Boston, MA -- (ReleaseWire) -- 01/08/2014 -- Data for pharmaceutical sales in Q213 indicate that the market is experiencing a slowdown in growth, which is in line with our forecasts for the full year. However, growth in Q213 compared to Q212 declined significantly, indicating that the relatively small market is now mirroring the macroeconomic picture in Estonia. We expect Estonia's commitment to balanced budgets and fiscally conservative policies on government spending to moderate growth in the pharmaceutical market, with the slowdown in growth to continue into 2014. Relative to the other markets in Central and Eastern Europe, Estonia will remain a relatively modest prospect for drugmakers, shaped by an increased emphasis on generic drugs, an implication of fiscal austerity measures.
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Headline Expenditure Projections
- Pharmaceuticals: From EUR276mn (US$370mn) in 2013 to EUR290mn (US$370mn) in 2014; +4.9% in local currency terms and +0.2% in US dollar terms. Local currency forecast of 4.9% in 2014 continues to decline modestly after 5.3% in 2013 and a marked decline from the growth of 9.2 in 2012 due to new market data and macroeconomic expectations.
- Healthcare: EUR1.15bn (US$1.53bn) in 2013 to EUR1.18bn (US$1.50bn) in 2014; +3.2% in local currency terms and -1.5% in US dollar terms.
Estonia scores 52.1 out of 100 in BMI's Pharmaceutical Risk/Reward Rating (RRR) tool, climbing one spot to 10th out of the 20 key markets covered in Central and Eastern Europe. Estonia's Industry Rewards score is still the weakest part of its pharmaceutical profile, at 12.8, significantly below the regional average of 19.2. This is mainly due to by above-average scores in the urban/rural split and pensionable population. As the population ages, the dominant types of disease will shift, with the emergence of many more long-lasting chronic conditions, cancers and degenerative illnesses. This will tip the ratio of working people to dependants towards the latter, increasing the pressure on overall funding for the healthcare system.
Fiscal tightening has already led to pressure on the Health Insurance Fund (HIF) to rein in pharmaceutical expenditure through pricing limits, generic prescribing and reference pricing mechanisms on reimbursed drugs. Nevertheless, there are also factors that present potential rewards in this market. Any growth in demand for medicine is highly dependent on the unemployment levels and the raising of premiums by the HIF. These are tied to the overall economic cycle, and as a result Estonia's pharmaceutical market broadly reflects macroeconomic trends.
Key Trends And Developments
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