PHSSR Saudi Arabia 2025

4.1 Medicine and technology for health system sustainability At present, 20% of the Saudi Arabia health service budget is spent on pharmaceuticals and technology, and the government is faced with the challenge of rising costs in this domain. Therefore, streamlining this expenditure is an important step towards transforming the health system. Adopting appropriate value-based policies in all areas of the health service, including a formulary review process and economic evaluation to establish agreements with pharmaceutical and health technology companies, will ensure substantial and more resilient improvements to health system financing and meet Vision 2030 goals and directives. In recent years, Saudi Arabia’s economic evaluations of new medical technologies have begun to take social and economic impacts into account. Building health economics research capability and improving the quality of evaluations will lead to better decision-making and the more e fficient allocation of healthcare resources. Saudi Arabia’s adoption of high-cost new medical technologies requires central planning and capital funding. Central planning involves decision-making at a higher organisational level and the strategic allocation of resources to ensure that the adoption of new technologies aligns with a hospital’s overall goals and objectives. This process, which is currently being adopted by a number of hospitals, involves assessing the potential bene fits, costs and long-term impacts of new technologies on patient care and on how the hospital operates. Capital funding, meanwhile, refers to the financial resources allocated for the acquisition of new technologies, equipment or infrastructure. In Saudi Arabia, this funding comes from a variety of sources, including government grants, donations, hospital-generated revenue and external investors. These resources are crucial for the successful implementation of high-cost new technologies, covering expenses such as purchasing equipment, staff training, maintenance and upgrading existing facilities. To overcome the barriers to adopting new technologies in hospitals, numerous healthcare institutions have established central innovation budgets to allocate funds to innovative technologies that bene fit multiple units, promote collaboration and reduce the financial burden on individual departments. This approach streamlines the decision-making process and ensures that the hospital’s resources are used more e fficiently when adopting new technologies that have the potential to improve patient care and overall hospital performance. Another option is to take a more decentralised approach by providing high-volume medical treatment units with budgets and greater autonomy, giving individual units greater accountability and flexibility in investing in innovative technologies that directly bene fit patients and improve the quality of care. Both approaches would facilitate the adoption of high-cost technologies, ultimately leading to better patient outcomes and more e fficient healthcare delivery. The Saudi Food and Drug Authority (SFDA) regulates most of Saudi Arabia’s medicines and health technologies (Saudi Food & Drug Authority, website). Regulation includes the safety of technologies and the accuracy of manufacturer-provided speci fications. In 2020, SFDA evaluated 76,418 health technologies, completing 99% of these evaluations within the set policy period of 35 days (Saudi Food & Drug Authority, 2020). SFDA also investigates the e fficacy of and issues with certain health technologies before and after their release onto the health market. Moreover, it operates a programme that receives and analyses health technology and medicine safety reports from the country’s health organisations and disseminates safety reports concerning those technologies, including safety alerts issued by internationally recognised organisations such as the Emergency Care Research Institute, which has been providing such services for over 50 years. In 2020, the SFDA issued 1,991 healthcare technology safety alerts to healthcare providers (Saudi Food & Drug Authority, 2020). The National Uni fied Procurement Company (NUPCO) was founded in 2009 to assist government health providers in acquisition and delivery of cost-effective health technologies. It is entirely owned by the government’s Public Investment Fund (National Uni fied Procurement Company, website). Combining orders from several government health providers helps NUPCO to negotiate affordable prices for health technology and medicines suppliers, enabling the adoption of innovative health technologies. NUPCO also has an established supply chain system with warehouses that have the capacity to 51 Sustainability and Resilience in the Saudi Arabian Health System The Partnership for Health System Sustainability and Resilience