Portugal Pharmaceuticals and Healthcare Report Q3 2009

In BMI's Q309 Pharmaceutical Business Environment Rankings (BER) for nine countries of Western Europe, Portugal - the latest addition to BMI's Industry Survey & Forecasts Series - no longer occupies last place, as in the previous quarter. In fact, operating conditions for pharmaceutical companies in Portugal are now considered more conducive than those of Belgium and Italy, the latter of which is especially contending with strong downward pressures on prices. However, cost-cutting measures and falling consumer confidence will remain one of the main factors influencing future development of the Portuguese pharmaceutical market, especially given that patented drugs account for most of the spending.

In fact, the figures recently revealed by the Association of Pharmaceutical Companies of Portugal (Apifarma) show that - in the first three months of 2009 - medicine sales had declined by 8%, due to the loss of income caused by the credit crisis. Consequently, after over a decade of continuous growth, Portugal's pharmaceutical market (prescription drugs plus over-the-counter (OTC) medicines) is expected to contract in 2009. Sales will fall to EUR3.3bn (US$4.9bn) - an 8.5% drop compared to the 2008 figures of EUR3.6bn (US$5.3bn). The main cause of this downturn is the global financial crisis and the resultant decrease in country's GDP (with a 2.8% contraction forecast by BMI for the current year). The value of the country's pharmaceutical market is forecast to reach EUR4.1bn (US$5.42bn) by 2013, representing a compound annual growth rate (CAGR) of 0.41% in US dollar terms (or a slightly higher 2.4% in local currency).

The demand for generics will continue to grow, with Jordanian Hikma Pharmaceuticals planning to exploit this trend with its recently inaugurated drug plant in Portugal. The output capacity of the plant, specialised in production of sterile injectable products, is likely to reach 1mn packages annually. Generics already account for almost one-fifth of the market in value terms, and are projected to increase to 31.6% by 2013, in part due to their still relatively high prices in relation to originator products.

In the meantime, the government is taking an active stance in relation to public health. To this end, in March 2009, the ruling Socialist party submitted a bill to parliament, calling on the legislators to introduce requirements for a decrease of the salt content in bread. The proposed law also requests the introduction of a fine of up to EUR5,000 (US$6,500) if agreed salt levels are exceeded and asks for the compulsory labelling of products with a high salt content. High blood pressure and high death rates, caused by cerebrovascular diseases such as strokes, are being attributed to the Portuguese diet, which is high in salt. Consequently, medicines for the treatment of such conditions will continue to lead the prescription segment.