Sri Lanka's healthcare spending is expected to continue strengthening over the coming years, according to the Business Monitor International's (BMI) 'Sri Lanka Pharmaceuticals and Healthcare Report Q1 2011'.
The most significant change in the country's performance in BMI's Pharmaceutical & Healthcare Business Environment Ratings (BERs) this quarter has been a substantial drop in its country risks score to 48, down from 63 in the previous quarter. Sri Lanka's country risks score is now no longer above the regional average, which stands at 58 this quarter, the report adds.
The BMI, a London-based company, publishes specialist business information on global emerging markets for senior executives in more than 125 countries worldwide.
The BMI is forecasting an increase of spending from LKR201.44bn (US$1.75bn) in 2009, to LKR225.53bn (US$1.99bn) in 2010.
The government's 2011 budget, outlined in November 2010, shortly after President Mahinda Rajapaksa was sworn in for his second term, could help reduce the cost of pharmaceutical products, the report said. Pharmaceutical products will be exempt from both import duties and VAT. The budget allocates as much as LKR900mn (US$8.08mn) to tackle non-communicable diseases in a three-year plan focusing on improvements in primary healthcare. It also allocates a total of LKR54bn (US$485.01mn) to both healthcare and education spending, up from LKR29.4bn (US$264.06mn) in the 2010 budget, the BMI stated in its report.
According to BMI's drug expenditure forecast model, sales of pharmaceuticals in Sri Lanka are expected to increase from LKR38.97bn (U$338mn) in 2009, to LKR43.67bn (US$386mn) in 2010. Due to the strengthening rupee, growth in 2010 will stand at 12.1% in local currency terms and 14.1% in US dollar terms.