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Kenya Pharmaceuticals and Healthcare Report Q1 2012
Business Monitor International, Nov 2011, Pages: 97
Business Monitor International's Kenya 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 Kenya's pharmaceuticals and healthcare industry.
BMI View: The Kenyan pharmaceuticals and healthcare market presents significant revenue earning opportunities for drug companies. Growth in the sector will be boosted by strong demographics, increased healthcare needs, longer life expectancy, rising healthcare spending in the public and private sectors and improved access to health facilities. Furthermore, in addition to an increase in the healthcare services provided by the government, BMI notes that there is also a growing demand for health services due to a growing awareness of preventative healthcare.
Headline Expenditure Projections
- Pharmaceuticals: KES33.02bn (US$417mn) in 2010 to KES38.72bn (US$450mn) in 2011; +17.3% growth in local currency terms and +5.6% in US dollar terms.
- Healthcare: KES146.71bn (US$ 1.85bn) in 2010 to KES167.43bn (US$1.90bn) in 2011; 14.1% growth in local currency terms and 2.8% in US dollar terms.
- Medical devices: KES6.50bn (US$82mn) in 2010 to KES7.12bn (US$81mn) in 2011; 9.1% growth in local currency terms.
Business Environment Rating: In BMI's Q112 BERs, Kenya is ranked 23rd in the Middle East and Africa (MEA) region, above Uganda, Nigeria and Cameroon. A sizeable counterfeiting industry, poor healthcare funding, corruption, regulatory deficiencies and a number of other issues will conspire to keep Kenya in a lowly position in the MEA matrix over the coming months. Nevertheless, in comparison with many other African markets, most of which are not surveyed by BMI, Kenya offers more commercial promise and a more stable overall business environment.
Key Trends And Developments
- Hit by rising inflation and the increase in the price of medicines and medical devices, the majority of which are imported, and the subsequent increase in the cost of operations, Kenya's top hospitals have increased bed and consultation charges. This translates into a 10-40% increase in charges in the third quarter of 2011.
- The Martin Lüscher Laboratory for Emerging Infectious Diseases in Kenya was inaugurated on September 16 2011. The laboratory will provide research and development (R&D) services for emerging infectious diseases such as yellow fever and dengue. The laboratory has been set up to provide risk detection, response capacity and research capability for key arbovirus disease agents in East Africa and will conduct a pilot study, worth US$5mn, on Rift Valley fever.
BMI Economic View: The decision by the Central Bank of Kenya's monetary policy committee to hike the central bank rate by 400 basis points to 11.00% represents a much-needed shift into aggressive tightening. Although not a panacea, BMI believes the change in stance will support the weak currency and temper the effects of imported inflation – relieving some pressure on patients faced with high medicine prices.
BMI Political View: Rising food prices, the slow implementation of the constitution, uncertainty about the date of the elections and the likelihood that divisive characters will contest the presidential vote all pose threats to Kenya's political stability over the coming months.
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