2013-02-28 12:32:17 - Recently published research from Business Monitor International, "Zimbabwe Pharmaceuticals & Healthcare Report Q1 2013", is now available at Fast Market Research
BMI View: The introduction of the pneumococcal conjugate vaccine in Zimbabwe, through a partnership between multiple foreign organisations, has been well received by mothers with young children in Zimbabwe. However, BMI maintains that the market is very unattractive to healthcare sector investors and drugmakers, due to the government's unfulfilled commitments to drive the local pharmaceutical and healthcare industries. This is evidenced by the recent partnership with non-commercial entities. As such, the local pharmaceutical sector is likely to remain neglected and underdeveloped, in turn deterring foreign investment by multinational companies. The country's unstable political situation and poor economic environment contribute to the unattractiveness of the market.
Headline Expenditure Projections
* Pharmaceuticals: US$160mn in 2011 to US$181mn in 2012; +13.3% in local currency
and US dollar terms. Forecast largely in line with Q412.
* Healthcare US$824mn] in 2011 to US$919mn in 2012; 11.5% in US dollar terms. Forecast unchanged from Q412.
* Medical devices: US$44mn in 2011 to US$49mn in 2012; +12.1% in US dollar terms. Forecast unchanged from Q412.
Full Report Details at
- www.fastmr.com/prod/541306_zimbabwe_pharmaceuticals_healthcare_r ..
Risk/Reward Rating: In BMI's Pharmaceutical Risk/Rewards Ratings (RRRs) table for Q113, Zimbabwe's score is an unchanged 30.1, which again ranks the country 28th of the 30 markets surveyed in the Middle East and Africa (MEA). Zimbabwe will remain one of the least attractive pharmaceutical and healthcare markets regionally and globally (currently ranking 92nd out of 95 countries surveyed) on account of the elevated political, economic and social risks, as well as the lack of finances for adequate healthcare provision and capacity utilisation.
Key Trends And Developments
* In September 2012, New Ziana reported that many Indian companies are looking to invest in Zimbabwe's pharmaceutical industry. Owen Mugurungi, the director of the AIDS and tuberculosis unit at the Ministry of Health, Children and Welfare was quoted as saying that several investors are willing to collaborate with the government to set up plants to produce generic antiretroviral (ARV) drugs. However, we caution that wider operating conditions may put a stop to such activities.
* Zimbabwean private hospitals have raised their fees by 20%, which is expected to result in an increase in premiums paid by patients to medical aid societies. The hospitals increased their fees following a resolution by the Private Hospitals Association of Zimbabwe (PHAZ) in August 2012, according to statements made by PHAZ vice chair Margaret Maulana to News Day. However, several companies and their employees will not be able to meet the increase in private hospital fees, as the industry is already struggling, an executive from one of the medical aid societies said. We expect this to exacerbate the already significant problems in the country's healthcare system.
* Similarly, local press has reported that some Zimbabweans are seeking specialist treatment in India, on account of lower prices of medical treatments there. In Zimbabwe, shortages of equipment and qualified staff have combined to increase the prices of most specialist treatments beyond the reach of all but the wealthiest few. For example, a heart surgery is reported to cost as much as US$200,000 (which is more expensive than in South Africa), compared to between US$3,000 and US$10,000 in India. According to embassy officials, each month, around five to six patients from Zimbabwe apply for medical visas to travel to India. Additionally, some medical aid societies have starting referring patients to India as this would save them money.
BMI Economic View: In July 2012, Zimbabwe's finance ministry downgraded its real GDP growth forecast for 2012 to 5.6% from 9.4% previously on account of poor harvests, lack of donor funding and policy inconsistencies. We made a downgrade to our growth forecast in April 2012, to 7.8%, from 9.0% originally, on account of a poor maize crop. However, we will hold off from making further downgrades until more data to support such a move becomes available. We have also revised downwards our expectations for Zimbabwean inflation due to a depreciating South African rand and ongoing weakness in domestic demand. The risks to this view, however, remain weighted to the upside.
BMI Political View: Zimbabwe has moved a step closer to legislative and presidential elections after the finalised version of a draft constitution was released by a constitutional drafting committee. The threat of violence and a refusal by security chiefs to accept anything but a ZANU-PF victory at a vote, regardless of when it takes place, also remains. A potentially explosive Second All Stakeholders conference kicked off in Harare on October 22 2012, more than two weeks after its original scheduled date. The two day event, attended by over 1,000 delegates made up of a roughly equal mix of politicians and civil society members, gave attendees the opportunity to review and suggest amendments to the draft constitution drawn up the Constitution Select Committee (Copac) in July 2012.
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