New Healthcare research report from Business Monitor International is now available from Fast Market Research
Boston, MA -- (SBWIRE) -- 02/07/2013 -- BMI View: The Croatian pharmaceutical market continues to pose a challenging environment to domestic and international drugmakers. The economy is expected to contract in 2012 with weak growth returning in 2013 on the anticipation of capital inflows from the EU. The implementation of a clawback tax at the start of the year will increase pricing pressures. VAT rises and inflation suggest growth seen in 2012 will not be due to increased drug consumption. We forecast weak growth in pharmaceutical market for the next decade owing to the prevailing economic conditions in Europe. Healthcare and medical devices spending is projected to rise significantly over the next 10 years owing to a rapidly aging population. Even after EU accession next year, we continue to believe the country will represent a modest opportunity for foreign firms.
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Headline Expenditure Projections
- Pharmaceuticals: HRK7.38bn (US$1.38bn) in 2011 to HRK7.55bn (US$1.39bn) in 2012; 2.2% in local currency and 0.1% in US dollar terms. Forecast up from Q412 due to analyst intervention.
- Healthcare: HRK25.56bn (US$4.78bn) in 2011 to HRK25.34bn (US$4.64bn) in 2012; -0.9% in local currency and -2.9% in US dollar terms. Forecast broadly unchanged since Q412.
- Medical devices: HRK1.41bn (US$264mn) in 2011 to HRK1.39bn (US$255mn) in 2012; -1.3% in local currency and -3.3% in US dollar terms. Forecast broadly unchanged since Q412.
Risk/Reward Rating: Croatia's RRR score remains unchanged from Q412; however, this should be seen as a positive development as the regional average score has decreased from 51.2 to 50.7. The country's Industry Risk score remains above the regional average, indicating the country's relatively favourable regulatory regime for drug approvals compared with its neighbours. However, in the categories of Industry Rewards, Country Rewards and Country Risk, Croatia scores below average, highlighting the challenging market conditions in the country.
Key Trends And Developments:
- The accrual of debts by hospitals and the CIHI has become a major problem for pharmacies and wholesalers who are owed significant amounts of money by the state. Moreover, the state has taken towards centralising procurement of specific drugs and medical supplies to cut costs.
- The implementation of a clawback tax on pharmacies and producers to ensure neutral budgets has placed even more strain on pharmacies and drugmakers. Prescriptions and drug consumption will continue to rise even as unemployment climbs and the economy slow recovers.
- It is anticipated that the government will likely introduce in the short term further price controls or co-payments on expensive medicines as the cost of funding these (especially for cancers) rises significantly.
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