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Philippines Pharmaceuticals and Healthcare Report Q1 2012
Business Monitor International, Dec 2011, Pages: 122
Business Monitor International's Philippines 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 Philippines's pharmaceuticals and healthcare industry.
BMI View: Despite the government's commitment to providing affordable medical treatment for the population, the vast majority of people continue to have poor access to adequate healthcare. This is primarily due to the high drug prices that are further exacerbated by the population's general preference for branded drugs. BMI highlights that the lack of proper intellectual property protection and the existence of parallel trade may have led to a rise in the number of cases of counterfeiting - influencing the population's choice of medication. Over the medium term, BMI expects foreign drugs to continue to dominate, highlighting opportunities for multinational companies; however, the government's promotion of generics drugs and price control measures will generate downside risks.
Headline Expenditure Projections
Pharmaceuticals: PHP123.59bn (US$2.7bn) in 2010 to PHP130.56bn (US$3.03bn) in 2011; +5.6% in local currency terms and +10.6% in US dollar terms. Forecast up marginally from Q411 due to macroeconomic factors.
Healthcare: PHP324.90bn (US$7.21bn) in 2010 to PHP344.53bn (US$8.00bn) in 2011; +6.0% in local currency terms and +11.1% in US dollar terms. Forecast down slightly from Q411 due to macroeconomic factors.
Medical devices: PHP12.31bn (US$273mn) in 2010 to PHP12.79bn (US$297mn) in 2011; +3.9% in local currency terms and +8.8.% in US dollar terms. Forecast broadly unchanged from Q411.
Business Environment Rating: The Philippines' pharmaceutical rating in Q112 has increased to 48.7 out of 100, which is well below the average of 53.7 for the region. The country has also ascended two places to occupy 11th position, behind India, with an Industry Rewards score of 52.
Key Trends & Developments
Roche's Avastin (bevacizumab) and Tarceva (erlotinib) were approved by the Philippine Food and Drug Administration as first-line treatments for ovarian and advanced or metastatic non-small-cell lung cancer with epidermal growth factor receptor (EGFR) respectively. While the approval of these two drugs is positive news for patients, BMI believes that the majority of the population will be unable to afford the drugs due to low per-capita pharmaceutical expenditure.
The House of Representatives has approved the PHP1.82trn national budget for 2012. Under the budget, PHP49.9bn is allocated for the healthcare sector, of which 89%, or PHP44.4bn, will be given to the Department of Health for programmes aimed at achieving Millennium Development Goals. The remaining PHP 5.1bn will be used to upgrade healthcare facilities under the Health Facilities Enhancement Program. BMI Economic View: Philippine President Benigno Aquino III has announced a PHP72.1bn (US$1.7bn) stimulus package aimed at protecting jobs, as the economy failed to meet growth expectations in 2011. While the package is a positive near-term sign that the government is willing to more actively promote economic growth, its modest quantum is unlikely to boost full-year growth to the government's target range of 5.0-6.0%, and BMI continues to predict the economy grew by 4.7% in 2011, before slowing further to 4.5% in 2012.
BMI Political View: Although Philippine President Benigno Aquino III's visit to China is a welcome step forward in relations between the two countries, underlying tensions will persist. In particular, a dispute over the Spratly Islands is a point of contention and despite China's initiative to outline binding terms, this is not likely to be resolved any time soon. China's main concern is largely political, with particular concern over the archipelago's strong defense ties with the US; while the Philippines is principally concerned with economic issues.
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