Abstract
In Q309, BMI expects Bahrain’s total drug market value to increase from
US$115mn, in 2008, to
US$118mn by 2013, with a compound annual growth rate
(CAGR) of only 0.52% in US dollar terms.
The proportion of GDP dedicated
to pharmaceutical spending will reach 0.60% by the end of our forecast
period. Per capita drug expenditure will be US$116.
The prescription drug
market will rise from US$102mn in 2008 to US$106mn by 2013. Note that the
Bahrain government is moving slowly toward a more pro-generic drug policy in
light of rising
prescription prices. The country imports most of its
pharmaceuticals from France, the UK, Germany,
Switzerland and the US. We
believe it is highly likely that the foreign-derived medicines are patented as
a
result, mirroring the UAE – a lack of a proper or thorough
regulatory process within Bahrain necessitates
FDA- or EMEA-produced drugs
as a quality control. This also leads to an unintentional preference for
more expensive patented products.
Drug exports are unlikely to increase
dramatically in the medium term. The small manufacturing sector is
unlikely to be producing a diverse patented portfolio and therefore potential
for expansion is limited
without government or private investment. During
Q309 it has become more apparent that the
government is trying to shift
perceptions that the Bahraini population can afford more expensive drugs.
We believe that the government is likely to enter more serious discussions on
generic substitution and
therefore this market will be ideal for
off-patent drugmakers looking for a new export destination. Good
trade
relations with developed countries also place Bahrain in a favourable position
for negotiation, and a
change in import composition regarding the
patent/generic ratios may invite competitive pricing in the
patented drug
sector by default. Our forecast indicates that generic medicines will reach a
value of
US$8mn by 2013, comprising 6.6% of the total drug market and only
7.5% of the total prescription
market.
The over-the-counter (OTC) drug
market is expected to undergo a modest decline during our forecast
period,
with compound annual growth only -1.31% through to 2013. The Bahraini
population are slow to
adopt a self-medicating approach, and with a slow
rise in generic spending expected, we believe that
patients prefer to see
a doctor and get cheaper prescribed drugs than explore OTCs. We maintain our
view
that the consumer health segment is underexploited. Despite the small
market size, there is huge potential
for the OTC to experience positive
growth. Clear retail policies and increasing the choice of OTCs may
provide an avenue for increased sales.
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