"Czech Republic Pharmaceuticals & Healthcare Report Q4 2013" now available at Fast Market Research

The Czech healthcare system is facing severe challenges as it struggles to contain budget deficits. At the same time, demand for pharmaceuticals and healthcare is expected to continue its steady growth trajectory, putting pressure on the state and insurers to raise premiums or cut back on services. We believe that pharmaceutical spending will rebound over the short term once funding for the healthcare system is stabilised and the macroeconomic outlook improves in line with the eurozone recovery.

Headline Expenditure Projections

Full Report Details at
- http://www.fastmr.com/prod/712764_czech_republic_pharmaceuticals_healthcare_report.aspx?afid=301

* Pharmaceuticals: CZK79.60bn (US$4.07bn) in 2012 to CZK81.16bn (US$3.96bn) in 2013; 2.0% in local currency terms and -2.6% in US dollar terms. Revised downwards from previous quarter.
* Healthcare: CZK278.34bn (US$14.23bn) in 2012 to CZK289.71bn (US$14.15bn) in 2013; +4.1% in local currency terms and -0.6% in US dollar terms. Revised upwards from previous quarter.
Risk/Reward Rating: Despite leading our regional RRR table with a score of 63.2 out of 100, drugmakers will face challenges in the Czech pharmaceutical market as a result of pricing pressure, poor access to the market and increasing generic substitution. Additionally, adopted and proposed amendments to healthcare and insurance laws have attracted criticism from the pharmaceutical sector.

Key Trends And Developments

* The healthcare deficit appears to be widening even further than estimates from the Ministry of Finance suggest. As a result, plans to raise premiums have been discussed as well as charging patients fees to use hospitals.
* The General Health Insurance Company has asked the Ministry of Finance for a loan of CZK2.6bn (US $134mn) to pay off rolling debts and restore liquidity in the healthcare system.
* In June 2013, it was reported that the Czech Ministry of Health is working on a new system of collecting insurance premiums that will primarily benefit the state-run insurer General Health Insurance (VzP), which has the most expensive patients on its books. Presumably, privately run health insurers have not been underwriting policies for the highest-risk patients or have demanded high premiums for coverage. As a result, patients unable to afford the coverage have turned to the state insurer.

BMI Economic View: We believe that despite the Czech Republic's worse-than-expected economic results in Q113, the country is poised for a modest turnaround this year as leading indicators signal that the worst may be now over. Although we have slightly revised down our forecast for growth for 2013 and 2014 - from 0.5% previously to 0.2% this year, and from 1.9% to 1.3% for 2014 - we maintain our expectation for a modest rebound of the Czech economy this year.

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