BMI View: Puerto Rico's ten-year fiscal plan will generate savings through reducing drug costs andcreating efficiencies across the health system, weighing on healthcare and pharmaceutical market growthrates. In fact, we anticipate additional downward pressure on drug spending as the government introducesmeasures such as increasing pharmacy discounts on branded drugs and enforcing the mandatorydispensing of generic drugs. Meanwhile, although structural reforms and internal devaluation willeventually improve the territory's competitiveness, outward migration of skilled workers and beleagueredcapital spending will mitigate gains in Puerto Rico's potential appeal to pharmaceutical investors.
Headline Expenditure Projections
Pharmaceuticals: USD3.83bn in 2016 to USD3.86bn in 2017; +0.9%. Forecast in line with last quarter.
Healthcare: USD8.37bn in 2016 to USD8.71bn in 2017; +4.0%. Forecast in line with last quarter.
The US Congress authorised USD295.5mn in Medicaid funding for Puerto Rico as part of 30 April2017's Continuing Resolution. While only roughly half of the USD600.0mn requested by the territory forFY2018 (which begins 1 July), it will provide severely needed support for Puerto Rico's public healthsystem.