Boston, MA -- (SBWIRE) -- 03/05/2013 -- BMI View: High inflation, currency devaluation, import and foreign currency controls, as well as other structurally distorting policies in Venezuela have made the country's pharmaceutical market increasingly unattractive to multinationals. We expect the market to grow below nominal GDP levels between 2011 and 2015, and experience a contraction in real growth terms.

Headline Expenditure Projections

- Pharmaceuticals: VEB36.28bn (US$8.45bn) in 2011 to VEB44.85bn (US$10.44bn) in 2012; +23.6% in local currency terms and +23.6% in US dollar terms. Forecasts up due to new macroeconomic information.
- Healthcare: VEB64.07bn (US$14.92bn) in 2011 to VEB81.68bn (US$19.02bn) in 2012; +27.5% in local currency terms and +27.5% in US dollar terms. Forecasts up due to new macro data.
- Medical devices: VEB11.07bn (US$2.58bn) in 2011 to VEB14.11bn (US$3.29bn) in 2012; +27.5% in local currency terms and 27.5% in US dollar terms. Forecasts up due to new macroeconomic data.

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Risk/Reward Rating: The attractiveness of the Americas to multinational pharmaceutical companies has increased, according to BMI's Pharmaceutical and Healthcare Risk/Reward Ratings (RRRs) for Q113. The average RRR score for the region has increased from 49.2 in Q412 to 49.4 in Q113. Venezuela's ranking in BMI's RRR matrix has remained the same at the 14th place in Q113, one position above its ranking last quarter. However, we highlight the risks of the government's increasingly harsh pricing policies, strict regulations and currency devaluation.

Key Trends And Developments:

- In November 2012, BMI expects Venezuela's pharmaceutical market is expected to grow at a faster rate between 2011 and 2016, experiencing a compound annual growth rate (CAGR) of 22.2% in local currency terms, instead of the previously forecast 19.3%. This accelerating growth is largely due to the longer period of high inflation that BMI's Country Risk team is forecasting. Inflation averaging more than 20% over the past decade has been forecast to increase to 22.0% by end-2012, as some of the government-led disinflationary policies are no longer in place, and it will be extended to the end of 2016 due to a combination of political and economic factors.
- In September 2012, Pfizer Consumer Healthcare has rolled out a new advertising campaign for its pain reliever - Advil (ibuprofen) - in Venezuela. The new campaign is aimed at boosting Advil's position in the country. Advil is seeking to position itself as the perfect analgesic treatment for headaches and back, muscular, menstrual and dental pain. The new campaign, which is produced by McCann Erickson Concept, will be aired across the country for the remaining part of 2012.

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