Muslim consumer spending on pharmaceuticals remained relatively stagnant in 2023, rising marginally from $106.9 billion in 2022 to $107.1 billion in 2023, according to the State of the Global Islamic Economy Report (SGIE) 2024/25. However, spending is projected to grow at a CAGR of 6.8%, reaching $149 billion by 2028.

Localization of Production Initiatives

Despite the modest growth, the halal pharmaceutical sector continues to show resilience and innovation. Localization of production, particularly insulin, has advanced, with Indonesia launching its first locally produced halal insulin, and Saudi Arabia aiming to localize over half of its insulin needs by 2027.

Additional localization efforts include Egypt initiated local insulin production through collaborations while UAE’s Julphar established a licensing partnership to localize modern insulin analogues in the MENA region.

Rising Importance of Halal Certifications

Halal certification for supplements has continued to gain traction globally. Key developments include South Korea’s Cosmax NBT expanding into Indonesia, Haleon Pakistan preparing to manufacture Centrum multivitamins, and Australia’s Blackmores obtaining halal certification from JAKIM.

Major brands are responding to market demand, with Nestlé Health Science and US-based ChromaDex have introduced halal-certified supplement ranges to address rising health consciousness among Muslim consumers.

Regulatory Framework Development

The halal pharmaceutical ecosystem has become more sophisticated, with countries like Azerbaijan adopting OIC/SMIIC halal medicine standards and Indonesia introducing comprehensive halal manufacturing guidelines. Additionally, regulatory frameworks for herbal and natural products have also advanced in Malaysia, Indonesia, and Nigeria.

Investment Landscape and Financial Performance

From an investment perspective, the halal pharmaceutical sector recorded 23 deals across either mergers and acquisitions, private equity funding or venture capital raises in 2023/24, down 34.29% from previous year’s 35. Despite this decrease, the sector accounted for 11.36% of total investment across other sectors.

Strengthening Local Manufacturing Capabilities

OIC countries such as Saudi Arabia, Egypt, Iraq, and Kazakhstan have enhanced local pharmaceutical manufacturing capabilities to increase self-sufficiency. This effort is supported by collaborations between universities and industries, such as Duopharma Biotech with Universiti Kebangsaan Malaysia and Biofarma with Padjajaran University, have supported R&D initiatives crucial for halal pharmaceutical growth.

Humanitarian and Digital Health Initiatives

Humanitarian medical support has complemented regulatory initiatives, particularly in war-stricken regions. Initiatives in hotspots such as Gaza, Sudan, and rural areas through telemedicine solutions underscore the potential of digital health technologies to enhance healthcare accessibility.

Technology and Innovation Investments

The sector has seen significant investment in technological advancement, with investments in AI-driven drug discovery have also accelerated, exemplified by UAE’s Insilico Medicine, MERCK’s integration of AI in drug synthesis, and Nvidia’s strategic partnerships supporting healthcare startups in Southeast Asia.

Innovation-Friendly Regulatory Environment

Regulatory sandboxes in Saudi Arabia, Abu Dhabi, and Indonesia continue to foster innovation by balancing technological advancement with appropriate regulatory oversight, creating an environment that encourages pharmaceutical innovation while maintaining necessary safety standards.

Original Article:

Salaam Gateway. (2025, July 14). SGIE Report 2024/25: Enhancing local pharma capabilities, halal certification emerge as key trends. https://salaamgateway.com/story/sgie-report-202425-enhancing-local-pharma-capabilities-halal-certification-emerge-as-key-trends