BMI View: Sweden’s high public expenditure on health (SEK252bn, or US$39bn, in 2011), accounting for 79% of total healthcare expenditure) is a major factor in making it an attractive place to sell medicines. Furthermore, given the country’s high per capita drug expenditure (US$699 in 2011), BMI believes pharmaceuticals will continue to bring in substantial income for companies operating in the country.
Headline Expenditure Projections
?? Pharmaceuticals: SEK42.84bn (US$6.60bn) in 2011 to SEK42.32bn (US$6.27bn) in 2012; -1.2% in local currency terms and -5.0% in US dollar terms.
?? Healthcare: SEK320.50bn (US$49.36bn) in 2011 to SEK329.90bn (US$48.85bn) in 2011; +2.9% in local currency terms and -1.0% in US dollar terms.
?? Medical devices: SEK21.04bn (US$3.24bn) in 2011 to SEK21.93bn (US$3.25bn) in 2012; +4.2% in local currency terms and +0.2% in US dollar terms.
Risk/Reward Rating: Sweden’s strong emphasis on the regulatory environment is a draw, though a major factor affecting the business environment for drugmakers is its small overall market size, which – combined with pressure on pharmaceutical spending – negatively affects the industry rewards score in particular. Nevertheless, given its high per capita drug expenditure, medicines continue to bring in substantial income for companies in the country.
Key Trends And Developments
?? In December 2011, UK biotechnology company GW Pharmaceuticals secured approval from the Swedish Medical Products Agency (MPA) for its oromucosal spray Sativex (delta-9- tetrahydrocannabinol and cannabidiol). The spray is designed to treat moderate-to-severe spasticity due to multiple sclerosis (MS) in patients who have not responded to other antispasticity medications. It is likely to be released in H112 after the conclusion of the national pricing and reimbursement process.
BMI Economic View: We have lowered our real GDP growth estimate for Sweden in 2012 to 1.6% from 2.0% in light of deteriorating economic conditions in Europe. Net exports, private consumption and fixed investment are all expected to weaken.
BMI Political View: The coming economic slowdown will force the government to decide whether it is willing to return to fiscal deficit in order to offset a decline in domestic and external demand. We believe it will attempt to enact further fiscal stimulus and we forecast general government budget deficits in 2012 and 2013.
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