2014-01-26 16:35:22 - Recently published research from Business Monitor International, "United Kingdom Pharmaceuticals & Healthcare Report Q1 2014", is now available at Fast Market Research
The UK government's implementation of an almost 4% price cut on medicines in 2014, under a five-year agreement to slow inflation in the GBP11bn (US$15bn) annual National Health Service (NHS) medicines budget, will work against the country's business environment. The continuation of the Pharmaceutical Price Regulation Scheme (PPRS), which should have been replaced by the value-based pricing (VBP) at the start of 2014, highlights the government's view that medicines are a cost that need to, and will be, managed - despite the negative implications this is already having on the country's investment attractiveness. Additionally, the details of the new pricing scheme remain unknown to industry, further increasing the uncertainty.
Full Report Details at
- www.fastmr.com/prod/760695_united_kingdom_pharmaceuticals_health ..
Headline Expenditure Projections
Pharmaceuticals: GBP23.30bn (US$37.15bn) in
2012 to GBP22.93bn (US$34.86bn) in 2013; -1.6% in local currency terms and -6.2% in US dollar terms. Forecasts broadly unchanged in relation to the previous quarter.
Healthcare: GBP144.42bn (US$230.24bn) in 2012 to GBP147.45bn (US$224.12bn) in 2013; +2.1% in local currency terms and -2.7% in US dollar terms. Forecasts unchanged in relation to the previous quarter.
Risk/Reward Rating: The UK has lost its pole position in our latest Pharmaceutical Risk/Reward Rating (RRR) matrix, now ranking only fifth out of the 14 markets profiled in the Western Europe region. While its developed healthcare system and the predicable operating environment support its attractiveness from the point of view of research-based manufacturers, the downward pressure on prices and a general climate of cost-containment in relation to pharmaceutical spending will continue to weigh down on its longer-term market opportunities. Nevertheless, we are still broadly optimistic that the UK's pharmaceutical market will remain one of the most attractive globally.
Key Trends And Developments
* In October 2013, UK Prime Minister David Cameron unveiled plans to offer extended general practitioner (GP) opening hours across England, making it easier for people to see their family doctors. The decision comes on the back of an National Health Service (NHS) survey, which revealed that almost one in five patients were concerned by inconvenient appointment times. Pilot projects are to be carried out in nine areas in England, covering up to half a million patients, with the first wave to be open during 2014/15. The project will incorporate communication technology with a view to modernise healthcare delivery and thus reduce pressure on stretched accident and emergency departments.
* We have long held the view that private healthcare spending will increase in importance in the UK. According to the figures obtained recently under the Freedom of Information Act, income received by NHS hospitals from private patients rose by 12% year-on-year (y-o-y), or GBP47mn (US$75mn) in 2012/13 (ending March). Hospitals have predicted that private patient income will grow by 10% in the 2013/14 financial year. BMI notes that the rise in private healthcare spending follows the controversial decision to allow hospitals to earn up to 49% of their income from treating private patients as part of the health and social care act of 2012, with the figures previously standing at only 2%.
BMI Economic View: The UK economy expanded during the third quarter of 2013, in line with the consensus forecast and marking the fastest pace of growth in three years. Though certainly a robust reading that extends the recovery gap between the UK and the eurozone, the economy is still far from firing on all cylinders and is instead gradually shifting through the gears. The slew of surprisingly strong economic data in recent months - particularly the confidence survey and purchasing managers' index data - suggests that the economy is expanding at a faster clip than the GDP data suggest.
BMI Political View: The UK party conference season is a chance for the main parties to start spelling out the policies that will determine campaign strategies ahead of the 2015 general election. The ruling Conservative Party have stuck with a pragmatic approach by focusing attention on the recovery and stability of the public finances. The opposition Labour party appear to be going down a more populist route by tackling the so-called 'cost of living crisis'. Although the latter will go down well with cash-strapped voters, we still hold our out-of-consensus call that the Tories will pick up the most seats in the 2015 general election.
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