New Market Report: Portugal Pharmaceuticals & Healthcare Report Q1 2014

Portugal's economy continues to struggle in the face of IMF-imposed austerity measures, but the latest review suggests that it is on track, and meeting its targets. But as far as the pharmaceutical and healthcare industry is concerned, it is still a long way from recovery. Health budgets are set to be slashed again in 2014; the authorities have to make further cuts in reimbursement; and reference prices are continually pushed downwards. In a further blow to the sector, new controls in place affect hospital's ability to prescribe innovative drugs. The few opportunities for growth are being taken by manufactures of generic drugs - which are gaining market share - and some non-prescription medicines. There are moves to boost Portugal's export sector, through initiatives such as Health Cluster Portugal and Pharma Portugal, but a new set of regulations will affect distributors' ability to export innovative drugs. It is not until 2015 that we forecast Portugal's healthcare market will return to growth, while pharmaceuticals will have to wait until 2019 for an upward turn.

Full Report Details at
- http://www.fastmr.com/prod/754640_portugal_pharmaceuticals_healthcare_report_q1.aspx?afid=301

Headline Expenditure Projections

* Pharmaceuticals: EUR3.74bn (US$4.75bn) in 2012 to EUR3.48bn (US$4.62bn) in 2013; -7.0% in local currency and -2.6% in US dollar terms. Forecast broadly unchanged from Q413.
* Healthcare: EUR16.82bn (US$21.36bn) in 2012 to EUR16.23bn (US$21.58bn) in 2013; -3.5% in local currency and +1.0% in US dollar terms. Forecast broadly unchanged from Q413.

Risk/Rewards Rating: In Q114, Portugal sat at the bottom of our Pharmaceutical Risk/Reward Rating (RRR) for Western Europe, with a score of 59 out of 100. Portugal posts below regional average scores for all indicators.

Key Trends & Developments

* In order to reduce parallel exports and shortages of innovative medicines, Infarmed launched a pilot legislation in November 2013 that requires distributors or drugmakers to obtain permission before exporting certain medicines. The pilot is in place until end-December 2013.
* While Portugal's pharma market is contracting overall, the latest data from Infarmed show that sales of non-prescription drugs in mass market outlets are increasing. Sales climbed by 5.5% in value in H113 compared to H112 to EUR16.4mn.
* The 2014 budget for healthcare will be approximately 9.4% lower than in 2012. One of the areas pinpointed for as an opportunity for savings is in drug reimbursement: Infarmed aims to cut EUR30mn from the drugs bill.

BMI Economic View: We estimate that Portugal's economy has continued to struggle during 2013 and into 2014, with real GDP growth of -3% and -0.5% respectively. For the economy to return to growth, Portugal will have to improve its competitiveness in exports; in the meantime, domestic demand continues to fall.

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