United Arab Emirates: What International Companies Need To Know To Distribute Pharmaceuticals In The UAE

The healthcare industry is a priority sector for the UAE government, which continues to increase its spending in the development of high standard healthcare services in the country, notwithstanding the bearish oil market.

Likewise, the UAE's pharmaceutical market is rapidly expanding. The prevalence of chronic lifestyle diseases in the region such as obesity and diabetes, and the development of medical tourism, contribute to this continuing growth, and the UAE currently imports between 85% and 90% of its pharmaceutical products. The value of the pharmaceutical market in the UAE is projected to reach around 3.7 billion USD by 2020 (i.e. an 8.2% growth per year).

The healthcare industry is strictly regulated at both the Federal and Emirate level. International (i.e. non-UAE) pharmaceutical companies seeking to import and distribute pharmaceutical products in the UAE require considered local advice to navigate the regulatory paths.

In this article, we examine what "medicines" fall under the auspice of the Pharmaceuticals Law, how to register medicinal products with the MoH, how and to whom a Pharmaceutical Import Licence and distribution registration may be awarded, and the key considerations regarding promotion (including packaging, labelling and advertising) of medicines that stakeholders should be aware of.

The key legislation

Federal Law No. 4/1983 on the Pharmaceutical Professions and Establishments and the Import, Manufacture and Distribution of Pharmaceutical Products (the Pharmaceuticals Law)1 mandates that:

  • No medicine may be placed on the market in the UAE unless it has been registered with the Ministry of Health and Prevention (MoH)2;
  • No medicine may be imported into and distributed in the UAE unless a Pharmaceutical Import Licence has been awarded by the MoH in respect of the relevant product;
  • No medicine may be sold or distributed in the UAE except by a distributor registered with the MoH.

In this respect, one should note that a distributor of medicines in the UAE must also be registered with the Ministry of Economy as a commercial agent3.

In this article, we examine what "medicines" fall under the auspice of the Pharmaceuticals Law, how to register medicinal products with the MoH, how and to whom a Pharmaceutical Import Licence and distribution registration may be awarded, and the key considerations regarding promotion (including packaging, labelling and advertising) of medicines that stakeholders should be aware of.

What "medicines" fall under the auspice of the Pharmaceuticals Law?

The Pharmaceuticals Law regulates the import, storage, distribution, sale, marketing and export of all medicines for humans and animals, being understood as any chemical substance intended for use in medical diagnosis, cure, treatment, or prevention of disease (further detail available in the Dubai Health Authority's Community Pharmacy Licensure and Pharmaceutical Practices Guide of February 2013 (the Pharmacy Guide)). Its scope extends to antiseptics and disinfectants, medicated cosmetics, dietary supplements, and miscellaneous products which contain pharmaceutical ingredients and/or a medical claim and cannot be classified as medicines (MoH's Circular Number 20 of 2001).

How to successfully register medicinal products with the Ministry of Health?

The Committee of Drug Pricing of the Ministry of Health is responsible for overseeing the award of Medicines Registrations (and also for determining the pricing of medicines).

Who can submit an application for a Medicines Registration?

The application for registration of the product should be filed jointly by the product marketing authorisation holder from the home country and its local authorised representative in the UAE.

The local authorised representative is the local entity/person appointed by the marketing authorisation holder to be responsible for monitoring the safety and effectiveness of the product once launched on the UAE market, and for any product recall or complaint. It must be registered with the Ministry of Health and may be the local distributor of the products (see further details below).

What needs to be submitted in an application for a Medicines Registration?

Registration requirements vary depending upon the classification of the relevant product, as determined by the Classification Committee of the MoH (e.g. as General Sale4, herbal, homeopathic, conventional or veterinary).

As a general rule, the application form must be accompanied by the following supporting documents:

  • the relevant Certificate of Pharmaceutical Product (CPP) as per the World Health Organization (WHO) Certification Scheme or a Free Sale Certificate (FSC) for the product issued by the Competent Authorities in the country of origin, and authenticated by the foreign affairs section of the UAE or any GCC Embassy in the country of origin;
  • three samples of the product in its final packaging;
  • a certificate of analysis of the given batch of the samples submitted for registration;
  • an audit plan and post-marketing pharmacovigilance plan;
  • a halal certificate issued by recognisable organisations and authorities (where applicable);
  • the details of the medical store licensed by the Ministry of Health;
  • a valid company registration certificate issued by the UAE MoH Drug Control Department;
  • details related to the intended use, precautions, and instructions for use of the product; and
  • a CD of the package (showing the related shelf life, batch number, outer, inner label and insert) of the product in JPEG format.

However, for those registered products to be imported into the UAE, the importing company first needs to get registered with the MoH as an authorised importer of pharmaceutical products.

How to obtain a Pharmaceutical Importation Licence?

Only a company registered with the MoH with a valid Pharmaceutical Importation License issued by the MoH is permitted to import pharmaceutical products into the UAE.

But, in order to be registered with the Ministry of Health as an authorised importer and distributor of pharmaceuticals in the UAE, the importing company must first obtain from the MoH a medical store license. A medical store is defined as an establishment within the UAE, the business purpose of which is the import, storage and wholesale distribution of medicine.

Only an entity incorporated in the UAE or a UAE national may apply for a medical store license

As a result, where a pharmaceutical company seeking to market its products in the UAE is based outside the country, it must choose one of the following approaches:

  1. Establish a local presence by incorporating a UAE structure5 that will apply for a medical store license and a Pharmaceutical Importation Licence

    The UAE structure importing the products into the UAE may be a company incorporated onshore with a 49% foreign ownership6. If it is possible to incorporate a company in a free zone (offshore), whereby 100% foreign ownership is possible, the officials at the Ministry of Health has orally confirmed to us that a company with 100% foreign ownership cannot apply for a medical store license.

    But, if the UAE structure importing the products into the UAE market is also meant to be the entity that will be distributing the products in the territory, then it is important to note that such incorporated entity must be 100% owned by UAE nationals. This is because the UAE Ministry of Economy requires that any distributor of pharmaceutical products in the UAE be registered as a commercial agent with the Ministry of Economy7. In order to be registered with the Ministry of Economy as a commercial agent, a distributor needs to be a UAE national or a company 100% owned by UAE nationals, and to be appointed on an exclusive basis, pursuant to the UAE Commercial Agency Law.

    However, it is possible, provided that the local partner is amenable, to overcome such a requirement by entering into a Shareholders' Agreement and other side agreements with the UAE partner(s) owning 100% of the share capital which will effectively give control of the entity and the economic benefits deriving from the entity to the foreign company. Whilst the entry of such arrangements is common in the region, it should be noted that the enforceability of such arrangements is uncertain given that they could be seen as circumventing foreign ownership restrictions.
  2. Appoint a local distributor who is already licensed through the MoH, to import and distribute the pharmaceutical products on its behalf

    Such a distributor must be wholly owned by UAE nationals and appointed on an exclusive basis, for the same reasons as mentioned above. It should be noted that the registration of the distributor with the Ministry of Economy results in a number of statutory rights vesting in the distributor pursuant to the Commercial Agency Law. These rights place the distributor in a strong position, commercially, with respect to the principal company. For example, without mutual agreement, it is impossible for the principal to terminate or end the distribution agreement without a "justifiable cause", irrespective of contractual arrangements between the parties. This means that absent a mutual agreement, it will be up to the courts to decide whether or not there is a "justifiable cause" for terminating the agreement.
  3. Appoint an already existing local entity who is not yet licensed through the MoH, to import and distribute the products.

    In this situation, the local distributor will have to make the application for the medical store license and the Pharmaceutical Importation Licence.

As detailed below, the Pharmaceutical Law governs the requirements that must be met before a Pharmaceutical Importation Licence will be granted to an importing company, and include the establishment of a medical store meeting specified storage as detailed below.

Which approach is most suited to the requirements of any particular pharmaceutical company will depend upon the circumstances. It will of course, be paramount to obtain experienced local advice before a distribution strategy for the Middle East region is settled upon and executed.

For an entity to be licensed to open a medical store, the following conditions must be fulfilled:

  1. A licensed pharmacist should be or be part of the medical store's management.

    In this respect, to be licensed, a pharmacist must have a pharmacy certificate from a recognised high institute, college or university, have practiced pharmaceutical profession for a period not less than two years and speak Arabic fluently (Article 2 of the Pharmaceuticals Law).
  2. The medical store should fulfil the medical and technical conditions issued by the Minister of Health from time to time.

    Ministerial Resolution No. 60/2013 on the Health and Technical Conditions of Medical Stores lists the health and technical conditions to obtain a medical store license. In particular, the size of the medical store should be of 25sq.m minimum.

    The MoH would ordinarily conduct an inspection of the proposed space for the storage of the products before granting a medical store license.

    Interestingly, in practice, it is permissible for the importer/distributor to enter into a service and lease agreement with a logistics company pursuant to which the logistics company handles the storage of the pharmaceutical products on behalf of the importer/distributor and rents a storage space for this purpose.

Key considerations when promoting pharmaceutical products in the UAE

The Pharmaceuticals Law contains mandatory labelling requirements and regulates aspects of promotion of medicines and pharmaceutical products in the UAE.

Preliminary observations: medical representatives

Where the distributor is also in charge of the promotion of the products, its trade license shall expressly list promotion and marketing activities amongst the authorised commercial activities of the company.

Any medical representative(s) hired by the distributor to promote the products in the UAE will only be authorised to carry out promotional activities within the Emirate in which the distributing company is incorporated. In other words, a distributor incorporated in Dubai is only permitted to carry out the activities specified in its trade license in the Emirate of Dubai, so the scope of action of its medical representatives will also be restricted to Dubai.

As a result, if an international pharmaceutical company wishes to promote and distribute its products across the territory of the UAE, on a regular and continuous basis, it is recommended to establish branches of the local distributing company in each Emirates, to hold trade licenses in the relevant geographical areas.

Also, the promotion of pharmaceutical products in the UAE requires the establishment of a scientific office (which may be located onshore or in a free zone) composed of qualified pharmacologists.

Packaging and labelling

The Pharmaceuticals Law requires that leaflets and containers of medicines and pharmaceutical products feature the following information in both Arabic and English:

  1. Name of the medicine or pharmaceutical preparation;
  2. Registration number;
  3. Compounds of the medicine and their amounts;
  4. Date of expiry;
  5. Name of the factory manufacturing the medicine or pharmaceutical preparation, and
  6. Instructions for use and cautionary warnings.

Advertising

Under the Pharmaceuticals Law, the MoH shall approve the publication of any advertising material (printed or broadcast) for any medicine or pharmaceutical preparation.

Other regulations and legislations must be considered when it comes to the promotion of pharmaceutical products in the UAE, such as Regulation 430 of 2007 on Health Advertisement and the Federal Law no 15 of 1980 on printed matters and publications.

Gowling WLG has a wealth of life sciences experience, with 200 experts around the world available to advise on all legal matters affecting your business.

Footnotes:

[1] UAE Federal Law N°4 of 1983 on the pharmaceutical profession and industry should be updated by the end of this year to introduce new seizure procedures for suspicious shipments, and to strengthen penalties against individuals and companies dealing with counterfeit drugs, in accordance with international best practices. The amendments are currently under discussion at the Federal National Council.

[2] Although there is a limited number of exceptions under which the importation of unregistered drugs is permitted by hospitals – but we will not deal with such exceptions in this article.

[3] Under Federal Law Number 18 of 1981 concerning organising of trade agencies.

[4] The General Sale List lists all the registered pharmaceutical substances in the UAE.

[5] Foreign companies willing to incorporate a UAE structure must be aware that a company incorporated in Dubai is only permitted to carry out its activities as set forth in its trade licence in the Emirate of Dubai. If the UAE entity is incorporated in a free zone, its trade license would only permit activities within such free zone.

[6] The UAE Commercial Companies Law requires companies incorporated under such law to have at least 51% of its share capital to be owned by UAE nationals. As a result, any company established in the UAE onshore is required to have one or more UAE partners holding at least 51% of the share capital of the company.

[7] The officials of the UAE Ministry of Economy and the Ministry of Health have confirmed orally, when preparing this article, that this requirement is still in force.

Read the original article on GowlingWLG.com.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
 
Email Address
Company Name
Password
Confirm Password
Country
Position
Industry
Mondaq Newsalert
Select Topics
Select Regions
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions