BMI calculates that Lithuania’s pharmaceutical market reached a value of LTL1.70bn (US$0.70bn) in 2008. By 2013, we expect the value of the prescription and over-the-counter (OTC) markets to reach a value of LTL2.13bn, equating to a compound annual growth rate (CAGR) of 4.61% over the forecast period. However, as a result of the weakening Lithuanian currency, drug market expenditure in US dollar terms will decline in 2009, to reach a value of US$0.526bn, before rising to US$0.528bn in 2010 and US$0.61bn by 2013, equating to a negative CAGR of -2.75%.

We also add that the growth in the drug market is modest, in line with other Central and Eastern Europe (CEE) countries. In BMI’s Business Environment Ratings matrix for Q409, Lithuania is found in 16th position out of the 20 markets surveyed in the CEE region, between Moldova and Latvia. In relation to the previous quarter, Lithuania has moved down one place. The country’s overall pharmaceutical rating is below average, due to small and falling population numbers that limit its overall size and an economy that is highly exposed to external risk.

Globally, Lithuania is 55th of the 71 markets within BMI’s pharmaceuticals and healthcare market universe, ahead of Morocco and Latvia and behind Indonesia and Israel. In company news, in August 2009 it was announced that Sicor Biotech’s turnover increased by 49% year-on-year (y-o-y) to LTL52.67mn (US$21.97mn) in H109. The results were attributed to sales of the oncology drug TevaGrastim, which is now registered for use in the EU. The company is planning to increase its exports dramatically. BMI notes that Lithuania’s biotechnology sector has benefited from strong government support. A knowledge-based economy is a priority, and this has translated to significant improvements in GDP in recent years.

The Lithuanian pharmaceutical market has experienced considerable volatility in recent years, due to a changing regulatory environment and a changing reimbursement regime. Most recently, economic pressures, including falling consumer confidence, will result in lower market values over the coming months. Following the release of Q2 GDP data, which showed the economy contracting by 20.2% y-o-y, BMI’s Country Risk team has revised down the forecast for Lithuanian growth in 2009, and now project real GDP to fall by 15.9% – making the Lithuanian economy one of the worst performing in the world this year. With the authorities attempting to correct the economy’s external asymmetries through a relatively unprecedented internal devaluation, we caution that output, wages and prices are all set to contract steeply. The consequences of the economic downturn have yet to be fully understood and despite the demand for healthcare being relatively independent of the trends in the troubled wider economy, BMI notes that market figures for subsequent years may be even lower than forecast.