Latvia Pharmaceuticals & Healthcare Report

Providing expert analysis, independent forecasts and competitive intelligence on the pharmaceuticals and healthcare industry.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, BMI's Pharmaceuticals and Healthcare Risk Reward Index, Market Summary, Economic Forecasts, Company Profiles and Competitive Landscape.

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Latvia Pharmaceuticals & Healthcare Report
Product Price
$1,295.00

BMI View: The development of Latvia's market will be shaped by an increased emphasis on generic drugs; an implication of fiscal austerity measures. As a result, despite its transparent regulatory policies and business-friendly operating environment, the Latvian pharmaceutical market will continue to remain a modest prospect for drugmakers. Exports will also be impacted by regional tensions.

Headline Expenditure Projections

  • Pharmaceuticals: EUR319mn (USD428mn) in 2014 to EUR338mn (USD372mn) in 2015; +5.8% in local currency terms and -13.2% in US dollar terms. Forecast unchanged from previous quarter .

  • Healthcare: EUR970mn (USD1.30bn) in 2014 to EUR1.01bn (USD1.11bn) in 2015; +4.0% in local currency terms and -14.7% in US dollar terms. Forecast unchanged on previous quarter.

Risk/Reward Index: Latvia is ranked 13th out of the 20 countries surveyed in the Central and Eastern Europe (CEE) region in Q116. Its position in the rankings has improved one place from our assessment for the previous quarter. Latvia's overall score is 47.6 this quarter, unchanged from Q415, hence its improved position in the ranking is due to the declining attractiveness of its neighbours' business environment. Latvia's score remains below the regional average of 49.6, indicating the country's challenging business environment, particularly in terms of potential industry rewards and government expenditures. Consequently, direct multinational operations are limited and domestic companies, such as Grindeks, have looked abroad for growth opportunities.

Headline Pharmaceuticals & Healthcare Forecasts (Latvia 2013-2019)
2013 2014 2015f 2016f 2017f 2018f 2019f
f = BMI forecast. Source: WHO, National Sources, BMI
Pharmaceutical sales, USDbn 0.410 0.428 0.372 0.378 0.404 0.438 0.474
Pharmaceutical sales, % of GDP 1.37 1.36 1.40 1.39 1.36 1.34 1.32
Pharmaceutical sales, % of health expenditure 33.2 32.9 33.5 33.6 33.4 33.2 32.9
Health spending, USDbn 1.235 1.300 1.109 1.126 1.208 1.321 1.443

Key Trends And Developments

  • Latvia's controversial 2016 budget will see cuts to healthcare spending as the government attempts to increase its military spending; this highlights a challenging business environment for drugmakers and healthcare providers operating in Latvia. The budget passed its first reading on November 3 2015 by a comfortable majority and is expected to take effect on January 1 2016.

  • The European Federation of Pharmaceutical Industries and Associations (EFPIA), the Latvian Association of International Research-based Pharmaceutical Manufacturers (SIFFA) and the Latvian Ministry of Health met in September to forge a stability pact and increase patient access to drugs. The meeting was aimed at implementing proposals contained within the letter of intent, signed between the Latvian government and the pharmaceutical industry back in June. The proposal is to facilitate a stable and predictable business environment in the pharmaceutical sector while enhancing access to novel drugs. The agreement mainly aims to explore ways to better manage the introduction of new and innovative medicines in Latvia, including the analysis of various funding models.

BMI Economic View

Real GDP growth accelerated in Q215, growing by 2.7%, up from 1.8% y-o-y in the first quarter of the year. Growth conditions have been challenging in recent quarters for Latvia, as the sharp deterioration in the Russian economy has led to a cooling of regional external demand. On a more positive note, the Russian sanctions on EU agricultural goods appear to have had an immaterial impact on Latvian exports and eurozone growth is beginning to pick up momentum, which should provide a modest tailwind for Latvian exporters.

BMI Political View

Security and external threats will dominate the bearing of Latvia's political risk outlook for the foreseeable future, while policy-making and continuity will remain stable. Externally, fighting in Ukraine has declined considerably, leading to a cooling of regional tensions and bringing forth the possibility of a lasting ceasefire. Nonetheless, Latvian concerns over an increasingly belligerent Russia are unlikely to fade as quickly. The government is pressing ahead with its plans to increase defence spending, although Defence Ministry State Secretary Janis Sarts has admitted that only one of the three planned projects to improve defence capabilities is likely to be completed within five years, even if the increase in defence spending is substantial.

BMI Industry View
7
SWOT
9
Political
11
Economic
12
Operational Risk
13
Industry Forecast
14
Pharmaceutical Market Forecast
14
Table: Pharmaceutical Sales, Historical Data And Forecasts (Latvia 2011-2019)
15
Healthcare Market Forecast
17
Table: Healthcare Expenditure Trends, Historical Data And Forecasts (Latvia 2011-2019)
18
Table: Government Healthcare Expenditure Trends, Historical Data And Forecasts (Latvia 2011-2019)
19
Table: Private Healthcare Expenditure Trends, Historical Data And Forecasts (Latvia 2011-2019)
19
Prescription Drug Market Forecast
19
Table: Prescription Drug Market Indicators, Historical Data And Forecasts (Latvia 2011-2019)
21
Patented Drug Market Forecast
22
Table: Patented Drug Market Indicators, Historical Data And Forecasts (Latvia 2011-2019)
23
Generic Drug Market Forecast
24
Table: Generic Drug Market Indicators, Historical Data And Forecasts (Latvia 2011-2019)
25
OTC Drug Market Forecast
26
Table: Over-The-Counter (OTC) Medicine Market Indicators, Historical Data And Forecasts (Latvia 2011-2019)
27
Pharmaceutical Trade Forecast
28
Table: Pharmaceutical Trade Data And Forecasts (Latvia 2013-2019)
29
Table: Pharmaceutical Trade Data And Forecasts local currency (Latvia 2013-2019)
30
Key Risks To BMI's Forecast Scenario
30
Macroeconomic Forecasts
32
Economic Analysis
32
Table: GDP By Expenditure (Latvia 2012-2019)
35
Industry Risk Reward Ratings
36
Central And Eastern Europe Risk/Reward Index - Q4 2015
36
Latvia Risk/Reward Index
42
Rewards
42
Risks
42
Market Overview
44
Industry Trends And Developments
46
Epidemiology
46
Table: Leading Causes of Death, 1990-2010
46
Table: New Cases of Cancer, 2004-2010
48
Table: Cumulative Reported Cases of HIV and AIDS, 2000-2010
50
Healthcare Sector
50
Healthcare Sector Funding
51
Healthcare Provision
52
Table: Healthcare Resources (Latvia 2009-2014)
52
Table: Hospitals & Beds, 2006-2010
53
Table: Hospital Beds by Specialty, 2004-2010
53
Table: Healthcare Personnel (Latvia 2009-2014)
54
Table: Healthcare Activity (Latvia 2009-2014)
55
Research & Development
55
Biotechnology
56
Clinical Trials
58
Regulatory Development
59
Regional Collaboration
60
Intellectual Property
61
Pricing Regime
61
Reimbursement Regime
63
Competitive Landscape
65
Research-Based Industry
65
Table: Licences Issued To Companies Engaged In Pharmaceutical Manufacturing And Distribution, 2007-2011
65
Table: Medicines Consumption According To Marketing Authorisation Holders (turnover in LVL)
66
Generic Drugmakers
67
Pharmaceutical Distribution
67
Table: Wholesale Mark-Up Scheme For Reimbursable Pharmaceuticals, 2008
68
Table: Wholesalers Market Share, 2010 (%)
70
Pharmaceutical Retail Sector
70
Table: Pharmacy Mark-Up Scheme For Reimbursable Pharmaceuticals, 2008
71
Table: Licences Issued To Pharmacies
72
Company Profile
74
GlaxoSmithKline
74
Grindeks
77
Merck & Co
81
Novartis
83
Olainfarm
85
Pfizer
89
Sanofi
91
Demographic Forecast
93
Table: Population Headline Indicators (Latvia 1990-2025)
94
Table: Key Population Ratios (Latvia 1990-2025)
94
Table: Urban/Rural Population & Life Expectancy (Latvia 1990-2025)
95
Table: Population By Age Group (Latvia 1990-2025)
95
Table: Population By Age Group % (Latvia 1990-2025)
96
Glossary
98
Methodology
100
Pharmaceutical Expenditure Forecast Model
100
Healthcare Expenditure Forecast Model
100
Notes On Methodology
101
Risk/Reward Index Methodology
102
Index Overview
103
Table: Pharmaceutical Risk/Reward Index Indicators
103
Indicator Weightings
104

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.

Key Benefits

  • 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.

Coverage

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.

Market Summary

A snapshot of key market characteristics, including total size of the pharmaceuticals and healthcare segments, growth drivers, leading therapeutic areas and the competitive landscape

Industry Developments

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.

Regulatory Regime

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.

Competitive Landscape

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.

Company Profiles*

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.