Industry Trend Analysis - Diverse Pharmaceutical Environment To Determine Drugmaker Opportunities - AUG 2017

BMI View : The pharmaceutical markets in the MENA region will be shaped by a combination of trends over the coming years. The MENA region is characterized by an unfavourable demographic profile, with the risks most pronounced in countries with large youth populations and weak growth outlooks. Rapid population growth bodes well for drugmaker opportunities over the long-term, yet this potential is somewhat marred by the negative impact of small pensionable populations limiting medicine sales growth.

Pharmaceutical Market Forecast
f = BMI forecast. Source: BMI

The Middle East and North Africa (MENA)'s USD31.7bn (EUR28.7bn) drug market is forecast to expand to USD38.9bn (EUR38.9bn) with a 6.7% compound annual growth rate (CAGR) at constant exchange rates (CER) through to 2021. The MENA region is made up of the sub-regions of North Africa and the Middle East. The USD9.9bn (EUR8.9bn) North Africa region will post a 7.8% CAGR through to 2021. The Middle East's USD21.8bn (EUR19.7bn) drug market will post a 6.2% CAGR over the same time period. MENA's pharmaceutical market will post a five-year CAGR of 4.2% in USD terms and 6.3% in EUR terms.

Healthcare privatisation and greater public-private health partnerships should provide momentum for drug sales in the MENA region. Multinationals can be seen to be pursuing strategies of cooperation with domestic companies as well as setting up local manufacturing facilities across the region. The biggest threat to our outlook stems from the recent era of low oil prices, as governments are expected to be increasingly strict with regards to spending on pharmaceuticals, and generic substitution is likely to be heavily encouraged - challenging multinational drugmaker revenues.

Regional Pharmaceutical Sales, Historical Data And Forecasts (2013-2021)
2013 2014 2015 2016 2017f 2018f 2019f 2020f 2021f
f = BMI forecast. Source: BMI
Pharmaceutical sales, USDbn 29.213 32.056 32.011 31.703 31.391 32.955 34.864 36.793 38.899
Pharmaceutical sales, USDbn, % y-o-y -0.20 9.73 -0.14 -0.96 -0.98 4.98 5.79 5.53 5.72
Pharmaceutical sales, USD per capita 73.2 78.8 77.3 75.2 73.1 75.5 78.6 81.6 84.9
Pharmaceutical sales, % of GDP 0.91 1.02 1.14 1.17 1.14 1.12 1.10 1.08 1.08
Pharmaceutical sales, % of health expenditure 18.3 18.6 18.8 18.6 18.1 18.1 18.2 18.2 18.3