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Latvia Pharmaceuticals and Healthcare Report Q4 2011
Business Monitor International, Aug 2011, Pages: 89
Business Monitor International's Latvia 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 Latvia's pharmaceuticals and healthcare industry.
BMI View: Latvia's disease profile and relatively low per-capita consumption of pharmaceuticals (compared with the rest of developed Europe) is a clear illustration of the need for innovative medicines. However, the performance of the pharmaceutical market remains indelibly tied to the country's macroeconomic environment. Having endured a three-year depression, the economy is finally set to return to positive growth in 2011. However, the road back to prosperity will be long, with private consumption still lagging behind the country's broader economic recovery, threatening the return of the predominantly out-of-pocket driven pharmaceutical market.
Headline Expenditure Projections
- Pharmaceuticals: LVL267mn (US$500mn) in 2010 to LVL277mn (US$561mn) in 2011; +4.1% in local currency terms and +12.2% in US dollar terms.
- Healthcare: LVL915mn (US$1.72bn) in 2010 to LVL936mn (US$1.89bn) in 2011; +2.3% in local currency terms and +10.3% in US dollar terms.
- Medical devices: LVL54mn (US$102mn) in 2010 to LVL56mn (US$113mn) in 2011; +2.5% in local currency terms and +10.5% in US dollar terms.
Business Environment Rating: Of the 20 markets analysed by BMI in the Emerging Europe region, Latvia has fallen by two places in Q411 to 12th place, down from 10th place in Q311, with an overall score of 51.9. BMI does not envisage Latvia challenging any of the top five Emerging Europe markets, given the limitations of its population size, among other factors.
Key Trends & Developments
- In February 2011, the Latvian Ministry of Health and the country’s Health Economics Centre launched an information campaign to raise awareness the affordability and effectiveness of genetic medicines.
- As stated by the Latvian State Agency of Medicines (SAM), a reduced VAT rate was applied to medical devices for individual use as of June 2011. These include single-use medical devices that are disposed of after use (such as syringes, gloves, catheters), custom-made medical devices (such as spectacles, prosthetics) and self-care medical devices (such as wheelchairs, functional beds, glucose monitors, respiratory monitors).
BMI Economic View: The Latvian economy is firing back up. Although deleveraging and fiscal consolidation are major headwinds, the export sector is booming and financial stability has improved significantly. Success in overhauling public finances has not only secured the admiration of other indebted states, but has also resulted in Fitch upgrading Latvia's sovereign debt to investment grade from junk. BMI believes the progress made in economic and fiscal reform will pave the way for eurozone accession by 2014.
BMI Political View: Latvia's economic fortunes have undergone a marked turnaround following its emergence from a three-year depression, with the government proving particularly adept in fiscal reform. However, with the consolidation programme on track, focus will shift towards two major challenges during this parliamentary term: reducing double-digit unemployment and securing membership to the eurozone.
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