Healthcare Resource Guide: Kuwait

Updated October 2019

 

 

Summary
Market Entry

Current Market Trends

Main Competitors

Current Demand

Registration Process

Reimbursement
Barriers

Procurement

Trade Events

Web Resources
Best Prospects

CS Contact

Statistics

Capital: Kuwait City

Population: 4.3 million

GDP: US$289.7 billion (2017 est.)

Currency: Kuwaiti Dinar

Language: Arabic

Summary

Major upgrades to the country’s healthcare infrastructure and facilities are underway. Kuwaitis suffer from high rates of obesity, diabetes, and cancer. According to the Global Burden of Disease Study, Kuwait is the fourth most obese country in the world. Although the population is young, the disease burden is a growing concern.

Kuwait’s public healthcare sector accounts for more than 80% of the healthcare spending in the country. Currently, Kuwait’s Ministry of Health is the owner, operator, regulator, and financer of most healthcare services rendered, pharmaceuticals purchased, and medical equipment acquired in the country. The government operates 15 general and specialized hospitals. The private sector is expected to grow moderately in the coming years, with private firms estimated to account for 20% of healthcare spending.

Kuwait aspires to create world-class healthcare providers as well as improve the quality of healthcare in treatment centers, such as the Kuwait Cancer Center, the Kuwait Chest Disease Hospital, the Kuwait Radiology Center, the Ibn-Sina Center for Ophthalmology, and the Dasman Research Center for Diabetes.

The Ministry of Health and the Ministry of Public Works has announced a $4.42 billion (KD 1.250 billion) project to replace or expand nine operating hospitals (five general hospitals and four specialized hospitals) within the next ten years. The goal is to add 5,400 beds, 150 operating rooms, and 500 outpatient clinics to the current 7,095 hospital beds countrywide. In addition, the $1.1 billion (KD 304 million) Sheikh Jaber Al-Ahmed Al-Sabah Hospital, which is near completion, will add another 1,200 beds. Currently, Kuwait has two hospital beds per 1,000 people. This represents a stark undersupply in the face of population growth and the rising disease burden.

According to the Ministry of Health, the private sector will be instrumental in the overall development of the medical sector. The private healthcare market is estimated to grow by 15-20% in the coming years. Currently, a total of 12 private hospitals (totaling 1,038 hospital beds) provide private medical services in Kuwait. Several new private hospitals are expected to open in the next few years, adding 1,800 hospital beds. Although the government offers free healthcare services, patients are willing to pay a premium for private treatment in order to reduce waiting times and treatment schedules. In certain fields, such as obstetrics and gynecology, local patients pay a premium for high-end services offered by private hospitals.

The healthcare sector is witnessing some reform initiatives. One of the reforms includes broadening public-private partnerships and giving the private sector a larger role in the provision of healthcare services. Recently, public healthcare centers began referring patients to private medical care providers for services like IVF treatment and physiotherapy.

Over the past year, the Ministry of Health has curbed the frequent overseas travel by Kuwaitis for medical care and is working to increase the development of the medical sector in Kuwait. The new hospitals coming online will need medical equipment, operators, training, and education. There is also an interest in improving the quality of trauma center care, paramedic training, and rehab centers in the country. There is a growing interest in developing hospital-to-hospital relationships so that for more serious illnesses that still require treatment in the United States, some pre and post-operative care can be delivered in Kuwait.

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Market Entry

The Gulf Cooperation Council (GCC) has a 5% flat rate tax on imports. Kuwait corporate income taxes for foreign corporations previously ranged from 15-55% but have been changed to a flat 15% rate as of 2008. To be successful in the Kuwaiti market, companies from the United States (U.S.) often identify, develop and support a local agent, representative, or account executive to manage their marketing strategy. Some companies find having a Kuwaiti partner, rather than an agent, a preferable approach, in part due to the local tax law.

Prior success in other Gulf Cooperation Council (GCC) countries is helpful, but companies rely on local experience and knowledge to conduct their business in these markets. Knowing regulations and the general business framework is a difficult task without the support of a competent local agent or business partner. U.S. companies should seek this type of business relationship and understand that the best representatives are those who are already active in their particular sector with cultivated contacts.

In summary, selecting the appropriate agent who will work for you is the single most important step a U.S. exporter can take in Kuwait. Getting competent local legal counsel to craft an agreement that protects your company from future liability is also key. The best local partners are those who share both the risk and profit with their American partners.

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Current Market Trends

The percentage of healthcare spending by the Ministry of Health as a percentage of overall government expenditure has stayed relatively stable at around 7%. This is almost 11% of the total budget. However, these figures do not consider the amount spent on healthcare by the other eight related government entities, such as the Ministries of Defense and Interior, and of the Kuwait Oil Company, which make up 10- 20% of the healthcare sector in Kuwait.

Kuwait’s healthcare expenditures are expected to grow at a compound annual growth rate of 7.5% up to 2020 to $8 billion, considering the population growth and the average inflation growth rate forecast by IMF for this period.

Despite the drastic decline in oil prices and the ensuing economic setbacks, healthcare spending remains a priority for the government. Kuwait awarded projects worth $11 billion in the construction of new infrastructure for healthcare, as it seeks to prioritize the transformation of its healthcare sector.

Realizing the need for facilities that cater to life-threatening diseases that previously required Kuwaitis to fly out of the country for treatment, several construction projects are booming in the country. The country has 40 upcoming healthcare projects, accounting for 6% of the total upcoming projects in the GCC region. However, in terms of project value, Kuwait accounts for nearly 17% of the total value of upcoming projects.

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Main Competitors

In terms of international competition, European healthcare companies are the primary competitor.

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Current Demand

There is demand for unique products and new technologies such as laser treatment, nanotechnology and molecular medicine. Laboratory testing is also a growing segment and will require testing equipment and disposable tests.

Surgical instruments are in high demand, as well as diagnostic and laboratory equipment in the fields of orthopedics, trauma care, ophthalmology, cardiology, oncology, radiology or radiotherapy and healthcare IT.

Medical services such as project management, healthcare consulting, human resource development, hospital administration, and technology transfers are and will continue to be in demand.

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Registration Process

The Kuwait Ministry of Health requires the following for product registration:

1. Free Sale Certificate from the relevant health authority of origin to be legalized by the Kuwait Embassy. This certificate should include the trade name of the product, its volume or weight, and it should state the product can be sold freely in the country of origin.

2. Certificate of composition (exact percentages) signed and sealed by the manufacturer.

3. Certificate of analysis signed and stamped by manufacturer.

4. Samples of each product to be tested.

5. Kuwaiti importer information.

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Reimbursement

Services through the healthcare public sector are free for Kuwaiti and GCC nationals. In 2016, the Ministry of Health introduced a new healthcare insurance plan for Kuwaiti retirees, which entitles them to also choose private healthcare services within Kuwait. The healthcare insurance plan covers about 107,000 retirees with an annual cap of KD 15,500 ($51,600) for a male retiree, and KD 17,000 ($56,600) for a female retiree, regardless of age.

In 2016, the Ministry of Health announced plans to require all foreign visitors and workers to purchase local health insurance policies that would link to three special expat-only hospitals and 15 expat-only health clinics that are currently planned. This plan has yet to be implemented; instead, foreign nationals, which make up over two-thirds of the population, will have to pay for utilizing public healthcare service through a list of fee-based treatments for both primary and secondary healthcare services.

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Barriers

The need for a Kuwaiti agent, distributor, or partner tends to add to the cost of selling goods in Kuwait. Potential opportunities can take longer to develop in Kuwait than in comparable markets.

Imports to Kuwait require three certified and legal copies of the commercial invoice, three copies of the transport documents and two copies of the certificate of origin. The certificate of origin must describe the place of origin of the goods, the full name of the manufacturing plant or producer, and the full name of the freight forwarder. It must also show gross and net weight, the trademark shown in the manifest, value, type of packaging, and means of transport. The certificate must be certified by the Chamber of Commerce in the exporter country and most of the time by the Kuwait Embassy or a mission of any of the GCC states in the absence of a Kuwaiti mission.

Kuwait Customs is strict and most of the Kuwaiti importers/companies know the best methods for successful importation.

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Procurement & Tenders

Tender Law No. 37 of 1964 regulates government tenders. The Central Tenders Committee (CTC), under the jurisdiction of the Council of Ministers, acts on behalf of most government ministries. It oversees public tenders that are valued at more than 5,000 KD (approximately $17,500), and oil sector tenders that exceed 5 million KD (approximately $17.5 million). However, the Ministries of Housing, Defense, and Interior (including the security forces) are capable of issuing their own tenders independently of the CTC. All contracts with the government valued at 100,000 KD (approximately $350,000) or more are subject to Kuwait Law No. 25 of 1996, which requires contractors/agents to disclose and report all payments made, received, or to be made or received when securing a contract. Besides awarding contracts, CTC invites companies to pre-qualify, and to attend pre-tender meetings. All CTC announcements can be found at the website http://www.ctc.gov.kw/ and are published weekly in Arabic in the official gazette, al-Kuwait al-Youm. An English translation of the gazette is available for subscription from a licensed vendor (Al-Abraj Translation & Publishing Co.).

Tenders are usually awarded based on the lowest price, once technical compliance has been established. Businesses should note that if a bidder wins a tender but then refuses to sign the contract, the concerned Ministry has the right to confiscate the bid bond as well as the performance bond, which may equal 5-10% of the contract’s value.

Many companies add 10-15% to the cost of the project to mitigate the potential risk of projects or losing the performance bond. Foreign companies cannot sell directly to the government nor can they participate in public tenders except through a local agent. In the oil sector, for instance, suppliers must be approved by an internal committee and placed on a list of “pre-approved” companies. For major projects, international companies are usually invited to pre-qualify.

There is a 10% price preference on public contracts in favor of Kuwaiti businesses. If a contracting officer or authority determines that a local company meets the technical specifications of the proposal, even though the bid price may be higher (within 10%), the local company is awarded the contract.

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Trade Events

Kuwait Medica Conference and Exhibition 2019 Kuwait

(November 5-7, 2019)

http://universalconf.com/medica/

Hospital Infrastructure Show

(March 4-7, 2020)

https://www.hospitalinfrastructureshow.com/

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Web Resources

Local Associations

Kuwait Medical Association

http://www.kma.org.kw/en-Us/default.aspx

Government Links:

Regulatory Body: Ministry of Health [www.moh.gov.kw]

Healthcare Procurement & tenders: Ministry of Health [www.moh.gov.kw]

Government Health Plans: Ministry of Health [www.moh.gov.kw]

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Best Prospects

There is large potential in Kuwait’s healthcare industry for U.S. companies offering medical/dental lab equipment, general hospital supplies, pharmaceutical products and specialized systems and applications.

Additionally, there is demand for unique products and new technologies, such as laser treatment, nanotechnology and molecular medicine. Laboratory testing is also a growing sector and will require testing equipment and disposable tests.

Surgical instruments are in high demand, as well as diagnostic and laboratory equipment in the fields of orthopedics, trauma care, ophthalmology, cardiology, oncology, radiology or radiotherapy and health care information.

Medical services such as project management, healthcare consulting, human resource development, hospital administration, and technology transfers are and will continue to be in demand.

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U.S. Commercial Service Contact Information

Name: Yousif Almahdi

Position: Commercial Specialist

Email: Yousif.Almahdi@trade.gov

Phone: +965 2259 1487

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