. Health indicators attest to its comprehensive and well-developed standards. Life expectancy at birth is a remarkable 75.5 years, placing Oman on par with many advanced western nations. The United Nations 2010 Human Development Report listed Oman at the top of the world's 10 leading countries that have made the greatest progress in recent decades in public health. The government’s determination to provide all its citizens with free, basic health care, along with treating persistent diabetes and cardiovascular disease, means that health-related expenditures are growing.

The country’s healthcare infrastructure now boasts around 69 modern hospitals with almost 6,400 beds, a ratio of 1.5 beds for every 1,000 citizens in addition to more than 242 health centers and close to 1,000 private clinics throughout the Sultanate. In 2012, the two leading private hospitals (Starcare and Muscat Private) both received Joint Commission International certification. Starcare also received PSFHI Accreditation in May 2017 (WHO initiative). According to Ministry of Health data, there were 46.8% Omanis among a total of 45,654 patients admitted and treated in private hospitals in 2014, despite the fact that Omanis can be treated without charge in government hospitals. (The government typically reimburses private hospitals for citizens’ care, if that care cannot be obtained within the public sector.) There were 13 private hospitals and health centers in 2015, with a total of 448 beds in contrast to 49 Ministry-run government hospitals with 4,659 beds. There are three Royal Armed Forces hospitals with 323 beds, 74 beds in the Royal Oman Police hospital, and 675 beds in the Sultan Qaboos University Hospital.

Market Entry

The United States entered into a Free Trade Agreement (FTA) with Oman on January 1, 2009. The FTA has succeeded in eliminating most tariff and non-tariff barriers, with all remaining barriers to be removed by 2018, and expedited the movement of goods and the provision of services between the two countries. The FTA allows US investors to wholly own their companies without requiring a local sponsor, although many choose to partner with Omani companies to leverage local expertise and to facilitate business. Companies wishing to register with the Ministry of Commerce and Industry are encouraged to use the new Invest Easy online business registration system.

U.S. companies can still distribute their products in Oman using a local agent if they prefer not to register in Oman. Agents are particularly useful for sales to the Omani government due to their local contacts, language ability, and cultural knowledge. Constrained budgets encourage government procurement officials to buy direct; however, in practical terms, it is still difficult for foreign firms to sell to the government without an Omani agent scouting for and bidding on tender opportunities. As in other Gulf countries, regular, personal contact is the key to success in trade relationships.

The manufacturer or supplier may not unilaterally terminate the agency agreement except where there is an unjustifiable breach of agreement by the agent. Article 10 of the Commercial Agencies Law governing agency agreements previously awarded 2-3 years of profit as compensation for “unjustified” failure to renew even fixed-term agencies; however, Sultani Decree 34/2014, effective from 21 July 2014, repealed the article in question, conceivably allowing the parties to an agreement to decide the terms of renewal and termination. Regardless, the courts still have authority in disputes between principals and agents, so consultation with a lawyer in drafting an agreement is highly recommended. Agents are encouraged to register agreements at the Oman Chamber of Commerce and Industry (OCCI). Agents must register in writing and in Arabic with the Registrar of Agents and Commercial Agencies at the Ministry of Commerce and Industry (MOCI), renewable every three years. Agencies may be non-exclusive and more than one agent may be engaged to promote the same product or services. Previously, an agent was entitled to commission even if the principal has resorted to direct selling in contravention of the Commercial Agencies Law, but this article was also repealed.

Current Market Trends

The Ministry of Health is the main provider of healthcare, but there is ample room for public-private partnerships as the Ministry seeks to transition to regulator status over the long term. The current five-year plan includes spending slated for preliminary and secondary healthcare in addition to women’s health issues, infectious and non-infectious diseases, radiology, ophthalmology, mental health, and occupational health.

The largest private health care group, the Omani-based Badr Al Samaa Group, operates eight hospitals and polyclinics in key regions such as Sohar, Salalah, Al Khoud, Barka, Sur, Nizwa and Muscat. The Saudi-based Shifa Al Jazeera Group, a recent entrant to the market, intends to invest OR100m ($260m) in Oman over the next five years to establish 13 medical centres.

The cost of the public health care in Oman is increasing steadily, and future public investment will need to continue rising in order to meet this demand. This could prove challenging in the years to come, and may see the private sector take on an increasingly prominent role in supplying medical treatment and care. There are talks of a national insurance scheme or the introduction of nominal fees for doctor visits at government hospitals.

Oman has been pushing for the implementation of modern technological solutions to boost efficiency in the health care sector and ultimately keep costs down and cut waiting times. This has been notable in the digitization of the country’s medical records, with 86% of all government hospital and health care facilities having been linked electronically to a central database by the beginning of 2015. In early January 2017 the MoH began implementing a cashless transaction system at public health care centers, with both primary clinics and government hospitals now accepting card payments.

Also to note is that the Ministry of Health has been reducing the prices of the most commonly used medicines in Oman, in phases over the past years. In June 2015, MoH revised the prices of 1,180 drugs including those of respiratory system diseases, psychiatric, ENT, eye, cancers, blood diseases and vaccines. This program is in line with the resolution passed at the 72nd meeting of the GCC Health Ministers, held in Muscat on January 4, 2012, to standardize the import prices of medicines. In April 2017, a 45 percent profit cap on medicines was introduced by the Ministry of Health.

The Omani government currently spends an estimated OR120m ($311.7m) a year on medicines, with more than 93% of medical supplies, including laboratory, surgical equipment and pharmaceuticals, needing to be imported from abroad. There is, however, an ongoing push to establish more pharmaceuticals operations in Oman. The development of the domestic pharmaceuticals industry, while challenging, could also offer a host of new opportunities.

Similar to other countries, Oman has seen a reduction in deadly infections and diseases. However, Oman is now contending with the rise in lifestyle diseases, such as diabetes, obesity and hypertension. The diabetes rate among Omanis has increased from 9% in 2009 to 16% in 2016, and is still rising. The health care sector continues to largely focus on treatment rather than preventative care, “with less priority placed upon wellness education and limited focus on rehabilitative care, including physical, occupational and developmental therapies.”

Main Competitors

According to the Ministry of Health, Oman imports more than 90 per cent of its demand for medicines and surgical supplies. The Ministry of Health is striving to reduce the reliance on imported medicines through encouraging domestic medicine industry which is still considered a small sector but has seen some growth in the past years. Currently there are two local drug-makers and only one company for surgical supplies.

Current Demand

The Omani market offers solid prospects for U.S. health care products. Oman is focused on upgrading its facilities and diagnostic capabilities. The Ministry of Health has expressed interest in U.S. healthcare information management technologies as part of its efforts to standardize operations and establish interconnectivity among Oman’s hospitals and regional clinics.

At present, more than 80 percent of Oman’s total health expenditure comes from the MoH, which had a budgetary allocation of OR1.3bn ($3.4bn) in 2016, down from OR1.6bn ($4.2bn) in 2015. This sum represented roughly 11% of the entire budget of Oman, which was OR11.9bn ($30.9bn) in 2016.

However, Oman’s health care expenditure is expected to rise by 12.9% a year until 2020, according to Alpen Capital, which forecasts that total health care outlays will hit $4.3bn by 2020, up from $2.3bn in 2015. Health care spending was estimated to be $2.6bn in 2016, with outpatient care accounting for $1.6bn and inpatient care $1bn. The Alpen Capital report cautioned that with low global oil prices, government budgets in GCC countries could come under increasing pressure. This proved true as low oil prices have led the government to cut health care spending in 2017 to just OR613m ($1.6bn). Hospital bed requirements in Oman are forecast to grow at an annual rate of 3.1% over the next five years, reaching a demand of more than 7600 beds by 2020.

MoH has also announced plans to build 30 hospitals and health centers around the country in projects worth $1 billion including new hospitals in Salalah, Khassab/Mussandam, Duqm, and Ghala. The $1 billion International Medical City (IMC) in Salalah, being developed by a private Saudi investor (Apex) along with U.S. companies Methodist International and General Electric has been on hold.

The MoH has outlined other requirements including a full-fledged EMS / ambulance system, innovative health insurance solutions for the 1.9 million expat population (and eventually for citizens, currently covered by the government), customized patient catering plans, and help with recruitment to address Oman’s severe shortage of doctors. MOH has also expressed specific interest in U.S. healthcare information management technologies as part of its efforts to standardize operations and establish interconnectivity among Oman’s hospitals and clinics.

The MOH has also repeatedly stressed the need to develop innovative health care financing and insurance solutions, as the government cannot continue to sustainably finance the majority of health care in the Sultanate. Under the FTA, U.S. insurers in Oman can establish a commercial presence through subsidiaries, branches, or joint ventures, and provide a full range of insurance products. U.S. providers are also assured a swift approval of new products (30 days for non-life insurance and 60 days for life insurance). The insurance market in Oman is small, but will likely grow, particularly the health insurance market, and the FTA positions U.S. providers to be more competitive.

Registration Process

In Oman, medical products and services are regulated by the Ministry of Health (MOH). Products, whether they are manufactured in Oman or imported into Oman, must be registered with the MOH. The registration procedure is conducted by submitting an application form and other relevant documentation through a local Omani representative. For more details, please refer to www.moh.gov.om/en/web/dgpadc/resources

Reimbursement

Omani nationals have free access to the country's public health care, though expatriates typically seek medical care in private sector clinics and hospitals. Companies provide health insurance coverage for their employees or have pre-determined arrangements with hospitals or clinics. Many insurance providers have introduced online portal to help members manage their reimbursement claims online.

Barriers

  • Tedious and time consuming registration process for new pharmaceutical products
  • Price regulation of medicines by the Ministry of Health
  • Relatively small population/consumer base
  • Bureaucratic obstacles – Omanization, clearances for visas for foreign workers, lack of coordination of investment promotion agencies
  • Duties continuing to be charged on American goods transshipped by road via Dubai
  • Authenticated certificates of origin/shipping documents are at times still requested by Omani authorities despite not being required under the FTA

Procurement & Tenders

http://www.moh.gov.om/

http://www.rop.gov.om/english/

Trade Events

Oman Health Exhibition and Conference 2016 9 -11 October 2017

IMTEC Oman 2017 Exhibition & Conference

Local Associations

Government Links:

Government Health Plans: http://www.oxfordbusinessgroup.com/interview/clear-vision-obg-talks-dr-ahmed-bin-mohammed-bin-obaid-al-saidi-minister-health

Dr. Ahmed Mohamed Al Qasmi

Director General of Planning

Tel: +968-24601161; 98005770

Fax: +968-24696533

E-mail: ahmqasmi@gmail.com ; exp-his@moh.gov.om

FAQs

For additional info:

https://www.oxfordbusinessgroup.com/overview/rise-growing-population-finds-health-care-system-ready-meet-its-needs

http://www.pharmalinkconsulting.com/blog/blog/the-gulf-central-committee-for-drug-registration-gcc-dr/

www.who.int/medicines/areas/.../OmanPSCP_Narrative2012-02-08-Final.pdf

U.S. Commercial Service Contact Information

Name: Andrew Barwig

Position: Economic Officer

Email: BarwigAW@state.gov

Phone: +968 2464 3623

Best Prospects

Pharmaceuticals, medical equipment and supplies, X-ray and MRI's, ultrasound devices, surgical equipment, management information systems, tele-medicine, fellowships, residencies, specialized short courses, and healthcare administrator training.

Market Size

Healthcare spending (including investment)

 

... as percent of GDP

3.6% of GDP (2014)

Hospitals, Procedures, Healthcare Professionals UN: http://data.un.org/Explorer.aspx?d=WHO

Number of hospitals

17

…Private

22.5 (2011)

... available beds per capita

18 (2009)

Number of surgical procedures

2,740.00 (2012)

Physicians

1.54 physicians/1,000 population (2014)

Dentists

726 (2011)

Demographics

Population

3,355,262 (July 2016 est.)

Life expectancy men/women

male: 73.5 years

female: 77.5 years (2016 est.)

Infant mortality

13.2 deaths/1,000 live births

Percent of population older than 65

3.99 (2012)

Annual deaths

3.3 deaths/1,000 population (2016 est.)


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