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Canada Pharmaceuticals and Healthcare Report Q1 2011
Business Monitor International, Jan 2011, Pages: 88
The Canada 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 Canada's pharmaceuticals and healthcare industry.
The Canadian economy is still slowing, and BMI’s Country Risk team is maintaining its belowconsensus projection for 2011. With fiscal stimulus amounting to 2.9% of GDP over the past two fiscal years, we believe government consumption growth will drop from about 4.1% y-o-y in real terms in H110 to 1.5-2.0% by H111. For 2011 as a whole, we expect government consumption growth to come in at 2.0%. Additionally, we are forecasting 2.3% growth in private consumption in 2011, a sharp slowdown from 3.3% in 2010, but still representing a contribution of 1.5 percentage points (pp) to GDP. In BMI’s Pharmaceutical Business Environment Ratings (BERs) for Q111, Canada remains in second place in the expanded regional matrix, trailing the US by almost four points. On a global scale, Canada also ranks second, after the US and above Switzerland, of the 83 markets surveyed globally. Despite a tightening cost-containment environment and the provincial variations regarding prescription drug subsidies, Canada will remain one of the most attractive pharmaceutical markets on a worldwide scale, in part due to its high per-capita spending on medicines, which topped US$651 in 2009, as well as population expansion and ageing.
Canada's healthcare system is facing serious challenges in terms of affordability and accessibility, as well as failing to meet the medical needs of the country's changing demographics, according to a report released by the Canadian Medical Association (CMA) in August 2010. Extensive reforms are being proposed ahead of the renegotiation of the current Health Accord, which is set to expire on March 31 2014. First Ministers have described the current level of spending on prescription drugs in the National Pharmaceutical Strategy as 'catastrophic', which is expected to lead to some policy changes and further cost-containment initiatives. This is in line with a trend that is beginning to prevail across the developed world, the government remains set on eliminating the deficit by 2014.
Over the next five years, BMI predicts that the Canadian pharmaceutical market will post a compound annual growth rate (CAGR) of 2.26% in local currency terms, reaching CAD28.01bn (US$24.36bn) in value by 2014. Growth over the 2009-2019 period will accelerate to 3.15%, due to a boost to the patented medicines segment in the latter parts of the forecast, driven by the use of more personalised therapies and higher-value medicines.
The generic drug segment, however, will post more modest five- and ten-year CAGRs of 2.75% and 2.51% in local currency terms, respectively, to reach CAD10.61bn (US$9.23bn) by 2019. The weaker growth of generic drugs compared with patented drugs is mainly due to the relatively high prices of generics and their poor consumer perception. Market growth opportunities for the out-of-pocket segment will also remain limited, given the outlook for slow growth in private consumption levels over the medium term.'
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