Industry Trend Analysis - Drug Sales To Underperform Compared To CIS Peers - AUG 2017

BMI View: Armenia represents a limited opportunity for pharmaceutical firms due to its small absolute market size and a below-par growth outlook in comparison to its regional peers. Sluggish economic recovery from recession will lead to greater cost-efficiency measures within healthcare , which will present a headwind to medicine spending expansion.

Armenia's pharmaceutical market will offer few opportunities of revenue-generation for multinational pharmaceutical firms on account of its small market size; at USD131mn in 2016, only Turkmenistan (USD114mn), Montenegro (USD90) and Tajikistan (USD86mn) are smaller in the Central and Eastern Europe (CEE) region. In addition, the market will underperform most of its frontier market peers within the region due to a combination of factors.

Armenia's pharmaceutical market is forecast to grow by 5.4% y-o-y in local currency terms (6.2% in US dollar terms) in 2017 to AMD65.8bn (USD139mnn), from AMD62.4bn (USD131mn) in 2016. By 2021, the market is forecast to reach AMD86.9bn (USD172mn), with a five-year local currency compound annual growth rate (CAGR) of 6.8% (5.5% in US dollar terms). Over the extended 2016-2026 forecast period, we forecast the drug market to grow at a CAGR of 8.7% in local currency terms and 7.1% in US dollar terms, reaching a value of AMD143.6bn (USD260mn). Per capita expenditure on pharmaceuticals in Armenia (USD43) falls below both the mean (USD57) and median (USD45) averages amongst the Commonwealth of Independent States (CIS).

Limited Opportunities In Frontier Market
A Comparison Of CIS Pharmaceutical Markets
Note: Bubble size = market size (USD). Source: BMI

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