Boston, MA -- (ReleaseWire) -- 01/03/2014 -- Kazakhstan remains the most attractive, and the only viable, pharmaceutical market in Central Asia for multinational drugmakers in terms of the overall regulatory environment and ease of doing business in comparison with neighbouring countries. The domestic market is constrained by the relatively small population and daunting infrastructure challenges; however, as healthcare infrastructure is eventually realised and services meted out, demand for pharmaceuticals is set to rise.
Headline Expenditure Projections
- Pharmaceuticals: KZT246.76bn (US$1.65bn) in 2012 to KZT273.92bn (US$1.84bn) in 2013; up 11.0% in local currency terms and 11.4% in US dollar terms.
- Healthcare: KZT1,332bn (US$8.93bn) in 2012 to KZT1,537bn (US$10.34bn) in 2013; up 15.4% in local currency terms and 15.8% in US dollar terms. Forecast adjusted slightly down due to updated macroeconomic forecast.
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Risk/Reward Rating: Kazakhstan has a RRR score of 51 out of 100, making it the 12th most attractive pharmaceutical market in Emerging Europe. Although the Kazakh market is characterised by relatively few market barriers and rapid growth, the potential rewards for the industry are moderated by low per capita spending, an unfavourable rural-urban population split
Key Trends And Developments
- Turkish drugmaker Abdi Ibrahim announced in October its intention to begin construction of a new pharmaceutical manufacturing facility in Kazakhstan. The facility is expected to come online by the end of 2014 and address the markets of both Kazakhstan and neighbouring Central Asian republics.
- In February, Ministry of Health and competition officials gave the strongest signals yet that they would contemplate 'regulation of prices' of medicines , with the head of the Kazakhstan Agency for Protection of Competition saying an analysis of the market found several areas of concern that were driving higher prices. The timeline for the enacting of future pricing regulations is unclear, although BMI is concerned as to whether the development and eventual enacting of such controls will be done in consultation with the domestic and international pharmaceutical industry. BMI has previously outlined areas of concern, such as the fragmented wholesale sector and a lack of clear rules for doctors and pharmacists regarding providing patients with the cheapest generic alternatives. However, rather than setting prices or margin limits, BMI hopes that the Kazakhstani officials look at root causes of high prices and contemplates steps that would foster greater competition and the development of more efficient private-sector delivery, such as modern format chain pharmacies.
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