Estonia Pharmaceuticals and Healthcare Report Q3 2012
Business Monitor International, May 2012, Pages: 77
The Estonia 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 Estonia's pharmaceuticals and healthcare industry.
BMI View: Estonia’s small pharmaceutical market is seen as having limited longer-term potential for multinationals. While the Estonian pharmaceutical market performed strongly in Q211 and Q311, weaker growth in Q411 has led to a moderate downward revision to our 2012 outlook, as our optimism that elevated economic growth would be maintained has diminished. Still, the country’s proximity to Western Europe and its integration into regional trade networks means imports will remain crucial in relation to Estonia’s pharmaceutical market supply.
Headline Expenditure Projections
- Pharmaceuticals: EUR240mn (US$334mn) in 2011 to EUR249mn (US$322mn) in 2012; +3.9% in local currency terms and -3.6% in US dollar terms. Forecast down from Q212 due to worsening macroeconomic conditions and new historical data.
- Healthcare: EUR909mn (US$1.26bn) in 2011 to EUR937mn (US$1.21bn) in 2012; +3.1% in local currency terms and -4.4% in US dollar terms. Forecast down from Q212 because of new historical data.
- Medical devices: EUR109mn (US$151mn) in 2011 to EUR115mn (US$149mn) in 2012; +6.2% in local currency terms and -1.5% in US dollar terms. Forecast slightly down since Q212 due to worsening macroeconomic conditions. Risk/Reward Ratings: Of the 20 key markets in Central and Eastern Europe (CEE), Estonia fell from ninth to 12th place in BMI’s Pharmaceutical Risk/Reward Ratings (RRRs) for Q312. Its overall score fell by 2.8% quarter-on-quarter to 52.7 out of 100, just above the regional average of 52.3. Estonia’s industry rewards are viewed as the weakest part of its pharmaceutical profile.
Key Trends And Developments
- In February 2012, Estonia, Latvia and Lithuania agreed to merge their state drug purchase systems for pharmaceuticals and medical equipment, in order to reduce costs and negotiate better deals with manufacturers. Estonia and Lithuania are administratively ready to execute the plan and they are waiting for the Latvian parliament to approve the changes to its legislation on public procurement. A working group, established in September 2010, has prepared documents for the single procurement system. The new system will be managed and coordinated by the existing regulatory bodies.
- In 2011, reimbursement expenses paid out by the Estonian Health Insurance Fund (HIF) rose by 1% year-on-year (y-o-y), on the back of higher spending on the 100% reimbursement group. For example, thrombosis care now receives full reimbursement – it was formerly reimbursed at 75% – as do chronic renal failure medicines. Additions to the group include new treatments for pulmonary hypertension, migraine and osteoporosis, among others. The 100% reimbursement group accounted for 50% of total reimbursement spending by the HIF in 2011.
- A study by the University of Tartu has supported pharmacist’s opposition to allowing the sale over-the-counter (OTC) medicines at grocery stores in Estonia. According to the study, Estonians have less knowledge of possible side-effects from OTC medicines than the government realise. The study found about 90% of the surveyed people said using OTC medicines is simple, while the remaining 10% considered the use of OTCs completely risk-free.
BMI Economic View: Estonia’s economic growth will slow to 2.7% in 2012 in real GDP terms, from 7.6% in 2011. While this is the strongest economic growth figure in the eurozone, the economy is not immune from the weakened external demand in the bloc. A high degree of uncertainty over the future of eurozone economic growth will feed through to lower private consumption and investment growth, both of which have been integral drivers of economic recovery in the country. In the meantime, due to strong inflationary pressure at the start of the year, as a result of a combination of elevated energy and food prices, we have revised upward our forecast for average consumer price inflation to 4.2% in 2012, from 3.5% previously.
BMI Political View: The rise in popular support for opposition parties in Estonia is a trend likely to continue during the centre-right coalition’s term. An increasingly challenging economic environment, combined with ongoing fiscal austerity, will stoke public dissatisfaction with the coalition. A 5% increase in taxes on alcoholic products and some public sector pay freezes are among the unpopular measures imposed in 2012 to maintain the fiscal account below the 3.0% of GDP deficit limit imposed by the EU. However, we do not expect this to unseat the government.
Executive Summary 5
SWOT Analysis 7
Estonia Pharmaceuticals And Healthcare Industry SWOT 7
Estonia Political SWOT 8
Estonia Economic SWOT 8
Estonia Business Environment SWOT 9
Pharmaceutical Risk/Reward Ratings 10
Table: CEE Pharmaceutical Risk/Reward Ratings, Q312 10
Rewards 11
Risks 12
Estonia – Market Summary 13
Regulatory Regime 15
Regional Harmonisation 16
Intellectual Property Regime 17
Parallel Importing 17
Pricing Regime 17
Reimbursement Regime 18
Table: Key Health Insurance Indicators, 2007-2011 20
Industry Developments 21
Epidemiology 21
Healthcare Sector 22
Healthcare Reform 23
Healthcare Provision 23
Healthcare Funding 24
Table: Healthcare Expenditure By The HIF, 2006-2011 (EURmn) 25
Healthcare Insurance 25
Table: Reimbursement Spending By Key Therapeutic Area, 2010-2011 (EURmn) 26
Table: Medicinal Products Reimbursed For Insured Patients, 2009-2011 (EURmn) 27
Healthcare Tourism 27
Biotechnology 27
Clinical Trials 29
Medical Devices 30
Industry Forecast Scenario 31
Overall Market Forecast 31
Table: Pharmaceutical Sales, 2008-2016 32
Key Growth Factors – Industry 33
Table: Overall Healthcare Expenditure, 2008-2016 34
Table: Government Healthcare Expenditure, 2008-2016 34
Table: Private Healthcare Expenditure, 2008-2016 35
Key Growth Factors – Macroeconomic 36
Table: Estonia Economic Activity, 2011-2016 40
Prescription Drug Market Forecast 41
Table: Prescription Drug Sales, 2008-2016 43
Patented Drug Market Forecast 44
Table: Patented Drug Sales, 2008-2016 45
Generic Drug Market Forecast 46
Table: Generic Drug Sales, 2008-2016 47
OTC Medicine Market Forecast 48
Table: OTC Medicine Sales, 2008-2016 49
Pharmaceutical Trade Forecast 50
Table: Pharmaceutical Trade, 2008-2016 52
Medical Device Market Forecast 53
Table: Medical Device Sales, 2008-2016 53
Other Healthcare Data Forecasts 54
Key Risks To our Forecast Scenario 54
Competitive Landscape 55
Pharmaceutical Industry 55
Foreign Pharmaceutical Players 55
Company Developments 56
Pharmaceutical Wholesale 57
Pharmaceutical Retail 58
Table: Pharmacies And Pharmacy Market Ratios, 2004-2009 58
Company Profiles 60
GlaxoSmithKline 60
Pfizer 61
Novartis 62
Sanofi 63
Merck & Co 64
Grindeks (incorporating Tallinn Pharmaceutical Plant) 65
Demographic Data 67
Table: Population By Age Group, 1990-2020 (‘000) 68
Table: Population By Age Group, 1990-2020 (% of total) 69
Table: Key Population Ratios, 1990-2020 70
Table: Rural/Urban Population Split, 1990-2020 70
Glossary 71
BMI Methodology 73
How We Generate Our Pharmaceutical Industry Forecasts 73
Pharmaceutical Risk/Reward Ratings Methodology 74
Ratings Overview 74
Table: Pharmaceutical Risk/Reward Indicators 75
Weighting 76
Table: Weighting Of Components 76
Sources 76
GlaxoSmithKline , Pfizer, Novartis , Sanofi , Merck & Co , Grindeks (incorporating Tallinn Pharmaceutical Plant) ,
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