BMI's Executive Summary

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The Serbian pharmaceutical market, which technically contracted following the June 2006 dissolution of the State of Union of Serbia and Montenegro, remains the least developed in Central and Eastern Europe (CEE). However, the country's desire to join the European Union (EU) will in the longer term boost opportunities for both foreign and domestic stakeholders. In the shorter term, a difficult pricing and reimbursement environment will continue to conspire to hamper market access and development.

The relatively underdeveloped status of the primary network has resulted in the dominance of hospitals as key points of care, with prescription medicines consequently accounting for the majority of pharmaceutical expenditure. Out-of-pocket spend is also high, as state reimbursed medicines are often out of stock and public funds suffer from chronic financial shortages. Generics, on the other hand, represent around one-third of the market in value terms, and a higher percentage in terms of volume. The copy segment will continue to make gains in the forecast period, supported by the need for cost containment as well as by the suboptimal intellectual property (IP) environment. In the longer term, however, patented medicines will benefit from the involvement of foreign players in the domestic industry (through acquisitions and investment), as well as from the country's need to align its regulatory environment with that of the EU.

In regional terms, BMI's new Business Environment Rankings table for Q108 once again finds Serbia last out of the 15 Central and Eastern European (CEE) states surveyed. From the point of view of research-based multinationals, negative factors include the strong local generics manufacturing sector, widespread deficiencies within the country's regulatory infrastructure, preferential treatment for the domestic industry and the existence of a sizeable counterfeit industry. Poor economic performance, high levels of corruption, and the fragile political climate will also remain obstacles to higher levels of foreign direct investment (FDI), although the country has become an attractive location for clinical trials.

Given the above factors, local producers – led by three key companies – will continue to meet around 60% of the country's demand for pharmaceuticals, with consolidation in the sector expected to continue under pressure to meet the 2009 Good Manufacturing Practice (GMP) deadline. Multinationals mostly deal in imported medicines, although in recent months, foreign companies increased their involvement in the market with acquisitions of domestic players. The trend is likely to continue at a modest pace, boosted by privatisation initiatives, but also dependent on the wider economic and political environments.

Competitive Landscape for Europe Pharmaceuticals and Healthcare: Sample of Companies Ranked

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Cross-border analysis of regulatory systems comparing the patenting environment, summarising regional pricing and reimbursement factors and monitoring the growth of the Pharmaceuticals sector across the region. Company SWOTs cover leading multinational and national drug companies operating in each market.

Network of European Pharmaceutical & Healthcare Sources

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BMI's Pharmaceuticals & Healthcare Reports are based on an extensive network of multilateral organisations, government departments, pharmaceutical & healthcare industry associations, chambers of commerce and company reports. Information sources include: