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Moldova Pharmaceuticals and Healthcare Report Q3 2011
Business Monitor International, June 2011, Pages: 74
Moldova 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 Moldova's pharmaceuticals and healthcare industry.
Moldova’s pharmaceutical market is tiny in absolute terms, although over the next five years we expect it to post respectable US dollar average annual growth rates of just under 8%. The country’s move to cap wholesale and retail markets and register pharmaceutical prices at the beginning of 2011 has had mixed results. It has not reduced prices by the 40% some officials had claimed and has, according to recent reports, reduced access to some imported medicines. The government, under Prime Minister Vlad Filat, has moved to adjust the insurance system and promised to build new healthcare infrastructure. The market is one of the most liberal in the CIS, but still hampered by poverty, small size and political instability.
Headline Expenditure Projections
- Pharmaceuticals: MLD2.7bn (US$184mn) to MLD2.3bn (US$186mn); -3.0% in local currency terms and +1.4% in US dollar terms. Forecast down from Q211 due to readjustment of base year forecasts.
- Healthcare: MLD8.7bn (US$702mn) to MLD9.7bn (US$772mn); +11.7% 9in local currency terms and +9.9% in Us dollars. Forecast virtually unchanged from Q211 due to macroeconomic factors.
- Medical devices: MLD507mn (US$41mn) to MLD560mn (US$45mn); +10.4% in local currency times and +8.6% in US dollar terms. Forecast virtually unchanged from Q211. Business Environment Rating: Moldova continues to rank 19th out of 20 countries in our Central and Eastern Europe (CEE) coverage universe. The country’s score in terms of Industry Rewards has improved since Q211. However, Moldova continues to rank near the bottom in terms of this score due to its status as Europe’s poorest country, as well as its current austerity measures and continued uncertain economic outlook.
Key Trends & Developments
- Conflicting reports about the efficacy of margin controls and mandatory pricing registration of medicines make it hard to assess whether the authorities have really succeeded in arresting the rapid growth in pharmaceutical prices in the country. Between January and May 2011, according to the Health Ministry, prices grew by just 0.76%, compared with 6.6% growth in 2009-2010 and 25% annual growth rates as recently as 2008. Nevertheless, these gains pale in comparison with earlier claims of a 14% cut in prices and predictions at the beginning of the year that prices could be reduced by up to 40%.
- Moldova is seeking to exploit the potential of phytotherapeutic products to provide its domestic pharmaceutical industry with a source of original drugs. Domestic agency Moldsilva is developing the sector, along with local market leader Farmaco and niche operator AV Murin & Co, Kommersant-MD reported in April.
Economic View: Inflation ticked modestly upwards in March, with the consumer price index registering a rise of 5.8% year-on-year (y-o-y), up from the 5.5% print seen in February. With the Moldovan economy continuing to chug along after posting impressive growth of 6.9% in 2010, coupled with still elevated global commodity prices, we expect inflation to continue heading higher over the course of 2011. We forecast inflation to hit 7.0% y-o-y by end-year.
Political View: We expect the process of reforms to the business environment in Moldova to remain protracted, despite EU threats to withhold aid. Indeed, we believe that the huge obstacles facing reformers and the ongoing political deadlock in the country will make meaningful progress extremely difficult.
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