Report Published: "Serbia Pharmaceuticals & Healthcare Report Q4 2013"

From: Fast Market Research, Inc.
Published: Fri Dec 06 2013

Despite per capita expenditure on drugs increasing considerably towards the end of the last decade, Serbia's pharmaceutical market as a whole is underdeveloped in regional terms, having suffered as a result of political and economic instability.. As the country continues its economic convergence with developed Europe, drug consumption is also expected to rise. However, financial inefficiencies within the health insurance system mean that the National Health Insurance Institution (RZZO) is unable to always meet its obligations on time, with frequent changes to coverage and pharmaceutical pricing.

Headline Expenditure Projections

* Pharmaceuticals: RSD81.38bn (US$0.93bn) in 2012 to RSD90.97bn (US$1.10bn) in 2013; +11.8% in local currency terms and +18.9% in US dollar terms. Forecast broadly unchanged from previous quarter.
* Healthcare: RSD358.34bn (US$4.07bn) in 2012 to RSD384.18bn (US$4.65bn) in 2013; +7.2% in local currency terms and +14.0% in US dollar terms. Forecast unchanged from previous quarter.

Full Report Details at

Risk/Reward Rating (RRR): Serbia's Pharmaceutical Risk/Reward Rating (RRR) score for Q413 is 48.5 out of 100, making it the 16th most attractive pharmaceutical market in the Emerging Europe region. The country's overall score is unchanged for the quarter, and remains below the regional average of 52.0.

The Serbian market's key selling points include its advantageous geographical position, which allows easy access to the rest of Europe, a largely untapped pharmaceutical market and the low cost and abundant supply of skilled labour - a position helped by a growing network of free trade agreements. However, Serbia will continue to be a challenging market for foreign investors, because of the prevalence of corruption, a large-scale black-market economy, and the poor state of the country's infrastructure and finances, in both public and private spheres.

Key Trends & Developments

* In June 2013, Valeant Pharmaceuticals North America, the US subsidiary of Canada's Valeant Pharmaceuticals International, pulled out of its offer to buy Galenika amid agitation in Belgrade over the possible privatisation of the Serbian company. The US-based unit sent a letter to the Serbian ministry of finance, in which it stated that it is rescinding the offer due to the hostile attitude of Galenika's trade unions and employees towards a possible privatisation.
* Serbian non-profit organisation Republic Fund Of Health Insurance (RFZO) reduced the prices of 650 prescription medicines in Serbia from June 1 2013. The move reduced prescription drug prices by an average of 2% in pharmacies across the country. The price cuts have been made for the medicines present in the A list (that cater to prescription drugs), A1 list (for prescription by percentage share) and B list (which caters to medicines given to hospitals).

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