Boston, MA -- (ReleaseWire) -- 03/28/2014 -- Ukraine remains a promising yet risky pharmaceutical market. In 2014, owing to the unstable political and economic situation in the country, drugmakers can expect a challenging business environment and capital outflow restrictions. Exchange rate risks present considerable downside to drugmakers' revenues in the country, and with the threat of price controls and compulsory licensing, Ukraine's Risk/ Reward ratio is worsening. Over the long term, we find the market to be attractive due to an ageing population, demographic trends and a considerable disease burden.
Headline Expenditure Projections
- Pharmaceuticals: UAH34.05bn (US$4.18bn) in 2013 to UAH37.13bn (US$4.31bn) in 2014; +9.0% in local currency terms and +3.1.0% in US dollar terms. Local currency forecast significantly lower in relation to previous quarter, on account of macroeconomic factors.
- Healthcare: UAH109.23bn (US$11.87bn) in 2013 to UAH113.7bn (US$13.2bn) in 2014; +5.0% in local currency terms and -0.6% in US dollar terms.
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Risk/Reward Ratings: Ukraine is seen as one of the least promising longer-term pharmaceutical markets within the 20 Central and Eastern Europe (CEE) countries surveyed in our Risk/Reward Ratings (RRRs). While volume demand is expected to continue growing in the coming years, the country's operating environment remains extremely unfavourable in 2014, especially in the light of the present social and political unrest and the country's worsening macroeconomic outlook. On almost every metric we measure, in both risk and reward, Ukraine's score has worsened. As a result, it's Q214 RRR score has been lowered relative to Q114.
Key Trends & Developments
- Ukrainian Ministry of Health officials and representatives of drugmakers sat down to discuss drug pricing and concessions the government was willing to offer to ensure supply stability of medicines.
- Reference pricing was introduced for insulin products sold in Ukraine. External referencing will be based on the insulin prices determined by the authorised government agencies in Bulgaria, Moldova, Poland, Slovakia and the Czech Republic. However, if the medicine is not available in these countries, external referencing will be based on the insulin prices determined by the authorised government agencies in Latvia, Hungary and Serbia.
- Doctors will now be forced to generically prescribe medicines, instead of prescribing on the basis of trade names.
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