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Singapore Pharmaceuticals and Healthcare Report Q1 2012
Business Monitor International, Dec 2011, Pages: 92
Business Monitor International's Singapore 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 Singapore's pharmaceuticals and healthcare industry.
BMI View: We commend initiatives launched by Singapore's government to ease the financial burden of healthcare on lower-income patients. However, the limited number of hospital beds and disproportionately high private healthcare expenditure will continue to put pressure on patients. BMI believes Singapore's ageing population and its high standard of medical technology will continue to attract investors, particularly those willing to invest in elderly care and medical tourism.
Headline Expenditure Projections
- Pharmaceuticals: SGD858mn (US$629mn) in 2010 to SGD903mn (US$716mn) in 2011; +5.2% in local currency terms and +13.9% in US dollar terms.
- Healthcare: SGD10.86bn (US$7.97bn) in 2010 to SGD11.42bn (US$9.07bn) in 2011; +5.2% in local currency terms and +13.8% in US dollar terms.
- Medical devices: SGD431mn (US$316mn) in 2010 to SGD450mn (US$357mn) in 2011; +4.3% in local currency terms and +12.9% in US dollar terms.
Business Environment Rating: Singapore’s score for Q112 stands at 63.4 out of a total of 100, placing Singapore in 5th place out of the 18 countries in the region. Singapore scores 80 for Risks, which is the highest in the region. It is therefore appealing to risk-adverse investors. On the Rewards side, Singapore scores 53 – constrained by its small population numbers, and the increased use of generic medicines. Over the medium term, we expect Singapore to fall down the ratings, as emerging countries such as Vietnam and Indonesia become more alluring for foreign firms selling patented products.
Key Trends & Developments
- In September 2011, Singapore's Health Minister Gam Kim Yong stated that the government would increase funding for healthcare in order to meet the demands of an ageing population. He also said that the country's healthcare expenditure is ‘likely to exceed the current 4% of GDP’. According to the World Health Organization (WHO), Singapore spent 3.9% of its GDP on healthcare in 2009.
- In October 2011, US pharmaceutical company Merck & Co announced plans to invest US$250mn over the next 10 years in its manufacturing capabilities in Singapore and a further US$554.1mn in local research activity. Merck & Co also plans to expand its biotechnology activities and deploy new technology to support product launches. The company will also liaise with universities to increase its workforce. Willie Deese, president of Merck & Co's manufacturing division, said: 'Merck & Co is pleased to expand its already substantial operations in Singapore with new, far-reaching commitments.'
BMI Economic View: We believe Singapore's economic growth performance has peaked and we expect weaker prints in 2011 and 2012 on the back of a global trade slowdown as well as tighter exchange rate conditions. This should push headline real GDP growth to 5.9% and 4.4% in 2011 and 2012 respectively, down from the astonishing 14.5% figure recorded in 2010.
BMI Political View: We maintain our view that the ruling People's Action Party will remain the dominant political force over the long term. The rise in support for opposition parties, however, has raised concerns for investors. Nevertheless, we maintain our sanguine view that political stability will prevail as the opposition forces the ruling party to be proactive in taking policy decisions.
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