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Netherlands Pharmaceuticals and Healthcare Report Q1 2011
Business Monitor International, Nov 2010, Pages: 77
Netherlands 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 the Netherlands' pharmaceuticals and healthcare industry.
In BMI's Q111 Pharmaceuticals & Healthcare Business Environment Ratings (BERs), the Western Europe region scored a total of 64.4 out of 100. The attractiveness of the region to pharmaceutical firms stems from the fact that its countries are key revenue sources for 'big pharma', particularly for companies selling high-end products, as per-capita spending is substantially higher than in emerging markets. However, it is BMI's view that drug companies will face many challenges in Western Europe over the next decade.
Deficits remain a key challenge for the majority of governments across Europe. While many industries may see only limited downside risks from the situation, the pharmaceuticals & healthcare sector is facing considerable pressures. The structure of pharmaceutical payments in Europe makes the industry more vulnerable to fiscal austerity measures than elsewhere, particularly as healthcare spending makes up a large proportion of government expenditure. As predicted by BMI, the dire fiscal situations facing many of these countries have necessitated a major acceleration in the introduction of harsher price erosion mechanisms across on pharmaceuticals in Europe. Furthermore, the healthcare sector has increased in importance to government cost-containment plans.
In BMI’s Q111 BERs for the 10 key Western European markets, the Netherlands lies in seventh place. The country’s strong and transparent regulatory framework means it scores strongly in terms of risk. However, poor market prospects – due to pressures on pricing and reimbursement – will continue to weigh on the country’s composite overall score.
In late September 2010, the caretaker Dutch government proposed cutting 2011 spending by EUR3.2bn (US$4.5bn) in order to halt rising public debt and aid long-term economic recovery. It was announced that savings would be found in wage moderation, lower pay rises for civil servants, higher tobacco taxes, reduced medical benefits and less spending on immigrants.
With the traditionally high public expenditure on healthcare and the expected growth in demand for healthcare services, it comes as no surprise that the government has included the healthcare sector in its list of spending cuts. In 2009, health expenditure in the Netherlands reached a value of EUR57.69bn (US$80.76bn), experiencing a 7.0% growth in local currency terms (and 1.9% in US dollar terms). Public sector health expenditure reached a value of EUR46.79bn (US$65.50bn) in 2009, accounting for a significantly high 81.10% of total health expenditure. As the country's population ages, the government will continue to face growing healthcare costs – especially as the growing number of elderly people among its population means that the number of working-age citizens contributing to social service funds is declining.
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