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Slovenia Pharmaceuticals and Healthcare Report Q1 2011
Business Monitor International, Nov 2010, Pages: 81
Slovenia Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Slovenia's pharmaceuticals and healthcare industry.
Developed state underperformance remains a recurring theme within our wider industry analysis, including pharmaceuticals and healthcare. Although pharmaceutical spending by some countries in Emerging Europe, of which Slovenia is part, was less affected by the recent economic crisis than other areas of consumer and government expenditure, the downturn has highlighted the need for fiscal prudence, as was the case in developed states of Europe. Therefore, in the coming five-year forecast period, we expect Slovenia’s annual pharmaceutical values growth rates to fall below those recorded in the five years to 2009. At a local currency compound annual growth rate (CAGR) of 3.52% in the 2009- 2014 period, Slovenian pharmaceutical spending at consumer prices is expected to rise from EUR712mn (US$997mn) to EUR847mn (US$1.06mn), which will also be impacted by upcoming patent expirations on a number of major products.
In the light of the above forecast, Slovenia’s attractiveness as a destination for pharmaceuticals is moderate, especially when considered in relation to its small population size, which falls in the region of 2.1 million. On the other hand, positives include the high per-capita GDP as well as considerable per capita levels of annual spending on medicines (in the region of US$450 currently), high standard of healthcare and widespread health awareness, which will drive demand for innovative treatments. However, the Slovenian government is forced to rationalise its healthcare and pharmaceutical spending, given that public funding covers over 70% of the country’s total healthcare expenditure. Specifically, a recently proposed series of pharmaceutical cost-containment measures, including a prescription system based on active pharmaceutical ingredients (APIs) or therapeutically equivalent medicinal products with comparable effects, will impact the growth of pharmaceutical market values. Although achieved savings could then be used to increase reimbursements for expensive but more therapeutically efficient biological drugs, even those products are expected to face a more challenging reimbursement environment, especially as their usage in Slovenia has risen in recent times.
In the meantime, further cost-containment measures can be expected if the economic recovery proves more difficult and protracted than had originally been anticipated. In fact, we have revised down our Slovenian growth forecast for 2010 to 1.8% (from 2.5%), on the back of persisting weak domestic demand data, which will also mean less funding available for public sector expenditure. Local credit conditions in the country have remained heavily constricted, despite the stabilisation of global financial markets and the emergence from recession in the second quarter. As a result, we now have weaker expectation for domestic demand growth, with private consumption forecast to expand by only 0.5% and gross fixed capital formation to contract for a second consecutive year
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