Puerto Rico Pharmaceuticals and Healthcare Report Q1 2013
- ID: 2373319
- January 2013
- Region: Puerto Rico
- 85 pages
- Business Monitor International
The outcome of the upcoming elections is expected to assist in shaping the development of Puerto Rico's healthcare and pharmaceutical markets, depending on the direction of the new governor's economic policies. Nevertheless, we do not expect a return to the historically-high annual rates of pharmaceutical spending, especially as the government now covers less than 40% of the territory's overall healthcare spending. In the meantime, the territory will remain an important pharmaceutical and medical devices production base, although its attractiveness has been on the wane for some time now.
Headline Expenditure Projections
- Pharmaceuticals: US$2.81bn in 2011 to US$2.88bn in 2012; +2.5% in local currency terms.
Forecast unchanged from Q412.
- Healthcare: US$11.27bn in 2011 to US$11.67bn in 2012; +3.6% in local currency terms.
Forecast unchanged from Q412.
- Medical devices: US$536mn in 2011 to US$541mn in 2012; +0.9% in local currency terms.
Forecast unchanged from Q412.
Puerto Rico again remains third in our proprietary Pharmaceutical Risk/Reward Ratings (RRRs) matrix for the Americas in Q113, ranking behind the US and Canada. Its composite score is also an unchanged 65.6 out of the maximum 100, comprising evenly-balanced risk and reward components. In the medium to longer term, Puerto Rico's high matrix placement will come under increased pressure due to factors such as its small population, uneasy economic prospects and competition from emerging markets in Latin America.
Key Trends And Developments:
- In October 2012, Johnson & Johnson (J&J) was reported to be investing US$226.5mn in four plants in Puerto Rico. The company, which employs about 3,000 people on the island, will expand two plants in Gurabo and one in Manati. The three plants are part of the company's subsidiary Janssen Pharmaceuticals. The company's medical device division, Ethicon, will expand production at a plant in San Lorenzo. The expansion project will create 308 new jobs,
according to local press reports quoting Governor Luis Fortuño.
- In the same month, Californian medical devices company Edwards Lifesciences was reported by local press to be expanding its Puerto Rican plant, with an investment of US$34mn. The US player, which currently employs around 780 staff in Puerto Rico, commenced its local operations in Añasco in 2000. The expansion of the facility is expected to create around 350 jobs. In addition to Puerto Rico, the company also manufactures heart valves and other products in California,
Dominican Republic, Switzerland and Singapore.
BMI Economic View:
We forecast Puerto Rico's economy to return to positive territory in 2012 after contracting continuously every year since 2007. However, even when taking into account our real GDP forecast of 1.2% for 2012, real GDP growth still averages a contraction of 2.0% per annum over the four years to now. In addition, unemployment has averaged 15.4% over the same period, partly because of austerity programs, which have seen a 17.0% cut in government payrolls since Luis Fortuño took office.
BMI Political View:
We believe the opposition candidate Alejandro García Padilla has a slight advantage over incumbent Governor Luis Fortuño in Puerto Rico's November 6 2012 governorship election.
Indeed, given the commonwealth's poor economic performance, including contracting growth and high unemployment, the electorate is eager for a change. Moreover, while a referendum to decide the political status of Puerto Rico will also be held on Election Day, we believe it is unlikely the commonwealth will vote for statehood. SHOW LESS READ MORE >
Executive Summary 5
SWOT Analysis 7
Puerto Rico Pharmaceuticals And Healthcare Industry SWOT 7
Pharmaceutical Risk/Reward Ratings 8
Table: Americas Pharmaceutical Risk/Reward Ratings, Q113 8
Puerto Rico - Market Summary 11
Regulatory Regime 13
Pricing And Reimbursement Issues 14
Tax Incentives 14
Table: Incentives, Benefits And Discounts For Pharmaceutical Manufacturers 16
Trade Accords 17
Industry Developments 18
Healthcare Sector 19
Effects Of US Healthcare Reform 21
Healthcare Financing 22
Healthcare Provision 24
Research & Development 24
Clinical Trials 27
Medical Devices 28
Industry Forecast Scenario 30
Pharmaceutical Market Forecast 30
Table: Pharmaceutical Sales Indicators 2008-2016 31
Healthcare Market Forecast 32
Table: Healthcare Expenditure Indicators 2008-2016 33
Table: Healthcare Governmental Indicators 2008-2016 33
Table: Healthcare Private Indicators 2008-2016 34
Key Growth Factors - Macroeconomic 34
Prescription Drug Market Forecast 36
Table: Prescription Drug Sales Indicators 2008-2016 36
Patented Drug Market Forecast 37
Table: Patented Drug Market Indicators 2008-2016 38
Generic Drug Market Forecast 38
Table: Generic Drug Sales Indicators 2008-2016 39
OTC Medicine Market Forecast 40
Table: OTC Medicine Sales Indicators 2008-2016 41
Pharmaceutical Trade Forecast 41
Table: Exports and Imports Indicators 2008-2016 44
Medical Device Market Forecast 45
Table: Medical Devices Sales Indicators 2008-2016 46
Other Healthcare Data Forecasts 46
Key Risks To BMI's Forecast Scenario 46
Competitive Landscape 48
Pharmaceutical Industry 49
Table: Major International Drugmakers In Puerto Rico 50
Pharmaceutical Production 52
Plant Closures 54
Table: Puerto Rico: Multinational Downscaling 54
Company Developments 55
Pharmaceutical Wholesale 58
Pharmaceutical Retail 58
Company Profiles 61
Merck & Co 65
Abbott Laboratories 67
Eli Lilly 71
Johnson & Johnson (J&J) 73
Demographic Outlook 75
Table: Puerto Rico's Population By Age Group, 1990-2020 ('000) 76
Table: Puerto Rico's Population By Age Group, 1990-2020 (% of total) 77
Table: Puerto Rico's Key Population Ratios, 1990-2020 78
Table: Puerto Rico's Rural And Urban Population, 1990-2020 78
BMI Methodology 81
How We Generate Our Pharmaceutical Industry Forecasts 81
Risk/Reward Ratings Methodology 82
Ratings Overview 82
Table: Pharmaceutical Business Environment Indicators 83
Table: Weighting Of Components 84