2014-03-25 21:48:27 - New Healthcare research report from Business Monitor International is now available from Fast Market Research
Belgium continues along the path of recovery. It is a European hub for clinical trials, new drug development and niche research, which attracts the attention of multinational firms. Even though per capita spending on pharmaceuticals is relatively high, it is subjected to continual downward pressure - creating opportunities for growth for manufacturers of generic drugs. In other words, economic agendas mean that the government will have little choice but to promote the use of generic drugs via methods other than patient information campaigns that have been launched in the past, if it is to comply with the fiscal deficit target imposed by the EU. Thus, there is not only room for the increased uptake of generic drugs following patent expiry
but it will also become swifter. This trend will reduce costs for governments, out-of-pocket payers and insurance companies, which is increasingly important as developed states reform their healthcare systems over the medium term. Key obstacles include prescribers' brand loyalty, pay-to-delay deals, the near-universal unpopularity of commodity generics and a lack of perfect competition in the pharmaceutical sector.
Full Report Details at
- www.fastmr.com/prod/782475_belgium_pharmaceuticals_healthcare_re ..
Headline Expenditure Projections
* Pharmaceuticals: EUR5.79bn (US$7.64bn) in 2013 to EUR5.68bn (US$7.21bn) in 2014; -1.9% in local currency terms and -5.6% in US dollar terms. Local currency forecast slightly lower than in Q114.
* Healthcare: EUR40.89bn (US$53.98bn) in 2013 to EUR41.66bn (US$52.91bn) in 2014; +1.9% in local currency terms and -2.0% in US dollar terms. Local currency forecast higher than in Q114.
Risk/Reward Rating: In our Q214 Pharmaceutical Risk/Reward Ratings Belgium continues to rank eighth out of the thirteen markets surveyed in the Western European region. It posted above or average scores in all indicators, with the exception of Country Risks.
Key Trends And Developments
In December 2013, The European Commission (EC) started a detailed investigation into Belgium's system of tax relief for companies related to research and development (R&D), and whether it is in accordance with EU state aid rules, according to Reuters. Back in 2006 the EC approved a scheme allowing Belgium to exempt new firms from paying payroll tax on the salaries of scientific staff. The country had pledged to define the categories of research eligible for tax relief, but had failed to do so until 2013, according to the Commission. The EU Commission deems the tax relief granted to certain companies for seven years to be an unfair advantage.
In February 2014, Biogen Idec and UCB signed exclusive agreements granting UCB the right to commercialise Biogen Idec products in South Korea, Hong Kong, Thailand, Singapore, Malaysia and Taiwan, and both develop and commercialise products in China. As part of the relationship, Biogen Idec will supply UCB with its portfolio of multiple sclerosis therapies and investigational candidates.
The elections for the European Parliament (EP), due to be held in May 2014, may add to the potential of domestic political turbulence. They will also provide a useful barometer of public support or antipathy for the EP and the European Union (EU) as a whole. Moreover, the election result will prove crucial in determining the policy direction and zeal for deeper EU integration over the course of 2014-2019.
BMI Economic View: The Belgian economy has enjoyed a relatively stronger economic recovery than other eurozone Member States. However, the high degree of financial and trade integration with the eurozone mean that the economy is highly exposed to a regional downturn and escalation in the eurozone sovereign debt crisis. The national debt remains near 100% of GDP, leaving Belgium vulnerable to a deterioration in investor risk sentiment should the economy slip back into recession. Our outlook for Belgium's growth trajectory has not materially changed since last quarter, although we have made an adjustment to our 2015 forecast. Provided that the eurozone can avoid a repeat of 2012s financial market turmoil, we expect Belgian growth to pick up further to 1.2% in 2014. As for 2015 we have revised down our 2015 growth forecast to 1.6% from 1.9% previously in light of the growing pool of unemployed that will weigh on consumer spending, and still sluggish growth in the broader eurozone. Nonetheless, we warn that if the ECB fails to correct passive monetary tightening, the recovery will remain at risk.
BMI Political View: Despite the current government being in power for just a year (following 541 days of negotiation to form the six party coalition), Belgians will go to the polls again in May for the next federal election. Although we do not expect to see a repeat of the 2010-2011 government formation debacle, there is nonetheless scope for protracted talks which will hit policymaking in the short term and will pose a risk to investor sentiment. It is the fragmented nature of Belgian politics and the robust strength of the separatist New Flemish Alliance that will likely ensure drawn out negotiations over government formation.
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