Hospital Sales Decline As Instability Impacts Procurement
BMI View: Hospital sales in Ukraine saw a significant decline as the acute political and economic situation forced cancellations and delays to government procurement. A revision of the budget and changes in the prevailing exchange rate will force further changes to the scope and value of government tenders. However, with tenders set to become more transparent and open, we see new opportunities for companies to submit competitive bids. On the whole, 2014 and 2015 will be challenging years for the industry in Ukraine.
The acute political and economic situation in Ukraine has impacted the delivery of public healthcare within the Ukrainian hospital system. Hospital purchases of medicines in Ukraine are normally quite muted in the first quarter of 2014 relative to retail pharmacy sales as the harsh winter sees a boost in Ukrainians purchasing medicines. In Q114, the proportion of hospital sales of the overall market fell 25% year-on-year to 6.3%. In value terms, sales in Q114 within the Ukrainian hospital system came to UAH595mn (USD50.7mn), a 16.6% y-o-y decline. Volumes of medicines sold tumbled by 26.2% as the Ministry of Health mothballed tenders for procurement of medicines under government programmes as the interim government dealt with the fallout of the Crimea crisis and the International Monetary Fund debt deal.
The purchasing patterns within hospital sales in Q114 saw a shift towards domestic producers; in value terms, 49.7% of medicines sold to the Ukrainian healthcare system were from domestic companies, an increase of almost 6.2% relative to the previous year (43.5%). In volume terms, domestic companies continued to dominate, providing almost 88% of medicines (2013: 84.0%).
|Pharmaceutical Market To Face Challenging Medium Term|
|Pharmaceutical Sales, USDbn|