Uganda Pharmaceuticals and Healthcare Report Q2 2012
BMI View: Uganda's pharmaceutical market is typical of developing markets: defined by an absence of a clear regulatory framework, a dependence upon drug imports and low healthcare expenditure per capita. Economic growth will aid the development of Uganda's pharmaceutical and healthcare sectors as affordability levels increase and fiscal contributions towards healthcare service provision rise – providing revenue earning opportunities for companies investing in the sector.
Headline Expenditure Projections
Pharmaceuticals: UGX676bn (US$266mn) in 2011 to UGX750bn (US$296mn) in 2012; +11.0% growth in local currency terms and +11.1%.
Healthcare: UGX2,845bn (US$1.12bn) in 2011 to UGX3,278bn (US$1.29bn) in 2012; 15.2% growth in local currency terms.
Risk/Reward Ratings: In BMI's Q212 BERs, Uganda is ranked 26th in the Middle East and Africa (MEA) region. A sizeable counterfeiting industry, poor healthcare funding, corruption, regulatory environment deficiencies and a number of other issues will conspire to keep Uganda in a similarly low position in the MEA matrix over the coming months. Nevertheless, we believe the Ugandan pharmaceuticals and healthcare market presents significant revenue earning opportunities for drug companies. Growth in the sector will be boosted by strong demographics, increased healthcare needs, longer life expectancy, greater healthcare spending in the public and private sectors and improved access to health facilities. Furthermore, in addition to an increase in the healthcare services provided by the government, we note that there is also a growing demand for health services by the population due to a growing awareness of preventative healthcare.
Key Trends And Developments
.. BMI's Burden of Disease Database (BoDD) records the number of disability-adjusted life years (DALYs) lost as a result of having or having had a disease. Therefore, our measure of DALYs is a measure of lost productivity. According to the BoDD, the number of DALYs lost to all diseases in Uganda will increase from 13.99mn in 2010 to 18.64mn in 2030. The BoDD also forecasts the number of DALYs lost to communicable diseases to increase from 10.24mn in 2010 to 12.13mn by 2030. While Uganda's disease burden is dominated by infectious diseases, economic growth will boost lifestyle diseases, increasing the demand for medicines for chronic diseases. The number of DALYs lost to non-communicable diseases is forecast to rise from 2.18mn in 2010 to 3.74mn by 2030.
.. In January 2012, Rwandan President Kagame announced that his government is to purchase antiretroviral and anti-malarial drugs from Ugandan pharmaceutical company Quality Chemicals.
BMI Economic View: We have revised down our 2012 Uganda economic growth forecasts, to 6.2% from 7.1% previously, on the back of evidence that high inflation and tight monetary policy will keep both investment and consumption subdued. We continue to expect robust real GDP growth once oil revenues come into play, in 2014-2015.
BMI Political View: The ongoing accusations of fraud and corruption among prominent politicians and other leaders threaten to blight Uganda's image as an investment destination, and have already had direct negative impacts on the nascent oil sector. Furthermore, the ongoing rise in the cost of living has caused public unrest, last seen in full force earlier in 2011, to resurface.
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