Greece Pharmaceuticals and Healthcare Report Q3 2007

The Greek pharmaceutical market remains one of the least-developed European Union (EU) markets. In 2006, the government implemented a new pricing and reimbursement system, which led to the reduction in prices of off-patent brands and the removal of over-the-counter (OTC) products from the reimbursement system. Consequently, in the short term, the OTCs are likely to experience some stagnation, although the value of the market will increase towards the latter ends of the forecast period, reaching US$670mn and representing just over 10% of the total market by value.

Nevertheless, economic reforms - especially in the areas of social insurance, welfare and the labour market, which are currently underway in the country - will continue to ensure that pharmaceutical-market growth experiences a gradual upward trend over the next five years. In addition, the government is seeking to improve the monitoring of public tendering, worth more than US$1.3bn per annum, in order to eradicate corruption. Other drivers of market growth include epidemiological and demographic trends, which will in particular stimulate the growth of the branded imported segment, although the need to contain hospital debts will dampen the sector's prospects. On the other hand, generics will be encouraged by cost-containment measures, although their share of the total pharmaceutical market value is likely to remain at no higher than 6.3% by 2011.

BMI's adjusted Business Environment Rankings for the Central Eastern Europe (CEE) region reveal that Greece is in joint sixth place with Ukraine and Russia, out of the 15 markets surveyed. Improvements in the regulatory conditions of other markets, Bulgaria, Romania and Estonia in particular, have pushed Greece down from the joint fourth place enjoyed in Q207. Barriers to market entry in Greece include downward pressures on prices (despite the recent improvement) and market delays suffered by innovative medicines, which has prevented some multinationals from launching in the country.

The country's pharmaceutical industry is relatively fragmented. While production remains dominated by some local 30 firms, which control 80% of the local market in volume terms, major multinationals jointly account for about two-thirds of the market in value terms. Most recent activities in the pharmaceutical sector include the spate of acquisitions by Greek chemicals and pharmaceuticals firm Alapis, which purchased local drug firm Farmalex, as well as domestic pharmaceutical wholesalers M Panou-Th Mavroudis and A. Moisoglou, and pharmaceutical company Revold Healthcare Products. The move will allow Alapis to achieve a degree of desired vertical integration, boosting its position in the market.