BMI View: The export-oriented Irish pharmaceutical industry will continue to benefit from its R&D and manufacturing capabilities as well as its competitive business environment. While the new US federal rules on so-called corporate inversion deals will mitigate purely tax-driven acquisitions of Irish pharmaceutical equities by U S-based companies, the highly developed Irish drug sector and its international role will continue to promote its appeal to investors. Meanwhile, we expect the Irish economy to remain an out performer among developed countries over the next few years, which will continue to support the recovering domestic pharmaceutical and healthcare markets.
Headline Expenditure Projections
Pharmaceuticals: EUR2.32bn (USD2.57bn) in 2015 to EUR2.27bn (USD2.43bn) in 2016; -1.9% in local currency terms and -5.4% in US dollar terms. Forecast broadly in line with last quarter.
Healthcare: EUR14.98bn (USD16.61bn) in 2015 to EUR15.28bn (USD16.35bn) in 2016; +2.0% in local currency terms and -1.6% in US dollar terms. Forecast revised upwards from last quarter.
|f = BMI forecast. Source: WHO, National Sources, BMI|
|Pharmaceutical sales, USDbn||3.160||2.570||2.430||2.470||2.570||2.680||2.710|
|Pharmaceutical sales, % of GDP||1.26||1.08||1.01||0.94||0.88||0.84||0.80|
|Pharmaceutical sales, % of health expenditure||16.2||15.5||14.9||14.4||14.0||13.7||13.4|
|Health spending, USDbn||19.520||16.610||16.350||17.170||18.370||19.660||20.200|
In Q316, we have revised downwards Ireland's Risk Reward Index score to 61.0 from 62.2 in the prior quarter (out of 100). The score revision was mainly driven by lower sector value growth indices. Nonetheless, Ireland retains its ranking position of 14th out of 15 countries in Western Europe in terms of market attractiveness to pharmaceutical investors. Ireland's score is driven by high spending per capita on medicine and low industry and country risks, but is dragged down by a small market size as well as the effects of recent years of austerity targeting health spending.
As of May 18 2016, following the failure of talks between the Irish government and the pharmaceutical industry to reach an agreement on drug price reductions, the Health Service Executive (HSE) announced that it will unilaterally reduce the reimbursement price it pays for medicines in order to meet its pharmaceutical cost-saving target of EUR110mn (USD124mn) for 2016, as well as trying to align the price of drugs with other European markets, although further negotiations between the government and the industry will probably ensue from this announcement in order to reach an agreement.
In May 2016 Ireland's HSE approved an EUR900mn (USD1.0bn) e-health plan to digitalise Ireland's health system, which is aimed at providing digital health records for all Irish patients by mid-2019 (Irish independent).
In April 2016, mental health reform advocacy groups protested in the cities of Dublin and Galway to highlight the need to preserve the total mental health budget of EUR35mn, amid attempts to divert one-third of this funding towards other areas in the HSE (Irish Times).
As of April 2016, Shire plans to invest USD400mn over the next four years to build a biologics manufacturing campus in County Meath, Ireland, which will expand the company's global biotechnology manufacturing capacities.
On April 6 2016, Allergan announced that, due to changes to the US financial regulations, its USD160bn merger with Pfizer would be terminated.
BMI Economic View
Ireland's economy will remain one of the EU's best performers over the next decade, even if current rates of extremely fast economic expansion are unlikely to last.
BMI Political View
The inconclusive result of the February 2016 Irish general election is set to predicate a return to the polls before the term of the current parliament expires. A minority government led by the Fine Gael party is a possibility, although this would be fragile and prone to collapse. Nevertheless, the ongoing political uncertainty is unlikely to have a material impact on the economy in the medium term.
The Ireland 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 Ireland Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the Ireland pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for Ireland, to test other views - a key input for successful budgeting and strategic business planning in the Irish pharmaceutical and healthcare market.
- Target business opportunities and risks in the Irish pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Ireland.
- 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.