New Healthcare market report from Business Monitor International: "Slovakia Pharmaceuticals & Healthcare Report Q2 2013"

Boston, MA -- (SBWire) -- 05/17/2013 --BMI View: Slovak Prime Minister Robert Fico plans to unify the country's private and public health insurance funds into a single state-owned insurer, but there is likely to be a lengthy negotiation and a legal battle before this is realised. We do not expect either of the two private insurers - Dovera or Dutch-owned Union - will surrender their businesses without a fight, with Union in particular well-placed to oppose the move, potentially invoking EU law on protectionism. It has already won an arbitration battle in an international court, but the decision is not legally binding. Moreover, the continued threat of parallel exports has forced Slovakia to roll back some harsh pricing controls. We forecast further generic uptake and greater co-payments by patients towards the cost of healthcare, in line with an established trend we see playing out in Eastern Europe.

Headline Expenditure Projections

- Pharmaceuticals: EUR1.66bn (US$2.11bn) in 2012 to EUR1.68bn (US$2.10bn) in 2013; 1.4% in local currency terms and -0.2% in US dollar terms. Local currency forecast broadly unchanged from Q113.
- Healthcare: EUR6.05bn (US$7.68bn) in 2012 to EUR6.26bn (US$7.82bn) in 2013; +3.4% in local currency terms and 1.8% in US dollar terms. Local currency forecast broadly unchanged from Q113.
- Risk/Reward Rating: Slovakia's Pharmaceutical Risk/Reward Rating (RRR) score for Q213 is unchanged from the previous quarter. This is also the case for all other countries in BMI's proprietary system that ranks pharmaceutical markets according to attractiveness to multinational drugmakers. A minor re-weighting of one of the RRR components is being implemented to improve the tool, and the adjusted scores for all markets will be published in the Q312 updates of the Pharmaceuticals & Healthcare reports. Slovakia has a RRR score of 53.6 out of 100, making it the seventh most attractive pharmaceutical market in Central and Eastern Europe.

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Key Trends And Developments

- The International Court of Arbitration ruled in favour of Dutch-owned private health insurer Union, after Robert Fico's government banned health insurers from turning a profit. Although not legally binding, the decision sets a precedent for rulings from the EU Commissioner, who may strike down on Slovakia's measures.
- The movement to buy out the stakes of the two private health insurers and form one state-run insurer has hit severe delays as both companies are stringently against selling their stakes, with the threat of judicial appeal to the EU.
- Parallel exports in the region and Slovakia have risen dramatically as reference pricing mechanisms have lowered drug prices significantly; the non-inclusion of specific countries in reference lists by Western European countries has created a massive arbitrage opportunity for wholesalers exploiting the higher prices in Germany, France and the UK.

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