BMI View: In line with our long-standing view, manufacturing investment in Ireland's pharmaceutical sector remained strong in H215, and we expect this trend to continue over a multi-quarter horizon. Sustained expansion of Ireland's economy will be underpinned by an increasingly robust consumer spending story, as well as accelerating export demand, which are set to benefit pharmaceutical production indices and overall healthcare sector growth. However, despite a recent increase in budget spending, we expect the Irish government to continue focusing on cost control measures across the healthcare sector, including through the increased use of generic medicines and price pressure, which will continue to weigh on market growth potential.
Headline Expenditure Projections
Pharmaceuticals: EUR2.39bn (USD3.20bn) in 2014 to EUR2.35bn (USD2.59bn) in 2015; -1.5% in local currency terms and -19.2% in US dollar terms. Forecast in line with last quarter.
Healthcare: EUR14.74bn (USD19.76bn) in 2014 to EUR14.87bn (USD16.35bn) in 2015; 0.8% in local currency terms and -17.2% in US dollar terms. Forecast in line with last quarter.
|f = BMI forecast. Source: WHO, National Sources, BMI|
|Pharmaceutical sales, USDbn||3.225||3.203||2.589||2.492||2.556||2.682||2.827|
|Pharmaceutical sales, % of GDP||1.40||1.29||1.19||1.12||1.06||1.01||0.97|
|Pharmaceutical sales, % of health expenditure||16.7||16.2||15.8||15.4||15.1||14.9||14.7|
|Health spending, USDbn||19.320||19.756||16.353||16.140||16.874||18.013||19.237|
In Q1 2016, we have revised downwards Ireland's Risk Reward Index score to 60.9 from 61.9 in the prior quarter (out of 100). The score revision was due to lower population growth indices. Against this backdrop, Ireland has now shifted down one ranking position to 14 out of 15 countries in Western Europe in terms of attractiveness to pharmaceutical investors. Ireland's score is driven by high spending per capita on medicine (spending per capita score 9.6 out of 12) and low industry and country risks (patent respect score 6.3 out of 7 and business transparency score 1.9 out of 2), but dragged down by a small market size (market expenditure score 12 out of 20) and weak dynamism (sector value growth score 0.0 out of 20).
US-based drugmaker Pfizer announced that it would acquire Allergan in a deal valued at USD160bn, in a bid to lower its US tax burden, which represents one of the largest takeovers in the pharmaceutical industry on record, while it would create the world's biggest drugmaker and move Pfizer's headquarters from New York to Ireland.
Mylan failed in its bid to acquire Perrigo, with 60% of shares not being tendered by the acquisition deadline on November 13 2015.
Several drugmakers announced investments in pharmaceutical facilities in Ireland, including US-based drugmaker Pfizer at its facilities at Grange Castle, west Dublin and Ringaskiddy and Little Island sites in Cork (which will create 130 jobs) over the next year, Spanish healthcare company Grifols at a new facility in Dublin to create 140 jobs, and US-based drugmaker Regeneron USD350mn investment in its biologics production facility in Limerick.
The Organisation for Economic Cooperation and Development (OECD) called for a reversal in the trend towards voluntary health insurance in Ireland and advised the Irish government to provide universal healthcare in order to improve the fiscal sustainability of the health system.
Ireland's Finance Minister Michael Noonan announced a 6.25% patent box tax on intellectual property (half the rate of the standard company tax levy of 12.5%) in order to continue to attract overseas investment, which would compete with similar benefits offered by other countries such as the UK and the Netherlands.
BMI Economic View
Ireland will remain one of the fastest growing economies in the developed world in 2015 and 2016, underpinned by strong private consumption and exports. Ireland's robust growth story looks sustainable, amid progress unwinding massive dual fiscal and current account deficits.
BMI Political View
Increasing threats to Northern Ireland's power sharing Executive will dent already declining support for Sinn Fein in the Republic of Ireland. Although the result of the next election, due by April 2016, remains uncertain, the deteriorating fortunes of Sinn Fein and Ireland's increasingly robust economy suggests Fine Gael have a growing chance of remaining in power following the vote.
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.