2012-01-12 14:18:41 - New Healthcare market report from Business Monitor International: "Hong Kong Pharmaceuticals & Healthcare Report Q1 2012"

BMI View: Hong Kong was in the past an attractive commercial prospect, largely propped by the widespread use of patented medicines. However, the climate of cost-containment over the past decade represents and the rising prominence of the pharmaceutical market of mainland China have somewhat diminished the interest in the Special Administrative Region (SAR), especially given its limited population numbers. Nevertheless, the prevalence of non-communicable diseases will continue to provide commercial opportunities for international drugmakers, as will its relatively advanced regulatory regime. Headline Expenditure Projections Pharmaceuticals: HKD7.98bn (US$1.03bn) in 2010 to HKD8.65bn (US$1.11bn) in 2011; +8.5% in local currency terms and +8.4% in US dollar terms. Forecast up slightly from Q311 due to macroeconomic factors. Healthcare: HKD83.01bn (US$10.69bn) in 2010 to

HKD86.11bn (US$11.08bn) in 2011; +3.7% in local currency terms and +3.7% in US dollar terms. Forecast up slightly from Q311 due to macroeconomic factors. Medical devices: HKD4.10bn (US$527mn) in 2010 to HKD4.21bn (US$542mn) in 2011; +2.8% in local currency terms and +2.8% in US dollar terms. Forecast up slightly from Q311 due to macroeconomic factors. Business Environment Rating: Hong Kong's composite score for Q411 stands at an unchanged 60.2, which again places it seventh of the 17 markets surveyed in BMI's proprietary Business Environment Ratings (BERs) matrix. The SAR's reward profile, dragged down by market maturity and small population numbers, remains considerably less attractive than its risk environment. Key Trends & Developments In June 2011, Japanese company Takeda Pharmaceutical and US pharmaceutical firm Eli Lilly entered an agreement to sell Evista (raloxifene HCl tablets) in seven Asian nations - including Hong Kong. Evista is approved and marketed to treat and prevent osteoporosis in postmenopausal women in all the regions, as well as to reduce the risk of breast cancer in the Philippines, Singapore and Thailand. About one in every 10 adults in Hong Kong has been found to be a carrier of hepatitis B virus, reported China Daily in August 2011. Of a sample of more than 1,900 citizens, the majority were found to be unaware of the disease and to have overlooked the requirement for vaccination or prevention, which indicates a huge unmet treatment potential. However, the younger generation - born after 1988 - have received mandatory free hepatitis B vaccination in the country. Hong Kong Pharmaceuticals & Healthcare Report Q4 2011 © Business Monitor International Ltd Page 7 BMI Economic View: We have revised our Hong Kong 2011 real GDP growth forecast from 4.1% to 5.0% on the back of stronger than expected Q111 growth, which should provide some assistance to government and private finances. However, as inflationary headwinds and a mainland Chinese economic slowdown will weigh on growth, we do not expect major investment in social projects, despite the upcoming elections. We have also revised our Hong Kong 2011 average consumer price inflation forecast upwards to 4.3% from 4.0% due to elevated price pressures in the mainland. BMI Political View: Hong Kong will soon enter an election cycle, with district council elections scheduled for November and legislative elections set to be held in 2012. A new Chief Executive will also be chosen in 2012, but there is no clear frontrunner at this point given that Beijing has yet to back any particular candidate. Key challenges the next chief executive and administration have to tackle will likely centre on housing and the widening wealth gap, which is also translating into the realm of healthcare. Nevertheless, and regardless of the results, we expect Hong Kong to maintain its strong business environment appeal.
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