Belarus Pharmaceuticals and Healthcare Report Q4 2011
Business Monitor International, October 2011, Pages: 66
Business Monitor International's Belarus 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 Belarus's pharmaceuticals and healthcare industry.
BMI View: All indicators point to a period of prolonged economic and political upheaval in Belarus, with the pharmaceutical market battered by a combination of high inflation and currency devaluation through to the end of the year. The market retains significant long-term growth potential, although much will depend on how quickly the economy, long managed by the quixotic President Alexander Lukashenko, is able to find a new equilibrium. In the short to medium term, with the pending liquidation of state-controlled giant Belbiopharm, deep uncertainty will likely deter even the hardiest investors.
Headline Expenditure Projections
- Pharmaceuticals: BYR2,111bn (US$720mn) in 2010 to BYR2,667bn (US$666mn) in 2011; +26.3% in local currency terms and -7.4% in US dollar terms. Local currency forecast adjusted in line with continued devaluation.
- Healthcare: BYR8,763bn (US$2.99bn) to BYR10,850bn (US$2.71bn) in 2011; +23.8% in local currency terms and -9.3% in US dollar terms. Forecast adjusted downwards in line with macroeconomic situation.
- Medical devices: BYR933bn (US$318mn) in 2011 to BYR1,160bn (US$290mn) in 2011; +24.3% in local currency terms and -8.9% in US dollar terms. Forecast adjusted downwards in line with macroeconomic situation.
Business Environment Rating: Belarus ranks 18th out of 20 Central and Eastern European (CEE) markets, down from 17th in Q311, with an unchanged composite score of 46.7. The country is in the throes of a severe economic crisis that threatens to turn into a full-blown political crisis. For potential investors in the pharmaceutical sector, the current uncertainty will deter all but the hardiest. As a primary creditor, Russia and, consequently, Russian firms, are best positioned to benefit from the current crisis.
Key Trends & Developments
- The sudden decision in mid August by the Belarusian authorities to dissolve the dominant, state-owned pharmaceutical holding Belbiopharm by decree, sacking its head and putting it under the direct control of the Ministry of Health, reflects the growing crisis in the country. The stated rationale – that the move will permit the further development of the pharmaceutical industry in line with government policy – appears to conceal a deeper conflict. As BMI has noted, Prime Minister Mikhail Myasnikovich raised the possibility of Russian and Kazakhstani investment in the broader chemicals sector, including pharmaceuticals, and spoke in July of “uniting” the country’s pharmaceutical industry with the sector in Russia. The move to transform Belbiopharm into a department within the ministry, with ‘corporate rights’ would complicate any such investment or privatisation. What is clear is that the decision will do little to raise the investment attractiveness of the sector or the quality of the market regulation. It also leaves the production sector adrift.
- While the government has continued to put out positive statistics about domestic pharmaceutical production, independent news sources have published accounts of sharp price rises on the wholesale and retail level. Following the official devaluation of the official exchange rate in May, the price on the self increased by two to three-fold for many medicines, Naviny.by reported in June.
BMI Economic View: Inflationary pressures continue to build on account of the recent devaluation of the Belarusian ruble, with consumer price inflation ticking up to 43.8% y-o-y in June, up from 32.6% the previous month, and the highest headline reading on record since May 2002. For now, BMI holds to its forecast for inflation to end this year at 45.0% and to moderate back towards 15.0% in 2012, however this will be dependent on the government stabilising the currency.
BMI Political View: Recent protests in Belarus – a result of the country's ongoing economic crisis – are further evidence of the growing political threats facing the government. While the authorities have, as of yet, had little difficulty in quelling dissent, BMI stresses that given the police force’s continued use of brute force, and the fact that domestic economic conditions are expected to become significantly worse over the coming quarters, Belarus is only just entering a period of protracted political upheaval.
Executive Summary
SWOT Analysis
Belarus Pharmaceuticals And Healthcare Industry SWOT
Belarus Political SWOT
Belarus Economic SWOT
Belarus Business Environment SWOT
Pharmaceutical Business Environment Ratings
Table: Emerging Europe – Regional Pharmaceutical Business Environment Ratings, Q411
Rewards
Risks
Market Summary
Regulatory Regime
Counterfeit Drugs
Intellectual Property Rights
Pricing and Reimbursement
Industry Developments
Epidemiology
Table: Disease Burden In Central And Eastern Europe, DALYs Lost Per 100,000 Population
Healthcare Sector
Industry Forecast Scenario
Overall Market Forecast
Table: Pharmaceutical Sales Indicators 2007-2015
Healthcare Expenditure Forecast
Table: Healthcare Expenditure Indicators 2007-2015
Table: Government Healthcare Expenditure Indicators 2007-2015
Table: Private Healthcare Expenditure Indicators 2007-2015
Key Growth Factors – Macroeconomic
Table: Belarus - Economic Activity, 2008-2015
Prescription Drug Market Forecast
Table: Prescription Drug Sales Indicators 2007-2015
Table: Top 10 ATC Level 2 Codes In Belarus By Pharmacy Sales, 2007-2008
Table: Top 10 ATC Level 2 Codes In Belarus By Hospital Sales, 2007-2008
Patented Drug Market Forecast
Table: Patented Drug Market Indicators 2007-2015
Generic Drug Market Forecast
Table: Generic Drug Sales Indicators 2007-2015
OTC Medicine Market Forecast
Table: OTC Medicine Sales Indicators 2007-2015
Pharmaceutical Trade Forecast
Table: Exports and Imports Indicators 2007-2015
Key Risks To BMI’s Forecasts
Competitive Landscape
Table: The Top 10 Drugmakers In Belarus In 2008 By Pharmacy Sales
Table: The Top 10 Drugmakers In Belarus In 2008 By Hospital Sales
Table: The Top 10 Trade Names In Belarus By Pharmacy Sales, 2008
Domestic Drugmakers
Foreign Drugmakers
Pharmaceutical Wholesale And Retail
Research & Development
Company Profiles
Belbiopharm
Lekpharm
Country Snapshot: Belarus Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2000-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Wages, 2005-2009
Glossary
BMI Methodology
How We Generate Our Pharmaceutical Industry Forecasts
Pharmaceutical Business Environment Ratings Methodology
Ratings Overview
Table: Pharmaceutical Business Environment Indicators
Weighting
Table: Weighting Of Components
Sources
- Belbiopharm
- Lekpharm
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