Thailand Pharmaceuticals and Healthcare Report

For the Q4 2009 update of BMI's Thailand Pharmaceuticals & Healthcare Report, we have extended our forecasts for prescription pharmaceuticals, patented products, generic drugs and over-the-counter (OTC) medicines through to 2018. The South East Asian country's US$3.52bn pharmaceutical market is projected to post a compound annual growth rate (CAGR) of 8.20% in local currency terms. Due to the strengthening of the baht over the next 10 years, the market will post a CAGR of 10.37% in US dollar terms. However, we must caution that there are significant risks to this optimistic forecast, primarily political instability.

In BMI's Pharmaceutical Environment Ratings table for Q409, Thailand has improved by one position, from 10th to 9th, out of the 15 key markets surveyed in the Asia Pacific region. Thailand's growing and ageing population represents a substantial commercial opportunity for drugmakers, although its controversial compulsory licensing scheme is deterring foreign investment.

Thailand's reputation for over-medicating has been highlighted once again. During the swine flu outbreak in July 2009, it was announced that the country would import second-line antivirals, such as zanamivir, amantadine and rimantadine. These would be in addition to oseltamivir, which was increasingly associated with resistance to the H1N1 virus in other parts of the world. In the World Health Organization (WHO)'s study on oseltamivir resistance during the 2007-2008 flu season, Thailand was named as one of the countries with a high antiviral drug resistance rate.

BMI's Burden of Disease Database (BoDD) reveals that Thailand will become unhealthier over the next 20 years. The number of disability-adjusted life years (DALYs) lost to non-communicable disease will increase from 6,518,798 in 2008 to 8,438,723 in 2030, a rise of 29%. Meanwhile, the number of DALYs lost to communicable disease will increase from 3,526,188 in 2008 to 5,303,347, a rise of 50%. The main driver of these increases is a growing and ageing population.

Thailand's GDP is expected to contract by -4.5% in real terms during 2009, from THB9,103bn (US$267bn) to THB8,813bn (US$253bn). This means that both state and patients will have less money to spend on healthcare. Partial economic recovery is forecast for 2009/2010, with full growth returning the following year. Pharmaceutical sales will rebound slightly in 2010, but then slowly decrease over our 10- year forecast period. It must be noted however that Thailand's projected growth is still one of the highest in our 71-market coverage universe, and above the average for Asia Pacific. By 2018, the value of annual pharmaceutical sales in Thailand will have reached just under US$10bn.