From BHD44mn (US$114mn) in 2008, BMI forecasts that Bahrain’s pharmaceutical market will expand to be worth BHD61mn (US$160mn) in 2018. While the market will remain small in absolute terms, rapid value growth, representing a compound annual growth rate (CAGR) of 6.8% and a favourable political economic and business environment mean that the country is likely to increasingly feature in drugmakers’ Middle East and Africa (MEA) strategies. In BMI’s Q409 Business Environment Rating for the 17 countries of the MEA region, Bahrain ranks eighth. The potential returns from the market are constrained by the island’s population of just 1mn. However, a strong regulatory structure and stable political climate create a relatively low-risk business environment. The Gulf Co-operation Council (GCC) member states already work together on a number of regulatory fronts and hope to deepen this collaboration in the coming years. At present, the GCC operates a unified import tariff system, as well as a system of collective tenders for group purchasing of drugs and vaccines. These tenders are an important way for multinational drugmakers to supply the Bahraini market. Healthcare is provided free of charge by the government to all citizens of Bahrain. Although, along with a number of other Gulf states, Bahrain has recently excluded non-Bahrain nationals from the public healthcare system. As a result, expatriates have to purchase private insurance – either personally or through their employers – or pay out-of-pocket for their treatments. Demand for healthcare is growing rapidly due to a combination of factors including population growth, an ageing population, and a higher prevalence of chronic disease. According to a Ministry of Health study published in 2008, these three factors alone will cause healthcare expenditure to increase by around 500% over the next 20 years to reach BHD1.15mn in 2025, assuming no changes in the type of care provided. Private healthcare is likely to see considerable growth over the coming years. The artificial ‘health island’ known as Dilmunia, off the north coast of Bahrain should become a focal point for the growing private healthcare industry in the country and provide a major draw for health tourists from overseas. The project is progressing on schedule, with land reclamation work completed at the beginning of June 2009. The first phase of the project is expected to be completed in 2012, and the second phase in 2015.