Headline Expenditure Projections
* Pharmaceuticals:
* Healthcare: LTL7.38bn (US$2.84bn) in 2010 to LTL7.80bn (US$3.05bn) in 2011; +5.7% in local currency terms and +7.6% in US dollar terms. Forecast moderately up from Q111 due to macroeconomic factors.
* Medical devices: LTL500mn (US$192mn) in 2010 to LTL531mn (US$208mn) in 2011; +6.1% in local currency terms and +8% in US dollar terms. Forecast unchanged from Q111.
Business Environment Rating: In our latest Pharmaceuticals & Healthcare Business Environment Ratings (BER) matrix for Emerging Europe, Lithuania ranks 15th, out of the 20 markets surveyed. Globally, Lithuania is also found in the bottom half of the table, placing 59th out of the 83 countries we survey for the BER rankings. We expect Lithuania to continue representing one of the less attractive pharmaceutical markets, especially in the light of the need for cost-containment and fiscal discipline, with its matrix ranking unlikely to show dramatic improvements.
Key Trends & Developments
* In February 2011, in a move which signalled progress towards regional harmonisation, Estonia, Latvia and Lithuania decided to follow a centralised procedure for granting approvals for drug labelling, with the move expected to cut costs as well as make the approvals process simpler, faster and clearer. Under the procedure, the companies will be required to file similar applications with the drug agencies in three countries in English and national languages in an electronic format. A reference country will then be selected and a verdict will be issued. The marketing authorisation holder (MAH) will submit labelling samples to all drug agencies following the approval.
BMI Economic View: Lithuania's structural problems continue to persist, as the economy undergoes a painful adjustment and the government continues to place strong emphasis on fiscal consolidation. While showing some signs of improvement in the past months, the registered unemployment rate remains near record highs. Perhaps most significant, however, youth unemployment remained above 35%, having been in double-digit territory since Q108, and long-term unemployment continued to increase. Even though much of healthcare provision is subsidised, the figures make for worrying reading, as persistently high unemployment will continue to negative impact inflows into public budgets. On a separate note, the lack of consumer confidence will also translate into less frequent purchases of over-the-counter (OTC) medicines that are considered anything other than essential.
BMI Political View: Globally, Lithuania was one of the economies worst affected by the 2009 downturn. Policymakers, who are looking to continue with the painful drive to rein in the public deficit and reduce the country's reliance on external financing, face an increasingly unhappy electorate and fierce parliamentary opposition. Although reductions in public expenditure on pharmaceuticals and healthcare would be an easy target, such moves would likely prove politically unpopular, especially as the current administration is already embattled. In the meantime, we continue to regard the 2011 Budget as overly ambitious in its expectations to reduce the fiscal deficit to 3% of GDP by next year. While we continue to see a continuation of government austerity measures, we believe that the outlook for significantly stronger revenue growth in 2011 remains weak.
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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
