Abstract
Of the 20 markets measured in BMI’s Q309 Pharmaceuticals & Healthcare
Business Environment
Rankings for Central and Eastern Europe (CEE),
Croatia is placed 10th, reflecting the country’s middleranking
attractiveness for multinational companies. While the Croatian market is
making great efforts to
align regulations with EU guidelines, the market
still holds certain drawbacks for companies looking to
enter. The Croatian
pharmaceutical market is in itself not overly high in value compared with many
of its
CEE counterparts, with per capita spending calculated to have
reached a mere US$178 in 2008. Through
to 2013 BMI forecasts compound
growth rate (CAGR) for drug expenditure in Croatia will be 5.76% in
local
currency terms, reflecting a stable level of expansion, albeit below many of
the emerging CEE
markets.
Legislative improvements and future EU
accession should prove a great attraction to pharmaceutical
companies in
future; however, there are still some potential drawbacks for the Croatian
system,
particularly in terms of a preference for local generics
manufacturers. While budget restraints have
limited widespread access to
modern treatments, a steady stream of patented pharmaceuticals have been
made available for reimbursement. The most recent additions to this list
include GlaxoSmithKline
(GSK)’s non-small lung cancer treatment
Tarceva (erlotinib) and Pfizer’s kidney cancer drug Sutent
(sunitinib). Nevertheless, as a result of the implementation of tendering
systems for medicines, as part of
recent procurements the HZZO has saved
close to US$67mn. Drugmakers have been forced to cut prices
by an average
of 12% in order to remain providers for drugs on the reimbursement list, with
patented
drugmakers having to make the largest concessions.
For 2009
the Ministry of Health has increased its budget for drugs to HRK3.1bn, which
should provide a
boost to prescription sales, reinforcing our view that
the prescription market will remain resilient to the
economic downturn.
However, we are slightly less optimistic for the over-the-counter (OTC)
market,
which is likely to witness some downturn as a result of a
contraction in spending, which may further
result in reductions in
spending on less essential medicines.
Over the longer term, however, it is
our view that OTCs will continue to prosper at the expense of the
prescription market share. The expansion of the number of outlets where OTC
medicines are available,
combined with a general increase in
self-medication should continue to drive growth in the sector.
Meanwhile
advertising – which is permitted in all major forms for OTCs –
should help create brand value
for high potential products.
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