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Thailand Pharmaceuticals and Healthcare Report Q1 2011
Business Monitor International, Nov 2010, Pages: 86
Thailand 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 Thailand's pharmaceuticals and healthcare industry.
In BMI’s Pharmaceutical Business Environment Ratings table for Q111, Thailand has retained 10th position out of the 17 markets surveyed in the Asia Pacific region, just above the Philippines. The country’s score has, however, decreased marginally, from 52.6 to 51.1, due to a perceived worsening of its Rewards rating. Nevertheless, Thailand appeals to bold investors because it ranks higher according to Rewards compared with the standard Risk/Reward composite, although we expect investment inflows to be negatively affected over the medium to longer term by the unstable political situation. Globally, Thailand ranks 43rd, out of 83 markets surveyed.
We calculate that the value of Thailand’s pharmaceutical market, which reached THB128.83bn (US$3.76bn) in 2009, will post a compound annual growth rate (CAGR) of 7.12% in local currency terms (and of 10.58% in US dollars, as the local tender appreciates). This rate will slow slightly to 7.08% over the 2009-2019 period, with the market reaching THB255.28bn (US$9.12bn) in 2019, as measured at consumer prices. While encouraging, this trajectory is below the 2004-2008 CAGR of 14.0%. Some of the reasons for this slowdown include expansion of encouragement of the use of generics, compulsory licensing, downward pressures on prices and low inflation.
Nevertheless, medical and healthcare providers on Phuket are likely to secure a large share of the THB402.9bn (US$12.5bn) in funding the health ministry has projected it will raise from Thailand's medical tourism industry over the next five years, reported Phuket Gazette in August 2010. Phuket Public Health Office Deputy Director Wiwat Seetamanotch has stated that the island achieved great success in providing health services to tourists over the last five years. Wiwat also expects Phuket island to experience a dramatic rise in number of medical tourists in the coming years. However, the unsettled political situation is clearly far from conducive to the development of the medical tourism-focused medical devices market.
In fact, despite multiple efforts from the Thai government to promote investment by introducing new tax incentives and keeping interest rates low, the value of investment in real terms has failed to recover to levels before the Asian Financial Crisis. Thailand's Industry Minister Chaiwut Bannawat highlighted the government's woes in promoting investment growth, when he stated on August 18 that applications for investment privileges may not reach the THB500bn target set by the Board of Investment this year. In the light of the above, we do not envisage major direct investments by foreign pharmaceutical companies in Thailand. Indeed, over the short term, we see political uncertainty and a global slowdown in H210 and 2011 as the key factors that will limit investment growth in Thailand. Over the longer term, we believe Thailand's attractiveness will be overshadowed by alternative investment options such China, India, Vietnam, and Indonesia.
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