2013-01-31 09:09:03 - New Healthcare market report from Business Monitor International: "Peru Pharmaceuticals & Healthcare Report Q1 2013"
BMI View: We have recently revised downwards our 2012 pharmaceutical sales growth for Peru, due to the recent price cuts in the prescription drug sector, which accounts for over 74% of total pharmaceutical sales. Still, our projected compound annual growth rate (CAGR) between 2011 and 2016 remains largely unchanged as BMI believes Peru still offers considerable longer-term benefits to local and foreign pharmaceutical companies because of the country's ageing population, increasing disease burden and the expected change in drug consumption patterns.
Headline Expenditure Projections
* Pharmaceuticals: PEN3.90bn (US$1.42bn) in 2011 to PEN4.11bn (US$1.57bn) in 2012; +5.3% in local currency terms and +10.4% in US dollar terms. Forecast revised downwards from Q412 due to price cuts in the prescription drug sector.
Healthcare: PEN19.52bn (US$7.09bn) in 2011 to PEN20.73bn (US$7.90bn) in 2012; +6.2% in local currency terms and +11.4% in US dollar terms. US dollar forecast unchanged from Q412.
* Medical devices: PEN897mn (US$326mn) in 2011 to PEN954mn (US$363mn) in 2012; +6.3% in local currency terms and +11.6% in US dollar terms. Forecast slightly lower than Q412 on account of macroeconomic factors.
Full Report Details at
- www.fastmr.com/prod/529443_peru_pharmaceuticals_healthcare_repor ..
Risk/Reward Rating: Peru's composite score for Q113 stands at an unchanged 47.7 out of the maximum 100, which again places the country ninth out of the 17 countries surveyed in our Pharmaceutical Risk/Reward Ratings (RRRs) matrix for the Americas. Peru will continue to be viewed as a moderately promising longer-term pharmaceutical market for multinationals, on account of the below-average industry rewards and risks, although we expect continued improvements in the country's operating climate. Globally, Peru is ranked 54th (up from 55th in the previous quarter) out of the 95 markets surveyed in our pharmaceuticals universe, above Kazakhstan and below Indonesia.
Key Trends And Developments
* According to Peru's pharmaceutical industry association, the Asociacion de Industrias Farmaceuticas Nacionales (Adifan), local drug sales in the first five months of 2012 amounted to PEN 1,126mn (US$418.5mn), which equates to an increase of 4.67% compared to the same period in 2011. Adifan President Jose Enrique Silva said the growth in generic drug volumes (6.00%) was higher than in value terms (4.67%), due to the drug price decreases this year. He said since 2009 there was steady drug price increase in line with the strong Peruvian economygrowth. However, prescription drug sales, experienced growth of 5.24% in value terms and a 6.45% increase in volume terms in the first five months of this year.
* The 'play and attack' rules of Peruvian pharmacists have changed after re-composition and natural consolidation of the country's pharmaceutical sector into three groups. The first, most visible effect of the change in tactics is aggressive competition related to offers, discounts and promotions to attract customers, said Boticas Arcangel's CEO, Gustavo Bravo, in November 2012. The second effect was the rise in partnerships, which became apparent when Interbank acquired Inkafarma in January 2011, and Fasa Mifarma collaborated with Banco Falabella. Major pharmaceutical groups will reportedly continue to rely on promotional tactics, although they will study new movements to expand their operations.
BMI Economic View: While we anticipate headline growth in Peru to slow in the coming years, as China's hard landing feeds through into a more moderate expansion of the mining sector, we continue to expect the country's economy to remain one of the most dynamic in Latin America. Moreover, we see a number of interesting investment opportunities at the sector level.
BMI Political View: We see no end to political risk in Peru over the coming quarters, highlighting in particular that the government will continue to struggle to fight insurgent group Sendero Luminoso in one of the country's most dangerous regions. Moreover, with energy and infrastructure investment on the rise, President Ollanta Humala's ability to provide a stable working environment for firms will be essential to ensuring continued foreign investment in the country.
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