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Greece Pharmaceuticals and Healthcare Report Q1

  • Publication Date:January 2011
  • Publisher:Business Monitor
  • Product Type: Report
  • Pages:81
  • ISBN:1748-1902

Greece Pharmaceuticals and Healthcare Report Q1 2011

Greece's pharmaceutical market remains a challenging environment for both local and internationaldrugmakers. The implementation of pharmaceutical price erosion mechanisms, tighter public healthcarespending and a poor economic environment result in a weak outlook for the industry. Greece's weak drugmarket outlook is reflected in BMI's Q111 Pharmaceutical & Healthcare Business Environment Ratings(BERs). The country's overall BE rating is 57.3, ranking it seventh in the region and well below itshistorically high position.

Supported by the latest market data, BMI believes 2010 will see an outright contraction in totalpharmaceutical sales (with a forecast of -8.13% year-on-year (y-o-y) in local currency terms) toEUR6.04bn (US$8.03bn) - a contraction from EUR6.57bn (US$9.20bn) in 2009.

According to the latest inflation figures from Eurostat, pharmaceutical prices contracted by an average of16.20% between June and October 2010, compared with drug prices in 2009. BMI expects y-o-y pricecontractions to last until June 2011. As a result, we project limited drug market growth of just 1.38% in2011 to EUR6.11bn (US$7.45bn).

More encouragingly, in October 2010, the Health Ministry's General Secretary Nikos Polyzos announcedthat Greece will clear all hospital debts to medical suppliers from 2005 till September 2010 by the end ofthe year. As of October 2010, debts from 2005, 2006 and the first half of 2007 had 'almost been paid off'at a cost of EUR1.5bn (US$2.0bn). However, BMI notes that there is a significant discrepancy betweenofficial hospital debt and the amount claimed by Greek pharmaceutical associations.Amid a broad range of structural reforms relating to the pharmaceutical industry, the government isplanning to axe the state-guaranteed profit of around 35% on the goods pharmacists sell. The changes tolegislation are intended to restrict the number of pharmacies in the country. Additionally, it has beenproposed that the VAT rate on drugs will rise from 11% to 23%. BMI notes that while the cuts to thestate-guaranteed profit margins for pharmacists may lead to a reduction in consumer prices, the expectedrise in VAT on drugs will more than compensate for any price reductions as a consequence of increasedprice competition.

BMI's Country Risk team believes that Greece's international credit conditions are unlikely to return topre-2008 levels in the foreseeable future, we expect both consumer and investment spending to be moresubdued over the longer term, anchoring the Greek economy on to a lower growth path than that leadingup to the global credit crisis. Although Greece will continue to post real convergence gains with the EU,we stress that a significant degree of integration has already occurred, with income per capita settling at alevel similar to that of Spain. Moreover, we believe that broad political and economic stability willremain in place, which will continue to accentuate Greece's attractive investment climate going forward.A further decline in port throughput is on the cards at Greece's ports in 2011 as macro factors affect theforecasts, with total trade predicted to decline by 1.6%.

The uptick in 2010 will therefore be cancelled out, meaning that recovery to historical highs has beenpushed further into the future, past out mid-term forecast period.

BMI notes that past few years have been tough on Greece's ports, with throughput buffeted by industrialaction and the downturn.

While the negative macro outlook for Greece affects projected port throughput, BMI is buoyed by developments at the ports that suggest the facilities could diversify their client base away from the muteddomestic market into areas that could offer more profit and increase throughput by using ports astranshipment hubs or gateways.

Headline Industry Data

  • 2011 port of Thessaloniki tonnage throughput forecast -0.10%, following projected growth of2.75% in 2010.
  • 2011 port of Piraeus container throughput forecast -0.90% following projected growth of10.21% in 2010
  • 2011 total trade y-o-y change forecast at -1.61%.

Key Industry Trends

China Increases Exposure To Greek Maritime Sector - China continues to cement its role in Greece'smaritime sector following the China's main terminal operator COSCO taking over operations at one of thecontainer terminals at the port of Piraeus. The terminal operator is seeking to expand its role in the country's logistics network further, with a plan to own and operate the Thriassio transhipment hub.Chinese banks have also opened their doors to Greek shipping firms seeking finance in order to expand,in another example of Sino-Greek relations on the shipping front increasing.

Thessaloniki Seeks Gateway Role - Thessaloniki is seeking its niche as its bigger container port sister,Piraeus, expands with the help of Greek investment. Thessaloniki is well placed to develop into amaritime gateway for the Balkans.

Risks To Outlook

Unemployment is rising, negatively affecting import demand, and together with a weak export sector thisspells disaster for Greece's ports. While we forecast muted throughput growth over the mid term, we donote some developments which could have an upside impact on our current forecasts, namely COSCOPacific's role at the port of Piraeus and the port of Port of Thessaloniki's plan to develop into a maritimegateway for the Balkans.

  • Executive Summary
  • SWOT Analysis
    • Greece Pharmaceuticals And Healthcare Industry SWOT
    • Greece Political SWOT
    • Greece Economic SWOT
    • Greece Business Environment SWOT
    • Pharmaceutical Business Environment Rating
    • Table: Central and Eastern Europe Pharmaceutical Business Environment Ratings for Q111
    • Rewards
    • Risks
    • Greece - Market Summary
    • Regulatory Regime
    • Intellectual Property Regime
    • Pricing Regime
    • Reimbursement Regime
    • Industry Developments
    • Epidemiology
    • Table: Disease Burden In CEE
    • Healthcare System
    • Hospital Sector Debt
    • Recent Healthcare Provision Developments
    • Healthcare Expenditure
    • Healthcare Reforms
    • Research and Development
    • Industry Forecast Scenario
    • Overall Market Forecast
    • Table: Pharmaceutical Sales Indicators 2006-2014
    • Key Growth Factors - Industry
    • Table: Healthcare Expenditure Trends, Historical Data and Forecasts, 2006-2014
    • Key Growth Factors - Macroeconomic
    • Table: Greece - Economic Activity
    • Prescription Drug Market Forecast
    • Table: Prescription Drug Sales Indicators 2006-2014
    • Patented Drug Market Forecast
    • Table: Patented Drug Sales Indicators 2006-2014
    • Generic Drug Market Forecast
    • Table: Generic Drug Sales Indicators 2006-2014
    • OTC Medicine Market Forecast
    • Table: OTC Medicine Sales Indicators 2006- 2014
    • Pharmaceutical Trade Forecast
    • Table: Pharmaceutical Imports & Exports Indicators 2006-2014
    • Medical Device Market Forecast
    • Table: Medical Device Sales Indicators 2006-2014
    • Key Risks To BMI Forecasts
    • Competitive Landscape
    • Leading Pharmaceutical Companies by Sales in Greece
    • Pharmaceutical Industry
    • Wholesale And Retail Sectors
    • Recent Pharmaceutical Industry Developments
    • Company Monitor
    • Indigenous Company Profiles
    • Vianex
    • Lavipharm
    • Elpen
    • Genesis Pharma
    • Genepharm
    • Pharmathen Pharmaceuticals
    • Kleva
    • Alapis Pharma
    • Multinational Company Profiles
    • GlaxoSmithKline
    • Pfizer
    • Novartis
    • Sanofi-Aventis
    • Merck & Co
    • Abbott Laboratories
    • BMI Methodology
    • How We Generate Our Pharmaceutical Industry Forecasts
    • Pharmaceuticals Business Environment Ratings
    • Risk/Reward Ratings Methodology
    • Ratings Overview
    • Table: Pharmaceutical Business Environment Indicators
    • Weighting
    • Table: Weighting Of Components
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