One of Europe’s smaller nations and its westernmost, Portugal, with a pharma market worth roughly USD 3.5 billion, may not be known as the continent’s pharma powerhouse. Yet the country boasts plenty of impressive credentials —such as a national healthcare system (NHS) that is not only universal and free, but increasingly digitalized— that attest to the vitality of its healthcare ecosystem, and its increasing life sciences potential.
Higher Life Expectancy than EU average
Among Portugal’s healthcare attributes are its high life expectancy. According to the European Commission’s State of Health in the EU 2021 Country Health Profile, life expectancy among Portugal’s some 10 million population is as much as half a year higher than the EU average (2020).
The figure may have fallen by 0.8 years between 2019 and 2020 due to COVID-19, but before the pandemic, life expectancy in the country had increased by more than five years between 2000 and 2019. Leading causes of death in Portugal are cardiovascular diseases and cancer.
A Universal Healthcare System
Another positive feature of Portugal’s healthcare landscape is the Portuguese National Health Service (NHS), a universal tax-funded system that covers all of the country’s residents. The NHS coexists with health subsystems, or special health insurance schemes for specific professions or sectors, as well as private voluntary health insurance (VHI) schemes.
Several recent reforms have aimed to increase financial coverage within the NHS and in 2020 Portuguese authorities adopted new measures to expand coverage, including new legislation to eliminate user charges for primary care services.
Not only does Portugal offer its citizens universal healthcare coverage, the country is also a trailblazer, having rolled out digitalization measures long before many of its European counterparts. Portugal was in fact one of the first Western European countries to make e-prescriptions mandatory in 2011.
In effect, the Portuguese Ministry of Health employs a dedicated team to rollout tech services in healthcare through its shared services organization SPMS. “Portugal is unique in Europe as it has electronic health records designed by the government in primary care and hospitals. The software hospitals use for most functions (admitting a patient, documentation, discharge) are produced by SPMS’s team,” said former CEO of SPMS Henrique Martins.
Yet another front where Portugal is a forerunner is in Health Technology Assessment (HTA) as the second country worldwide to introduce an HTA system. The Portuguese National Health Technology Assessment System (SiNATS), created in 2015, has aimed to provide the NHS with an instrument to improve its performance by racionalising the reimbursement of drugs and medical devices.
Steady Growth in Healthcare Spending
While Portugal spends less than the EU average on health, the country did see steady moderate growth between 2013 and 2019, spending EUR 2,314 per capita (more than one third below the EU average of EUR 3,523). Although the health spending share of GDP in 2019 was below the EU average at 9.5 percent as opposed to 9.9 percent, with the government plan to improve NHS responsiveness approved in 2020, Portugal increased its health budget by EUR 800 million in 2020 to devote additional resources to the COVID-19 pandemic. In addition, Portugal is benefitting from a EUR 22.2 billion package in the form of loans and investments as a part of the European recovery and resilience plan with EUR 1.4 billion destined for the NHS.
Outpatient care represents the largest share of Portugal’s health spending – 46 percent, or EUR 1,074 per capita, and the highest portion dedicated to this spending category in the EU. However, expenditure on pharmaceuticals at EUR 443, or 19 percent, was considerably below the EU average of EUR 630 which reflects the country’s efforts to improve efficiency and contain costs in recent years.
Pharma Market Comparable to Similar-Sized Nations
Portugal’s pharma market, valued at some USD 3.5 billion, is roughly equivalent to that of similarly populated European countries like Sweden and Czech Republic. According to Apifarma, the Portuguese pharmaceutical industry’s leading association, in 2021 the industry represented EUR 1.734,2 million in production and EUR 1.364 million in exports while R&D investment represented EUR 120,9 million, or 5,6 percent of the total corporate sector. The market has been exhibiting slight growth and represents over 2 percent of GDP.