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Health | Science & Technology | Middle East | Kuwait

Life Sciences Innovation

Health 2.0 tech sharpens focus on prevention and attitudes


2 years ago

Dr. Mussaad Al Razouki, Chief Business Development Officer at Kuwait Life Sciences Company (KLSC)
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Dr. Mussaad Al Razouki

Chief Business Development Officer at Kuwait Life Sciences Company (KLSC)

Dr. Mussaad Al Razouki, Chief Business Development Officer at Kuwait Life Sciences Company (KLSC), discusses why international investors should take a closer look at Kuwait –a nation of firsts that continues to push innovation in healthcare and life sciences, and the GCC’s ‘dark horse’ for returns on investment.

The gulf countries are bound together by beliefs, history and a strong sense of brotherhood, and they have developed their own personality. Given its power and geographical position, the GCC is on the main stage of the world economic and political scene. What is Kuwait’s identity and the set of values that define and distinguish Kuwait from its brothers in the Gulf?

I believe that what differentiates Kuwait is, first of all, our democracy. Considering that every single Kuwaiti citizen is very lucky and privileged to have a voice and a vote to represent them in the legislative branch of the government – our parliament.

The government is, I would say, very foresighted, in that they do look towards ensuring the future and sustainability of the country and they put a lot of initiatives in place.

Kuwait was a pioneering country. There were many firsts that have been achieved in the GCC because of Kuwait, whether it’s the first airline company, the first stock market, or the first sovereign wealth fund, which was not just in the region but also in the world.

There is the first national level technology transfer company, such as our parent company, National Technology Enterprises Company or NTEC, which is involved in transferring technology to the region, and we’ve been pioneers in lots of spheres now.

Many might criticize the fact that Kuwait’s a little bit behind compared to our neighbors when it comes to some development indicators, but I think the government and the private sector are aware of that and, obviously, we are looking to improve our standing.

Regarding the private sector, I’d like to touch on the nature of KLSC, but you mentioned a lot of firsts. We actually think of Kuwait as a country of firsts, the first democratically elected parliament, the first constitution in the GCC, so out of all of those, Kuwait has revived the humanitarian role. What is the reason behind the choice of Kuwait’s humanitarian role by the government?

This has always been a role that is very important to Kuwait.

Right before the Iraqi invasion on the 2nd of August, 1990, Kuwait hosted the Peace and Friendship Games, which invited a lot of the OIC – Organization of Islamic Cooperation – countries, to have a sort of mini-Olympics, if you would.

The stadium right next to my house in Adailiya was named the Peace and Friendship Stadium, so this is a role Kuwait has always been at the forefront of. It’s part of our role in this global community – to give back to other nations that are in need, whether they are in the region, such as Syria, or even further abroad.

If you look at the Kuwait Fund for Arab Economic Development, they have funded hundreds of projects, ranging from the Caribbean all the way to East Asia.

So this has continued to be our role; it’s the role of affluent nations, to give back to human society.

What role do you think the humanitarian side plays in Kuwait’s economic future?

We are part of a global community; the world today is getting smaller and smaller.

If you’re not visible on a global scale and on a positive scale, then it’s very difficult for other members of this global community to not only invest in your country, but to participate in the growth of it as well.

If you look at, for example, most of the regional headlines about Kuwait, some of them are quite negative, whether it’s about not allowing ex-pats to stay for extended periods of time and inviting their families, or seeing companies have issues in terms of financing.

We need more positive public relations in Kuwait, and becoming a global center for humanitarian issues is definitely a step in the right direction.

When you were talking about that spirit that has always deemed Kuwait as leader of the region, one thing is that they’re really trying to do – and this is coming directly from Sheik Meshaal – is actually to diversify the economy. Currently there are many initiatives. KLSC is a very innovative company, and it’s also very dedicated to youth. How would you describe the current efforts that the government is implementing to diversify and promote private sector growth?

This issue is diversifying away from a single-resource economy – I don’t like to say ‘oil economy’ because many countries around the world have a single-resource and they try to diversify away from it.

Keeping that in mind, it’s not an issue faced only by Kuwait; I think that many of our neighbors have a similar drive to diversify away from oil, or at least increase their non-oil GDP.

Obviously NTEC and Kuwait Life Sciences, by extension, are great examples of our government creating entities whose primary goal is not only to transfer technology, but also to ensure their own financial sustainability.

There are also other great initiatives, such as creating the Ministry of State for Youth Affairs, whose goal is trying to encourage young entrepreneurs to develop their own initiatives.

I believe they have funded over 50 different initiatives so far. There’s another great initiative, which is the Kuwait Small and Medium-Size Enterprises Fund, which is a KD2 billion ($6.6bn) fund and is probably the largest I’ve heard of in the world to support the SME sector.

Any economist will tell you that this sector is the growth engine of any economy.

These are some concrete examples; obviously we can do better, such as improving the ease of doing business and finding ways in which we can encourage foreign businesses to invest in Kuwait.

But you have to start somewhere and I think the strategy taken by the government in the past few years has been very positive.

There may not have been an immediate impact thus far, but we hope it will come very soon.

When you mention the importance of getting other countries to invest in Kuwait, and establish those relationships, what would you say would be the best effort to attract those businesses to come to Kuwait?

We must first recognize that Kuwait has always been very accommodating to foreign investment, starting from the ‘60s and ‘70s – there are third generation Palestinian families, Syrian families, Lebanese families and Egyptian families, who have not only started their own businesses but also partnered with many of Kuwait’s most established merchant families.

That mechanism already existed. Now, whether the comparison is similar to Dubai or Qatar, where they have a free-zone that companies can rent real estate in, without contributing to the economy but instead to set shop there and transfer those profits or whatever they’ve made back to their home business, in my opinion this is not something we really need here in Kuwait.

Instead we need a mechanism to encourage international companies to partner with local companies here, whether they’re owned by the state or privately owned, to develop the real economy of Kuwait.

Instead of just setting up a very simple office and basically bringing in the workers, working on projects in the region and sending those profits back to their home country, there needs to be a real contribution to the economy beyond just a few rental and electricity bill payments.

We have seen that in terms of costs, there is a very efficient the Ministry of Health; it gives great coverage and only represents 6% of the GDP. But still there are challenges, in terms of the back structure of the sector, which is data management, and more efficiency in terms of process. We have also seen that 25% of the budget is allocated to lifestyle and non-communicable diseases. A new, more modern and broad concept of health needs to be approached. What do you think are the current challenges in the heath sector for that to be achieved?

I think you mentioned very appropriately that the Ministry of Health is doing, for all intents and purposes, a good job.

I don’t think we have any eminent health crises in Kuwait. To have a health crisis you are probably a sub-Saharan country where the communicable disease and the infant mortality rate is very high, and you also have a very low life expectancy.

So let’s say, on the type of Millennium Development Goal challenges that the UN has identified, I think we’re doing a great job. Can we do a better job? Yes we can.

I do not agree with you that in terms of a cost-benefit ratio we’re doing a good job. I think for the amount of money we are spending, specifically in terms of these future projects, we should have a much better appreciation for quality of life instead of life expectancy.

Kuwait is among the top countries worldwide in both diabetes and obesity. These are huge risk factors and because our population is very young, they might not be apparent yet, but they will be in the next few years and it will put a huge cost burden on the economy.

If you have diabetes, you are four times as likely to be hospitalized, and if you’re obese you’re two times as likely to get diabetes.

By extension this will be a huge burden on the government and I think the government and some in the private sector need to do a better job in encouraging preventive care, as opposed to reactive care.

You also touched upon, let’s say, health 2.0-type technologies and finding ways in which you can encourage people to have a healthier lifestyle, and I think we can do a better job not just in Kuwait but in the region in terms of promoting these types of technologies and processes, and that’s something that we have started to focus on at Kuwait Life Sciences.

I know that you have written extensively about health 2.0, and this concept touches on preventive medicine and also getting behavioral economics into the health sector formula so as to achieve a broader and more preventive medicine-focused future in Kuwait. As you said, if not implemented we are going to see statistically the quality of life of Kuwaitis go down. What are the main measures that you believe need to be taken to ensure better quality of life?

Some don’t consider the patient first, so I always have a patient-focused approach, and what really strikes me about the Kuwaiti population is that we have a very, very large discrepancy between reality and the patient’s expectations.

So a great example I like to quote is there was a broad interview and op-ed piece done about the current state of the healthcare system, and they interviewed some experts as well as some patients here in Kuwait.

Something that one patient said really resonated with me: he said that in Kuwait we have such a low number of doctors, we actually must have only one doctor for every 10 people.

Now, if you extrapolate that to world standards, he means that there are 100 doctors per thousand, and that’s over 10 times what Japan has, which is the highest number of doctors in the world at 8.5 per thousand people.

So this person, even though he believes that there are 100 doctors for every thousand people in Kuwait, is still not satisfied.

So we have this huge discrepancy, and this can be extrapolated beyond just healthcare.

There was a great article written by Time magazine called “Protesters in Porsches and Prada Shoes” and you look at that and it’s about people who are living in the top 1% of the world by socio-economic standards, and are not satisfied with what they have.

So I think there needs to first be a very open and transparent dialogue about people’s expectations, and secondly, to look at how sustainable the system is.

I think every Kuwaiti’s perception is that they have access to a doctor 24/7, access to a specialist 24/7, and access, if they need to, to the top hospitals in the world, whether it’s in the US, UK or in Europe.

These are the expectations that need to be met, and thankfully our government is very affluent and it has been very kind to people in the past. We just need to start seriously thinking about developing a sustainable system for the future.

You mentioned before all the efforts that Kuwait has been taking to promote one of those pillars, which is research. What would you say are the areas that are currently under-researched or understudied in Kuwait?

That’s an important question, but I think that before you talk about research, part of the issue is that we have the different pieces of the puzzle but they’re not being worked together in an effective way.

There are a lot of silo-ed initiatives. If you look at any R&D-based economy, whether it’s Silicon Valley or Taiwan, they are usually built on three solid pillars.

The first is the regulatory pillar, which ascertains the government’s role in both setting the proper policies, framework and infrastructure to allow innovation and entrepreneurship to flourish, and either the military or the role of R&D budgets for the ministries.

Next you have the academic pillar, which is very important and encourages universities to become more research orientated and actually allows this new mindset to trickle down to the K-12 system where students are instilled with the virtues of the scientific process through STEM programs and critical reasoning skills.

Finally, you must have the financing pillar, where you need to encourage a robust venture capital community as well, where different ventures throughout the innovation life cycle are both critiqued openly and then financed.

If you do not have these three pillars, then you cannot become a knowledge-focused economy.

So do you have any ideas about raising awareness about the importance of R&D and the motto of the KFAS, which is to turn Kuwait into a knowledge-based economy? Furthermore, do you have any ideas about how to unite those three pillars – venture capitalism, universities, and other efforts – and put join the pieces of the puzzle together?

I think if you start somewhere it has to be with encouraging the next generation of entrepreneurs and researchers to be able to allow them to seek these different pillars.

I don’t think it needs to be at a more governmental level, I think it needs to be done at the grass roots level.

Necessity is the mother of invention. So as the government has increasing difficulty in employing the younger generation of Kuwaitis, they will go ahead and try to develop their own initiatives in the private sector.

We see it happening today. So I don’t think it’s a question of will it ever happen – it’s already happening today.

What can we do to make it better? We definitely need to have more collaboration between these different entities and communication and efficiency are key to achieving that.

I’ve had many friends who have applied for research grants from certain government funds. The process takes a very long time, although today it shouldn’t take that long.

It shouldn’t take a Kuwaiti six months to a year to start a business; it should happen within a month, within two months maximum. Ideally, the process would be complete within an hour, just like Singapore.

When it comes to the research side, we need more universities in Kuwait to make contributions; one public university isn’t enough to make significant strides in R&D.

The professors need to be encouraged to do more groundbreaking research as opposed to just doing a meta-analysis of the same research. These are some quick wins that can be readily achieved.

In terms of doing things better now, you’re in a position of developing business and we’re going into KLSC, and that’s the proof that this is happening.

We’ve invested in research before. One of the companies we own is a company called Clinart, which is one of the first healthcare research organizations in the Middle East and Africa.

Clinart works with private companies, big pharma companies such as GlaxoSmithKline, Pfizer, Abbott and others to host trials in the Middle East and to focus on creating medicine specific to our population.

In such a niche sector that Kuwait Life Sciences occupies, what do you do better in terms of your competitive advantage to gain market share?

Healthcare, a lot of people realize, is one of the largest parts of the global economy. It’s a $5 trillion market, globally. $2.5 trillion of that is in the US, and the rest of the $2.5 is spread across the world.

Just to give you an example, healthcare is so large that the entire history of the heart, when it comes to beta blockers, cardiovascular surgeons, cardiology services – that specialty of the heart is actually larger than the entire automotive industry, including the Big Three in Detroit, Toyota, the tire manufacturers, and the companies that contribute to the parts and accessories of cars.

If you look at the diabetes industry – insulin, dialysis, and all internal medicine specialists that focus on diabetes – it is larger than the FMCG (fast moving consumer goods) industry, which is basically almost everything you could buy in a supermarket. That’s how big healthcare is.

Now for us to invest in healthcare, it was very important to us to identify what areas, within this large life sciences or healthcare industry, we’d like to contribute to.

One is training and development, where we have the region’s first ever life sciences academy.

We are very specialized now that we have, and we have 80 different courses per year to train the next generation of both clinical leaders as well as administrative leaders and executive leaders in healthcare.

We have also invested in the research company that I mentioned, Clinart, which is involved in the contract research organization space.

We have invested in a company that provides the active pharmaceutical ingredients, so the ingredients that go into drugs. We have developed these synergistic qualities between our investments.

There are two other companies or platforms that we have invested in as part of this very large life sciences space.

One of them is a UAE-based company called New Bridge Pharmaceuticals and the other is called Innomedics.

New Bridges is involved in pharmaceutical licensing and distribution that contributes to the entire Middle East.

KLSC was part of the founding group of investors back in 2011 and today New Bridge is a regional market leader.

Innomedics is a company currently being incubated by KLSC here in Kuwait that is bringing the latest technology to the region, whether it’s consumer health products – these are products that the consumer uses to be able to use prevention – or large MRI systems from China or smaller personal health devices from Europe and the USA.

Moving forward, there are two sectors that we’re very interested in. One is the health IT space, which innovates ways of bringing technology into healthcare, specifically into the hospital and into the provider’s space.

The other is bringing new, efficient models of healthcare delivery to the healthcare provider’s space. So not necessarily investing in hospitals, but investing in new modalities of care.

You mentioned something that’s very important in business, which is the need to go abroad and base a company in Dubai. KLSC plays a very important role in KIA, the Kuwait Investment Authority, so what’s the importance of investing overseas? How does KLSC see that with correct growth, it can be a flagship company for Kuwait overseas?

I view the GCC region as more of a regional economy. I don’t really consider having one company in Dubai, Riyadh or Jeddah as being abroad. I see it as, I hope, one economy.

We need to do a better job working together towards developing a one-economy mindset. But at the end of the day, Kuwait itself is a small market and for us to be able to succeed on a major level, we need the scale. 

Scale comes by going regional and eventually international.

What are you doing and what are the challenges for KLSC to actually attract those countries and economies to invest with you in Kuwait to invest in future businesses?

Kuwait is part of the GCC, and we like to call ourselves one of the gateways to the GCC for life sciences companies.

Now, the GCC is becoming a more attractive place for global investors, partly because of the growth we’ve had and the favorable economics of our healthcare industry.

Unfortunately, this implies that the population is unhealthy, although that means there are increasing investment opportunities for the life sciences investor, because this unhealthy population has many healthcare needs.

KLSC is an investor’s entry into the GCC, one of the fastest growing regions in the world.

Another challenge we face is getting talent into the region. Beyond immigration difficulties, many companies find it tough to base a talented individual in Kuwait. 

These individuals obviously want to have good schools for the families and visibility on their future in the country, so there need to be ways in which we can address and find solutions to accommodate their needs, so they can truly be a part of this economy.

Another challenge is, I would say is that it’s a competitive world; if I’m working for a company that’s based in Silicon Valley, am I going to consider China, India or the Middle East first?

It’s tough to say no to China, it’s tough to say no to India, and it’s also tough also to say no to the Middle East for some companies.

By overcoming these challenges and investing in our future, we can create a great gravitational force to bring work to the Middle East.

You did mention the Life Sciences Academy. How do you see the contribution of human capital to the industry from KLSC?

It’s all different pieces of the puzzle. The human element of healthcare is a very important pillar of the Life Sciences industry in general, whether it’s excellent pharmaceutical researchers or great doctors for hospitals.

That aspect is so important since 85% of your typical hospital’s budget goes towards salaries for doctors, nurses and clinical staff. It is a very human capital-intensive industry, and that’s definitely why we’ve invested in the Life Sciences Academy and developed this capability, because we believe in empowering the next generation of leaders and making sure they have all the training they require to excel in the field.

Anybody in Life Sciences, whether it’s a researcher, doctor or a nurse, needs to continuously update themselves and their skills.

You mentioned that NTEC was the first national level technology transfer company in the region, and with such a dynamic business environment, how is NTEC’s relationship from you in terms of autonomy in terms of daily decisions and business decisions?

We have a very open, transparent, and more importantly, efficient decision-making system. NTEC is the sole owner of Kuwait Life Sciences Company. It also owns two other investment companies: Impulse for ICT investment, and Enertech for clean and renewable energy investments.

NTEC also owns two other service-based subsidiary companies, NASCO, which does strategic advisory and consultancy, as well as a company called GIC that specializes in HR solutions and recruitment of talent for many companies, including government-owned ones and those in the private sector.

We have a very efficient open and transparent process with NTEC. They give us enough autonomy to go ahead and source the right investment opportunities and have our own investment thesis and strategies, but at the same time, they provide us with the oversight needed and the sounding board, which is very important, to see if this fits with the overall vision of the group.

You mentioned the $2.5 trillion spent on healthcare. The United States is the largest healthcare market in the world, so how important is it for KLSC to attract business from the US?

We have many US-based partners that are comprised of venture capital funds, medical device manufacturers, medical consumables companies, companies involved in consumer health, healthcare IT, and those that are involved in making the provider’s space more efficient.

The US is a very important market for healthcare; it’s a world leader in health and in many parts of healthcare and life sciences.

If you had one minute with Jaime Diamond or Warren Buffet and he tells you, Dr. Razouki, I want to invest in Kuwait, what’s the best advice you can give me to do a successful business?

First of all, I am sure that Warren Buffet would give me more than one minute, since we are both graduates of the same MBA program at Columbia Business School.

But, nevertheless, I would say that Kuwait is very undervalued and I think that any investor would like to invest in a company that is undervalued so that they can see their value and their investment grow over time.

Kuwait is definitely at that stage. If you invest in Dubai or in Qatar, you will probably not get enough return on investment on your money because they have developed so much over the past five to 10 years and this is definitely to their credit.

Kuwait is the dark horse, the sleeping giant, if you would, here in the GCC region and I would definitely say it’s a great place to allocate your capital.

We’re engaged with the GCC; we’re hopefully going to be engaged with Iraq, which has a very promising economy, and we hope that the recent stability will lead to increasing investment opportunities.

We have a government that has developed a legal and a social framework that is 50 years ahead of our neighbors’, by virtue of our laws, our parliament, and our constitution, so Kuwait is definitely where you should start looking. Was that one minute?

At a very young age you have achieved so much, being the specialist on healthcare management and finance, since having practiced medicine before means you know the front end and the back end of the healthcare sector. What is it that you would like to achieve? What is the contribution that you would like to make to the state of Kuwait?

My personal vision for Kuwait is for us to be major players in global innovation. Whether it means becoming the Silicon Valley of the region, or being the hub for entrepreneurship, Kuwait’s economic development is a matter I’m personally invested in.

I would also like to see the Kuwaiti healthcare sector to be more sustainable, whereby any Kuwaiti citizen or any resident of Kuwait will not have to worry about their future healthcare needs, in terms of financing or quality of life. That’s something that I work on very effectively.

If you’re asking me about my personal vision for Kuwait Life Sciences Company, I would definitely like to see Kuwait Life Sciences listed on the stock exchange, preferably in either London or New York – I think it’s well within our ability to be the first Kuwaiti company to be listed on an international stock exchange.

We have all of the dynamics, we have the correct support from our parent company NTEC, and we hope to achieve this vision. 



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