Boston, MA -- (ReleaseWire) -- 05/02/2014 -- This quarter has seen the beginning of a multi-phased plan by the National Health Regulatory Authority to significantly reduce medicine prices in the country, signalling a potential advancement towards the implementation of a unified Gulf Cooperation Council pricing system. Although less optimistic than before, our medium- and long-term outlooks for the Bahrain pharmaceutical market remain bullish.
Medicines uptake will be supported by robust economic growth, in addition to the country's growing and ageing population, and rising chronic disease burden. We highlight further medicine price cuts, lower-thanexpected oil prices in coming years and the potential for elevated tensions between the Sunni-dominated government and the Shi'a opposition as key downside risks to our outlook for the pharmaceutical market.
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Headline Expenditure Projections
- Pharmaceuticals: BHD106mn (US$281mn) in 2013 to BHD97mn (US$257mn) in 2014; -8.3% in both local currency and US dollar terms. Forecast revised downwards due to medicine price cuts and the National Health Regulatory Authority (NHRA)'s release of a new medicines price list in January 2014.
- Healthcare: BHD430mn (US$1.14bn) in 2013 to BHD451mn (US$1.20bn) in 2014; +5.1% in both local currency and US dollar terms. Forecast revised downwards due to medicine price cuts and the NHRA's release of a new medicines price list in January 2014.
Risk/Reward Rating: In our Q2 2014 matrix for the Middle East and Africa, Bahrain ranks seventh out of the 30 markets surveyed in the region. Though the country's position is currently propped up by its favourable risks profile, we note that the unresolved political situation threatens its positive outlook, especially given the small population numbers. On the other hand, Bahrain's well-developed epidemiological trends should continue to provide commercial opportunities for innovative drugmakers, wider operating environment permitting.
Key Trends And Developments
A visit by a Bahrain business delegation to India concluded with seven business deals and 27 memorandums of understanding between Bahraini companies and their Indian counterparts. One of the deals was a distribution agreement between Deeko Group Bahrain and Mankind Pharma, which would help one of India's leading pharmaceutical businesses access the Gulf Cooperation Council (GCC) market.
The NHRA released a new medicines price list confirming a series of medicine price reductions. The price cuts are applicable to approximately 5,000 registered medicines in Bahrain, with the rate of reduction ranging between 7% and 15%. The new prices are based on a Cost, Insurance and Freight price plus a pharmacy profit margin of 25% for medicines exceeding BHD20 (US$53) and 35% (previously 45%) for medicines below BHD20 (US$53).
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