BMI View: Innovative pharmaceutical firms will see limited upsides from New Zealand's newly adopted health strategy for the next decade. Cost rationalisation remains a cornerstone of the government's approach and affirms the pharmaceutical management agency's stringent control on pharmaceutical spending. Drugmakers will also have to adapt to shifts in patient flow as New Zealand seeks to encourage the delivery of medical services within local communities.
Headline Expenditure Forecasts
Pharmaceuticals : NZD1.48bn (USD1.0bn) in 2015 to NZD1.51bn (USD982mn) in 2016; 2.0% in local currency terms and -4.9% in US dollar terms.
Healthcare: NZD27.42bn (USD19.13bn) in 2015 to NZD28.41bn (USD18.47bn) in 2016; 3.6% in local currency terms and -3.5% in US dollar terms.
|*figures rounded to two decimal places. f = BMI forecast. Source: WHO, National Sources, BMI|
|Pharmaceutical sales, USDbn*||1.200||1.030||0.980||0.950||0.940||0.960||0.980|
|Pharmaceutical sales, % of GDP||0.61||0.60||0.60||0.59||0.58||0.57||0.55|
|Pharmaceutical sales, % of health expenditure||5.5||5.4||5.3||5.2||5.2||5.1||5.0|
|Health spending, USDbn*||21.940||19.130||18.470||18.100||18.290||18.940||19.620|
In BMI's Q3 2016 Pharmaceutical Risk/Reward Index (RRI), New Zealand has climbed up one place from its Q216 position, coming in at ninth out of 19 markets. With a score of 51.0 out of 100, the country is now ranked below the regional average of 52.3. A strong and predictable environment of low operating risks are weighed down by a small market and low potential for growth relative to other markets in the region.
In April 2016, New Zealand's government launched a new health strategy. This represents an update to the existing approach which was put in place in 2000. Underpinning this strategy are five key themes; people-powered, closer to home; value and high performance; one team; and smart system.
Local news sources reported in May 2016 that despite Merck Sharp & Dohme's submission of new data for Keytruda (pembrolizumab), the New Zealand government will continue to recommend that funding for the treatment receive a lower priority. According to New Zealand's Health Minister, Jonathan Coleman, this additional evidence referenced by the firm has not been peer-reviewed.
That same month, the government announced that the pharmaceutical management agency will receive an extra NZD39mn to help fund Opdivo (nivolumab) for approximately 350 patients. Money will also be spent on funding treatments for hepatitis C such as Harvoni (sofosbuvir and ledipasvir) and Viekira Pak (ombitasvir, paritaprevir, ritonavir and dasabuvir).
BMI Economic View
New Zealand's real GDP growth in q-o-q seasonally adjusted, annualised terms picked up to 4.9% in Q315 (versus 2.8% q-o-q in Q215) due to strong growth in manufacturing and services. However, we are revising down our 2016 real GDP forecast to 2.3% (versus 2.5% previously) given the significant downside risks to economic activity in the agriculture and construction sectors.
BMI Political View
Wellington's lifting of UN sanctions against Iran on February 18 will be positive for New Zealand as Iran has the potential to become a new dairy market amid slowing Chinese demand. The country's positive image in Iran will further help boost the efforts of New Zealand businesses, benefitting the country's exporters
The New Zealand 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 New Zealand Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the New Zealand pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for New Zealand, to test other views - a key input for successful budgeting and strategic business planning in the New Zealand pharmaceutical and healthcare market.
- Target business opportunities and risks in the New Zealand pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in New Zealand.
- 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.