Industry Trend Analysis - Pharmaceuticals & Healthcare Outlook For 2017: Western Europe - FEB 2017

BMI View: Drugmakers in Western Europe will need to continue to assess their business strategies, R&D focus and product portfolios. Despite the growing demand for and consumption of high - value medicines in the region, government focus on the cost-effective prescribing of medicines will require companies to seek efficiencies in order to boost revenue streams. It is our view that in addition to employing internal strategies- including the restructuring of business - multinational drugmakers will increasingly participate in discussions regarding drug pricing and sustainable spending.

Despite the increasingly tough regulatory challenges facing drugmakers in Western Europe, the region will remain integral to the commercial prospects of multinational pharmaceutical firms. In 2017, the Western Europe pharmaceutical market will grow by 0.7% in EUR terms (-1.2% in US dollar terms) to EUR236.8bn (USD248.7bn). Over a five year period, the EUR235bn (EUR252bn) Western Europe region will post a 1.5% CAGR through to 2020. Growth forecasts are in local currency terms that are aggregated from the country-level US dollar proportions which have been equalised to minimise currency fluctuations using a time series-weighted calculation.

The predominant driver of increasing healthcare expenditure is the region's growing pensionable population. In particular, the rising incidence of chronic conditions amongst a population with a strong bias towards branded drugs will continue to boost healthcare spending. Nevertheless, cost containment remains high on the agenda of all governments and efficiency measures will weigh on market growth - particularly within Western Europe.

An Ageing Population
Western Europe: Pensionable Population As A Percentage Of The Total Population
Source: World Bank/UN/BMI

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