Switzerland Pharmaceuticals and Healthcare Report

Switzerland's CHF5.9bn (US$5.4bn) drug market has so far avoided the worst effects of the global financial crisis, growing by around 4% in Swiss francs in 2008, However, the next five years are likely to see markedly slower growth. It is expected that the Swiss drug market will be worth CHF6.6bn in 2013, expanding at a CAGR of 2.4%. In US dollar terms, however, as a result of the weakening euro, drug market expenditure will fall in 2009 and 2010, before rising again to US$5.6bn in 2013. This will affect all the subsequent forecasts in this report.

Switzerland has one of the most expensive healthcare systems in the world, behind the US. BMI calculates Switzerland's health expenditure to have reached a value of CHF55.2bn (US$50.2bn) in 2008, and by 2013 it is expected health expenditure will reach a value of CHF61.9bn (US$52.5bn), equating to a 2.3% CAGR in local currency terms. According to a report released by the Organisation for Economic Co-operation and Development (OECD), healthcare spending in Switzerland accounts for nearly 11.1% of the country's GDP. BMI's figures of 10.9% in 2008 closely matched the report, underlining the strength of our forecast. We calculate that health expenditure as a percentage of GDP will marginally increase to a value of 10.9% by 2013.

In BMI's Business Environment Rankings for Q409, Switzerland has retained its pole position in the Western European matrix. Its score for Q409 stand at a strong 70.6, which is above the regional average of 63.9. Moreover, globally, Switzerland remains one of the top five pharmaceutical markets in which to do business.

The financial crisis has only had a minimal adverse effect on Roche, enabling the firm to continue its strong revenue performance in 2009. In the first half of 2009, Roche registered a 10% growth in sales in local currency to CHF24bn (US$22bn). The Pharmaceuticals Division's sales increased by 11% in local currency terms to CHF19.1bn (US$17.7bn) - twice the global growth rate. The Diagnostics Division also continued to grow well, with sales up 7% in local currency terms to CHF4.9bn (US$4.5bn). The company's revenue was boosted by the sales of influenza drug Tamiflu (oseltamivir), which reported an increase of 203.1% to CHF1.01bn (US$935mn).

Additionally, during the first half of 2009, Novartis's net sales rose by 8% in local currencies, but declined 2% in US dollars to US$20.3bn. Pharmaceuticals delivered strong and sustained growth, with the division's net sales rising by 12% in local currencies (+3% in US dollars) thanks to growth in the sales of Aclasta, Tasigna, Tekturna/Rasilez and Galvus.