Serbia Pharmaceuticals and Healthcare Report Q1 2009

Summary

The value of the Serbian pharmaceutical market was estimated at US$1.17bn in 2008, with the figure likely to top US$1.7bn by the end of 2013. Main therapeutic areas for prescription products are cardiovascular drugs and antibiotics, with the latter being illustrative of an emerging market. In the forecast period, cardiovascular and other chronic treatments will make considerable gains, representing a commercial opportunity for foreign players. The over-the-counter (OTC) market development will be patchy, dependent on the wider state of legislative as well as economic affairs. However, due to the shortcomings of the regulatory system, many prescription products can be obtained over the counter, which makes market valuations more difficult.

Industry developments have been relatively muted over the past few months, with the notable exception of the October 2008 announcement that the Serbian government will start selling an 80% stake in its diversified pharmaceutical company Galenika, expecting to receive around US$800mn for the secondlargest domestic drug-making firm. The sale of has reportedly attracted interest from Greek company Alapis, given its desire to acquire a non-EU based company as one of the key considerations, although there are likely to be other bidders.

Shortcomings of the public funding have gradually led to the situation whereby much of the financial responsibility for pharmaceutical requirements has been shifted onto the patient. However, with much of the population living below the poverty level, and with many pensioners living alone, access to medicines is substandard. While, in November 2008, the government announced a 12% increase in total public sector budgets, much of this money will be directed towards pensions, road construction and the readjustment of election budgets. Healthcare can also expect modest contributions, but smaller than those for the previously mentioned sectors. Nevertheless, given the current state of public sector facilities, which overwhelmingly lack modern equipment, much more will need to be done in order to improve access to adequate healthcare services and medicines.

Serbia's pharmaceutical market is also likely to suffer the fallout from the September 2008 failure of the European Union (EU) to extend trade benefits to the country and unfreeze trading ties. The decision was made despite a favourable report from the United Nations (UN)' war crimes tribunal on Serbia's cooperation with the court. While this comes as a setback for Serbia, we nevertheless expect the government to continue to pursue political and economic reforms supportive of potential future EU accession. Additionally, the country is enjoying the state of lower inflation, which fell to 10.5% year-onyear (y-o-y) in August 2008, down from 11.6% in June, although well above the 6.3% registered in August 2007. Consequently, Serbia's short-term economic rating has increased to 51.9, due to an adjustment in our exchange rate stability subcomponent.

Contents

• Executive Summary
• Serbia Pharmaceuticals And Healthcare Industry SWOT
• Serbia & Montenegro Political SWOT
• Serbia & Montenegro Economic SWOT
• Serbia & Montenegro Business Environment SWOT
• Pharmaceutical Business Environment Ratings
• Regional Pharma Business Environment Ratings
• Limits Of Potential Returns
• Risks To Realisation Of Returns
• Serbia - Market Summary
• Regulatory Regime
• Intellectual Property Environment
• IP Disputes
• Pricing Regime
• Reimbursement Regime
• Price Cuts
• Price Rises
• Industry Trends And Developments
• Epidemiology
• Healthcare Sector
• Healthcare Insurance
• Healthcare Reforms
• Medical Tourism
• Pharmaceutical Sector
• Pharmaceutical Wholesale And Retail
• Domestic Pharmaceutical Industry
• Domestic Company Activities
• Foreign Pharmaceutical Industry
• Foreign Company Activities
• Stada Sales vs Generic Market Growth
• Clinical Trials
• Medical Devices
• Medical Device Classification In Serbia
• Industry Forecast Scenario
• Overall Market Forecast
• Key Growth Factors - Industry
• Key Growth Factors - Macroeconomic
• Prescription Market Forecast
• OTC Market Forecast
• Patented Market Forecast
• Generics Market Forecast
• Export/Import Forecasts
• Other Healthcare Data Forecasts
• Key Risks To BMI's Forecast Scenario
• Competitive Landscape
• Company Monitor
• Multinational Company Profiles
• Pfizer
• GlaxoSmithKline
• Novartis
• Sanofi-Aventis
• Merck & Co
• Indigenous Company Profiles
• Hemofarm (Stada)
• Galenika
• Zdravlje Actavis
• Jugoremedija
• Country Snapshot: Serbia 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: Top 10 Causes Of Death In Serbia And Montenegro
  • Table Serbia - Major General and Specialised Hospitals
  • Table: Cosmetic Surgery Costs
  • Table: Proposed Members Of Serbia's Pharmaceutical Industry Association
  • Table: Number Of Ongoing Clinical Trials In Serbia
  • Table: Serbia Medical Device Market Forecast
  • Table: Serbia --Drug Expenditure And Prescription Market Indicators, 2004-2013 (RSDmn unless otherwise stated)
  • Table: Serbia - Health Expenditure Indicators, 2004-2013 (RSDmn unless otherwise stated)
  • Table: Serbia - Economic Activity
  • Table: Serbia - Prescription Market Indicators, 2004-2013 (RSDmn unless otherwise stated)
  • Table: Serbia - OTC Market Indicators, 2004-2013 (RSDmn unless otherwise stated)
  • Table: Serbia - Patented Market Indicators, 2004-2013 (RSDmn unless otherwise stated)
  • Table: Serbia - Generics Market Indicators, 2004-2013 (RSDmn unless otherwise stated)
  • Table: Serbia - Pharmaceutical Trade Indicators, 2004-2013 (RSDmn unless otherwise stated)
  • Table: Serbia - Other Healthcare Indicators, 2004-2013 (RSDmn unless otherwise stated)
  • Table: Companies Involved In The Serbian Pharmaceutical Industry
  • Table: Market Share By Therapeutic Group, 2004
  • Table Competitive Landscape in Serbia
  • Table Serbia - Defined Daily Dose (DDD) Per 1,000 Inhabitants
  • Table: Demographic Indicators, 2005-2030
  • Table: Rural/Urban Breakdown, 2005-2030
  • Table: Education, 2000/01
  • Table: Vital Statistics, 2005-2030
  • Table: Employment Indicators, 2001-2006
  • Table: Average Annual Manufacturing Wages, 2000-2012
  • Table: Pharmaceutical Business Environment Indicators
  • Table: Weighting Of Components