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: 4.6 million

GDP: $72.5 billion (at market prices end-2017)

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.

According to reports published by the Oxford Business Group, as of the end of 2016, the Ministry of Health had 74 hospitals with a total of 6589 beds (equivalent to 14.9 beds per 10,000 people) as well as 266 governmental health centers, clinics, and pharmacies, and 1105 private clinics. Government-run hospitals for the general Omani public accounted for 49 hospitals and 4659 beds, while the private sector accounted for 15 hospitals with 637 beds. The rest of the hospitals are operated by the Royal Armed Forces, the Royal Oman Police and Sultan Qaboos University.

Despite the fact that Omanis can be treated without charge in government hospitals, some choose to visit private hospitals, in order to avoid wait times. The government typically reimburses private hospitals for their care. Additionally, the government pays for specialized treatment abroad for Omani citizens when it is not available domestically. The preferred destination for most Omanis is India, but many people also go to Thailand or Europe.

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 remaining barriers eliminated in 2018, and expedited the movement of goods and the provision of services between the two countries. The FTA allows U.S. 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. Health Vision 2050, the Omani government’s strategic development plan for healthcare in the country, outlines the need for the expansion of specialist services, reduction of costs, results-based project funding, further decentralization of management, more transparency, and collaboration among providers.

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 have been discussions about a national insurance scheme or the introduction of nominal fees for doctor visits at government hospitals, but not definitive action has been taken so far.

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 Ministry of Health 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, Ministry of Health 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 more than OR100m ($260 m) a year on medicines and supplies, with more than 93% of medical supplies, including laboratory, surgical equipment and pharmaceuticals, needing to be imported from abroad. There is an ongoing push to establish more pharmaceuticals operations in Oman. The development of the domestic pharmaceuticals industry, 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, and the Ministry of Health has begun to respond with a concerted focus on prevention of non-communicable diseases. Despite this, the health care sector continues to largely focus on treatment rather than preventive 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 percent of medicines and surgical supplies consumed in the country. The Ministry of Health is striving to reduce the reliance on imported medicines by 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.

Recent cuts to the government’s budget have not affected the healthcare spending, and the government is committed to investing to provide quality healthcare to its citizens. From an estimated $3.2 billion in 2017, current healthcare expenditure in Oman is expected to grow at a compounded annual growth rate (CAGR) of 9.1 per cent to $4.9 billion in 2022, according to the GCC Healthcare Industry report published by Alpen Capital, an investment banking advisory firm. This growth is due to rising population, the roll-out of mandatory insurance during the year and the rising cost of care.

Further, treatment of non-communicable diseases and preventive care measures are accounting for a large portion of the healthcare expenditure. Consequently, current healthcare expenditure on outpatient and inpatient services in Oman is projected to grow at an annualized average rate of 10 per cent to $1.5 billion and $2.3 billion, respectively, by 2022. To accommodate the growing base of patients, the bed requirement in Oman is anticipated to grow at a CAGR of 3.2 per cent through 2022, translating into a demand for more than 1,100 new beds to reach a capacity of 7,937 beds.

In November 2017 the Ministry of Health announced it had signed contracts to build three new hospitals in Salalah, Khasab and Suwaiq, worth a combined OR270m ($701.1m) as well as OR40m ($103.9m) worth of upgrade projects to add a combined 553 beds at three referral hospitals. In the private sector, Badr Al Samaa group started on a new 100-bed hospital in Sohar. Large scale projects such as the $1 billion International Medical City (IMC) in Salalah, and the Medical City in Barka by the Ministry of Health has been on hold.

The Ministry of Health has outlined other requirements including a full-fledged EMS / ambulance system, innovative health insurance solutions for the 2 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. The Ministry of Health 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 Ministry of Health 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. The Oman Chamber of Commerce and Industry, a government body representing the Omani private sector, has been pushing for mandatory health insurance for private sector employees and wishes to implement it by 2019. 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. Products, whether they are manufactured in Oman or imported into Oman, must be registered with the Ministry of Health.

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/

Trade Events

Oman Health Exhibition and Conference 2016

24 – 26 September 2018

http://www.omanhealthexpo.com/

IMTEC Oman Exhibition & Conference

23 – 25 April 201

http://www.medicaltourismfair.com/

Local Associations

Government Links:

Director General of Planning

Tel: +968-24601161; 98005770

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

FAQs

1. How can a company market their healthcare products their products in Oman?

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 and http://www.pharmalinkconsulting.com/blog/blog/the-gulf-central-committee-for-drug-registration-gcc-dr/. Certain public health related products such as cosmetics, supplements must also be registered with the Ministry of Health and also conform to quality standards specified by the Ministry of Commerce and Industry and shipments must carry documentation to demonstrate this. http://timesofoman.com/article/130792

2. Which are the principal sales channels in Oman?

In Oman, any international pharma company needs to either register a local company or use the services of a local agent/distributor, who are mostly pharmacies, who will then market/sell your product directly to the government institutions and/or through their retail outlets. There are also two local manufacturing plants, who sell directly to the government/private hospitals and exports as well.

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:

Number of hospitals

17

... available beds per capita

1.7 per 1000 people

Number of surgical procedures

2293 (2015)

Physicians

1.92 physicians/1,000 population (2016)

Dentists

726 (2011)

Demographics

Population

4,613,241 (July 2017 est.)

Life expectancy men/women

male: 73.7 years female: 77.7 years (2017 est.)

Infant mortality

12.8 deaths/1,000 live births

Percent of population older than 65

3.49 (2017)

Annual deaths

3.3 deaths/1,000 population (2017 est.)


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