Boston, MA -- (ReleaseWire) -- 11/13/2012 -- BMI View: Portugal continues to implement widespread changes to its healthcare sector as part of the EU/IMF/ECB's EUR78bn economic rescue package approved in May 2011, and the effects of cuts are taking their toll on the pharmaceutical industry. Delayed payments are commonplace, with the impact felt throughout the supply chain, and this is reducing Portugal's appeal to multinationals: Roche has suspended drug supplies to some public hospitals and press reports suggest that Merck KGaA is also considering reducing its investment in the country. While generic drug manufacturers are benefiting from moves such as obligatory prescriptions by active ingredients, the sector also claims that prices have dropped to five-year lows and that increased volume sales do not equate to increased revenues. With domestic opportunities for growth limited, at least in the short term, Portuguese drugmakers are turning to exports to bolster the bottom line. Bluepharma now exports 70% of its production and Bial has set a target of raising exports from 40% of production in 2011 to 60% by 2015.
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Headline Expenditure Projections
- Pharmaceuticals: EUR4.47bn (US$6.21bn) in 2011 to EUR4.24bn (US$5.38bn) in 2012; -5.2% in local currency and -13.3% in US dollar terms. Forecast raised slightly from Q312 because of macroeconomic factors.
- Healthcare: EUR19.59bn (US$27.22bn) in 2011 to EUR20.13bn (US$25.57bn) in 2012; +2.8% in local currency and -6.1% in US dollar terms. Forecast raised from Q312 because of macroeconomic factors.
- Medical Devices: EUR740mn (US$1.03bn) in 2011 to EUR763mn (US$0.97bn) in 2012; +3.1% in local currency and -5.8% in US dollar terms. Forecast lowered from Q312 because of exchange rate differences.
Risk/Rewards Rating: Portugal's score of 58.6 in Q412 places it at the bottom of the Pharmaceutical Risk/Reward Ratings (RRRs) table for Western Europe. Portugal's healthcare and pharmaceutical market is suffering from the impact of widespread cost cutting measures as part of the EU/IMF/ECB's three year economic adjustment package, begun in May 2011. While Portugal is generally adhering to the terms of the package, the short-term drop in spending, and the longer term impact this will have on the pharmaceutical market hamper Portugal's growth prospects. In terms of country risk and rewards, the Portuguese have lower spending power, high levels of unemployment, and many of the young are emigrating, leaving an ageing population behind.
Key Trends & Developments
- Infarmed - part of the Ministry of Health - has responsible for the pricing of medicines since August 1 2012. Previously, it was the role of part of the Ministry of Economy.
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