Australia Pharmaceuticals & Healthcare Report Q4 2014 - New Market Report

Over 300 drug formulations listed on the Pharmaceutical Benefits Scheme (PBS) will be subject to price reduction from October 1 2014, following the first simplified price disclosure (SPD) cycle in Australia. As a result, the prices of the affected drugs will be lowered by 20% on average, from those in April 2014. The Australian government continues to push price controls on pharmaceuticals. This is a reflection of the fact that high prices are no longer accepted by patients and national health services. The advent of health economics, coupled with increasing budget deficits, will result in more caps on medicine expenditure, especially on essential drugs. Given the government's aim to contain overall healthcare costs, BMI forecasts that the pharmaceutical and healthcare sector will grow at a low single-digit rate. Nevertheless, pharmaceutical firms can expect swifter access to the Australian pharmaceutical market, following the scrapping of the Pharmaceutical Benefits Pricing Authority which will not have a significant impact on how drugs are listed on the Pharmaceutical Benefits Scheme. However, we highlight that any potential reform of the healthcare system is a downside risk to our forecasts.

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Headline Expenditure Projections

* Pharmaceuticals: AUD12.95bn (USD12.50bn) in 2013 to AUD13.41bn (USD11.93bn) in 2014; +3.5% in local currency terms and -4.5% in US dollar terms, due to significant exchange rate fluctuations. Forecast was downgraded after taking into account new data from Pharmaceutical Benefits Scheme's expenditure.
* Healthcare: AUD142.16bn (USD137.18bn) in 2013 to AUD148.64bn (USD132.29bn) in 2014; +4.6% in local currency terms and -3.6% in US dollar terms, due to exchange rate fluctuations. Forecast changed slightly from Q314 in local currency terms.

Risk/Reward Rating

Australia's Pharmaceutical Risk/Reward Rating (RRR) score for Q414 remained at 65.8 out of the maximum 100 and kept third position within the region. In Q414, Japan is...

The Australia Pharmaceuticals & Healthcare Report features Business Monitor International (BMI)'s forecasts for drugs and healthcare expenditure and imports and exports, focusing on the growth outlook for the prescription, OTC, patented drugs and generics market segments.

BMI's Australia Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the Australian pharmaceutical and healthcare industry.

Key Benefits

* Benchmark BMI's independent pharmaceutical and healthcare industry forecasts for Australia to test other views - a key input for successful budgeting and strategic business planning in the Australian pharmaceutical and healthcare market.

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