Opportunities for companies in health sector in Croatia
In spite of Croatia's modest per capita spending on health, the healthcare sector is considered advanced in terms of personnel and know-how. The financial position of public hospitals is weak but private polyclinics are equipped with up-to-date, high quality devices. Both offer their services for very competitive prices (from the Finnish point of view). So far the focus of health sector reforms has been the financial stabilization of the system. Healthcare funding in Croatia functions through the compulsory health insurance system operated by the Croatian Institute for Health Insurance (HZZO(Link to another website.) (Opens New Window)). In terms of modernization of public hospitals, private-public partnerships (PPP) are actively promoted. One exemplary project is the construction of new facilities at the Clinical Hospital Centre Rijeka(Link to another website.) (Opens New Window).
Driven by the trend of aging population, development of all forms of medical or health tourism is underlined in Croatia’s Tourism Development Strategy and National Health Development Strategy for 2020. Both the pharmaceutical market and medical equipment market are characterized by positive growth rates and there are many international players present. The biggest market challenge for pharma companies is the strict criteria to enter the official lists of reimbursed medicines, and for the medical equipment providers the "jungle" of tenders. At first, Croatia may seem as a challenging and saturated market, but it offers good growth prospects for the future and we are optimistic about the market potential.
Medical equipment
According to the World Health Organization (WHO) data, Croatia spends approximately 8% of its gross domestic product (GDP) on healthcare and around 5% of this on medical equipment. Majority of the products are imported from the EU countries and the United States. Global brands such as Siemens, General Electric, Toshiba, and Dräger are actively present on the market. As for the Finnish companies, Planmeca(Link to another website.) (Opens New Window) for example, operates successfully on the market through local distributors.
Small purchases of medical equipment and supplies are usually made directly by hospitals and local health authorities, while for larger procurements the Ministry of Health announces tenders in the web page www.zdravlje.hr(Link to another website.) (Opens New Window). Public tenders are also published in the Official Gazette (Narodne Novine(Link to another website.) (Opens New Window)).
There are 49 public health centers, 22 general hospitals, 12 clinics, 40 special hospitals and 363 polyclinics in Croatia. We believe the role of the local distributor is essential for success. Tendering procedures are time-consuming and sometimes complex. The biggest obstacles when doing business with the public institutions are long delays in payments to the suppliers. Certain medicines and surgical implants have a reduced value-added tax (VAT) rate of 5%, while the normal 25% VAT is applicable for all other medical products and supplies.
The leading local distributors of medical equipment are Medika and Medical Intertrade. The registration of medical devices in Croatia is under the jurisdiction of HALMED(Link to another website.) (Opens New Window), the Agency for Medicinal Products and Medical Devices. Medical equipment products exported to Croatia must have the CE mark and directions for use in Croatian language.
Pharmaceuticals
Croatia is considered to be the pharmaceutical hub of the region with strong emphasis on R&D activities. The sector is very well developed representing 4% of the country's total manufacturing industry. In addition to more than 40 international companies (Sandoz, Novo Nordisk, PharmaSwiss, Novartis, Pfizer etc.) the major domestic players in the market are Belupo, Pliva (although nowadays part of the Israeli Teva Group), and Jadran Galenski Laboratorij. All of them specialize primarily in generic drugs. Pharmaceutical companies are also among Croatia's greatest exporters (e.g. 80% of Pliva's products are exported, mostly to the US.)
Today there are over 1000 pharmacies in Croatia. Most of them, i.e. 63% are in the private ownership, 23 % state-owned and 14 % under private lease. Atlantic Grupa owns the largest private chain of pharmacies in the country, Farmacia. Pharmaceutical products prescribed by the doctor have the VAT rate of 5%. Only medicinal products with marketing authorisation granted by either the Agency for Medicinal Products (HALMED(Link to another website.) (Opens New Window)) or European Commission may be on the market. Online sales of drugs is not allowed in Croatia.
IT & health technology
The current National Healthcare Development Strategy 2012-2020 defines that IT is an important part of the strategy. The prescription system and e-waiting lists have been implemented already. However, Croatia is rather below global average of 3.2 percent of health budget spent on IT. With only around 200 IT specialists working in Croatian hospitals, Croatia is far below the global average of 2,9 percent of all hospital employees.
Croatian health system ranked 16th in Europe
The European Health Consumer Index (EHCI) 2015, which compares the performance of health systems in 35 European countries, ranks the Croatian health care system at 16th place. The EHCI analyses 48 indicators, including the right of patients to information, availability of medical services, treatment outcome, waiting lists, prevention, the consumption of drugs and their availability, etc. Croatia improved its position with seven places compared to 2014. In spite of the modest per capita spending on health, the local health system applies very advanced. An interesting fact is that in expensive procedures such as kidney transplants, Croatia is at the very top in Europe with close to 50 transplants per one million inhabitants.
Finnish know-how:
- The Team Finland Health growth program(Link to another website.) (Opens New Window)
- Digital Hospitals(Link to another website.) (Opens New Window)
Up-coming events in Croatia:
- HospITal days(Link to another website.) (Opens New Window) (October 2016) Health, IT, pharmacy and health insurance sectors
Useful links:
- Ministry of Health www.zdravlje.hr(Link to another website.) (Opens New Window)
- Agency for Medicinal Products and Medical Devices HALMED www.almp.hr(Link to another website.) (Opens New Window) & http://www.halmed.hr/en/O-HALMED-u(Link to another website.) (Opens New Window)
- Agency for Quality and Accreditation in Health Care and Social Welfare www.aaz.hr(Link to another website.) (Opens New Window)
- Croatian Institute for Health Insurance www.hzzo-net.hr(Link to another website.) (Opens New Window)
- Croatian Chamber of Economy / Sector for Health http://www.hgk.hr/category/zajednice/zajednica-proizvodaca-proizvoda-za-zdravstvo(Link to another website.) (Opens New Window)
Text: Laura Stojic, Team Finland coordinator, Embassy of Finland in Zagreb [laura.stojic(a)formin.fi]