Abstract
Slovenia is ranked in 9th position in BMI’s Business Environment Ratings
for Central and Eastern
Europe (CEE) in Q409, highlighting it as a
reasonably attractive investment opportunity for drugmakers.
While
regionally the country can be considered a relatively safe investment,
particularly in light of
relatively strong regulations and risk ratings,
the market’s size somewhat restricts opportunities for
returns.
Nevertheless high per-capita spending is a bonus for companies selling higher
priced products.
Over the next five years BMI forecasts the pharmaceutical
market will grow at a compound annual
growth rate (CAGR) of 5.8%. Using
BMI’s new 10-year forecast model, a longer-term view sees the
Slovenian market becoming increasingly mature. Towards the end of the forecast
period low single-digit
growth rates will become the norm, as high level
per-capita spending results in smaller opportunities for
increases.
To
a notable extent, positive market developments – such as rising
healthcare expectations and changing
demographic profile – will be
offset by government cost-cutting policy. This has been seen most recently
in the new health insurance regulations and changes to the reimbursement
system, subsidising only the
cheapest generics. Additionally, mandatory
generic prescribing is a significant brake on the market.
Manufacturers
will, however, be looking for private healthcare cover to pick up some of the
slack,
although this is more of a medium- to long-term prospect.
By
far the leading source of pharmaceutical imports into Slovenia is Germany,
which provided 33.2% of
the total in 2008. Austria (14.1%), Switzerland
(10.0%), Netherlands (8.6%) and France (6.9%) are the
next biggest
sources. The country’s Western European import base highlights its
reliance on foreign
sources for patented drugs. Export destinations are
dominated by Russia and Poland, which together
account for 35.1% of total
value in 2008.
BMI’s Burden of Disease Database (BoDD) calculates
that the number of disability-adjusted life years
(DALYs) lost to all
diseases and injuries per 10,000 patients in 2008 was 13,880. This makes
Slovenia
the second least burdened country in CEE, a strong reflection of
relatively well-developed healthcare
standards in the country. The country
spends around 8.2% of GDP on healthcare to manage diseases
effectively.
Domestic giant Krka has shown resilience in the face of the
economic downturn, with sales up 2% yearon-
year (y-o-y) in H109. Profits
were down only marginally over the same period. As with many
drugmakers,
foreign exchange rates – rather than true local demand – have
prevented improved
performance.
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