Croatia Pharmaceuticals and Healthcare Report Q1 2010

Summary

Croatia is ranked joint ninth in BMI's Pharmaceuticals & Healthcare Business Environment Rating matrix for Central and Eastern Europe (CEE) in Q110. BMI's regional outlook for pharmaceutical companies in the region has improved marginally, marking the first improvement in our ratings since Q209. Globally Emerging Europe is the second-least attractive market, with only the Middle East & Africa less attractive.

Croatia's score is exactly average for the region and the country remains a fairly attractive market for multinational drugmakers. Positive aspects of the Croatian market include above average per-capita spending on pharmaceuticals, an ageing population and sound political and economic indicators. However, regulatory aspects, while improving, remain substandard in relation to other EU states. Total market size and growth rates remain unspectacular, however, with BMI projecting a compound annual growth rate (CAGR) of 3.24% over the next five years for sales of prescription and over-thecounter medicines (OTC). As a percentage of GDP, drug expenditure was 1.69% in 2008, just below average in CEE. This marks a fall in comparison with the previous two years, which registered 1.92% and 1.93%.

Steady levels of market growth have kept spending within a sensible range over the past five years; however, with increases in 2006 and 2007 and inflation. This figure is above average for the region and in combination with a high preference for generic drugs, highlights good access to medicine in the country. Nevertheless, the addition of innovative products to the reimbursement list is likely to provide strong impetus for growth in future.

The demand for pharmaceuticals will also be boosted by the development of the overall healthcare sector, with most of the new expenditure sourced from private pockets, given the need for austerity measures in the public sphere. Croatia's healthcare reforms, introduced in 2009, have shown strong efficiency gains for public spending. During H109 the Croatian Health Insurance Institute (HZZO) reduced debts by HRK311mn (US$64mn). Supplementary insurance and the introduction of co-payments should help maintain strong revenues in the system and allow for greater budget allowance for pharmaceuticals.

The structure of Croatia's pharmaceutical output is undergoing a period of transition. The country's main domestic drugmaker Pliva has successfully completed its restructuring and integration into Teva, achieving strong efficiency and production gains. Pliva has increased production by up to 30% year-onyear (y-o-y), increasing efficiencies by 25-50% as a direct result of knowledge transfer from Teva. Following a reduction in employees from 2,800 to 2,000, Pliva has increased efficiency per employee by up to 55%.

Contents

• Executive Summary
• SWOT Analysis
• Croatia Pharmaceuticals Industry SWOT
• Croatia Political SWOT
• Croatia Economic SWOT
• Croatia Business Environment SWOT
• Pharmaceutical Business Environment Ratings
• Limits Of Potential Returns
• Risks To Realisation Of Returns
• Croatia - Market Summary
• Regulatory Regime
• Intellectual Property Regime
• Pricing Regime
• Reimbursement Regime
• OTC Regulations
• Industry Trends And Developments
• Epidemiology
• Healthcare Provision
• Healthcare Expenditure
• Healthcare Debts
• Healthcare Reform
• Domestic Pharmaceutical Industry
• Domestic Company Activity
• Foreign Company Activity
• Pharmaceutical Retail
• Research And Development Sector
• Clinical Trials
• Medical Devices
• Industry Forecast Scenario
• Overall Market Forecast
• Key Growth Factors - Industry
• Key Growth Factors - Macroeconomic
• Prescription Market Forecast
• Patented Market Forecast
• Generics Market Forecast
• OTC Market Forecast
• Pharmaceutical Trade Forecast
• Other Healthcare Forecasts
• Key Risks To BMI's Forecast Scenario
• Competitive Landscape
• Company Monitor
• International Company Profiles
• GlaxoSmithKline
• Pfizer
• Sanofi-Aventis
• Novartis
• Merck & Co
• Krka
• Indigenous Company Profiles
• Pliva (now part of Teva Pharmaceuticals)
• Belupo
• Jadran Galenski Laboratorij (JGL)
• Country Snapshot: Croatia Demographic Data
• Section 1: Population
• Section 2: Education And Healthcare
• Section 3: Labour Market And Spending Power
• BMI Forecast Modelling
• How We Generate Our Pharmaceutical Industry Forecasts
• Pharmaceutical Business Environment Ratings Methodology
• Ratings Overview
• Weighting
• Sources
• List Of Tables
  • Table: Emerging Europe - Regional Pharma Business Environment Ratings for Q110
  • Table: Disease Burden In CEE
  • Table: Croatia - Economic Activity, 2005-2014
  • Table: Croatia - Top 10 Medicines by Value Sales
  • Table: Croatia - Top 10 Medicines by Value Sales in Retail Outlets
  • Table: Demographic Indicators, 2005-2030
  • Table: Rural/Urban Breakdown, 2005-2030
  • Table: Education, 2000-2003
  • Table: Vital Statistics, 2005-2030
  • Table: Employment Indicators, 1999-2004
  • Table: Consumer Expenditure, 2000-2010 (US$)
  • Table: Average Annual Wages, 2000-2010
  • Table: Pharmaceutical Business Environment Indicators
  • Table: Weighting Of Components
• Forecast Tables