LCGPA unveils additional price preference mechanism for pharma sector

Logo of The Local Content and Government Procurement Authority (LCGPA)

The Local Content and Government Procurement Authority (LCGPA) announced today, Feb. 6, the first batch of products eligible for the additional price preference mechanism in the pharmaceutical and medical products sector, as part of its efforts to enhance local content and support national products.

In its statement, the authority explained that the mechanism grants an additional price preference of up to 20%, in addition to the existing 10% preference stipulated in the Regulations on Preference for Local Content and Local SMEs.

A total of 17 pharmaceutical and medical products have so far been included in the list designated for this mechanism.

LCGPA estimates that spending on these target products will reach SAR 141 million, with an expected contribution of SAR 53.8 million to GDP. This highlights the initiative's crucial role in strengthening the national economy and driving growth in the local pharmaceutical industry.

Eligibility for the additional price preference mechanism requires each product to have a valid registration certificate issued by the Saudi Food and Drug Authority (SFDA).

The mechanism does not apply to national products that have only undergone secondary packaging, except for those on which clinical studies or bioequivalence testing have been carried out in Saudi Arabia or those containing an active pharmaceutical ingredient (API) manufactured locally.

LCGPA emphasized that this initiative is designed to support the national pharmaceutical industry by introducing new competitive incentives within the government procurement framework, ultimately boosting reliance on local products in the Saudi health sector.