New Study: Puerto Rico Pharmaceuticals & Healthcare Report Q2 2016

Despite short-term headwinds due to fiscal tightening, Puerto Rico's pharmaceutical market is expected to observe modest positive growth over the next five years. This slightly improved outlook already represents a recovery trend against the negative market growth patterns observed in recent years. Over the next few years, Puerto Rico's increase in funding through the Medicaid programme and key changes to the healthcare policy will act as main drivers of pharmaceutical growth. That said, we expect the effects of healthcare coverage expansion on market growth to be partially counterbalanced by continuing cost control measures and an increasing use of generic drugs.

Full Report Details at
- http://www.fastmr.com/prod/1152873_puerto_rico_pharmaceuticals.aspx?afid=301

Headline Expenditure Projections

Pharmaceuticals: USD3.81bn in 2015 to USD3.84bn in 2016; +0.7%. Forecast revised upwards from last quarter.
Healthcare: USD8.07bn in 2015 to USD8.38bn in 2016; +3.9%. Forecast broadly in line with last quarter.

Risk/Reward Index

In Q216, Puerto Rico's Risk/Reward Index score remains unchanged from last quarter at 63.8 out of 100. Puerto Rico continues to stand as the third most attractive market to pharmaceutical investors in the Americas region, behind the US and Canada. Puerto Rico's score is driven by high spending per capita on medicine and high patent respect and business environment indices, but dragged down by a small market size and low sector value growth.

Latest Updates

February 2016

The Obama administration proposed the US Congress USD30bn in additional Medicaid funding for Puerto Rico over the next decade.

The US Department of Health and Human Services (HHS) pushed Congress to strengthen Puerto Rico's federal Medicaid funding as called for in President Barack Obama's 2017 fiscal year budget proposal.

The HHS called for the annual cap on Medicaid funding be lifted for Puerto Rico and other US territories, suggesting the matching rate (federal share for the program) to be gradually increased from 55% to 83% and the expansion of eligibility for the entitlement program to 100% (from its current level at around 50%) of the federal poverty level.

The Zika virus outbreak in the Americas is expected to slow down the ongoing growth in tourism arrivals in the Caribbean region, including Puerto Rico, despite the recent call by the Obama administration for an extra USD250mn to tackle a potential virus outbreak in the island.

BMI Economic View

Puerto Rico will see its real GNP post positive growth in 2016 after contracting for nine of the past 10 years. Nonetheless, growth will remain tepid as fiscal tightening weighs on government consumption and keeps many investors on the sidelines.

BMI Political View

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