Zimbabwe Pharmaceuticals and Healthcare Report Q3 2008

Summary

Zimbabwes pharmaceutical market remains an extremely unattractive prospect due to ongoing political and economic problems. Indeed, the problems breed uncertainty that makes long-term market forecasts challenging. BMI expects further slow deterioration of the market through to 2010. We believe that the market will continue to be propped up to a large extent by donations from international aid agencies, meaning that it has little further to fall. Having said this, recent threats to clamp down on international aid agency activity by the regime of President Robert Mugabe or the possible imposition of international sanctions backed by the US and UK could precipitate a further fall in the value of the pharmaceutical market.

Demonstrating the ongoing supply chain difficulties, in April 2008, Zimbabwes leading health insurance organisation Cimas suspended its HIV/AIDS drug benefits for those covered by the add-on chronic disease package, citing a shortage of antiretrovirals (ARVs). The insurer claimed it was unable to source ARVs from abroad due to a lack of foreign currency. Meanwhile, its local manufacturing partners had stopped producing the drugs due to pricing controls. Such a situation is likely to have a serious adverse effect on the countrys HIV/AIDS burden. BMIs Burden of Disease Database (BoDD) forecasts that the number of disability-adjusted life years (DALYs) lost to HIV/AIDS will increase by an average of 1.4% a year between 2007 and 2012 to reach 4.92mn in 2012.

Unsurprisingly, BMI rates Zimbabwes business environment as the least attractive of the 13 Middle East and Africa (MEA) pharmaceutical markets surveyed. The business environment has continued to deteriorate over the past year, with the international community, led by the US and UK, looking seriously at imposing sanctions on the Mugabe regime. Meanwhile, in October 2007, Zimbabwe's parliament passed the Indigenisation and Empowerment Bill, which aims to increase local ownership of companies.

The bill extends and formalises the controversial land reforms pursued by the Mugabe regime in the agricultural sector. It requires that at least 50% of shares in the manufacturing industry be owned by Zimbabweans. However, uncertainty again plagues the proposals, with no clear timescale set out for the implementation of the bill's objectives.

In April 2008, Indian backer Shreya Life Sciences divested its 40% stake in CAPS Pharmaceuticals (co-owned with CAPS Holdings) to an unnamed foreign investor. CAPS Holdings is continuing its investment in capital projects. However, the loss of its Indian backer is likely to make it challenging to obtain hard currency to fund such activities.

Contents

• Executive Summary
• Zimbabwe Pharmaceuticals And Healthcare Industry SWOT
• Zimbabwe Political SWOT
• Zimbabwe Economic SWOT
• Zimbabwe Business Environment SWOT
• Pharmaceutical Business Environment Ratings
  • Table: Middle East And Africa Pharmaceutical Business Environment Ratings
• Limits Of Potential Returns
• Risks To Realisation Of Returns
• Market Summary
• Regulatory Regime
• Intellectual Property Developments
• Pricing And Reimbursement Issues
• Public Drug Procurement
• Industry Developments
• Health Profile
• HIV/AIDS Situation
• Healthcare System
• Healthcare Funding
• Healthcare Staff
• Pharmaceutical Sector
• Timeline Of Zimbabwe's Hyperinflation
• Recent Pharmaceutical Sector Developments
  • Table: ARV Prices Available Through Direct Purchase From Roche (CHF)
• Traditional Medicine
• Biotechnology Sector Developments
• Industry Forecast Scenario
• Overall Market Forecasts
  • Table: Zimbabwes Drug Market Forecasts
• Key Growth Factors Industry
• Key Growth Factors Industry
  • Table: Zimbabwes Healthcare Expenditure Indicators
• Key Growth Factors Macroeconomic
  • Table: Zimbabwe Economic Activity
• Prescription Market Forecast
  • Table: Zimbabwes Prescription Drug Market, 2005-2012 (US$mn unless otherwise stated)
• OTC Market Forecast
• OTC Market Forecast
  • Table: Zimbabwes OTC Market, 2005-2012 (US$mn unless otherwise stated)
• Generics And Patented Market Forecast
  • Table: Zimbabwe Generics And Patented Market, 2005-2
• Export/Import Forecasts
  • Table: Zimbabwes Pharmaceutical Imports And Exports, 2005-2010 (US$mn)
• Other Healthcare Data Forecasts
• Other Healthcare Data Forecasts
  • Table: Zimbabwes Other Healthcare Forecasts, 2005-2012
• Key Risks To BMI Forecasts
• Competitive Landscape
• Company Profiles
• Multinational Companies
• Ranbaxy
• Pfizer
• Novartis
• Sanofi-Aventis
• Merck & Co
• GlaxoSmithKline
• Indigenous Companies
• Datlabs
• Varichem Laboratories
• CAPS Holdings
• BMI Forecast Modelling
• How We Generate Our Pharmaceutical Industry Forecasts
• Pharmaceutical Industry
• Pharmaceutical Business Environment Ratings Methodology
• Ratings Overview
  • Table: Pharmaceutical Business Environment Indicators
• Weighting
  • Table: Weighting Of Components
• Sources