BMI View: The su rprise victory of Donald Trump in the US presidential election provides something of a mixed bag for multinational drugmakers ' revenue-earning opportunities in the country . Indeed, while potentially lower medicine expenditure poses downside risk to our projections for pharmaceutical spending, in contrast, lower tax rates and a subsequent boost in corporate activity pose upside risk . Nevertheless, d rug pricing remains th e key issue worrying drugmakers and this concern has been present well before both Trump and Hillary Clinton started their campaigns. As such, w e are maintaining our curre nt forecasts for pharmaceutical and healthcare expenditure in the US.
Headline Expenditure Projections
Pharmaceuticals : USD371bn in 2016 to USD390bn in 2017; +5.2% growth. Market forecast unchanged since Q416 update.
Healthcare : USD3,281bn in 2016 to USD3,440bn in 2017; +4.8% growth. Market forecast unchanged since Q416 update.
|f = BMI forecast. Source: WHO, National Sources, BMI|
|Pharmaceutical sales, USDbn||316.339||343.605||370.929||390.275||402.900||415.973||429.469|
|Pharmaceutical sales, % of GDP||1.82||1.92||1.99||2.02||2.01||2.00||1.99|
|Pharmaceutical sales, % of health expenditure||10.6||10.9||11.3||11.3||11.3||11.1||11.0|
|Health spending, USDbn||2,985.748||3,139.179||3,280.775||3,439.511||3,577.456||3,735.317||3,904.267|
The US pharmaceutical market ranks first both regionally and globally within BMI's Pharmaceutical Risk/Reward Index (RRI) matrix, a reflection of its unquestionable attractiveness and limited risks relative to other markets. The US has ranked first consistently over the past three years, thanks to strong scores across the four major sub-categories. We expect this to remain the case for the foreseeable future, with no other markets expected to top the vast commercial potential of the country's pharmaceutical market, underpinned by the high per capita volume use of medicines.
The US has a RRI score of 83.9 out of 100 for Q117. This is unchanged from Q416 and Q316, and slightly higher than the 82.8 recorded in Q216. The high RRI score recorded by the US underlines the pharmaceutical market's unassailable status as the most lucrative globally. This is due to unparalleled healthcare access, considerable spending power, a high burden of disease, minimal market access barriers and intense company activity. The key risks to this positive outlook are the increasing influence of pharmacy benefit managers and greater regulation, such as the Branded Prescription Drug Fee.
US President-elect Donald Trump has said he is open to keeping key parts of President Barack Obama's healthcare bill, specifically that of the ban on insurers denying coverage for pre-existing medical conditions. He would also keep the provision that allows young adults to be covered by insurance held by their parents.
Mylan agreed to the terms of a USD465mn settlement with the US Department of Justice and other government agencies. The settlement will resolve questions that have been raised about the classification of Mylan's EpiPen Auto-Injector and EpiPen Jr Auto-Injector (epinephrine) for purposes of the Medicaid Drug Rebate Program.
BMI Economic View
The demographic landscape in the US will support an expansionary economic growth trajectory over the medium term. More individuals will enter their prime working age (between the ages of 25 and 54), helping to counteract the opposing force of retiring 'baby boomers' (individuals born between 1946 and 1964) and pushing the labour force participation rate higher. Recovering private investment, alongside the increasing educational levels of new employees, will support an uptick in productivity growth, translating into stronger wage growth than we have seen in the past decade. We expect the US housing sector to be a major beneficiary of this trend, as rising employment and wages support residential real estate demand.
BMI Political View
The election of Donald Trump as President of the US represents a major shake-up of the established order in US politics. The Republicans last controlled both the presidency and Congress in 2006, and the nature of Trump's victory across traditionally Democratic states and against all odds (as an 80-20% underdog on the eve of the election according to betting markets) suggest that he could have significantly greater leeway in policy formation in Congress than foreseen by most. Now, the Republican Party will have its greatest degree of dominance since the 1920s, controlling the Senate, House of Representatives, a majority of state governors, and the presidency, in addition to having significant influence in the Supreme Court (with at least one and potentially more vacancies to fill in the next Congress).
The United States 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 United States Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the United States pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for United States, to test other views - a key input for successful budgeting and strategic business planning in the American pharmaceutical and healthcare market.
- Target business opportunities and risks in the American pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in United States.
- 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.