BMI View: We expect growth in Estonia's healthcare expenditure to decelerate over the long term given the country's fiscally conservative nature, the limited capacity of the national health insurer to accommodate further healthcare spending growth and BMI's outlook for the country's economy over the long term. Drugmakers can expect to see constrained revenue growth in the country as pricing pressures and restrictive drug reimbursement are employed by the Estonian health insurance fund to restrict healthcare expenditure.
Headline Expenditure Projections
Pharmaceuticals: Sales will rise from EUR310mn (USD341mn) in 2015 to EUR328mn (USD351mn) in 2016, up 6.0% in local currency terms and down 3.2% in US dollar terms. Forecast stayed flat from last quarter.
Healthcare: Spending will rise from EUR1.22bn (USD1.34bn) in 2015 to EUR1.29bn (USD1.38bn) in 2016, up 5.8% in local currency terms and down 2.9% in US dollar terms. Forecast stayed flat from last quarter.
|f = BMI forecast. Source: WHO, National Sources, BMI|
|Pharmaceutical sales, USDbn||0.391||0.341||0.351||0.382||0.423||0.465||0.490|
|Pharmaceutical sales, % of GDP||1.46||1.49||1.51||1.50||1.49||1.48||1.47|
|Pharmaceutical sales, % of health expenditure||25.3||25.4||25.4||25.5||25.6||25.6||25.7|
|Health spending, USDbn||1.543||1.342||1.381||1.499||1.652||1.814||1.906|
Estonia scores 55.7 out of 100 in BMI's Pharmaceutical Risk/Reward Index for Central and Eastern Europe in Q216, ranking in 11 th place down from ninth in the previous quarter. Estonia's Industry Rewards score is still the weakest link in its pharmaceutical profile, at 16.4, below the regional average of 19.9.
On January 14 and 15 2016 in Vilnius, Lithuania, the European Union Joint Action on HIV and Co-infection Prevention and Harm Reduction (HA-REACT) held its first Partnership Forum to kick off activities. HA-REACT addresses existing gaps in the prevention of HIV and other co-infections, especially tuberculosis and viral hepatitis. This three-year project was launched in late 2015 with core funding from the European Union (EU) and is being implemented in 18 EU Member States.
According to Health and Labour Minister Jevgeni Ossinovski, the Estonian government will invest around EUR115mn (USD122.78mn) through to 2023 towards improving the primary healthcare services of the country. The fund, which includes EUR85mn (USD90.8mn) from the EU, will be used to upgrade the infrastructure of primary healthcare service providers. The amendments seek to ensure a better and higher-quality primary healthcare service and would result in shorter waiting lists in hospitals.
In the first nine months of 2015 Baltic pharmaceutical company Grindeks' sales were EUR63.5mn, up 0.6% compared with the same period in 2014, while net profit was EUR3.9mn, up 5.7%. According to the company, while operations were still affected by the events in Russia and Ukraine, which are among its key markets, the focus on diversifying distribution to new markets has started paying off. Turnover of the final dosage forms was EUR24.1mn, up 230% versus the first nine months of 2014.
BMI Economic View
Rising external demand will help accelerate GDP growth in 2016, boosted by an improving outlook for inward investment. While private consumption will remain an important driver of production, increasing inflation following the euro's depreciation in 2015 will weigh on this component as a share of overall GDP.
BMI Political View
Despite some signs that relations are improving, tensions with neighbouring Russia will continue to dominate Estonia's political landscape in 2016. The issue of Russian aggression will remain at the heart of the debate surrounding Estonia's foreign policy and domestic political landscape.
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.