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Bulgaria Pharmaceuticals and Healthcare Report Q1 2011
Business Monitor International, Dec 2011, Pages: 96
Bulgaria 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 Bulgaria's pharmaceuticals and healthcare industry.
The outlook for pharmaceutical companies targeting the Bulgarian drug market is deteriorating. A lack of political expediency has led to severe delays in the implementation of health sector reforms. On top of government medical service expenditure cuts, the National Health Insurance Fund (NHIF) and the Ministry of Health have failed to clear payments owed to hospitals.
For the Q111 update of BMI’s Pharmaceuticals and Healthcare Business Environment Ratings (BERs), Bulgaria continues to rank in the lower half of the index with a score of 47.3 out of 100, which places the country 13th of the 20 markets surveyed in the Central and Eastern European (CEE) region.
BMI forecasts that Bulgaria’s pharmaceutical market will increase from BGN1.75bn (US$1.27bn) in 2009 to BGN1.87bn (US$1.32bn) in 2010. Between 2009 and 2014, BMI projects a compound annual growth rate (CAGR) of 6.80% in local currency terms and 4.11% in US dollar terms.
Bulgaria’s pharmaceutical market growth remains susceptible to shocks from domestic funding problems. While revenues for medical services are set to improve in the near term, accumulated healthcare and hospital debts generated over the last few years will have to be cleared, prolonging funding shortages.
In 2009 and 2010, the Bulgarian government failed to effectively manage the country’s healthcare budget. Overly optimistic projections for public healthcare expenditure in the proposed 2011 budget creates further uncertainty for BMI’s pharmaceutical, medical device and healthcare expenditure forecasts. In October 2010, the selection of the new Health Minister, Stefan Konstantinov, a strong advocate of healthcare reform, may give this critical issue some much-needed impetus.
The latest macroeconomic data indicates that a recovery is underway in Bulgaria, but domestic demand remains weak. The data from the National Statistical Institute has shown a second consecutive month of slowing decline. Having plunged by 5.9% year-on-year (y-o-y) in Q409, real GDP contracted by 3.6% in Q110 and just 1.4% in the second quarter. On the back of data for the first half of the year, we forecast the economy to contract by 1.6% this year, with positive growth of 2.6% pencilled in for 2011. However, BMI highlights the risk stemming from public finances should the government fail to keep a lid on the fiscal deficit.
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