Boston, MA -- (ReleaseWire) -- 09/13/2012 -- BMI View: The small size of the Sri Lankan pharmaceutical market (US$444mn in 2011) and the subsequently restricted commercial opportunities for innovative drug companies mean the ban on sales representatives visiting doctors in public hospitals will not be of much worry to drug companies selling their products in the country. However, we believe that in the long term the lack of communication between sales reps and doctors will prevent patients from getting access to up-to-date treatments.
Headline Expenditure Projections
- Pharmaceuticals: LKR49.04bn (US$444mn) in 2011 to LKR53.79bn (US$450mn) in 2012; +9.7% in local currency terms and +1.5% in US dollar terms.
- Healthcare: LRK250.62bn (US$2.27bn) in 2011 to LKR278.99bn (US$2.34bn) in 2012; +11.3% in local currency terms and +3.0% in US dollar terms.
- Medical devices: LRK11.20bn (US$101mn) in 2011 to LKR11.94bn (US$100mn) in 2012; +6.6% in local currency terms and -1.3% in US dollar terms.
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Risk/Reward Rating: According to our Q312 regional matrix, Sri Lanka's is 17th out of the 18 markets in surveyed, above Cambodia. Sri Lanka's rewards and risks profiles are relatively evenly balanced, with low per capita expenditure on drugs and the modest overall market size some of key factors contributing to its low ranking.
Key Trends And Developments
- In March 2012, Sri Lanka's Ministry of Health banned medical sales reps from visiting doctors in public hospitals. Sales reps were previously permitted to arrange visits with doctors at 12-2pm on Thursdays, Fridays and Saturdays. The ban was enforced as the ministry said large numbers of sales reps were routinely interrupting doctors during work hours, often increasing patient waiting times.
BMI Economic View: Given the Central Bank of Sri Lanka (CBSL)'s largely unexpected slew of policy measures to combat overheating over the recent months, including currency devaluations and policy rate hikes, we have cut Sri Lanka's 2012 real GDP growth forecast to 5.0% (from 6.0% previously), implying a sharper slowdown from the 8.3% growth rate in 2011. Keeping in mind that the bank's measures were mainly in response to the country's external imbalances, we expect this year to mark the start of the country's 'rebalancing' as its external deficits moderate..
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