BMI View: The outlook for Latvia's pharmaceutical and healthcare markets will be primarily driven by the government's fiscal austerity measures. The healthcare sector, already severely underfunded, will struggle given cuts and place more emphasis on the private sector. Growth in the pharmaceutical sector will be limited by an increasing preference for generic substitution despite a transparent regulatory environment.
Headline Expenditure Projections
Pharmaceuticals: EUR338mn (USD372mn) in 2015 to EUR353mn (USD377mn) in 2016; +4.4% in local currency terms and 1.5% in US dollar terms. Forecast unchanged from previous quarter .
Healthcare: EUR1.01n (USD1.11bn) in 2015 to EUR1.05bn (USD1.13bn) in 2015; +4.2% in local currency terms and 1.4% in US dollar terms. Forecast unchanged on previous quarter.
|f = BMI forecast. Source: WHO, National Sources, BMI|
|Pharmaceutical sales, USDbn||0.428||0.372||0.377||0.404||0.439||0.476||0.494|
|Pharmaceutical sales, % of GDP||1.36||1.40||1.39||1.36||1.34||1.32||1.30|
|Pharmaceutical sales, % of health expenditure||32.9||33.5||33.5||33.5||33.3||33.0||32.6|
|Health spending, USDbn||1.300||1.110||1.125||1.207||1.320||1.443||1.514|
Latvia is ranked 13th out of the 20 markets in the Central and Eastern European (CEE) matrix with an improved score of 49.4, compared with the previous quarter (47.6). This Increase is primarily due to an increase in the sector value growth of the country's pharmaceutical and healthcare market. Latvia's score remains below the regional average of 52.6, indicating the country's challenging business environment, particularly in terms of potential industry rewards and potential impacts of the eurozone crisis. Consequently, direct multinational operations are limited and domestic companies, such as Grindeks, have looked abroad for growth opportunities.
In January 2016, a EU-wide program to prevent HIV and other infectious diseases among people who inject drugs was launched, focussed primarily at Latvia.
In December 2015, it was announced that the number of new HIV infections recorded per 100,000 residents in Latvia was three times higher than the European average over the calendar year.
In November 2015, Latvia's healthcare workers went on strike against the government's controversial 2016 budget proposals which are due to scale back healthcare funds.
BMI Economic View
Despite ongoing uncertainty over the leader of the next government, the outlook of Latvia's public finances remains one of the strongest in the eurozone, and we forecast only modest fiscal deficits ahead. Robust real GDP growth and low real borrowing costs will help to drive down the debt/GDP ratio.
BMI Political View
The collapse of the Latvian government, although a surprise, will not lead to significant macroeconomic or market developments. There is a high probability that the new government will be formed from the three parties in the previous coalition, and a significant change of course in government policy seems unlikely.
The Latvia 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 Latvia Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the Latvia pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for Latvia, to test other views - a key input for successful budgeting and strategic business planning in the Latvian pharmaceutical and healthcare market.
- Target business opportunities and risks in the Latvian pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Latvia.
- 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.