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Ukraine Pharmaceuticals and Healthcare Report Q3 2008Published by: Business Monitor International Published: Aug. 18, 2008 - 61 Pages Table of Contents
AbstractBased on BMI’s upgraded forecasting methodology, we have substantially upgraded our five-year forecast for the total Ukrainian pharmaceutical market, with an average 2008 to 2012 US dollar growth rate of 14.4% and local currency rate of 12.9%. We are anticipating 21.8% market growth for 2008 in US dollar terms, albeit against a background of high inflation, which peaked at a worrying 30.2% in April 2008 before aggressive action by the National Bank of Ukraine (NBU). Our forecast comes with some major disclaimers. First and foremost is the omnipresent threat of Ukraine’s economic and political imbalances finally triggering a major crisis and the subsequent impact on the currency.Just how far Ukraine is from either the brink of disaster or a major positive breakthrough is a matter of deep contention. On the plus side, Ukraine formally entered the World Trade Organisation (WTO) in mid-May 2008, after a surprisingly efficient drive by the president, prime minister and Rada (parliament) to push through enabling legislation. Despite surging inflation, the economy is expected to grow by a still robust 6.0%. Optimists hope NBU moves have lowered the odds of the economy overheating. Finally, those arguing the positive case point to consensus on the need for massive healthcare reform and the introduction of a national reimbursed medicines programme. Beyond the urgent need for state spending in these areas, the key for any candidate seeking to unite the country during the campaign ahead of the 2010 presidential polls will be reform and wide-scale expansion of social spending. The pessimists’ case foresees either deadlock or yet another round of out-cycle parliamentary polls as the president and prime minister, one-time Orange coalition partners, are unable to find common ground on policy and attack each other publicly, while the opposition Party of Regions promises further backsliding or reversal on liberal reforms. The result will be a continuance of political stalemate and widespread corruption and inability to prevent the onset of a major financial crisis. In the pharmaceutical sector, one recent example was the apparently secret transfer of state-owned shares from insulin-maker Indar - one of the country’s most successful multinational companies - scuppering further investment by Polish suitor Bioton. Another company, Biostimulator in Odesa reportedly illegally took over offices belonging to the medicines regulator itself. If true, it is a depressing example of impunity and chaos. Moreover, in April 2008, the Open Institute of Public Health published a report underlining corruption and a lack of transparency in the medicines market. So, despite massive market growth potential, Ukraine lingers near the bottom of BMI’s Business Environment Rankings this quarter, tied with another developing but deeply flawed and corrupt marketplace, Kazakhstan. Still, for those multinationals willing to risk the market, the rewards are substantial. Players such as Berlin-Chemie, Sanofi-Aventis, Sandoz, GlaxoSmithKline, KRKA and Servier all experienced double-digit growth. Locals are generally lagging market growth, with Farmak and Arterium among the few major local players to deliver growth at or above the market growth in 2007. Get Full Details About This Report >> |
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