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Portugal Pharmaceuticals and Healthcare Report Q1 2011
Business Monitor International, Nov 2010, Pages: 71
The Portugal 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 Portugal's pharmaceuticals and healthcare industry.
Portugal’s pharmaceutical market was worth EUR3.58bn (US$5.01bn) in 2009, and drug market expenditure is likely to remain at a similar level in 2010. Portugal’s pharmaceutical market has experienced a considerable slowdown in growth in recent years. This is the result of a number of factors: the market is a mature one, it has a low birth rate and stable population, and more recently, the global recession has placed considerable pressure on Portugal’s economy. Portugal’s 2011 budget, approved in Q410, is marked by austerity meaures, and healthcare expenditure has not escaped cuts.
Drug prices have come under scrunity over recent months as politicians struggle to generate savings in a healthcare system that many feel the population has in some ways, taken for granted. In addition to drug price cuts effected in July and August 2010, VAT rises in July 2010 and downward pressure on generic medicine prices, mid-October saw a new range of cuts for branded pharmaceuticals. Patented drugs that are reimbursed by the state are now subject to a 6% price cut, while reimbursement levels have also dropped. Industry association, Apifarma, has warned that so many cuts in such a short time scale could have a devastating impact on the industry – it forecasts that firms will post combined losses of between EUR150-170mn as a result, and that as many as 1,500 jobs will be put at risk.
The government has also decided to address healthcare costs in other areas. In October 2010, a bill was passed which proposes doctors be obliged to prescribe by active ingredient, rather than by brand names, in an attempt to lower expenditure. While doctors will be permitted to prescribe medicines by brand name if no generic alternative exists, or if they can justify their decision, the move has generated a negative reaction from the industry, generic manufactuers and even doctors. In order to become law, the decree has to be approved by Portugal’s president, and if granted, it could come into force as soon as January 2011.
One of the potential beneficiaries of cost cutting are the manufacturers of OTCs, with national press indicating that the government is considering expanding the list of drugs available for self-medication.
OTCs have no price restrictions because margins and prices are kept low in order to remain competitive. Generic drugs have also been boosted by a new informative campaign aired in Q410, including television advertisements and radio broadcasts, to encourage patients and doctors to consider the cost of medicines. Given the downward pressure on prices, and the likelihood that this will continue throughout 2011 and beyond, BMI forecasts a compound annual growth rate (CAGR) of -1.79% between 2009 and 2014 in local currency terms.
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