BMI View: Wide-scale changes to the regulatory environment of Ukraine's pharmaceutical sector will increase its attractiveness to multinational pharmaceutical manufactures. The introduction of reference pricing will aid in improving medicine affordability and accessibility, driving increased demand, while changes to medicine registration will reduce market access barriers.
Headline Expenditure Projections
Pharmaceuticals: UAH46.8bn (USD2.14bn) in 2015 to UAH52.1bn (USD2.11bn) in 2016; +11.2% in local currency terms and -1.1% in US dollar terms. Forecast revised downwards compared to the previous quarter .
Healthcare: UAH103.1bn (USD4.70bn) in 2015 to UAH101.9bn (USD4.13bn) in 2016; -1.2% in local currency terms and -12.1% in US dollar terms. Forecast revised downwards compared to the previous quarter .
|f = BMI forecast. Source: WHO, national sources, BMI|
|Pharmaceutical sales, USDbn||3.350||2.140||2.110||2.350||2.620||3.090||3.630|
|Pharmaceutical sales, % of GDP||3.34||2.59||2.18||2.20||2.11||2.01||2.05|
|Pharmaceutical sales, % of health expenditure||36.2||45.4||51.1||58.1||64.1||69.2||72.9|
|Health spending, USDbn||9.260||4.700||4.130||4.050||4.080||4.470||4.980|
In Q316, Ukraine is ranked as the 14th most attractive market in the Central and Eastern Europe region, scoring 48.8 out of 100 and moving up by two positions. Ukraine's score is still under pressure due to the perilous condition of the country's economy, the depreciation of the local currency against the dollar and the bleak short-term outlook.
Key Trends & Developments
The introduction of a reference pricing mechanism and a simplified medicine registration system bodes well for the outlook of Ukraine's pharmaceutical market. In accordance with a draft bill by the Ministry of Health (MoH), which gained approval from Ukrainian parliament on May 31, the process of registration for medicines already approved abroad has been simplified.
Medicines that have been registered by the competent authorities of the US, Switzerland, Japan, Australia, Canada and the EU will have a streamlined registration process, eliminating the need for a full assessment of the drug by Ukrainian authorities. BMI views the move as a step forward to an improved working environment in the country, which should increase market access to multinational pharmaceutical firms.
Recently the Ministry of Health also announced the draft resolution 'On The Reference Pricing Of Medicines' with the change coming into effect on October 2016 if passed by the parliament. This proposal outlines changes to wholesale medicines prices based on a basket of CEE countries: Bulgaria, Moldova, Poland, Czech Republic, Latvia, Hungary and Serbia. The wholesale price of pharmaceutical products must be 20% less than the reference price calculated from the basket.
BMI Economic View
The resolution of Ukraine's political crisis paves the way for a return to moderate economic growth in the next two years, as political stability and structural reform progress bodes well for a recovery in private investment. Additionally, a return to positive real wage growth and higher disposable income resulting from tax cuts will lead to an upswing in private consumption.
BMI Political View
The appointment of Volodymyr Groysman as Prime Minister will bolster the power of President Petro Poroshenko in the near term. However, the new premier faces an uphill struggle to implement reforms, which will require a tougher stance on reducing corruption.
The Ukraine 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 Ukraine Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the Ukraine pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for Ukraine, to test other views - a key input for successful budgeting and strategic business planning in the Ukrainian pharmaceutical and healthcare market.
- Target business opportunities and risks in the Ukrainian pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Ukraine.
- 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.