Merck Serono, a division of Germany-based Merck, and a local manufacturer, Neopharma, have formed the first partnership of its kind to locally produce Merck branded medication in the UAE for distribution across the Middle East.

Merck Serono will be the first multinational pharmaceutical company to work with a local manufacturer to cater to regional demand for key pharmaceutical products through export out of the UAE manufacturing base. Initially, two Merck Serono products will be manufactured by Neopharma: Euthyrox , a hormone therapy requiring a very stringent sterile environment for production and packaging, and Glucophage, a standard oral treatment for people suffering from type 2 diabetes that helps control blood sugar levels. Production of both branded medications will begin in 2013.

"Currently valued at approximately 1.4 billion and growing at 6.8% annually, the UAE pharmaceutical market is one of the most developed markets in the Middle East, with a strong healthcare infrastructure and the highest per-capita medicine expenditure in the region,” said Sheikh Nahyan bin Mubarak Al Nahyan, chairman of Neopharma and Minister of Higher Education and Scientific Research. "This partnership characterizes our country's rapidly developing healthcare industry and improved production capabilities, putting it on-par with international standards of pharmaceutical production."

Stefan Oschmann, CEO of Merck Serono, said, “After careful consideration of the production capabilities of various companies across the Middle East, we identified Neopharma as having the most advanced, European-standard manufacturing facilities capable of producing significant quantities of both hormone and regular pharmaceutical drug products.”

Traditionally the local manufacturing sector in the UAE has been relatively small and focuses on basic medicines. Until this alliance, the market relied on imports for pharmaceutical prescriptions. In 2010, nearly 64% of pharmaceutical imports came from Europe, around 8% from North America and another 8% from the MENA region.