Limited Growth Potential In The Short Term
BMI View: Government commitment to healthcare will be a key driver of growth for Myanmar's pharmaceutical and healthcare sector. However, we believe that the potential in Myanmar's healthcare system can only be realised over the long ter m as decades of military rule has meant that the healthcare sector has been severely underfunded.
In December 2012, several healthcare developments surfaced in Myanmar. Myanmar's military chief, Vice-Senior General Min Aung Hlaing, stated that the country intends to use nuclear technology for medical and research purposes. In addition, a team of US-based scientists coordinated by the World Health Organization launched a study focused on drug-resistant malaria in Myanmar, with the aim to track the spread of the disease in the country.
Due to the decades of military rule, a large proportion of public expenditure has been devoted to defence. In 2010, government spending on healthcare reached MMK97.1bn (US$100mn) representing 12.2% of the total healthcare expenditure (MKK798bn (US$822mn)). Highlighting a shift in this, in March 2012, Minister of Health Pe Thet Khin said the country intends to quadruple its health budget to hire more doctors and modernise hospitals. Subsequently in October 2012, the health minister stated that HIV programme in the country will be scaled up in terms of HIV testing and providing HIV drugs for pregnant women.
|Growth From Low Base|
|Myanmar Healthcare Expenditure (LHS) And Public And Private Health Expenditure (RHS) (MMKbn)|
While we maintain our view that Myanmar's quest to reform its economy will benefit the healthcare sector - we believe that the potential in Myanmar's healthcare system can only be realised over the long term. The country's healthcare expenditure is one of the lowest in South East Asia. Additionally, according to the 2011 Human Development Report from the United Nations Development Programme, Myanmar ranked 149 th out of 187 countries in terms of public health expenditure (as % of GDP), life expectancy at birth, maternal mortality ratio and under five mortality rate.
Its transition from a frontier market to ultimately a developed one will benefit different types of pharmaceutical firms over time. For example, given the country's current low expenditure on healthcare, it is unlikely that the majority of the population will be able to afford expensive patented products. Consequently, India-based generic drugmakers will see strong growth opportunities in Myanmar. Between July 2011 and July 2012, the country imported medicines worth US$89mn from countries such as India, Thailand and China.