Botswana Pharmaceuticals and Healthcare Report Q3

BMI View: Botswana’s private healthcare system has the demand for investment in specialist treatment facilities and the government will to help investment in public-private partnerships (PPPs). However, fixed pricing for services from health insurance providers is stifling competition and discouraging investment.
Headline Expenditure Projections Pharmaceuticals: BWP1.43bn (US$209mn) in 2011 to BWP1.60bn (US$248mn) in 2012; +1202% in local currency terms and +18.6% in US dollar terms. Growth forecast up from Q212 due to analyst intervention.
Healthcare: BWP9.28bn (US$1.36bn) in 2011 to BWP10.38bn (US$1.61bn) in 2012; +11.9% in local currency terms and +18.5% in US dollar terms. Historic data down from Q212 due to new data from the World Health Organization (WHO).
Medical Devices: BWP397mn (US$58mn) in 2011 to BWP455mn (70mn) in 2012; +14.8% in local currency terms and +21.5% in US dollar terms. Growth forecast up slightly from Q212 due to analyst intervention.
Risk/Reward Rating: In Q312, Botswana’s Pharmaceuticals & Healthcare Risk/Reward Rating (RRR) has remained stable, with an overall score of 45.2 out of 100. It is 15th out of the 30 countries surveyed in the Middle East and Africa (MEA) and scores slightly above the regional average of 44.5.
Key Trends And Developments 􀂃 In February 2012, Interpol was approached by the Botswana police service to assist it in a case regarding the seizure of a large consignment of antiretroviral (ARV) drugs and birth control pills.
􀂃 In March 2012, the Botswana Pharmaceutical Wholesalers and Manufacturers Association (Bopharma) highlighted the importance of the regulatory harmonisation of medicines in the Southern African Development Community (SADC) region, saying it will allow greater access to drugs, which would help to eliminate counterfeit medicines in the region. Botswana’s government has echoed this sentiment, saying that it is imperative that regulatory standards in SADC member states are harmonised. The government went on to speculate about the possibility of joint procurement in the SADC.
􀂃 According to a report released in March 2012 by USAID and Securing Pharmaceutical Systems (SPS) called the Safety of Medicines in Sub-Saharan Africa, Botswana scores a two out of a maximum of four for the strength of its pharmacovigilance (PV) structures. This score is not very positive considering that the country’s healthcare system would be considered above average for Sub-Saharan Africa (SSA).
BMI Economic View: We have made downward revisions to our real GDP growth forecasts for Botswana over the next two years, as a protracted global economic slowdown will temper the outlook for diamond exports, while the government’s attempts to reduce its wage bill will weigh on final consumption. We forecast economic expansion of 4.2% in 2012 and 5.4% in 2013, down from previous projections of 5.4% and 5.5% respectively.
BMI Political View: We believe the governing Botswana Democratic Party (BDP) is facing a number of key challenges in the coming few years. In particular, we highlight opposition to privatisation plans and concerns over chronic power shortages as potential causes of strikes. A reigniting of factionalism may destabilise the party from within. Looking further ahead, we do not see these issues being reflected by voting patterns in the 2014 parliamentary election as the fragmentation of opposition parties will pave the way for BDP dominance