Sales at the UAE pharmaceutical company Julphar were up more than 10 per cent in the first half of the year, despite the recent introduction of a drug price cut affecting more than 6,600 medicines.
The Ras Al Khaimah-based drugs company registered a 10.5 per cent increase in sales revenue during the first six months to Dh696.4 million, largely driven by private market sales that grew 13.4 per cent year on year.
Gross profit stood at Dh412.1m in the period, an increase of 8.3 per cent, while operating profit was Dh126.5m, up 2.8 per cent year on year.
In February, the Government announced that the cost of 6,632 medicines - 94 per cent of the 7,053 products registered in the UAE - would be dropped by up to 40 per cent.
It is understood that the change came into force in early June. Julphar has hardly been affected so far, nor does it expect to be, according to Raghu Sarma,the head of investments and corporate planning at the company. "Out of these 6,000-odd products which were marked for these price decreases, most pertain to the originator drugs, as in the originator patent holder," said Mr Sarma.
"There are hardly any generic medicines in that basket, so Julphar is not really impacted by that circular."
The company, also known as Gulf Pharmaceutical Industries, exports its products to about 34 countries across the Middle East and Africa.
The company's positive result in the first half is partly due to health care being underserved in the region, said Mr Sarma.
"We have been growing in the area of 13 to 15 per cent every year over the last four or five years. That's been our general growth trajectory, so 10.5 per cent is pretty normal for us.
"We're not surprised by these results. This kind of growth is expected in a market which has a sizeable population which is pretty underserved."
The Julphar chairman, Sheikh Faisal bin Saqr Al Qasimi, added maintaining stable financial growth and delivering sustainable health care is a key priority.