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Bahrain Pharmaceuticals and Healthcare Report Q1 2010
Business Monitor International, Dec 2009, Pages: 80
Bahrain Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Bahrain's pharmaceuticals and healthcare industry.
In 2008 Bahrain’s pharmaceutical market was worth BHD44mn (US$115mn) but should shrink slightly in 2009 to BHD43mn (US$112mn) as the economic downturn impacts private expenditure - which counts for around half of total spending. However, BMI, forecasts a recovery in the market in 2011, and growth should be comfortably above 4% in the 2010-2014 period. This is in-line with an overall recovery in the economy, which BMI believes has already passed its bottom. In 2010, GDP growth should stand at 1.3%, after a small contraction was recorded in 2009. After this, levels will pick up although they will still remain a couple of percentage points below growth in the pharmaceutical sector, which could cause problems for public finances.
However, pharmaceutical expenditure is not growing at anywhere near the levels seen in the health sector as a whole, which is forecast to post annual increases of more than 20% per year. This suggests that drug expenditure is not the main reason behind health cost inflation. Austerities concentrating on drug spending are often the first measures governments put in place in order to tackle runaway health costs. In this instance, BMI’s figures suggest such an approach would be unsuccessful and we concur with current government thinking, which believes that a great role for the private sector is needed in order to meet health obligations in the coming years.
Indeed, Bahrain is considering making health insurance compulsory for the entire population. Between 2008 and 2014, BMI expects health expenditure to almost triple to reach US$2,253.8 per capita. Health Minister Dr Faisal Al Hamer favours a gradual shift towards privatisation, with the Ministry of Health (MoH)’s role eventually changing to one of regulation and policy-making rather than provision. However, public commentators have railed strongly against any moves to scrap free healthcare. Under the new system, much of the extra burden will fall on employers, although there are fears that they will simply pass the extra cost onto the customers. Meanwhile, there are also concerns that individuals with rare or chronic diseases will not be covered by insurance companies. This is especially worrying considering the high-level of genetic blood disorders prevalent in the country. A further concern is that private health insurance could actually make the health of the country worse, as people may be less likely to use primary care due to the cost.
In BMI’s Q1 2010 Business Environment Ratings for the 17 countries of the MEA region, Bahrain ranks in sixth place. Key constraints on the business environment include the small size of the drug market and a population of just over 1mn. However, a strong intellectual property regime coupled with expanding trade links - both with the immediate region and further afield - could make Bahrain an attractive location for pharmaceutical investment going forward.
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