ECONOMY

Imported medicines going down well

Cheaper imported products are now outselling domestically produced and packaged pharmaceutical products, the Foundation for Economic and Industrial Research (IOBE) said in its report released yesterday on the pharmaceutical industry in Greece. Local medical products are projected to see their market share slip to 42 percent in 2002 from a height of 80.6 percent in 1987. Imported products in turn saw their market share go up by two and a half fold, to 57 percent last year from 18.3 percent in 1987. Domestically produced pharmaceutical products have been on a downward trend in the last decade due to the lower ex-factory prices offered by foreign pharmaceutical companies, IOBE pointed out. The economic think-tank suggested that the future for the local industry could be even gloomier, as profits are not ploughed back into investments due to declining sales and the tax on profits. Investments to replace capital equipment have been declining steadily, while the outlay for production facilities has stagnated and in some cases even been reduced, it said. This factor, together with the absence of a long-term policy, makes it difficult for the local industry to reinforce its standing vis-a-vis foreign pharmaceutical companies. IOBE said that in general spending on pharmaceutical products in Greece has steadily gone up, amounting to 1.55 percent of gross domestic product last year or 629 billion drachmas. Medical expenditure in the private sector also showed a dramatic jump to 241.7 billion drachmas from 117.7 billion drachmas in 1995. Sales to state hospitals and pharmaceutical warehouses last year came to 876.5 billion drachmas. Parallel exports last year rose to 103 billion drachmas. IOBE said the local industry continues to be dogged by the low level of consolidation, with four of the biggest companies controlling 25.6 percent of revenues, privately owned pharmaceutical warehouses 21.6 percent and cooperatives 20.3 percent. However, the current restructuring of the wholesale distribution market could force the smaller companies to merge. Another problem facing the industry is the different legislative framework compared with the European structure. As a result, Greeks do not get quick access to new pharmaceutical products, IOBE said.