Abstract
In the BMI’s Q409 Pharmaceuticals & Healthcare Business Environment
Rankings (BER) for Central
and Eastern Europe (CEE), Croatia is once again
10th of the 20 regional markets surveyed. Its small and
price-conscious
population is one of the key barriers to market penetration for pharmaceutical
companies,
although the country’s progress towards European Union
(EU) membership should provide an impetus
for some improvement in its
regulatory and pricing and reimbursement environment. Consequently, we
forecast that Croatia’s pharmaceutical market value will increase from
HRK5.34bn (US$0.99bn) in 2008
to HRK7.64bn (US$1.32bn) in 2013. This
translates into a compound annual growth rate (CAGR) of
5.78% in local
currency and 3.25% in US dollar terms, which falls below the growth predicted
for a
number of other emerging CEE markets.
In the meantime, the fact
that the Croatian economy posted a hefty contraction during the first quarter
of
2009 means that our forecast for a full-year GDP contraction of 3.21%
is likely to be on target.
Consumers continue to rationalise their
spending, and given that they are required to foot some of their
healthcare and pharmaceutical bills, this trend will be reflected in spending
on medicines, with over-thecounter
(OTC) items expected to suffer the
most. Even though government spending is not falling
drastically, lower
tourism and industry revenues will mean that pharmaceutical and healthcare
reimbursement will need to be tightened, especially given the high
unemployment rate and the recent
additions of innovative medicines to the
reimbursement list.
In addition to the above, Pliva’s new owner, the
major global, Israel-based generics producer Teva,
announced HRK622mn
(US$121mn) in Q109 losses for Croatia’s largest pharmaceutical
company.
However, much of this figure is attributed to the recent
restructuring, which followed Teva’s take-over of
Pliva’s
original owner, the US’s Barr Laboratories. In fact, total revenues for
the period actually rose by
6% in relation to Q108, due to the strong
growth of sales in the UK, Russia and the US on the back of the
rising
demand for generics.
There are other positive signs for the pharmaceutical
industry. The previous owner of a prominent
Croatian dairy company, Luka
Rajic, returned to the country to set up a new company, PharmaS.
According
to local sources, Mr Rajic is to invest around HRK300mn (US$59mn) in the
construction of a
plant for the production of generic drugs in Croatia,
which will employ some 100 staff. Generic drugs,
especially those of the
branded variety, are well-received in Croatia, although PharmaS will have
strong
competition from the now foreign-backed Pliva.
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