Slovakia Pharmaceuticals and Healthcare Report Q4 2009

The Slovakian pharmaceutical market reached EUR1.52bn (US$2.04bn) with per-capita expenditure of US$378 in 2008. Drug market expenditure is expected to drop to EUR1.43bn (US$2.02bn) in 2009, with per-capita spending dropping to US$374, despite government-driven measures to curb out-of-pocket expenditure on pharmaceuticals.

The short-term economic outlook remains poor. According to data released by Slovakia's Statistics Office, industrial output was down by 18.0% year-on-year (y-o-y) in March 2009, compared with a decline of 25.6% in February 2009. The pharmaceutical products market also fell by 15.1% y-o-y during March. During Q109, overall industrial production was down by 22.9% y-o-y. BMI estimates drug market expenditure will increase from US$2.04bn in 2008 to US$2.18bn in 2013.

Slovakia spends around 6.3% of its annual GDP on healthcare. However, austerity measures introduced by the new socialist-leaning government, the global recession and the adoption of the euro on 1st January 2009 are likely to restrict the growth of pharmaceuticals and healthcare in the country. The most recent changes include a ban on profit-making in the healthcare insurance segment and amendments to the reference price system in order to reduce pharmaceutical spending as a proportion of the total health budget. Under the new system, drug prices will be referenced against the six lowest-cost EU countries.

Preventive healthcare has historically been neglected in Slovakia. This is reflected by the high incidence of cardiovascular diseases and smoking-related cancers - the major causes of death in the country. Around 40% of all adult men and 15% of women smoke, at a rate slightly higher than in Western Europe.

Slovakia has significant potential as a location for pharmaceutical research since it offers a demographic and epidemiological profile broadly similar to Western Europe, has EU membership (which allows for faster regulatory filings and approvals) and cheap production and labour costs. However, shortcomings in its intellectual property (IP) environment will restrict development in this area.

In August 2009, Swiss drugmaker Nycomed announced that it was going to acquire the marketing rights for 20 branded generic products from Sanofi-Aventis and Zentiva across a number of countries in Central and Eastern Europe (CEE). Nycomed has stated that they expect the biggest gains to be in the Czech and Slovakian markets In the BMI Business Environment Ratings matrix for Q409, Slovakia scored 50.8 for its overall pharmaceutical rating, lower than in Q309. The new score has placed Slovakia in 7th position, out of the 20 markets surveyed in CEE.