Pharmacoeconomics is rapidly becoming a cornerstone of healthcare decision-making in Saudi Arabia. With the release of the Saudi Food and Drug Authority (SFDA) guidelines on Economic Evaluation Studies (EES) in July 2024, a structured framework now guides how pharmaceutical companies should demonstrate the value of their products.
What Are Pharmacoeconomic Studies?
Pharmacoeconomic or economic evaluation studies (EES) are comparative analyses of healthcare interventions in terms of their costs and outcomes. They answer a key policy question: Does this new medicine provide value compared to what is already available?
The guidelines distinguish between two broad categories:
- Partial Economic Studies – such as Budget Impact Analysis (BIA), which assess the financial affordability of new interventions.
- Full Economic Studies (Pharmacoeconomics Evaluations) – including:
- Cost-Effectiveness Analysis (CEA) – comparing costs and outcomes in natural units.
- Cost-Utility Analysis (CUA) – measuring outcomes in QALYs (quality-adjusted life years).
- Cost-Minimization Analysis (CMA) – applicable when outcomes are assumed equivalent.
- Cost-Benefit Analysis (CBA) – expressing both costs and benefits in monetary terms.
Regulatory Framework in Saudi Arabia
Implementation Timeline
The SFDA has introduced a phased approach for implementation:
- July–December 2024: EES submission voluntary.
- January–June 2025: General requirements mandatory; EES still voluntary.
- From July 2025 onward: Both general requirements and EES become mandatory.
Scope of Application
The guidance applies to all human pharmaceutical products undergoing:
- New registrations
- Price re-evaluations
- Renewals
Thus, every product entering or remaining in the Saudi market must align with these requirements.
General Requirements for Submission
Pharmaceutical companies must include detailed background information in their submission files:
- Epidemiological Data – Prevalence, incidence, and patient population in KSA and globally.
- Market Share – Current product share or five-year forecasts for new drugs.
- Drug Marketing Plan – Distribution channels (tender, retail, public, OTC) and prescription type (hospital, restricted, controlled).
- Access Agreements – Details of entry agreements, localization, patient support programs, or other mechanisms to improve access.
- List of Published EES’s and Health Technology Assessment HTA Decisions – Summaries of Health Technology Assessment (HTA) outcomes, such as The National Institute for Health and Care Excellence NICE, Institute for Clinical and Economic Review (ICER), Canadian Agency for Drugs and Technologies in Health CADTH, Haute Autorité de santé HAS, or Pharmaceutical Benefits Advisory Committee PBAC.
Requirements for Economic Evaluation Studies (EES)
Study Types by Product
The SFDA outlines required analysis by product category:
|
Product Type |
BIA |
CMA |
CEA |
CUA |
|
New Chemical |
✔ |
✘ |
✔ |
✔ |
|
Biological |
✔ |
✘ |
✔ |
✔ |
|
Generic Chemical |
✔ |
✔ |
✘ |
✘ |
|
Biosimilar |
✔ |
✔ |
✘ |
✘ |
- Innovative drugs must demonstrate long-term cost-effectiveness or utility.
- Generics and biosimilars must show affordability and budget sustainability.
Full Economic Evaluation Requirements (CMA, CEA, CUA)
|
Criteria |
Description |
Application |
|
Study Objective |
Clearly state objectives and research questions. |
Required (CMA, CEA, CUA) |
|
Target Population |
Define the target population, including subgroup analyses if relevant. |
Required |
|
Perspective of Analysis |
Indicate study perspective (healthcare payer and/or societal). |
Required |
|
Time Horizon |
Should capture natural disease history or differences in cost/outcomes. |
2–5 years (CMA), Lifetime (CEA/CUA) |
|
Comparator |
Must include current standard of care (least costly and most effective). Emerging technologies may also be considered. |
Required |
|
The estimated Threshold |
Estimated at SAR 50,000–75,000 per QALY (with flexibility for specific products). |
Applicable to CEA/CUA |
|
Modeling |
Provide model details and justification. Include validation where possible. Adapt global models with local parameters if no Saudi-specific model exists. |
Required |
|
Cost Calculations |
Include all relevant costs based on perspective. Direct healthcare costs are mandatory; intangible and societal costs encouraged. |
Expressed in SAR or USD |
|
Long-Term care & Productivity loss Costs |
Costs of long-term care or productivity loss should be included, with method of calculation specified. |
Expressed in SAR or USD |
|
Outcome Measurement |
Specify chosen outcomes. For CEA: natural units. For CUA: QALYs. |
Natural units (CEA), QALYs (CUA) |
|
Additional Benefits in Efficacy or Safety |
Highlight added safety or efficacy. Real-world evidence (RWE) is encouraged. |
Required for CEA/CUA |
|
Sources of Cost or Clinical Data |
Use Saudi cost data. Clinical evidence should come from RCTs, RWE, or network meta-analysis (NMA). |
Required |
|
Discounting |
Apply annual discount rate of 3–5%, at minimum for cost. |
Required |
|
Uncertainty & Sensitivity Analysis |
Address parameter, methodological, and structural uncertainty. Provide Deterministic Sensitivity Analysis (DSA: one-way and multi-way) and Probabilistic Sensitivity Analysis (PSA). |
Required |
|
Presentation of Results |
Report incremental costs/outcomes. Use cost-effectiveness plane, CEAC (for PSA), scatter plot, and tornado diagram (for DSA). |
Required (ICER/ICUR) |
|
Data Source, Equity & Generalizability to Saudi Arabia |
Ensure results apply to Saudi Arabia, considering equity and fairness in treatment access. |
Required |
|
Other |
Disclose conflicts of interest and funding sources. |
Required |
Partial Economic Evaluation Requirements (BIA)
|
Criteria |
Description |
|
Study Objective |
Clearly define objectives and research questions. |
|
Target Population |
Describe the target population, with subgroup analyses encouraged. |
|
Perspective of Analysis |
Use healthcare payer perspective. All costs must be reported in SAR. Direct healthcare costs are mandatory. |
|
Time Horizon |
Must cover 2–5 years. |
|
Comparator |
Include current standard of care (least costly and most effective). Consider emerging technologies. |
|
Uncertainty & Sensitivity Analysis |
Perform scenario analyses to address uncertainty. |
|
Presentation of Results |
Results should be presented in table format. |
|
Other |
Conflicts of interest and funding sources must be declared. |
Submission Process
All information must be submitted in eCTD format, using standardized forms:
- Form A: General Requirements
- Form B: Pharmacoeconomics
- Form C: Budget Impact Analysis
Applicants must provide full supporting studies, references, and justifications for any missing data.
Key Takeaways
- From July 2025, pharmacoeconomic studies are mandatory for drug pricing submissions in Saudi Arabia.
- Innovative products require full economic evaluations (CEA/CUA), while generics/biosimilars focus on BIA and CMA.
- Submissions must include local epidemiology, market projections, and HTA evidence.
- The cost-effectiveness threshold in KSA is estimated at SAR 50,000–75,000 per QALY, but exceptions may apply.
- Standardized forms (A, B, C) must be submitted via eCTD, supported by complete study documentation.
Authored by Baupharma KSA team,
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