Serbia - PharmaceuticalSerbia - Pharmaceutical
OverviewSerbian pharmaceutical market is one of larger markets in the Central and Eastern European (CEE) region, Serbia’s overall pharmaceutical market is relatively underdeveloped, seeing regular medicine shortages and somewhat long waiting times for patients. The total market for pharmaceutical products in Serbia was estimated at USD 1.051 billion in 2016, remaining at the 2015 level. More than half of consumption went to state-controlled prescription drugs. While the market is small in absolute terms, relative per capita spending on medicines is expected to improve over the long term. However, financial inefficiencies within the health insurance system mean that the National Health Insurance Institution (RFZO) is not always able to meet its obligations on time, forcing patients to pay for formerly reimbursed medicines or hospitals having to cover the difference.
The Pharmaceutical Market (USD thousands)
|Pharmaceutical Market||2015||2016||2017 (e)||2018 (e)|
|Total Local Production||600.000||600.000||600.000||600.000|
|Total Market Size||1.050.000||1.051.000||1.100.000||1.100.000|
|Exchange Rate: 1 USD||110||120||125||130|
Source: Serbian Bureau of Statistics and independent experts EPISCOM Report: The Pharmaceutical Market: Serbia (e) – Estimated
Serbia's pharmaceutical market is dominated by prescription drug sales, which account for 89.70Spercenterbia of the total value of the market, primarily generic medicines, which in turn constitute 69.00 percent of prescription drug sales and 61.90 percent of the total value of the market. Over-the-counter (OTC) medicines are the smallest segment of the market, accounting for 10.28 percent of total pharmaceutical sales. Patented drugs are also a considerable segment of the pharmaceutical market, worth some 27.78 percent of the market in value terms. Serbia's Republic Health Insurance Fund provides full and partial reimbursement to insured citizens for pharmaceuticals placed on its positive reimbursement list. Currently, the reimbursement list consists primarily of generic drugs and the market segmentation reflects this.
The Serbian pharmaceutical market is split between domestic production and imports of pharmaceuticals from foreign multinationals, as the country is home to several, large generic drug makers such as state-owned Galenika, Stada subsidiary Hemofarm and Actavis subsidiary Zdravlje. State-owned Galenika is currently undergoing a process of privatization, with the Serbian government actively seeking buyers for the enterprise as part of its reform agenda with the International Monetary Fund (IMF). Presently, most multinationals are involved in the Serbian market through imports of their product portfolios or through licensing and marketing agreements with local players. Roche is one of the leading players on the market, with other multinational companies in Serbia including Merck, GlaxoSmithKline, Pfizer, Sanofi, Novo Nordisk, Abbot, Janssen-Cilag and AstraZeneca. About 70 foreign companies have representative offices in the country, with the majority being members of the Association of Foreign Pharmaceutical Manufacturers in Serbia. Roche remains the only foreign pharmaceutical player with affiliate status, and reportedly records the largest turnover among the international pharmaceutical players in the country.
The United States exported $ 42 million worth of pharmaceutical preparations to Serbia in 2016.
The implementation of centralized procurement was introduced in 2013, resulting in some forced price reductions, particularly in the case of high-volume products and generics. This could benefit larger firms who are able to benefit from economies of scale. The intent of the central procurement system, which includes both public and private pharmacies, was to improve transparency and combat corruption. Results will depend on many other factors, including monitoring systems and the free and open availability of information about tenders.
In January 2015, the RFZO announced that patients would have to pay full price for more than 120 drugs that had been fully or partially reimbursed. These drugs include antibiotics, sedatives, statins, anti-hypertensives, and drugs for other serious diseases. The move is aimed at slowing consumption of certain high-demand medicines.
Positive development in the Serbian marker regarding innovative drugs was carried out in November 2016. The state Health Insurance Fund (RFZO) signed agreement with 11 pharmaceutical companies, out of which 4 are American, on including their innovative drugs to the state-subsidized drugs list. It is expected that in the following years more innovative drugs will be added to this list, which is good opportunity for US pharmaceutical companies doing business in Serbia.
Leading Sub-SectorsSerbia has some of the highest rates in Europe for cardiovascular disease, cancer, liver disease, and cirrhosis because of poor diets, high smoking rates, and other unhealthy habits. Pharmaceuticals that address these conditions, as well as their precursors (e.g., hypertension, high cholesterol, etc.) are in demand. In 2016, the highest demand was for cardiovascular drugs, followed by antibiotics and medications for the nervous system. The market for drugs and supplements is growing and local distributors are in constant search of new U.S. suppliers.
OpportunitiesThe market for natural medicines has expanded significantly in recent years. While U.S. suppliers should be able to offer a full range of food supplements, calcium citrate/ acetate/ lactate, iron sulfate, and glucosamine sulfate are in particular demand. There is significant demand for oncology products, vitamins/minerals, and natural medicines aimed at the prevention of diseases, as well as for drug/alcohol tests.
The Serbian Law on Drugs prohibits the sale of any pharmaceuticals, including OTC, outside of pharmacies. Customs-free access to some markets such as Russia, former-Yugoslav countries, and the EU provide many opportunities for both medicines and medical devices, such as export-oriented green-field investments, contract manufacturing and outsourced small-batch production. Serbia's leading pharmaceutical companies have modern technological solutions that comply with good manufacturing practice and enable them to manufacture over 95 percent of existing generic forms.
Web ResourcesOther resources can be found at the following websites:
- Ministry of Health of the Republic of Serbia
- Health Fund of the Republic of Serbia
- Association of Pharmaceuticals of Serbia
- Medicines and Medical Devices Agency of Serbia
- The Inovative Drug Manufacturers’ Fund – INOVIA
- Institute of Public Health of Serbia
- American Chamber of Commerce in Serbia Healthcare Committee
For more information on market entry strategies contact:
Serbia Healthcare Trade Development and Promotion