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Moldova Pharmaceuticals and Healthcare Report Q4 2011
Business Monitor International, Sep 2011, Pages: 73
Business Monitor International's 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.
BMI View: Moldova is forecast to deliver a solid US dollar compound annual growth rate (CAGR) of just under 8% for the period 2010-2015, below its rate earlier this decade. The market is generally one of the most liberal in the CIS and its government is by far the most unambiguously dedicated to integration with the European Union. The country has, largely driven by a lack of funds, taken harsh steps to eliminate the wasteful excess of secondary care facilities seen throughout the region. The current government is generally dedicated to healthcare reform, but the country faces ongoing political instability and, despite recent economic growth, remains the poorest country in Europe.
Headline Expenditure Projections
- Pharmaceuticals: MLD2.27bn (US$184mn) to MLD2.34bm (US$186mn); +3.0% in local currency terms and +1.4% in US dollar terms. Forecast unchanged from Q311.
- Healthcare: MLD4.00bn (US$323mn) to MLD4.28bn (US$340mn); +7.1% in local currency terms and 5.4% in US dollar terms. Forecast readjusted downward on the basis of restated baseline data.
- Medical devices: MLD508mn (US$41mn) to MLD562mn (US$45mn); +10.6% in local currency terms and +8.9% in US dollar terms. Forecast unchanged from Q311.
Business Environment Rating: Moldova continues to rank 19th of the 20 markets in BMI’s Central and Eastern Europe (CEE) coverage universe and its score remains unchanged this quarter. Moldova continues to show poorly due to continued political deadlock and a small economy dependent primarily on an underdeveloped agricultural sector. Its primary pluses compared to other Commonwealth of Independent States (CIS) markets are its government’s steady focus on EU integration and relative openness.
Key Trends & Developments
- Moldova’s government continues to face criticism over the mixed results from margin and retail caps on imported medications introduced at the beginning of 2011. Newspaper Komsomolskaya Pravda claimed that prices rose in July (without providing data), while the government itself admitted in May that it had achieved a less than 1% cut in medicines prices. While consumers have seen prices stabilise compared to price growth of 25% per annum earlier this decade (down to a more modest 6.6% reported in 2009-2010), the data fail to support previous assertions that such caps could reduce prices by up to 40%.
- The Moldovan government increased state medical workers’ salaries by 15% in mid-August, a month later than initially promised, raising some eyebrows. The country’s public health system has suffered from an acute shortage of skilled personnel, in particular in rural areas, due to low salaries and demand for staff and higher salaries in other European countries.
BMI Economic View: Moldova's economy continued to expand strongly in the first quarter of 2011, growing by 8.4% year-on-year (y-o-y) in real terms, up from a full-year print of 6.9% in 2010. Economic growth was well supported by both household consumption and gross fixed capital formation, which registered growth of 11.9% y-o-y and 24.9% y-o-y respectively. We expect growth to cool over the balance of 2011 and are holding to our real GDP growth forecast for this year at 5.3%, though we acknowledge upside risks to our forecasts.
BMI Political View: With Moldova's parliamentary opposition Communist Party posting strong results in local elections held on June 5 2011, we believe the party's fortunes may be on the rise. Voter dissatisfaction with the lacklustre pace of reforms and a tepid recovery is rising and this will weigh on the popularity of the ruling Alliance for European Integration. The Communist Party's strong showing will likely entrench political differences, meaning that the possibility for a resolution to the political deadlock surrounding the presidency is even less likely to be resolved in the near term.
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