2013-08-25 09:14:35 - Fast Market Research recommends "Netherlands Pharmaceuticals & Healthcare Report Q4 2013" from Business Monitor International, now available
We maintain our subdued outlook on the Dutch pharmaceutical and healthcare sector for the remainder of 2013 and looking forward into 2014. With further essential structural reform to the public sector on the horizon, leading to excessive budget deficits, we see economic recovery being put on hold. We therefore do not expect the pharmaceutical industry to return to positive growth until 2016 at the earliest. The Dutch on average spend 14% less on medicines than the rest of Western Europe, and uptake of generic medicines, encouraged by patent expiries and insurers' preference policies, will result in continuing negative pressures on volume consumption and prices of medicines.
Headline Expenditure Projections
* Pharmaceuticals: EUR6.88bn (US$8.74bn) in 2012 to EUR6.81bn (US$9.06bn) in 2013; -1.0%
in local currency terms and 3.7% in US dollar terms. Forecast revised upwards due to incorporation of hospitals sales in historic data.
* Healthcare: EUR73.08bn (US$92.81bn) in 2012 to EUR74.15bn (US$98.62bn) in 2013; 1.5% in local currency terms and +6.3% in US dollar terms. Local currency forecast revised upwards from previous quarter.
Full Report Details at
- www.fastmr.com/prod/670582_netherlands_pharmaceuticals_healthcar ..
Risk/Reward Ratings: The Netherlands has been shifted downwards in BMI's Q413 RRRs for the 13 key Western European markets. The Netherlands weighs in at eighth in our ratings, having fallen from seventh in Q313. While at 66 its overall RRR score (slightly below the regional average of 67) has not changed from the previous quarter, the inclusion of Austria in our ratings this quarter means that the Netherlands has been pushed down. While the country offers drugmakers a relatively low-risk operating environment, poor market prospects - due to pressures on pricing and reimbursement and the market's maturity - will continue to weigh down the country's overall standing.
Key Trends And Developments
* Data published by the Central Bureau for Statistics (CBS) in July stated that in 2012, healthcare spending in the Netherlands amounted to EUR92.7bn (US$120.56bn), a 3.7% increase from EUR87.28bn (US $113.51bn) in 2011. This highlights the problem of rising healthcare costs for the government, which currently accounts for around 86% of healthcare expenditure. The government-funded Exceptional Medical Expenses Act (AWBZ) budget can no longer cover the costs of medical care, and its deficit since 2009 has increased annually by more than EUR3bn (US$4bn). As a result, the government is now considering restricting some of the conditions of the AWBZ.
* In May 2013, Health Minister Edith Schippers announced that a simpler, more transparent insurance registration system will be introduced from January 2014. Currently, patients and insurers are unable to understand hospital bills detailing their treatment. This, in combination with the lack of contact between patients and insurers, has led to reports of inflated bills and suspicions of large-scale fraud by hospitals. Under the new system, patients will be sent hospital bill directly, with treatments detailed in plain language.
BMI Economic View: Although a full year of economic contraction is expected for the Dutch economy in 2013, we anticipate a return to positive growth in 2014. We project real GDP year-on-year (y-o-y) growth will hit 1.1%, as household spending and business investment recover from the eurozone turmoil of 2012. However, rising unemployment (7.8% of the labour force in 2013, up from 6.5% in 2012), economic uncertainty, falling property prices (the house price index is now down 20% since the 2008 peak) and weak consumer credit supply, will continue to compound consumer growth into 2014.
BMI Political View: The efforts of the Dutch coalition government to shrink its budget deficit are being undermined by the deepening recession, which is driving up unemployment and hitting tax revenues. Although Prime Minister Mark Rutte's government is unlikely to change course, having long taken the same stance as other fiscal hawks in the eurozone, the Netherlands' reputation for budget discipline is waning, and a slower pace of consolidation is now likely. Further cuts are, however, still needed, which will wither the government's popularity in the polls and pose risks to stability.
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