Boston, MA -- (ReleaseWire) -- 05/26/2014 -- Pharmaceutical firms can expect swifter access to the Australian pharmaceutical market, following the scrapping of the Pharmaceutical Benefits Pricing Authority. Given that the development will not have a significant impact on how drugs are listed on the Pharmaceutical Benefits Scheme, we have maintained our pharmaceutical sales forecast. However, we highlight that any potential reform of the healthcare system is a downside risk to our forecasts.
While the Abbott administration has repeatedly stressed its commitment to healthcare, we note that any reduction in government health expenditure will invariably lead to a decline in overall health expenditure, which, in turn, will also affect our pharmaceutical sales forecast, constituting a downside risk.
Headline Expenditure Projections
- Pharmaceuticals: AUD12.75bn (USD12.30bn) in 2013 to AUD13.18bn (USD11.34bn) in 2014; +3.42% in local currency terms and -7.8% in US dollar terms, due to significant exchange rate fluctuations. Forecast was downgraded after taking into account new data from Pharmaceutical Benefits Scheme's expenditure.
- Healthcare: AUD142.24bn (USD137.27bn) in 2013 to AUD149.31bn (USD128.41bn) in 2014; +5.0% in local currency terms and -6.5% in US dollar terms, due to stronger exchange rate fluctuations. Forecast changed slightly from Q214 in local currency terms.
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Australia's Pharmaceutical Risk/Reward Rating (RRR) score for Q314 declined to 65.8 out of the maximum 100 and dropped to third position within the region. In Q314, Japan is ranked as the most attractive market in the Asia Pacific region (scoring 78.1 out of 100), followed by South Korea (68.6) and Australia (65.8). In general, Australia scored above average for all indicators and sub-indicators. However, Australia has among the top five countries the lowest industry rewards score with 22.4 compared to both Taiwan and South Korea with scores of 27.2 and 29.2 respectively. While South Korea managed to overtake Australia in Q314, Taiwan is closely trailing Australia in the overall ranking with a score of 65.7. Thus, focusing on the rewards component of the rating system, Australia scores a total of 39.0 out of 65. Australia's score is boosted by a relatively large pensionable population (pensionable population score of 6.4 out of 8), a through immigration steadily growing population (population growth score of 3.0 out of 5) and high spending per capita scoring 8.4 out of 12 - second only to Japan - but dragged down by a declining pharmaceutical market (sector value growth score of 0 out of 12).
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