2013-02-22 13:52:15 - Fast Market Research recommends "Belarus Pharmaceuticals & Healthcare Report Q1 2013" from Business Monitor International, now available

BMI View: We remain largely pessimistic about Belarus's pharmaceutical market development, at least in the short term. The government remains committed to boosting domestic pharmaceutical output over the coming years, with authorities in manufacturing joint venture (JV) discussions with a number of countries. However, the devalued ruble, high inflation and weak household consumption will continue to constrain both the volume and value of medicines consumed in Belarus. We also note increased political and economic risks, as the country aligns itself away from the European Union.

Headline Expenditure Projections:

* Pharmaceuticals: BYR3,598bn in 2011 (US$692mn) to BYR5,623bn (US$686mn) in 2012; +56.3% in local currency terms and -1.0% in US dollar terms. Forecast upgraded slightly from Q412 on the basis of new macroeconomic

data.
* Healthcare: BYR12,764bn (US$2.46bn) in 2011 to BYR17,621bn (US$2.15bn) in 2012; +38.1% in local currency terms and -12.5% in US dollar terms. Forecast upgraded slightly from Q412 on the basis of new macroeconomic data.
* Medical Devices: BYR2,174bn (US$418mn) in 2011 to BYR3,234bn (US$394mn); +48.8% in local currency terms and -5.7% in US dollar terms. Forecast upgraded slightly from Q412 on the basis of new macroeconomic data.


Full Report Details at
- www.fastmr.com/prod/536407_belarus_pharmaceuticals_healthcare_re ..


Risk/Reward Rating: Belarus's pharmaceutical risk/reward rating (RRR) score has worsened for Q113, largely on account of high levels of inflation and the corresponding weak growth in US dollar terms. The country is still viewed as one of the least attractive pharmaceutical markets in Central and Eastern Europe (CEE), ranking 18th out of 20 countries surveyed regionally. Risks remain elevated, both on political and economic fronts.

Key Trends And Developments:

* According to statements made to local press in early December 2012 by Tatiana Migal, deputy head of the Department of Healthcare at the Ministry of Health, the share of Belarus-made drugs in the domestic pharmaceutical market is expected to reach 50% in value by end-2015, mirroring previous announcements. Developing the domestic medical and pharmaceutical industries is one of Belarus's vital strategic goals, according to Migal, who added that this development will improve the population's access to affordable, good quality medicines.
* In September 2012, citing Belarusian Healthcare Minister Vasily Zharko, BelTA reported that Belarus will not develop insurance-based healthcare within the next two years. Belarus, which has managed to maintain a state healthcare system, could lose this achievement if a new model is implemented without being thoroughly assessed, Zharko added. He said that Belarusians are not prepared for the new system. In the meantime, Zharko announced that a pilot project concerned with the right of the heads of healthcare institutions to manage their allocated funding is scheduled to be rolled out in Minsk and Mogilev Oblast in 2013.
* In the same month, Belarus' Premier Mikhail Myasnikovich visited Bangladesh-based Square Pharmaceuticals to discuss the construction of a pharmaceutical factory in Belarus, according to reports by BelTA. Square Pharmaceuticals agreed to participate in a pharmaceutical plant project. The Bangladeshi company had been invited as an investor and exporter of medications by Myasnikovich.

BMI Economic View: Belarus's consumer price inflation, running at 30.6% year-on-year (y-o-y) in October 2012, faces potential upside risks in 2013 despite our negative inflation forecast. Policy rate cuts in place since Q112 threaten to undo the decline in inflation. An uptick in real household consumption and increase in government spending also threaten to increase inflationary pressure over the next 12 months.

BMI Political View: A renewal of EU sanctions in October 2012, as a result of their alleged failure to protect citizens' human rights, and the desire for energy security, has led President Alexander Lukashenko to shift Belarus's shipping hub from ports on the Baltic Sea to the Leningrad Oblast of Russia. This move marks a determined effort by Belarus to focus its foreign and economic policy toward Russia and away from the West. Since the arrangement will cost Belarus more than its previous set-up, the motivations behind the move are almost wholly political.

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