Latvia Pharmaceuticals and Healthcare Industry Update Quarter 4 2011

• Publication date: August 2012
• Report size: 86 pages

BMI View: Latvia's disease profile and relatively low per-capita consumption of pharmaceuticals (compared with the rest of developed Europe) is a clear illustration of the need for innovative medicines. However, the performance of the pharmaceutical industry remains indelibly tied to the country's macroeconomic environment. Having endured a three-year depression, the economy is finally set to return to positive growth in 2011. However, the road b...

BMI View: Latvia's disease profile and relatively low per-capita consumption of pharmaceuticals (compared with the rest of developed Europe) is a clear illustration of the need for innovative medicines. However, the performance of the pharmaceutical industry remains indelibly tied to the country's macroeconomic environment. Having endured a three-year depression, the economy is finally set to return to positive growth in 2011. However, the road back to prosperity will be long, with private consumption still lagging behind the country's broader economic recovery, threatening the return of the predominantly out-of-pocket driven pharmaceutical industry .



Headline Expenditure Projections
- Pharmaceuticals: LVL267mn (US Dollar 500mn) in 2010 to LVL277mn (US Dollar 561mn) in 2011; +4.1% in local currency terms and +12.2% in US dollar terms.
- Healthcare: LVL915mn (US Dollar 1.72bn) in 2010 to LVL936mn (US Dollar 1.89bn) in 2011; +2.3% in local currency terms and +10.3% in US dollar terms.
- Medical devices: LVL54mn (US Dollar 102mn) in 2010 to LVL56mn (US Dollar 113mn) in 2011; +2.5% in local currency terms and +10.5% in US dollar terms.
Business Environment Rating: Of the 20 industry s analysed by BMI in the Emerging Europe region, Latvia has fallen by two places in Q411 to 12th place, down from 10th place in Q311, with an overall score of 51.9.We do not envisage Latvia challenging any of the top five Emerging Europe industries, given the limitations of its population size, among other factors.

Key Trends & Developments
- In February 2011, the Latvian Ministry of Health and the country’s Health Economics Centre launched an information campaign to raise awareness the affordability and effectiveness of genetic medicines.
- As stated by the Latvian State Agency of Medicines (SAM), a reduced VAT rate was applied to medical devices for individual use as of June 2011. These include single-use medical devices that are disposed of after use (such as syringes, gloves, catheters), custom-made medical devices (such as spectacles, prosthetics) and self-care medical devices (such as wheelchairs, functional beds, glucose monitors, respiratory monitors).
BMI Economic View: The Latvian economy is firing back up. Although deleveraging and fiscal consolidation are major headwinds, the export segment is booming and financial stability has improved significantly. Success in overhauling public finances has not only secured the admiration of other indebted states, but has also resulted in Fitch upgrading Latvia's sovereign debt to investment grade from junk. We believe the progress made in economic and fiscal reform will pave the way for eurozone accession by 2014.
BMI Political View: Latvia's economic fortunes have undergone a marked turnaround following its emergence from a three-year depression, with the government proving particularly adept in fiscal reform. However, with the consolidation programme on track, focus will shift towards two major challenges during this parliamentary term: reducing double-digit unemployment and securing membership to the eurozone.

Drug And Medication Industry in Latvia

Executive Summary 5
Industry SWOT Analysis 7
Latvia Pharmaceuticals And Healthcare Industry Environment and Risk Analysis . 7
Latvia Political Environment and Risk Analysis .. 8
Latvia Economic Environment and Risk Analysis 9
Latvia Business Environment SWOT ... 10
Pharmaceutical Business Environment Ratings 11
Data : Emerging Europe – Regional Pharmaceuticals Business Environment Ratings, Q411 ... 11
Rewards .. 12
Risks ... 12
Latvia – Industry Summary .. 14
Regulatory Regime 15
Regional Collaboration .. 15
Corruption .. 16
Intellectual Property Developments 17
Pricing Regime ... 18
Pricing Changes . 18
Reimbursement Regime ... 20
Data : Latvia - Number of Pharmaceutical Products**
* 21

Industry Developments . 22
Epidemiology .. 22
Communicable Disease ... 23
Healthcare Segment ... 24
Healthcare Provision .. 25
Biotechnology . 26
Clinical Trials . 28
Medical Devices.. 28

Market Projection Scenario ... 30
Overall Industry Projection . 30
Data : Pharmaceutical Sales, Historical Data and Projections . 31
Key Growth Factors – Market ... 32
Data : Latvia Healthcare Expenditure, Historical Data and Projections ... 33
Key Growth Factors – Macroeconomic .. 35
Data : Latvia – Economic Activity .. 38
Prescription Industry Projection . 39
Data : Prescription Drug Sales, Historical Data and Projections . 40
Data : Latvia - Medicines Consumption by ATC Groups (LVLmn)
* 41
Patented Drug Industry Projection . 42
Data : Patented Drug Sales, Historical Data and Projections ... 43
Generic Drug Industry Projection ... 44
Data : Generic Drug Sales, Historical Data and Projections ... 45
OTC Medicine Industry Projection . 46
Data : Over-The-Counter (OTC) Medicine Sales, Historical Data and Projections .. 47
Medical Device Industry Projection 48
Data : Medical Device Sales, Historical Data and Projections .. 49
Pharmaceutical Trade Projection . 50
Data : Exports, Imports and Balance . 52
Other Healthcare Data Projections ... 53
Key Risks To BMI’s Projection Scenario ... 54

Competition Overview 55
Pharmaceutical Market . 55
Data : Medicines Consumption According to Industry ing Authorisation Holders (turnover in LVL) in 2009 ... 56
Recent Pharmaceutical Firms Developments 57
Pharmaceutical Wholesale . 59
Data : Latvia - Wholesale Mark-Up Scheme for Reimbursable Pharmaceuticals, 2008 .. 60
Pharmaceutical Retail 60
Data : Latvia - Pharmacy Mark-Up scheme for Reimbursable Pharmaceuticals, 2008 .. 60
Data : Latvia Pharmacies And Pharmacy Industry Ratios, from 2004 to 2009 . 62
Company Monitor .. 63
Indigenous Firms Profiles .. 63
Grindeks (includes Tallinn Pharmaceutical Plant) . 63
Olainfarm ... 67
Multinational Firms Profiles .. 70
Pfizer .. 70
GlaxoSmithKline . 72
Sanofi-Aventis . 74
Novartis .. 76
Merck & Co 78
Country Snapshot: Latvia Demographic Data. 80

Section I : Population .. 80
Data : Demographic Indicators, 2005-2030 ... 80
Data : Rural/Urban Breakdown, 2005-2030 .. 81

Section II : Education And Healthcare . 81
Data : Education, from 2002 to 2005 . 81
Data : Vital Statistics, 2005-2030 ... 81

Section III : Labour Industry And Spending Power . 82
Data : Employment Indicators, from 2001 to 2006 . 82
Data : Consumer Expenditure, from 2000 to 2012 (US$) ... 83
Data : Average Annual Wages, from 2000 to 2012 . 83
Pharmaceutical And Healthcare Glossary ... 84
BMI Methodology .. 86
How We Generate Our Pharmaceutical Market Projections ... 86
Risk/Reward Ratings Methodology . 87
Ratings Overview 87
Data : Pharmaceutical Business Environment Indicators .. 88
Weighting 89
Data : Weighting Of Components ... 89

Drug and Medication in Latvia

Latvia Patented Drug Sales, Us$bn

• $ 250
• Industry data
• January 2013

Yearly, From 2004 To 2021
By Business Monitor International
Source: ZVA, BMI

• Industries : Drug and Medication
• Countries : Latvia

Latvia Patented Drug Sales, Us$bn, % Chg Y-o-y

• $ 250
• Industry data
• January 2013

Yearly, From 2005 To 2021
By Business Monitor International
Source: ZVA, BMI

• Industries : Drug and Medication
• Countries : Latvia

Latvia Patented Drug Sales, Us$bn, 5 Year Trailing Cagr, %

• $ 250
• Industry data
• January 2013

Yearly, From January 01, 2012 To January 01, 2012
By Business Monitor International
Source: ZVA, BMI

• Industries : Drug and Medication
• Countries : Latvia

Latvia Patented Drug Sales, Us$bn, 10 Year Forward Cagr, %

• $ 250
• Industry data
• January 2013

Yearly, From January 01, 2012 To January 01, 2012
By Business Monitor International
Source: ZVA, BMI

• Industries : Drug and Medication
• Countries : Latvia

Latvia Patented Drug Sales, Eurbn, % Chg Y-o-y

• $ 250
• Industry data
• January 2013

Yearly, From 2005 To 2021
By Business Monitor International
Source: ZVA, BMI

• Industries : Drug and Medication
• Countries : Latvia