Denmark’s pharmaceutical market value to fall to US$3bn by 2020, forecasts GlobalData
Market analyst says price-cap agreements and high tax rates stand in way of growth
Denmark’s pharmaceutical market will decline in value from $3.5bn in 2013 to $3bn by 2020, with price-cap agreements and high tax rates on pharmaceutical products two of the main barriers to growth, finds research and consulting firm GlobalData.
The company’s latest report, CountryFocus: Healthcare, Regulatory and Reimbursement Landscape – Denmark, states that price-cap agreements between the Danish Ministry of Health and the Danish Association of Pharmaceutical Industry have existed since 2008 and continue to limit pharmaceutical market growth as the government aims to keep drug prices down.
This is further exacerbated by 25% VAT on pharmaceutical products, which is high compared with other EU countries, restricted sales of over-the-counter medicines and a costly labour force.
But Joshua Owide, GlobalData’s Director of Healthcare Industry Dynamics, says there are a number of favourable conditions for the future Danish pharmaceutical market, which will be sustained by increasing demand for medicines and higher healthcare expenditure, as well as government healthcare reforms.
'Denmark’s corporate taxes are to be gradually reduced to 22% by 2016 and the country does not levy capital duty, share transfer duty or wealth taxes,' says Owide. 'This benign tax environment could encourage pharmaceutical companies to set up business in Denmark.'
He adds that the registration of a pharmaceutical product under the national procedure in Denmark takes an average of six to 12 months.
'This is less than the average time taken by regulatory authorities in the US and EU, which is currently 322 days and 366 days, respectively.'
Pharmaceuticals are one of Denmark’s largest export goods. In 2013, the country exported DKK71.3bn ($12.1bn) worth of pharmaceutical products, accounting for almost 11.4% of Danish exports.
