Fast Market Research recommends "Czech Republic Pharmaceuticals & Healthcare Report Q3 2013" from Business Monitor International, now available

Boston, MA -- (SBWire) -- 08/27/2013 --The Ministry of Health's decision to reimburse the state insurer more for taking on expensive patients suggests state favouritism, but given the VzP's longer list of high-risk patients, it is understandable. The fact that private insurers have not diversified their pools of patients has meant that the most demanding patients have ended up with the VzP, contributing to its significant debts. The insurance system must draw from other European countries, where risk is equalised to ensure coverage for all patients.

Headline Expenditure Projections

- Pharmaceuticals: CZK79.60bn (US$4.07bn) in 2012 to CZK82.68bn (US$4.04bn) in 2013; 3.9% in local currency terms and -0.8% in US dollar terms.
- Healthcare: CZK278.34bn (US$14.23bn) in 2012 to CZK284.58bn (US$13.90bn) in 2013; +2.2% in local currency terms and -2.4% in US dollar terms

Risk/Reward Rating: Despite leading our regional RRR table, drugmakers will face challenges in the Czech pharmaceutical market as a result of pricing pressure, poor access to the market and increasing generic substitution. Additionally, adopted and proposed amendments to healthcare and insurance laws have attracted criticism from the pharmaceutical sector.

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Key Trends And Developments

- In June 2013, it was reported that the Czech Ministry of Health is working on a new system of collecting insurance premiums that will primarily benefit the state-run insurer General Health Insurance (VzP), which has the most expensive patients on its books. Presumably, privately run health insurers have not been underwriting policies for the highest-risk patients or have demanded high premiums for coverage. As a result, patients unable to afford the coverage have turned to the state insurer.
- In June 2013, it was reported that the number of antibiotics prescribed annually by Czech doctors has reached around 70 tonnes, which is equivalent to 15mn packages per year. However, increasing antibiotic resistance accounts for around 25,000 deaths every year across Europe. Around 25% of Escherichia coli strains and nearly 50% of Klebsiella pneumoniae strains in the Czech Republic have become resistant to antibiotics, according to Czech microbiologist Vaclav Adamkova. Experts believe that few antibiotics are left that will work against these super-strains of bacteria, and those that do work are being used in everincreasing quantities, further driving resistance.

BMI Economic View: While coincident economic indicators for the Czech Republic continue to indicate sustained weakness in the domestic economy, the improvement in eurozone manufacturing PMI's - particularly with major trade partners such as Germany - points to a potential recovery in economic activity this year. We maintain our forecast for real GDP growth of 0.5% in 2013, rising to 1.9% in 2014.

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