Paul Thomen

Sunday, 28 October 2012

Estonia Pharmaceuticals and Healthcare Report Q4 2012

BMI View: We continue to view Estonia as a low-potential market, largely on account of its small – and gradually declining – population. Short-term development of its pharmaceutical market will be shaped by the factors including prevailing economic conditions, patent expirations and government encouragement of the consumption of cheaper generic medicine. We expect imports to remain of crucial importance to market supply, with Estonia lacking a major domestic drug producer and with local research and development (R&D) conducted on a small scale.

Headline Expenditure Projections

Pharmaceuticals: EUR240mn (US$334mn) in 2011 to EUR253mn (US$322mn) in 2012;
+5.6% in local currency terms and -3.5% in US dollar terms. US forecast unchanged from

Healthcare: EUR909mn (US$1.26bn) in 2011 to EUR945mn (US$1.20bn) in 2012; +3.9% in
local currency terms and -5.1% in US dollar terms. Forecast slightly down from Q312 on
account of tightening fiscal conditions.
Medical devices: EUR97mn (US$134mn) in 2011 to EUR101mn (US$128mn) in 2012; +4.2%
in local currency terms and -4.8% in US dollar terms. Forecast slightly down from Q312 due
to worsening macroeconomic conditions and reassessment of historical data.
Risk/Reward Ratings: In our Pharmaceutical Risk/Reward Ratings (RRRs) for Q412 – out of the 20 key markets in Central and Eastern Europe (CEE) – Estonia remains in 12th place, to which it fell from ninth in the previous quarter. Its composite score continued to fall, and now stands at 51.2 out of the maximum 100, on a par with the regional average. With a score of just 30 for the quarter, Estonia’s industry rewards remain considered the weakest part of its pharmaceutical profile.

Key Trends And Developments

The renovation of Haapsalu Neurological Rehabilitation Centre, a key rehabilitation centre in
Estonia, started in May 2012, with a significant amount of support from the European Regional

Development Fund. The EUR4mn (US$5.2mn) project, which is expected to be completed by
2014, includes the construction of an extra floor for the building to allow a research centre for
neurological research studies.
BMI Economic View: Estonia’s economic growth will slow in real GDP terms, from 7.6% in 2011.
While the country’s economic growth rate ill, nevertheless, remain the strongest figure in the eurozone, the economy is not immune from the weakened external demand in the bloc, which we expect to contract Estonia Pharmaceuticals & Healthcare Report Q4 2012
© Business Monitor International Ltd Page 6 this year. A high degree of uncertainty over the future of eurozone economic growth will feed through to lower private consumption and investment growth, both of which have been integral drivers of economic recovery in the Baltic country. Lower revenues will preclude major investment in healthcare facilities.
BMI Political View: We forecast Estonia’s fiscal position to turn to a deficit of 2.4% of GDP in
2012 following a surplus of 1.0% in 2011, on the back of higher spending obligations influenced by a number of factors. Moreover, public debt will rise in the coming years in line with increased eurozone bailout obligations, but will still remain well below the eurozone average as a share of GDP.

Report Details:
Published: Oct 2012
No. of pages:77
Price: Single User License: US $1175           

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