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Puerto Rico Pharmaceuticals & Healthcare Report Q4 2013 - New Market Research Report

New Healthcare research report from Business Monitor International is now available from Fast Market Research


Boston, MA -- (SBWIRE) -- 10/10/2013 -- Puerto Rico's importance as a major production hub for multinational pharmaceutical companies will continue to diminish on account of patent expirations, production quality issues, increasing labour and operational costs, and a potential tax increase by the local government. However, the pharmaceutical industry will still be an economic mainstay for the country, as evidenced by the recent investment by US major Bristol-Myers Squibb (BMS). The island's incentives will continue to attract multinational drugmakers' investment provided the market's appeal continues to offset the effect of negative issues.

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Headline Expenditure Projections

- Pharmaceuticals: US$2.92bn in 2012 to US$3.06bn in 2013; +4.6% in local currency terms. Forecast broadly in line with the previous quarter's projection.
- Healthcare: US$7.53bn in 2012 to US$7.81bn in 2013; +3.7% in local currency terms. Forecast unchanged from the previous quarter.

Risk/Reward Rating: In our latest Pharmaceutical Risk/Reward Rating (RRR) regional assessment, Puerto Rico remains ranked third of the 17 markets surveyed in the Americas region, trailing only the US and Canada. While its high per capita spending on medicines distinguishes it from countries in Latin America, its longer-term potential is under pressure due to an economic slowdown and falling population numbers.

Key Trends and Developments

- In July 2013, local press reported that Humana has given notice to around half its 700 staff following the loss of a government contract to run three Mi Salud regional programmes, which cover the poorer sections of society. Shortly before, rival Triple-S had secured contracts to manage all eight regions covered by Mi Salud, having previously been responsible for the other five. As a result of the loss of the contract, Humana faces serious financial repercussions, given that Mi Salud and its 34,000 beneficiaries accounted for some 70% of its overall business in Puerto Rico.

BMI Economic View: After emerging from a five-year recession in FY2012, recent economic data suggests the Puerto Rican economy could have fallen back into another. Indeed, contracting economic activity across several sectors, rising unemployment and a contraction in business loans have increased the likelihood of a double-dip recession in FY2013. Moreover, while the commonwealth's close affiliation with the US bolsters its stability, a low 'Growth' score reflects the structural weaknesses of its economy.

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