Thailand's pharma market 'relatively' safe from local unrest, for now, says BMI report

The recent political unrest in Thailand will not have an immediate impact on pharmaceutical sales or the revenue earning opportunities of drugmakers because the demand for health care is relatively independent of the trends in the economy people get ill and need medicines despite drops in national wealth, according to Business Monitor International's fourth-quarter 2010 report on the country. However, "note the word relatively," it pointed out.

BMI believes the conflict and its effect on the country's economy could have a longer-term impact on drugmaker's revenues in Thailand as a result of the downward trend in consumer spending, as well as the slowdown in government contributions towards health care schemes. Thailand's economy is the biggest loser of the political stalemate, which has negatively affected the country's investment climate as well as its tourism industry, including medical tourism. The violent clashes in Thailand could cost the economy 150 billion baht ($4.6 billion), according to a statement by Deputy Prime Minister Trairong Suwankiri in May 2010.

Consequently, BMI expects headline real Gross Domestic Product (GDP) expansion to average a below-potential 4.0% per annum over the next decade. The government's budget deficit amounted to 4.0% of GDP in 2009 and BMI believes the cost of the violence will not ease these fiscal pressures. It calculates that fiscal expenditure will drop by 8% year-on-year in 2010, having grown by 15% in 2009, which will have a bearing on the government's ability to provide adequate health care and pharmaceutical services.