BMI View: While the challenging business environment in Ukraine will continue to pose risks to multinational pharmaceutical firms operating in the country, the much-needed reforms of the healthcare sector are moving closer to realisation. This will significantly boost prospects for drugmakers, where growth potential is considerable given the market's current underdevelopment.
Headline Expenditure Projections
Pharmaceuticals: UAH46.8bn (USD2.13bn) in 2015 to UAH54.0bn (USD2.09bn) in 2016; +15.2% in local currency terms and -2.0% in US dollar terms. Forecast in local currency terms revised upwards compared to the previous quarter .
Healthcare: UAH113.9bn (USD5.19bn) in 2015 to UAH117.5bn (USD4.55bn) in 2016; 3.2% in local currency terms and -12.3% in US dollar terms. Forecast revised upwards compared to the previous quarter .
|f = BMI forecast. Source: WHO, national sources, BMI|
|Pharmaceutical sales, USDbn||3.350||2.130||2.090||2.200||2.440||2.710||2.970|
|Pharmaceutical sales, % of GDP||3.34||2.59||2.53||2.42||2.41||2.41||2.43|
|Pharmaceutical sales, % of health expenditure||36.2||41.1||45.9||50.4||54.2||57.6||60.3|
|Health spending, USDbn||9.260||5.190||4.550||4.380||4.510||4.700||4.920|
In Q416, Ukraine is ranked as the 14th most attractive market in the Central and Eastern Europe region same as in Q316, scoring 49.5 out of 100. 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
In June 2016, Gilead Sciences filed a claim against the Ukrainian Drug Regulation Authority and the Ministry of Health alleging a breach of its patents for Sovaldi (sofosbuvir). It is challenging the right for Egyptian generic drugmaker, Pharco Pharmaceuticals, to supply a generic version of the hepatitis C medicine. Generic sofosbuvir is available in Ukraine due to lack of patent protection.
In September 2016, Medecins Sans Frontieres (MSF) has issued a letter to Gilead Sciences regarding what MSF alleges have been efforts to remove generic sofosbuvir for hepatitis C from Ukraine. The letter notes the organisation's 'serious concerns and strong opposition to Gilead's ongoing efforts to remove the only existing source of generic sofosbuvir in Ukraine'.
In March 2016, GlaxoSmithKline altered its patent policy by eschewing its patents in low income countries as well as issuing licences to generic drugmakers for a royalty fee in lower-middle income countries. This is expected to benefit a number of countries, particularly Ukraine where there is currently a patent registered for the firm's HIV drug Tivicay (dolutegravir) and where the country's healthcare system is struggling to treat the large number of HIV-positive patients.
BMI Economic View
Weak growth, rising tensions in the Donbas, and stalling structural reform momentum pose a major risk to the sustainability of Ukraine's fiscal position. Continued financial support from the IMF will be indispensable for the government to finance itself over the medium term, which will keep pressure on the government to press ahead with crucial reforms.
BMI Political View
The most recent escalation of tensions between pro-Russian separatists and the Ukrainian army in Eastern Ukraine indicates that peace in the region is still a distant prospect. Therefore, we believe that the self-proclaimed People's Republic of Donetsk and the People's Republic of Luhansk will not obtain autonomy in the near future, which means that political instability and security risks in the region will remain elevated over the coming quarters.
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.