Greece Pharmaceuticals and Healthcare Report Q3 2008

Greece represents one of the least developed pharmaceutical markets within the established European Union (EU) members. However, when judged against Emerging Europe, Greece continues to occupy pole position in BMIs Business Environment Ranking for Q308, ahead of the other 16 markets surveyed in the region. Some of the markets positives include the potential for the growth of its over-the-counter (OTC) market following the 2006 removal of such products from the reimbursement list. On the other hand, pharmaceutical prices are continuously revised downward, with BMI actually forecasting market contraction through 2012, to US$5.41bn, down from some US$5.68bn in 2007.

There are other worrying signs. For example, a recent report by Eurostat warned that the ageing and less mobile population across the EU may have a marked disadvantage for the Blocs ability to innovate in science and technology. Specifically, Greece had the lowest job-to-job mobility within the EU, alongside Hungary and Slovenia. Given that such mobility is beneficial to the overall economy, through the means of knowledge transfer, Greece is seen as being disadvantaged by this fact, which results from a less flexible labour market.

Similarly, in April 2008, the Advocate General of the European Court of Justice (ECJ) ruled that UK pharmaceutical giant GlaxoSmithKline (GSK) must lift self-imposed restrictions on supplying wholesalers in Greece, which had been put in place to prevent parallel exports. The court stated that the restrictions constituted an abuse of dominant market position, while also potentially breaching EU antitrust rules. Apart from being set to negatively impact financial performance of the company in question, the ruling also represents a significant blow to opponents of parallel trade. Multinationals are already sidelining Greece when choosing where to launch innovative medicines, with the latest development further discouraging their presence in the country.

On the other hand, the medical devices sector continues to offer substantial opportunities for foreign players. The medical devices industry in Greece is worth an estimated US$850mn, with imports supplying the vast majority of the market, especially on the high-tech end of the scale. In fact, in the 2002-2006 period, imports rose by almost 100% in terms of value. Domestic producers of medical devices are mostly engaged in the manufacture of low-value but high-quantity products, such as medical supplies.