2013-02-28 12:17:07 - New Healthcare research report from Business Monitor International is now available from Fast Market Research
BMI View: Croatia's entrance into the EU will accelerate its economic liberalisation and the development of the private sector. It is also likely to bring about an influx of EU funding in modernising the country's economy. The Croatian pharmaceutical market continues to pose a challenging environment to domestic and international drugmakers, but we believe EU accession will ease the regulatory burden as legislation is harmonised with EU norms. In 2013 the economy is expected to post weak growth in anticipation of capital inflows from the EU. However, VAT rises and inflation suggest that growth seen in 2013 will not be due to increased drug consumption. We forecast weak pharmaceutical market growth for the next decade due to the prevailing
economic conditions in Europe. Healthcare and medical devices spending is projected to rise significantly over the next 10 years, caused by the rapidly aging population.
Full Report Details at
- www.fastmr.com/prod/541204_croatia_pharmaceuticals_healthcare_re ..
Headline Expenditure Projections
* Pharmaceuticals: HRK7.50bn (US$1.37bn) in 2012 to HRK7.65bn (US$1.33bn) in 2013; 2% in local currency and -3.4% in US dollar terms. Forecast unchanged from Q113.
* Healthcare: HRK25.09bn (US$4.59bn) in 2012 to HRK26.15bn (US$4.53bn) in 2013; +4.2% in local currency and -1.3% in US dollar terms. Forecast unchanged from Q113.
Risk/Reward Rating: Croatia's RRR score remains unchanged from Q113, 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 to its neighbours. However, in the categories of Industry Rewards, Country Rewards and Country Risk, Croatia scores below average, highlighting its challenging market conditions.
Key Trends And Developments:
* Accession to the EU in June 2013 will see an inflow of EU funding into reforming and modernising the country's economy, legislative bodies, healthcare system and business environment. The benefits of these will only be felt in the medium-to-long term, but promise to boost pharmaceutical spending as Croatia's economy grows.
* 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 added to the strain on pharmacies and drugmakers. Prescriptions and drug consumption will continue to rise even as unemployment climbs and the economy slowly recovers.
* Price controls or co-payments on expensive medicines are to be introduced this year as the cost of funding these (especially anti-cancer drugs) rises significantly.
BMI Economic View: On the back of a weak flash estimate for Croatian real GDP growth, we have revised down our forecast for economic growth in 2012 and 2013 to -2.2% and 0.8%, from -1.7% and 1.0% respectively. The return to growth in 2013 will be driven by increased investment spending on the back of the country's accession to the EU, combined with the recently relaxed fiscal consolidation drive.
BMI Political View: We do not expect the recent souring of relations between Croatia and Serbia to threaten long-term international ties between the Balkan nations or regional stability. Rather, in the shortterm we expect the Serbian government will use this event to deflect the electorate's attention from domestic issues. Meanwhile, we believe that the Croatian government will maintain its commitment of becoming an example for other Balkan countries in the region attempting to join the EU.
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Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
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