New Market Research Report: Venezuela Pharmaceuticals & Healthcare Report Q3 2016

Multinational pharmaceutical companies will increasingly experience the negative currency impact of Venezuela's recent reforms which will allow for much more rapid currency depreciation for the Simadi rate. It is our long-standing view that currency devaluations, price controls, import and foreign currency controls and hyper inflation, as well as other structurally distorting policies in Venezuela, will continue to plague the country's pharmaceutical market in 2016.

Headline Expenditure Projections

Pharmaceuticals: VEB88.7bn (USD3.0bn) in 2015 to VEB259.6bn (USD950mn) in 2016; +192.6% in local currency terms and -68.6% in US dollar terms. Forecast has been maintained with Q216 in local currency terms .

Healthcare: VEB297.3bn (USD10.2bn) in 2015 to VEB838.7bn (USD12.9bn) in 2016; +182% in local currency terms and +27.0% in US dollar terms. Forecast has been revised up ward from Q 216 due to newly released historical data .

Full Report Details at
- http://www.fastmr.com/prod/1191683_venezuela_pharmaceuticals.aspx?afid=301

Risk/Reward Index

Venezuela has increased from 10th to 14th place in BMI's Risk/Reward Index matrix for Q316 in the Americas, which ranks pharmaceutical markets according to their attractiveness to multinational drugmakers. Venezuela's pharmaceutical market is expected to grow at double-digit rates through to 2025 in local currency terms, though largely due to hyper inflation. The country's poor business environment will keep investment and productive capacity subdued in the short term. The intellectual property environment is also a major cause for concern as the country has not granted a pharmaceutical patent since 2003.

Latest Updates

In May 2016, Aspen expressed its willingness to supply drugs to Venezuela during the visit of South African Vice President, Aristobulo Isturiz.

In May 2016, Indian officials proposed an oil-for-medicines barter plan with Venezuela to recoup millions of dollars in payments owed to some of India's largest pharmaceutical companies, such as Dr Reddy's and Glenmark Pharmaceuticals.

In May 2016, Venezuela was reported to have invested a total of USD250mn over the past 13 years for Cuban doctors.

In March 2016, the government provided USD69mn to purchase anti-cancer drugs (USD50mn) and vaccines (USD19mn) to address the drug shortage issue.

BMI Economic View

The long-awaited release of a range of macroeconomic indicators in Venezuela confirms our view that the economic challenges that have long confronted the country became significantly more severe in 2015. Despite the prospect of economic reform following the opposition MUD coalition's rise to power in the legislature, the country will experience another year of recession and world-leading price growth in 2016.

BMI Political View

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