Slovenia Pharmaceuticals and Healthcare Report Q2 2008

Despite being smaller and more mature than most of its Central and Eastern European (CEE) peers, Slovenia still offers considerable commercial opportunities within its pharmaceutical market. Most of the growth over the coming years is set to be driven by the introduction and use of more advanced treatments, despite the government's attempt to control pharmaceutical spending by placing limits on prescribing and similar measures. In addition, the fact that most branded generics enjoy relatively high prices in relation to original products will support this upward trend.

In the meantime, the high incomes of a substantial proportion of the population will also be positively reflected in the growth of the over-the-counter (OTC) segment, especially as consumers become more health conscious. The government's programme for reducing the use of hospitals, as well as an attempt to address overprescribing, will also result in the development of the OTC market.

The Slovenian medical devices market is relatively advanced in relation to its CEE peers. Further commercial opportunities are provided by the country's wealth, healthcare system modernisation and rising patient demands. While imports have traditionally dominated the medical devices landscape, exports have recorded strong growth in recent years, with the main destinations being the territories of the former Yugoslavia.

In BMI's adjusted Business Environment Rankings for Q208, Slovenia slipped from joint sixth to joint eighth position, which it now occupies alongside Romania. The country's ranking is negatively affected by its limited population number, negligible population growth and the country's inadequate IP laws. On the other hand, the expansive private insurance coverage and established trade regimes with Western Europe (boosted by the recent entry into the eurozone) allow for good placement of novel drugs onto the market.

Given the limitations of a saturated home market, Slovenia's key pharmaceutical producers - namely Lek and Krka - are increasingly looking abroad for revenue. Lek's activities have expanded following its takeover by Sandoz, a generic arm of Swiss major Novartis, while in November 2007 Krka indicated a change in its strategy, which was previously focused on organic growth, by acquiring a German generics firm. Foreign firms are highly visible on the local market, but only through imports - bar Novartis.