Abstract
In the BMI’s Q409 Business Environment Rating (BER) matrix, Serbia
continued to improve its
placement, and is now found in 9th position, out
of the 20 key markets surveyed in the Emerging Europe
region. Key selling
points of the Serbian market include its advantageous geographical position,
which
allows easy access to the rest of Europe, a largely untapped
pharmaceutical market, and the low cost and
abundant supply of skilled
labour. However, Serbia will continue to be a challenging market for
foreign
investors, partly due to the prevalence of corruption, a
large-scale black-market economy, and the poor
state of the
country’s infrastructure. We have recently downward revised our Serbian
real GDP growth
forecast for 2009, now expecting a sharper contraction of
3.8%, which will be negatively impacted by
faltering aggregate demand,
reduced access to credit, and lower levels of foreign investment.
Additionally, Serbia’s market is characterised by a general trend of
downward pressure on prices and an
emerging regulatory environment, which
often marginalises foreign players. All of those factors, in
combination
with the challenging economic environment, will have an impact on
pharmaceutical market
performance over the coming years. Nevertheless, BMI
forecasts that pharmaceutical sales in Serbia will
continue to grow over
the next five years, registering a compound annual growth rate (CAGR) of
8.72%
in local currency terms. From being worth some RSD74.9bn (US$1.28bn)
at consumer prices in 2008, the
value of the market is expected to top
RSD113.77 (US$1.69bn) in 2013. Due to limited financing
available for
healthcare in general (both in the private and the public spheres), generics
and over-thecounter
(OTC) medicines are forecast to post the strongest
gains.
Still, the government appears committed to modernising the
country’s healthcare. By May 2009, six
institutions were connected
to the new computerised medical information system for hospitals, allowing
for a much faster transfer of medical information. The project is part
financed by the World Bank, which
is also funding a further update of
hospital networks, provision of technical assistance for doctors and
medical staff and help with the evaluation of the new diagnosis-related groups
(DRG)-based payment
system for hospital use.
In the meantime, the
Serbian pharmaceutical market continues to attract foreign players. In July
2009,
leading Macedonian pharmaceutical manufacturer Alkaloid AD reported
that its plans to begin drug
production in Serbia. The EUR4mn project,
which will be realised in co-operation with Serbian Infarm,
will
eventually result in the manufacture of 19 types of drugs. According to
Alkaloid, which already
operates a subsidiary in Serbia – Alkaloid
d.o.o – the portfolio will target export markets, primarily
Russia.
Around the same time, the government announced that the planned sale of local
drug producer
Galenika will be scheduled for September 2009. The majority
stake will be sold through tender, rather
than through the initial offer
of stocks, as previously planned. Greek company Alapis – which owns
a
drugmaker and a wholesaler in Serbia – has already been linked
with the Galenika purchase, although
other European generic players are
likely to join in the bidding.
| 
View Cart
