Iraq. Pharmaceutical market development in Q4 2012
Iraq's weak intellectual property (IP) framework, poor healthcare infrastructure and poor regulation of pharmaceutical sales channels have allowed a huge black market trade in real and counterfeit pharmaceuticals to develop. The government is now attempting to reassert control over the sector through initiatives such as the creation of an agency tasked with closing down unregistered health practitioners, but with the sales channels now so porous, it will be very challenging to address this problem in the short term.
Headline Expenditure Projections
Pharmaceuticals: IQD 1,239 bn (US$1.06 mio) in 2011 to IQD 1,479 bn (US$1.26 bn) in 2012; +19.3% in local currency and +19.2% in US dollar terms. Forecast broadly unchanged from Q3 2012.
Healthcare: IQD 9,439 bn (US$8.07 bn) in 2011 to IQD 11,536 bn (US$9.86 bn) in 2012; +22.1% in local currency and +21.1% in US dollar terms. Forecast broadly unchanged from Q3 2012.
Medical devices: IQD 407.35 bn (US$348 mio) in 2011 to IQD 484.44 bn (US$414 mio) in 2012; +18.9% in local currency and +18.8% US dollar terms. Forecast broadly unchanged from Q3 2012.
Risk/Reward Rating: In our latest Pharmaceuticals Risk/Reward Ratings (RRRs), Iraq moved up by one position to now rank 13th out of the 30 markets surveyed in the Middle East and Africa (MEA) region.The country’s composite score improved 3.4% on a quarter-on-quarter (q-o-q) basis, to 46.7 out of the maximum 100 points, on account of its slightly raised rewards profile. However, Iraq’s risks remain high due to the country’s political and security instability, which will continue to pose significant downward risks to our forecasts.
Key Trends And Developments
In June 2012, the Iraqi Ministry of Health and USAID's Health Promotion Programme In Iraq (HIPPI) launched a mass-media campaign to promote good nutrition and exercise among young people. The print, radio and TV campaign, which will target children and parents, will include in-school activities to promote balanced diets and exercise. The HPPI is responsible for building up the ministry's capacity to implement and evaluate activities that promote better health and reduce illness and injury among people in Iraq. In the meantime, government funding for medical treatments, including provision, remains viewed as inefficient.
In mid-2012, Iraqi News reported that a new hospital will be opened in 18 months’ time in Ramadi, the capital of the Angar province, west of Baghdad. The Heit hospital, which is expected to contain 200 beds, will cost US$75 mio, according to the statements made by Finance Minister Rafiaa al-Issawi and Health Minister Majied Amin during the laying of the hospital’s foundations.
Economic View: We forecast Iraq's economy to grow 10.5% and 13.8% in real terms in 2012 and 2013, respectively, compared to our estimate of 12.4% in 2011. Increasing oil exports will be the main factor driving growth, offsetting a rapid increase in imports, while private consumption will expand at as lower pace. Given our relatively bullish forecasts on domestic oil production over the coming years, we retain our optimistic view on the country's economic outlook through 2016, with Iraq expected to be one of the fastest growing economies in the region over the coming five years.
Political View: Iraq is in the midst of an acute political crisis, which will slow policy formation and hinder the government's ability to guarantee security and the rule of law. At the root of Iraq's political uncertainty is the absence of basic consensus among the main political blocs over how the country should be run, and we thus believe that the current political stalemate is unlikely to be resolved through institutional means. Moreover, as we do not see instability abating any time soon, the risks that the country will fall back into civil war are on the rise. The deterioration in the domestic political environment aside,instability is also increasing as a result of the weakened regional security environment, particularly the crisis in neighbouring Syria. The political crisis is also undermining the government's ability to pass along-awaited oil revenue sharing law relating to the autonomous Kurdistan region, which will have a negative effect on the country’s economic progress.
Headline Expenditure Projections
Pharmaceuticals: IQD 1,239 bn (US$1.06 mio) in 2011 to IQD 1,479 bn (US$1.26 bn) in 2012; +19.3% in local currency and +19.2% in US dollar terms. Forecast broadly unchanged from Q3 2012.
Healthcare: IQD 9,439 bn (US$8.07 bn) in 2011 to IQD 11,536 bn (US$9.86 bn) in 2012; +22.1% in local currency and +21.1% in US dollar terms. Forecast broadly unchanged from Q3 2012.
Medical devices: IQD 407.35 bn (US$348 mio) in 2011 to IQD 484.44 bn (US$414 mio) in 2012; +18.9% in local currency and +18.8% US dollar terms. Forecast broadly unchanged from Q3 2012.
Risk/Reward Rating: In our latest Pharmaceuticals Risk/Reward Ratings (RRRs), Iraq moved up by one position to now rank 13th out of the 30 markets surveyed in the Middle East and Africa (MEA) region.The country’s composite score improved 3.4% on a quarter-on-quarter (q-o-q) basis, to 46.7 out of the maximum 100 points, on account of its slightly raised rewards profile. However, Iraq’s risks remain high due to the country’s political and security instability, which will continue to pose significant downward risks to our forecasts.
Key Trends And Developments
In June 2012, the Iraqi Ministry of Health and USAID's Health Promotion Programme In Iraq (HIPPI) launched a mass-media campaign to promote good nutrition and exercise among young people. The print, radio and TV campaign, which will target children and parents, will include in-school activities to promote balanced diets and exercise. The HPPI is responsible for building up the ministry's capacity to implement and evaluate activities that promote better health and reduce illness and injury among people in Iraq. In the meantime, government funding for medical treatments, including provision, remains viewed as inefficient.
In mid-2012, Iraqi News reported that a new hospital will be opened in 18 months’ time in Ramadi, the capital of the Angar province, west of Baghdad. The Heit hospital, which is expected to contain 200 beds, will cost US$75 mio, according to the statements made by Finance Minister Rafiaa al-Issawi and Health Minister Majied Amin during the laying of the hospital’s foundations.
Economic View: We forecast Iraq's economy to grow 10.5% and 13.8% in real terms in 2012 and 2013, respectively, compared to our estimate of 12.4% in 2011. Increasing oil exports will be the main factor driving growth, offsetting a rapid increase in imports, while private consumption will expand at as lower pace. Given our relatively bullish forecasts on domestic oil production over the coming years, we retain our optimistic view on the country's economic outlook through 2016, with Iraq expected to be one of the fastest growing economies in the region over the coming five years.
Political View: Iraq is in the midst of an acute political crisis, which will slow policy formation and hinder the government's ability to guarantee security and the rule of law. At the root of Iraq's political uncertainty is the absence of basic consensus among the main political blocs over how the country should be run, and we thus believe that the current political stalemate is unlikely to be resolved through institutional means. Moreover, as we do not see instability abating any time soon, the risks that the country will fall back into civil war are on the rise. The deterioration in the domestic political environment aside,instability is also increasing as a result of the weakened regional security environment, particularly the crisis in neighbouring Syria. The political crisis is also undermining the government's ability to pass along-awaited oil revenue sharing law relating to the autonomous Kurdistan region, which will have a negative effect on the country’s economic progress.
Source: Business Monitor International
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