BMI View: While the Netherlands is a low risk market from the point of view of multinational drugmakers, the country’s modest per capita expenditure on pharmaceuticals relative to other Western Europe countries remains an issue. A further challenge facing drugmakers is cost-containment, which can only intensify as the Netherlands enters a phase of slower economic growth.
Headline Expenditure Projections
?? Pharmaceuticals: EUR6.70bn (US$9.38bn) in 2011 to EUR6.55bn (US$8.78bn) in 2012; -2.2% growth in local currency terms and -6.4% growth in US dollar terms. Historical data increased on basis of new figures from official sources.
?? Healthcare: EUR62.83bn (US$87.96bn) in 2011 to EUR64.59bn (US$86.55bn) in 2012; +2.8% growth in local currency terms and -1.60% growth in US dollar terms. Forecast unchanged from Q112.
?? Medical devices: EUR11.33bn (US$15.86bn) in 2011 to EUR11.68bn (US$15.66bn) in 2012; 3.2% growth in local currency terms and -1.3% in US dollar terms. Forecast unchanged from Q112.
Business Environment Rating: The Netherlands’ composite score in our latest Pharmaceutical Risk/Reward Ratings (RRRs) matrix for Western Europe is unchanged from the previous quarter. However, the figure of 64.2 out of the maximum 100 now ranks it sixth rather than seventh, due to Sweden dropping down the rankings. Despite a developed healthcare market, the Netherlands’ overall ranking continues to be propped up by its favourable risk variable, with the rewards negatively impacted by cost-containment, in combination with patent expirations.
Key Trends And Developments
?? In October 2011, the European Commission started an antitrust investigation against US Johnson & Johnson (J&J) and Swiss Novartis over allegations the companies may have restricted market access to generic competitors to fentanyl (chronic pain treatment) in the Netherlands. The investigation will examine the contractual arrangements between the US healthcare company and Novartis' Sandoz subsidiary in the Dutch market.
?? In the same month, the governments of Russia and the Netherlands reached various agreements to strengthen their relationship in the healthcare sector, Russian Deputy Prime Minister Viktor Zubkov said at the opening of a joint business forum. The governments signed a cooperation agreement between the universities of Groningen and Skolkovo and a memorandum on the construction of a plant for the production of mobile medical complexes.
BMI Economic View: The Dutch economy's growth outlook has deteriorated considerably in recent months, as the eurozone sovereign debt crisis weighs heavily on economic activity and confidence. As a result, we have significantly revised down our 2012 real GDP forecast to 0.4%, from 2.3% previously. Similarly, our 2013 forecast is now 1.5%, from 2.7% previously, which will have a bearing on the availability of public finances for both healthcare and pharmaceutical spending.
BMI Political View: The stability of Netherlands’ Prime Minister Mark Rutte's minority government is likely to come under increased pressure in 2012, as the negotiations over Dutch involvement in eurozone bailout packages expose rifts between the coalition parties. In particular, with the far-right Party For Freedom gaining momentum, a coalition breakdown cannot be precluded, which could potentially stall some of the government’s fiscal austerity measures.
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