United Arab Emirates: Legalities Surrounding Pharmaceutical Industry In UAE

Last Updated: 9 February 2018
Article by STA Law Firm
Most Read Contributor in United Arab Emirates, September 2018

What are the main laws and regulations governing pharmaceutical companies in the United Arab Emirates?

  1. The primary piece of legislation governing pharmaceutical companies in the United Arab Emirates is Federal Law Number 4 of 1983 concerning the Pharmaceutical Profession and Pharmaceutical Institutions (the Pharmaceutical Law). This law applies to pharmacists, pharmaceutical establishments, and governs the import, manufacture, and distribution of pharmaceutical products. Articles 63 to 67 of the Pharmaceutical Law deals with the registration of pharmaceuticals. Article 47 of the Pharmaceutical Law states that a company must obtain a license to open a pharmaceutical company and Article 48, 55 and 56 lists the conditions that the company should meet to obtain the license. These include, among others, the requirement that the company is composed of different sections (production section, chemical section, disinfection section, and bacteriological laboratories) and that licensed pharmacists should supervise the factory. Article 49 mandates that the application for a license to open a pharmaceutical company should be accompanied by the factory's contract of establishment/ articles of association and also the permit issued to the manager and the pharmacists, among other documents.
  2. Federal Law Number 14 of 1995 regarding counter-measures against narcotic drugs and psychotropic substances regulate the import of (pharmaceutical products and) medicines into the United Arab Emirates.
  3. Federal Law Number 5 of 1984 governs the licensing and registration requirements of physicians, pharmacists, and other professionals within the country's pharmaceutical industry.
  4. Federal Laws Number 7 of 1975 and Number 2 of 1996 has laid down specific requirements for the establishment and licensing of public and private medical laboratories, clinic and hospitals in the country.
  5. Federal Law Number 1 of 1979 on the Organization of Industry Affairs affect pharmaceutical companies located in the mainland as a local Emirati agent must be appointed, and their shares in the company's capital should not fall below a certain percentage.
  6. Federal Law Number 2 of 2015 regarding Commercial Companies, provides further requirements applicable to companies on a general note, over matters such as licensing, the trade name, the Memorandum of Association (Articles 12 to 15).
  7. The governmental regulators of each Emirate (such as the Dubai Health Authority or DHA and Health Authority - Abu Dhabi or HAAD) also issue regulations from time to time to regulate the pharmaceutical companies in their jurisdiction. The 'Dubai Community Pharmacy Licensure and Pharmaceutical Practices Guide' (February 2013) issued by the Health Regulation Department of the Dubai Health Authority focuses primarily on the licensing and protocol of institutions and professionals. This guide provides information on the administrative procedures required to set up a pharmaceutical company. It also offers instructions on purchasing, storing, dispensing, and prescribing medication and drugs. The Ministry of Health Code of Conduct also outlines the standards expected of professionals providing medical services.

Which governmental authorities regulate the licensing of pharmaceutical companies?

The Ministry of Health and Prevention (MoH) is the primary body regulating the licensing of pharmaceutical companies in the United Arab Emirates. Article 65 of the Pharmaceutical Law specifies that imported pharmaceuticals should be registered with the MoH, regardless of whether or not they have been approved or registered in their country of origin. The MoH is also responsible for the regulation and implementation of health care policies in the country. Moreover, individual Emirates have also established their local health regulators to oversee the healthcare and pharmaceutical sector of their specific jurisdiction (Dubai Health Authority in Dubai, and the Health Authority - Abu Dhabi). These regulators monitor the licensing of pharmacists and pharmacies, the registration of pharmaceuticals and advertising guidelines for medications. The MoH formulates federal health policies and regulates the healthcare market in the Northern Emirates.

What is the registration process to set up a pharmaceutical company in the UAE?

As mentioned earlier, under the Pharmaceutical Law, pharmaceutical products, and preparations must be registered with the MoH before being imported into the national market. The market authorization holder, along with its local representatives (such as licensed distributors) are mandated to submit a new drug application to the MoH before importing or manufacturing a pharmaceutical. The local agent is wholly liable for any complaints made by customers and non-compliance with the regulations set out by the Ministry.

The Pharmaceutical Law prohibits anyone from preparing, composing, separating, manufacturing, packaging, selling or distributing any medicine without a valid license from the MoH (Article 1). This law also mandates that companies importing pharmaceutical products or medical devices must be locally established in the United Arab Emirates and have a pharmaceutical importation license. A sole natural person may also import these products if he is UAE national.

Are there any exceptions to the requirement that pharmaceutical products to be registered in the United Arab Emirates?

The Pharmaceutical Law states that all pharmaceutical products imported into the United Arab Emirates must be registered with the Ministry of Health, with NO exceptions. However, the general practice has confirmed that the Ministry of Health has authorized the import of unregistered products in exceptional circumstances such as:

  1. Emergency situation medicines
  2. Drugs and medications required by government or semi-government health institutions
  3. Registered and unregistered medication that is not available in the local market
  4. Narcotic and psychotropic drugs (as per Federal Law Number 14 of 1995)

However, pharmaceuticals that are not registered in the country of origin cannot be imported to the UAE even under the above-mentioned circumstances.

How can a foreign manufacturers trade, distribute and advertise pharmaceutical products in the United Arab Emirates?

Foreign manufacturers have two options to trade and distribution of pharmaceutical products in the United Arab Emirates. They can either establish a local presence (a company in the UAE) or appoint a local agent. Given that the MoH requires all pharmaceutical products be registered, a foreign manufacturer with no local presence will have to appoint a domestic partner to obtain the necessary approvals for trade, distribution, and advertisement of the product. This allows foreign manufacturers to access the network and resources of the local agent, who may have nurtured their business relationships in the country over an extended period. The United Arab Emirates imposes restrictions on such foreign ownership and sponsoring arrangements.

Are local agents of pharmaceutical companies regulated? If so, how?

The appointment of a local licensed agent by pharmaceutical companies is governed by Federal Law Number 18 of 1981 concerning organizing of trade agencies. Under this statute, the local agent will distribute the pharmaceutical companies' products in the United Arab Emirates vide an agency agreement registered with the Ministry of Economy. However, the following conditions must be met by the local agent:

  1. the local agent should be a UAE national, or an entity fully owned by UAE nationals (i.e., hundred percent stake owned by UAE nationals);
  2. the agent's appointment will be granted exclusively for one Emirate or several Emirates; and
  3. the agreement must be notarized in Arabic, and the foreign manufacturer must provide a letter confirming they have no objection to the registration;

The local agent will have the right to trade, distribute and advertise the pharmaceutical products, exclusively and within the confines of the territory agreed on in the distribution agreement after meeting the above criterion. The agent's exclusivity to manage the registered products means that they can block third parties from dealing with them. Agents are also entitled to a commission on the sale of the registered products and will have the right to claim compensation upon the termination of the agreement.

Which license should a company obtain to open a medical store in the UAE?

A person (legal or natural) that intends to set up a medical store or warehouse for medical products should obtain a medical store license to conduct their activities in the country. This is not limited to companies that deal with pharmaceutical products but also applies to businesses that store medical equipment. To obtain this license, the company must employ at least two licensed pharmacists to regulate the medical store, and these pharmacists must be in charge of the regulation of medical devices and pharmaceutical products.

What are the responsibilities of a licensed pharmacist in the United Arab Emirates?

A license issued to a pharmaceutical will bear the name of the 'licensed pharmacist' and he or she would be responsible for the following:

  1. Importing pharmaceutical products;
  2. Storing pharmaceutical products;
  3. Enter into contracts regarding pharmaceutical products and/ or medical devices; and
  4. Complying with the regulations of the MoH and local regulator and the provisions of the Pharmaceutical Law.

Are there any sanctions for submitting false documents to obtain a license to undertake the pharmaceutical profession?

Articles 83 and 84 of Federal Law Number 4 of 1983 states that the offenders may face imprisonment of up to (1) one year along with a fine for anyone who submits false documents or information to obtain a license, and on anyone practicing as a pharmacist illegally. Article 86 of the law states that people who adulterate or imitate substances may face imprisonment of up to three (3) years and fines of up to AED 10,000.

Are there any restrictions on the ownership of pharmacies in the United Arab Emirates?

In the United Arab Emirates, one can obtain a license for more than one medical facility. As for pharmacies, they must either be owned by UAE Nationals or a UAE National must own at least 51% of the company's shares. Federal Law Number 2 of 2015 states that pharmacies may also be wholly owned by GCC nationals. One cannot obtain a license to open more than two stores except for pharmacies that are located in hospitals.

What happens when the licensed pharmacist is terminated from the pharmaceutical company?

When a licensed pharmacist resigns or is terminated from their employment, the pharmaceutical company should submit a request through the Ministry of Health's online portal for the cancellation of the current pharmacist's license. Upon the revocation of the license, the company should then apply for a new license with another licensed pharmacist-in-charge. After this step, an application should be filed with the Department of Economic Development for the amendment of the trade license to replace the name of the licensed pharmacist with the new one.

The Ministry of Health may take approximately 3-4 weeks to cancel a license and issue a new license and the Department of Economic Development would take approximately 2-3 weeks to replace the license.

Can a company's pharmacovigilance and regulatory affairs be handled and managed by the same person or is there a requirement for separate people to do the job?

Pharmacovigilance is known popularly as drug safety and is the pharmacological science to collect, detect, assess, monitor and prevent adverse effects of the pharmaceutical products. Generally, the pharmaceutical companies assign the same licensed pharmacists to handle pharmacovigilance also; although, the MoH has not mandated that the same person should undertake both the assignments. A company is also entitled to appoint separate officials for each of these functions.

Can a company outsource the importation of medical goods or storage in the United Arab Emirates?

Outsourcing the function of importation or warehousing to a third party is not authorized by the MoH. All medical equipment imported by a pharmaceutical company should be registered under the name of the same entity before the MoH. These medical devices and pharmaceutical products have to be stored in warehouses and/ or medical stores which should also be under the license of that company.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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