BMI View: Estonia is facing a crisis in its healthcare system. An ageing population is increasing demand for services at a pace faster than wage increases can bolster revenues for the country's health insurance fund. While both pharmaceutical and healthcare expenditure is forecast to grow due to the country's demographics, this funding crisis poses significant risk to our long-term forecast.
Headline Expenditure Projections
Pharmaceuticals: Pharmaceutical spending will rise from EUR310mn (USD354mn) in 2015 to EUR328mn (USD361mn) in 2016, up 6.0% in local currency terms and up 2.3% in US dollar terms. Forecast revised downwards from last quarter .
Healthcare: Spending will rise from EUR1.28bn (USD1.42bn) in 2015 to EUR1.33bn (USD1.53bn) in 2016, up 4.1% in local currency terms and up 0.5% in US dollar terms. Forecast de creased from last quarter.
|f = BMI forecast. Source: WHO, National Sources, BMI|
|Pharmaceutical sales, USDbn||0.354||0.337||0.361||0.400||0.440||0.465||0.491|
|Pharmaceutical sales, % of GDP||1.46||1.50||1.54||1.55||1.56||1.55||1.54|
|Pharmaceutical sales, % of health expenditure||23.6||23.9||23.6||23.8||24.0||24.2||24.3|
|Health spending, USDbn||1.502||1.414||1.530||1.680||1.836||1.924||2.016|
Estonia scores 52.1 out of 100 in BMI's Pharmaceutical Risk/Reward Index for Central and Eastern Europe in Q117, ranking in 10th place, down from 8th place in the previous quarter. Estonia's Industry rewards score is still the weakest link in its pharmaceutical profile, at 12.8, below the regional average of 18.9. Estonia has above average scores in the urban/rural split and pensionable population.
Estonia has an ageing population which will lead to a sustained increase in chronic disease medicines. The head of pharmacovigilance at the Estonian State Agency for Medicines, Ott Laius, stated in October 2016 that consumption of medicines of almost all types is increasing, with the exception of antibiotics whose consumption has remained relatively stable due to a concerted drive to reduce antibiotic resistance through oversubscription.
Estonia is among 12 Central and Eastern European countries that will participate in a joint procurement initiative which should provide stronger negotiating ground with pharmaceutical companies, as announced during a press conference in July 2016 by Romania's Health Minister Vlad Voiculescu. The minister said the initiative will represent a population of 100mn people, with EUR10bn to be directed at pharmaceutical spending (Agerpres).
E-consultations have proven to be efficient in Estonia in decreasing waiting times to see a general practitioner. This practice has now been extended to medical specialists as well to the East Tallinn Central Hospital, which is among the first now offering e-consultations with endocrinologists, urologists, immunologists and ear, nose, and throat (ENT) specialists.
BMI Economic View
The Estonian economy lost growth momentum in Q216 and we have revised down the country's 2016 real growth forecast to 1.6%, from 2.8% previously, to reflect recent weakness. However, the slowing headline growth rate masks some promising underlying trends in the domestically focused parts of the economy, which suggest that current weakness should prove temporary, and we forecast real GDP growth of 2.8% in 2017.
BMI Political View
Elections for a new president to replace the term-limited incumbent Toomas Hendrik Ilves have become a protracted affair, leaving the country in constitutional deadlock. Once a new president is in place there are likely to be renewed calls to the election process to avoid such a protracted affair in the future. That said, Estonia's political risk indices are unchanged as the current uncertainty is unlikely to weigh on policymaking.
The Estonia Pharmaceuticals & Healthcare Report features BMI Research's forecasts for drugs and healthcare expenditure and imports and exports, focusing on the growth outlook for the prescription, OTC, patented drugs and generics market segments.
BMI's Estonia Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the Estonia pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for Estonia, to test other views - a key input for successful budgeting and strategic business planning in the Estonian pharmaceutical and healthcare market.
- Target business opportunities and risks in the Estonian pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Estonia.
- Assess the activities, strategy and market position of your competitors using our company profiles (including SWOTs, KPIs and latest activity) and competitive landscape tables.
BMI Industry View
An at-a-glance perspective on the latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The pharmaceuticals and healthcare SWOT outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.
BMI Industry Forecast Scenario
Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Healthcare: Total healthcare expenditure (USDbn), healthcare expenditure (% of GDP), healthcare expenditure per capita (USD), hospital beds, doctors, and birth & mortality rates (all per ‘000 population).
- Pharmaceutical Market: Drug expenditure in USDbn, % of GDP and per capita (USD).
- Patented Drug Market: Prescription drug sales (USDbn & % of total sales).
- Generic Drug Market: Generic product sales (USDbn), generic sales (% of total sales).
- OTC Drug Market: OTC sales (USDbn & % of total sales).
- Macroeconomic Forecasts: Nominal and real GDP, % real GDP growth, % private consumption growth, % industrial output growth, % consumer price index, % GDP price deflator, exports, imports, trade balance, current account balance, foreign direct investment, exchange rate against USD, government expenditure and external debt.
BMI’s Pharmaceuticals and Healthcare Risk Reward Index
BMI’s Risk Reward Index provides investors (both national and multinational) looking for opportunities in the region with a clear country-comparative assessment of the market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
A snapshot of key market characteristics, including total size of the pharmaceuticals and healthcare segments, growth drivers, leading therapeutic areas and the competitive landscape
A focus on government healthcare reforms, epidemiological trends, mergers and acquisitions, product launches, market entries, FDI activity, R&D, biotechnology, clinical trials and supply chain issues.
Details of the industry regulatory framework and key legislation covering the licensing of new products/services, pricing and reimbursements, intellectual property, taxation and advertising, as well as analysis of the overall regulatory burden.
The competitive landscape section provides comparative company analyses and index by USD sales and % share of total sales – for the total pharmaceutical sector, as well as the OTC, generics and distribution sub-sectors.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.