BMI View: Growth in the Spanish pharmaceutical market will remain sluggish over the coming years. Despite calls made by pharmaceutical companies for the implementation of a system that adequately rewards innovation and supports investment in future medicines, ongoing debt issues will result in the Spanish government remaining committed to fiscal consolidation. We expect the government to continue its promotion of lower-value generic medicines over patented medicines.
Headline Expenditure Projections
Pharmaceuticals: EUR24.71bn (USD33.11bn) in 2014 to EUR25.18bn (USD27.70bn) in 2015; +1.9% in local currency terms and -16.3% in US dollar terms. Forecast revised upwards from last quarter.
Healthcare: EUR90.72bn (USD121.56bn) in 2014 to EUR91.70bn (USD100.87bn) in 2015; +1.1% in local currency terms and -17.0% in US dollar terms. Forecast revised upwards from last quarter.
In BMI's Pharmaceutical Risk/Reward Index for Q415, Spain scored 64.2 and ranked 12th out of the 15 countries surveyed in Western Europe - just below the Netherlands (64.7). While Spain offers investors positive features, such as its large drug market, it also has problems, such as the government's focus on cost containment, low population growth, cumbersome bureaucracy and provincial differences regarding drug regulations and reimbursement.
Key Trends And Developments
In August 2015, the Spanish government came under pressure to reinstate healthcare cuts after several regions in the country started restoring access to free primary healthcare for illegal immigrants. Prime Minister Mariana Rojoy's government withdrew access to all but emergency treatments for illegal immigrants in 2012, in a bid to control the public deficit. However, these measures have yet to be officially implemented by the government which has led to several autonomous regions of the country acting independently and restoring healthcare cover to illegal immigrants in their respective facilities.
In July 2015, Bluefish Pharmaceuticals was selected as the exclusive provider of three products in another contract with Servicio Andaluz de Salud (SAS), the state health authority in Spanish Andalusia. The new contract includes almotriptan 12.5mg, bicalutamide 150mg and eplerenone 25 and 50mg. Bluefish reported that the additional net sales from the contract is estimated to be around SEK19mn (USD2.2mn) per year.
In June 2015, Amelia Martin, manager at the Spanish Technology Platform for Innovative Medicines, stated that Spain needed to continue nurturing biomedical public-private partnerships if it is to maintain its leadership role in European bio-medical research. Martin stressed the importance of initiatives such as the Innovative Medicines Initiative (IMI) and IMI-2, which provide a rare opportunity for companies and public centres to engage in needed collaborations.
In June 2015, data published by Farmaindustria revealed that between May 2011 and February 2015, the generic medicines market grew by more than +75% in accumulated terms, while the branded medicines market fell by almost 25%. In this same period, expenditure on prescription drugs in Spain fell by 15.2%.
BMI Economic View
Growth is likely to slow over the coming months due to base effects from faster growth in the latter-parts of 2014. Accordingly, we forecast real GDP growth of 2.5% in 2015 and 2.2% in 2016, below Bloomberg consensus estimates of 2.9% and 2.5% respectively.
BMI Political View
The ruling People's Party (PP) administration will pin its re-election hopes on Spain's recovering economy and uncertainty in Greece. No party is likely to win a majority in the December 2015 election. Uncertainty surrounding the vote and post-election coalition formation will dent Spain's economic recovery.