Boston, MA -- (ReleaseWire) -- 04/09/2014 -- As a new member of the Customs Union, Kazakhstan will impose a tariff on imported pharmaceuticals. This will moderately impact medium term growth in the pharmaceutical market as demand for medicines is driven by private consumption. Nevertheless, we expect pharmaceutical spending to accelerate as the government commits to increasing healthcare expenditure and wages continue to grow. For multinational drug manufactures, Kazakhstan will continue to be the most attractive pharmaceutical market in the Central Asian region.
Headline Expenditure Projections
- Pharmaceuticals: KZT273.92bn (US$1.84bn) in 2013 to KZT302.36bn (US$2.06bn) in 2014; up 10.4% in local currency terms and 12.0% in US dollar terms.
- Healthcare: KZT1,537bn (US$10.34bn) in 2013 to KZT1,705bn (US$11.63bn) in 2014; up 10.9% in local currency terms and 12.5% in US dollar terms.
Risk/Reward Rating: Kazakhstan has a RRR score of 50.9 out of 100, making it the 11th 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
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Key Trends And Developments
Kazakhstan will provide equal funding for primary healthcare across all regions in the country in 2014, according to Kazakh Prime Minister Serik Akhmetov. Continuous reform of the country's primary healthcare sector and the implementation of integrated capitation have helped the government to remove the funding imbalance in primary healthcare across all regions, Akhmetov added. Akhmetov observed that primary healthcare will provide up to KZT800 (US$5.05) a month for each patient in 2014, if the actual expenses incurred by the government range from KZT160-480 (US$1.01-3.03) a month in 2012.
Hospitals in Kazakhstan are not using human resources efficiently, with the proportion of administrative personnel in some hospitals exceeding the recommended 15% limit, according to Health Minister Salidat Kairbekova. The country also faces the inefficient use of funds in the form of unjustified procurement of medicines and medical devices. Of the 520 providers of inpatient services in 2013, 279 (54%) reported excessive visits (longer than two months), Kairbekova added.
Kazakhstan's Health Ministry will collaborate with patient organisations and drugmakers to create a special working group to discuss the method of medicine procurement in Kazakhstan. The aim of the working group will be to negotiate on matters associated with the use of medicines to be used in the treatment of various diseases, including hepatitis B.
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