Croatia Pharmaceuticals and Healthcare Report Q2 2012
Business Monitor International, February 2012, Pages: 88
BMI View: Based on Croatia’s deteriorating macroeconomic outlook, combined with our expectations that the new Kukuriku coalition government will pursue more severe austerity measures and the fact the Croatian Institute For Health Insurance (HZZO) announced huge – though probably not achievable – cuts to its Q112 healthcare budget, BMI has downgraded the 2012 and 2013 outlooks for Croatia’s pharmaceutical, healthcare and medical device market. We expect further cost-cutting measures to be announced in the coming months. Croatia’s pharmaceutical market will continue to be a modest prospect for foreign companies despite some opportunities provided by the operating environment improvements expected in the leadup to EU membership.
Headline Expenditure Projections
- Pharmaceuticals: HRK7.16bn (US$1.34bn) in 2011 to HRK6.94bn (US$1.29bn) in 2012; - 3.1% in local currency and -3.7% in US dollar terms. Forecast down significantly from Q112 due to economic factors and analyst modification.
- Healthcare: HRK27.10bn (US$5.07bn) in 2011 to HRK26.19bn (US$4.86bn) in 2011; -3.4% in local currency and -4.0% in US dollar terms. Forecast down significantly from Q112 due to economic factors and analyst modification.
- Medical devices: HRK1.46bn (US$274mn) in 2011 to HRK1.45bn (US$274mn) in 2012; -1.0% in local currency and -1.6% in US dollar terms. Forecast down significantly from Q112 due to economic factors and analyst modification.
Business Environment Rating: Croatia remains stable in our Q212 ranking, but is likely to come under additional pressure next quarter. The country remains one of the least attractive markets for multinationals in the CEE region. While Croatia has made concerted efforts to meet its EU membership requirements, thus facilitating market access for foreign players, its longer-term demographic and pharmaceutical market dynamics are considered subdued.
Key Trends And Developments
- Our medium-term outlook for Croatia’s pharmaceutical, healthcare and medical device markets is increasingly tied to the country’s weakening economic outlook. Our top-line macroeconomic projections are directly tied to our reduced expectations for private and public expenditure for the medical service sector. With decisions pending on how quickly and how deeply the new government can install public expenditure cuts, the immediate outlook for the economy has the potential to shape more long-term funding policy for healthcare and pharmaceuticals.
- In mid-December 2011, the Croatian Institute for Health Insurance (HZZO) adopted a provisional budget of HRK4.4bn (US$822mn) for Q112, HRK1bn (US$181mn) less than in Q111, representing a 20% year-on-year (y-o-y) decline. It also emerged that the Ministry of Health had selected Croatia’s budget for prescription pharmaceuticals as the main source from which savings will be drawn, with a cut equivalent to 60% y-o-y reduction for Q112. While we have revised our 2012 outlook downwards, we are sceptical about whether this size of cut can be achieved in Q112, especially with the apparent lack of measures to achieve these savings.
- The VAT which applies to non reimbursed prescription drugs, over-the-counter medicines and private healthcare services is set to rise from 23% to 25% in March 2012.
BMI Economic View: We have revised down our real GDP forecast for Croatia, expecting the country to post negative growth of 1.5% this year. We expect the government's expenditure cuts to weigh heavily on already paltry economic growth. We also highlight the potential risks to the economy stemming from the bloated banking sector. We now expect the Balkan economy to return to recession in 2012.
BMI Political View: We long predicted the centre-left Kukuriku coalition, led by the Social Democratic Party, to win the parliamentary election on December 4 2011, with official results showing it won 81 out of 151 seats. The coming years will pose many difficulties for the new government, including balancing the aims of boosting economic growth and implementing fiscal austerity, keeping the EU accession drive on track and tackling corruption. In this context, and against a backdrop of financial market uncertainty, we expect the government to seek support from the IMF in 2012.
Business Monitor International's Croatia 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 Croatia's pharmaceuticals and healthcare industry.
Executive Summary
Croatia Pharmaceuticals Industry SWOT
Croatia Political SWOT
Croatia Economic SWOT
Croatia Business Environment SWOT
Pharmaceutical Business Environment Ratings
Table: Central And Eastern Europe Risk/Reward Ratings, Q212
Rewards
Risks
Croatia – Market Summary
Regulatory Regime
Pharmaceutical Advertising
Intellectual Property Regime
Pricing Regime
Reimbursement Regime
OTC Regulations
Industry Trends And Developments
Epidemiology
Healthcare Provision
Healthcare Expenditure
Table: Overview Of Prescribing Patterns, 1999-2009
Healthcare Debts
Healthcare Reform
Medical Devices
Industry Forecast Scenario
Overall Market Forecast
Table: Pharmaceutical Sales Indicators 2008-2016
Healthcare Market Forecast
Table: Healthcare Expenditure Indicators 2008-2016
Table: Healthcare Governmental Indicators 2008-2016
Table: Healthcare Private Indicators 2008-2016
Key Growth Factors – Macroeconomic
Prescription Drug Market Forecast
Table: Prescription Drug Sales Indicators 2008-2016
Patented Drug Market Forecast
Table: Patented Drug Market Indicators 2008-2016
Generic Drug Market Forecast
Table: Generic Drug Sales Indicators 2008-2016
OTC Medicine Market Forecast
Table: OTC Medicine Sales Indicators 2008-2016
Medical Device Market Forecast
Table: Medical Devices Sales Indicators 2008-2016
Pharmaceutical Trade Forecast
Table: Exports and Imports Indicators 2008-2016
Key Risks To BMI’s Forecast Scenario
Competitive Landscape
Pharmaceutical Industry
Table: Croatia – Top 10 Medicines by Value Sales
Domestic Pharmaceutical Industry
Table: Croatian Pharmaceutical Manufacturers
Foreign Pharmaceutical Industry
Recent Company Activity
Pharmaceutical Wholesale
Pharmaceutical Retail
Company Profiles
Indigenous Company Profiles
PLIVA (Teva Pharmaceuticals)
Belupo
Jadran Galenski Laboratorij (JGL)
Foreign Company Profiles
GlaxoSmithKline
Pfizer
Sanofi
Novartis
Merck & Co
Krka
Country Snapshot: Croatia Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2000-2003
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 1999-2004
Table: Consumer Expenditure, 2000-2010 (US$)
Table: Average Annual Wages, 2000-2010
Glossary
BMI Methodology
How We Generate Our Pharmaceutical Industry Forecasts
Risk/Reward Ratings Methodology
Ratings Overview
Table: Pharmaceutical Business Environment Indicators
Weighting
Table: Weighting Of Components
- Indigenous Company Profiles
- PLIVA (Teva Pharmaceuticals)
- Belupo
- Jadran Galenski Laboratorij (JGL)
- GlaxoSmithKline
- Pfizer
- Sanofi
- Novartis
- Merck & Co
- Krka
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