Industry Trend Analysis - Drug Pricing Regulations To Increase Market Transparency - NOV 2017

BMI View: Kazakhstan's pharmaceutical market represents a significant growth opportunity for multinational drugmakers, which will be aided by pharmaceutical regulatory development and healthcare reforms. The gradual roll-out of drug pricing regulations will benefit drugmakers through reduced patient inequality in affordability and increased market transparency. We note that innovative drugmakers will remain unattracted to the market.

The rapidly evolving pharmaceutical regulatory landscape in Kazakhstan will continue to bolster the market's positive growth story. We have highlighted that the introduction of a mandatory social health insurance system will enable greater access to healthcare services, particularly in the rural regions of the country, which will result in medicine demand growth. Moreover, the country is implementing a phased introduction of pharmaceutical pricing policy which will significantly improve drugmaker prospects.

Kazakhstan's pharmaceutical market is forecast for robust expansion over the coming years due to the aforementioned implementation of healthcare reforms. Over our five-year 2016-2021 forecast, medicine sales will increase from KZT391.7bn (USD1.15bn) to KZT782.8bn (USD2.49bn), reflecting a five year CAGR of 14.9% in local currency terms and 16.8% in USD terms. We note that inflation is forecast to remain at high levels (high single digit territory, according to BMI's Country Risk team) over this period, however in real terms the market will remain a regional outperformer.

Strong Growth Outlook
CIS Markets: Average Real Pharmaceutical Sales Growth, 2016-2020 (%)
Source: BMI

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