Healthcare & Pharmaceauticals


We help healthcare Investors to build and maintain successful and sustainable businesses, we undertake customised research,  analysis and recommendations across the full spectrum of the healthcare industry.

Using CalErin’s broad network and extensive database, we can identify opportunities both off-market and on.

CalErin can undertake M&A; and JV partner searches, quantify the assets of potential acquisitions, as well as provide full due diligence.

Before taking any mandate, CalErin will conduct a preliminary assessment of the clients brief, in order to ascertain the viability and complexity of the task at hand.

Investment opportunities in Health care & Pharmaceutical:

  • Building of new hospitals, medical centres, clinics, hospices etc. Private or PPP with the state or municipality;
  • Purchasing of already existing projects in medical or pharmaceutical business;
  • Organizing of medical tourism business;
  • Creating of new trade chains of pharmacies;
  • Investing in implementation of new technologies or medical business in SEE;
  • Investment in R&D; or new drugs or supplements and in bio products.


The pharmaceutical industry is one of the leading and fastest growing sectors of the Bulgarian economy. It is characterised by high quality production at competitive prices. Since Bulgaria’s EU accession in January 2007, the Bulgarian pharmaceutical legislation has been harmonized with the EU regulations in that field. Bulgarian manufacturers are continuously making significant investments in modernization of their production facilities. Moreover, some of the multinational players of the pharmaceutical industry have entered the Bulgarian market either through acquisition of Bulgarian pharmaceutical producers or via local distributing companies. Despite historically strong growth, a prolonged recession, as well as cuts to reimbursement spending and anticipated negative exchange rate pressures means that the short-term outlook for Bulgaria is relatively unattractive. However, despite a poor macroeconomic performance in 2009 and throughout 2010, Bulgaria’s pharmaceutical market continued to grow at rates higher than in more developed CEE markets, with this situation expected to remain in place over the coming years. Downward pressures are exerted by factors such as the relatively limited size of the market due to the population size, as well as limited potential for high value products due to low per-capita consumption and income in comparison to other markets in the region. The small market is susceptible to shocks caused by funding shortfalls and other one-off factors. Nevertheless, the country’s drug sector is likely to be boosted by modernisation of production and foreign investment in the industry resulting from EU membership. Imports account for well over half of the total market, but exports have also grown rapidly as drug makers target high-growth CIS (Common Wealth Of Independent States) markets.

Market overview: Bulgaria’s accession to the EU in 2007 and related improvements in the country’s commercial ties with Europe – as well as in its regulatory environment – provided a solid base for market growth in the pharmaceutical and healthcare sectors. Despite the economic decline in 2009 and negligible real growth in 2010, the drug market returned strong growth of 8.1% and 9.2%, respectively. Despite its composite score being 1% lower on a quarter-on-quarter (qo-q) basis, Bulgaria remains 13th in the latest Pharmaceutical and Healthcare Business Environment Ratings (BERs) for emerging Europe. The health status of the Bulgarian population worsened notably with the deteriorating state of the economy during the 1990s and early 2000s. From the middle of the decade, however, the country has witnessed improvements in this area, with life expectancy rising to 70 for men and 77 for women, according to official 2010 estimates. For The European country the life expectancy for men is 71 years, and 77 for women. According to World Health Statistics 2012 made by WHO, data from 2008 reveals that non communicable diseases represents the leading cause of death in Bulgaria, about 90%, followed by 4% caused by communicable diseases. Figures for the European Union show that 82% dies of non communicable diseases and 7% of communicable diseases. In the same report for Bulgaria, about 49% of all deaths are caused by cardiovascular diseases and diabetes, and 29% caused by cancer. For the European Union 26% dies of cancer and 38% of cardiovascular disease and diabetes.

Demand in internal markets Although the domestic consumption per capita of pharmaceutical products sustains relatively low levels compared to other EU member-states, there is a clear tendency of growth in domestic demand, including demand for food supplements. Since 2000, the overall consumption of pharmaceutical products in Bulgaria has grown more than threefold. Foreign drugs for the treatment of chronic diseases such as hypertension and diabetes characterise the list of best selling medicines in Bulgaria, indicating that the prescription market is approaching Western European standards. However, local players dominate the table of leading pharmaceuticals by number of packs sold. The volume of the pharmaceutical market reached almost 2 billion BGN in 2010. The purchases from the pharmacies were worth over 1.6 billion BGN while the treatment of patients that hospitals financed was worth about 280 million BGN. Pharmacies make the biggest turnover in the sector. Their sales grew by 10%. In 2010, 4300 pharmacies were licensed, 3900 of them had commercial activities. The number of sold packages of drugs is 2% less but this decrease doesn’t mean that the Bulgarians used less medicaments. It is due to the fact that producers started putting more pills in one package and producing more combined products, which requires the intake of fewer pills. The medicines with prescription mark a 10% growth in comparison to 2009. This is owed to the easier access to drugs in the positive list and the increase of the rights of the GPs to prescribe drugs. The revenues from medicines without prescription increased by 4% in 2010. The sales of the so called original products grew by 7.8% (as packages) and by 15% (as revenues). The generic products marked a decrease of 4.5% in packages and an increase of 3.5% in revenues.

Conclusions and recommendations: The Bulgarian pharmaceutical market is expected to experience a significant development in the coming years, reaching a valuation of approximately EUR 1.3 billion in 2011. The market prospects have been improved by the recent alignment of the local legislation with the EU requirements, as well as by the country’s removal from the ‘Special 301’ Watch List of countries with questionable intellectual property (IP) regimes. In the past years, Bulgaria managed to comply with all relevant EU pharmaceutical directives and regulations, most of them well ahead of other accession countries, without any transition periods for the local industry. Due to the EU requirements in this sector, local manufacturers have made significant investments for modernisation of their production facilities. Many of the country’s leading manufacturers have been privatised and multinational activity has become increasingly significant for the development within the sector. The Bulgarian pharmaceutical industry has established itself as one of the fastest growing sectors of the Bulgarian economy in recent years. The traditions and the good experience in the production of high quality medicines on competitive prices are advantages that make the Bulgarian pharmaceutical market an attractive destination for the initiation of a successful business.

Health care:

Health care sectors, which have good economic potential:

  • Ophthalmic Surgery
  • Plastic Surgery, Dermatology and Cosmetology
  • Orthopaedic surgery – bone and joint diseases
  • Aesthetic Dentistry and Implantology
  • Assisted reproduction
  • Bulgaria is among the countries providing the most favourable conditions for recovery and healing through water
  • Mineral water is among Bulgaria’s most valuable natural resources

Bulgaria has about 600 operating deposits of mineral water and 1 600 springs, but only 30% of them are being used.


Local industry and trade Romania has about 40 national manufacturers, who are making generic or OTC drugs. Only a handful of companies are of significant size. Tightening of legal requirements for manufacturing standards required significant investments for these companies. About 40 companies that were not able to meet EU GMP standards had to close in recent years. At the same time, Romania’s accession process to the EU improved the investment climate. Glaxo Smithkline Beecham acquired the Romanian generic manufacturer Europharm 6 years ago. Foreign multinational generics companies such as Ranbaxy, Actavis and Sandoz/Lek as well as some regional players such as the Czech Zentiva and Hungarian Gedeon Richter took advantage of this constellation and acquired major Romanian manufacturers. This is consistent with a global trend towards consolidation of the generics drug business, in which large volumes and efficient supply chains define profitability. The injection of foreign capital and know-how has led to significant market share gains for some domestic manufacturers in the generic market. Romanian companies are also exporting drugs. With the foreign acquisitions the share of exports is expected to grow, as local manufacturing sites will increasingly be integrated into global supply chains. There is also a trend towards forward integration – manufacturers are buying wholesalers and setting up their own logistics chain. The wholesale sector is still fragmented with about 100 companies, although there is a clear trend to consolidation that has led to the development of some major players with national presence. This trend is likely to continue this year as all distributors have to comply with Good Distribution Practices in 2008. Wholesale margins are currently in the range of 10-12%, higher than in more advanced countries because of lower efficiency and lacking infrastructure. Wholesalers also integrate forward by setting up, buying or partnering with pharmacy chains. Romania currently has about 5000 pharmacies. 30% are chain pharmacies, with an upward trend as chains are aggressively competing with small owner-run pharmacies. Many pharmacists decide to sell their pharmacy to a chain and continue working on a 19 salary. There are rules that limit the number of pharmacies based on population, but exceptions from these rules are generously granted, leading to a very high density of pharmacies in some urban neighborhoods. Retail margins are lower than in other countries, encouraging integration of wholesale and retail business. One way to increase profitability is to push OTC sales (visible in the steep growth of the OTC market, +30% in the first quarter 2007). In addition, there are somewhat less transparent ways of enhancing profitability: rebates offered by manufacturers and passed on partially by wholesalers create additional margins for pharmacists, as they get the full reimbursement value from CNAS although they did not pay the full price for the drugs sold on prescription. Pharmacy chains are offering rebate cards with a discount of 5-7% for regular customers, passing on some of the discounts at least to the patient. Manufacturers use such rebates to increase market share in the generic market, if there are several brands with similar prices that are all reimbursed at the same level. Overall profitability of the retail sector including such unofficial (but legal) income is said to be in the range of 20% of sales. This does not account for illegal transactions that are possible in a system that does not systematically control whether prescriptions paid for by CNAS were actually dispensed to the patients.

Health Care:

Statistics reveal that over 20,000 health tourists visited Romania in 2013, with a majority of them seeking dental care or cosmetic surgeries. Medical tourists in Romania usually come in from countries like Germany, Italy, France, Israel and the UK. Also, over 2 million Romanian citizens who have settled abroad are known to travel back home to seek medical care at nominal rates. The short-waiting period has been another reason for visiting the country.

The healthcare services in Romania have evolved during the past few decades, and especially since the country became a part of the European Union in 2007. The government has been taking strict measures to ensure that all citizens have access to healthcare facilities and services. It is also securing and deploying funds to improve the current state of healthcare in Romania, in both private and public systems.


The Croatian pharmaceutical market continues to pose a challenging environment to domestic and international drugmakers. The economy is expected to contract with weak growth returning on the anticipation of capital inflows from the EU. The implementation of a clawback tax at the start of the year will increase pricing pressures. VAT rises and inflation suggest growth will not be due to increased drug consumption.

We forecast weak growth in pharmaceutical market for the next decade owing to the prevailing economic conditions in Europe. Healthcare and medical devices spending is projected to rise significantly over the next 10 years owing to a rapidly aging population . Even after EU accession next year, we continue to believe the country will represent a modest opportunity for foreign firms. Competitive Landscape: The competitive landscape section provides comparative company analyses and rankings by US$ sales and % share of total sales – for the total pharmaceutical sector, as well as the OTC, generics, and distribution sub-sectors.

Main companies:

  • Belupo;
  • GlaxoSmithKline;
  • Jadran Galenski Laboratorij;
  • Krka;
  • Merck & Co;
  • Novartis;
  • PLIVA;
  • Pfizer;
  • Sanofi.

Health care:

Health tourism, driven by the trend of aging populations in developed countries, and an increased focus on healthy living, is showing above-average growth rates in the global tourism market. Given the significant competitive advantages Croatia has, such as qualified personnel, a good reputation for proving health services, competitive prices, but also the proximity and accessibility to major markets and general tourist attractions, there is massive potential for the industry to grow in Croatia.

Recognising this potential, Croatia’s Tourism Development Strategy until 2020, and the National Health Development Strategy until 2020, both emphasize further development of all forms of health tourism and developing a platform to raise the competitiveness of health tourism in Croatia.

The Tourism Development and National Health Development strategies have identified three forms of medical tourism which will be focused on – Wellness tourism, health tourism and medical tourism.

Health tourism in Croatia today includes around 80 wellness centres, 15 specialised hospitals and a large number of private clinics spread across the country, although there is an obvious concentration in Kvarner, Istria, North Croatian counties and in the Zagreb area.

Health care:

Albania has a population of 3.58 million. This is one of the youngest populations in Europe, with an average age of 28.9 years. In 2005, total health expenditure was 6.6% of Gross Domestic Product, putting the country in line with the average for lower middle income countries. Albania’s health care system prior to this transition was characterised by strong central government control over all aspects of the system. This was based on the Semashko style, which in one manner reflected the relationship between countries in central and eastern Europe. A series of reforms were initiated in the mid-1990s, which included the decentralisation of primary care management, privatisation of the pharmaceutical sector and the establishment of the Health Insurance Institute (HII). The government is the major provider of healthcare services. They are organised on three levels: (i) primary health care is provided at health centres and polyclinics; (ii) secondary health care is provided at districts hospitals (51 hospitals in 36 districts); and (iii) tertiary health care is provided at the University Hospital Centre (CHU) located in the capital Tirana, where more than one-fifth of the population lives. The HII covers primary health care services, including general practitioner and specialist visits, as well as the reimbursement of a list of outpatient pharmaceuticals (‘positive list’). In contrast, hospital care remains under direct state administration. Established in 1995, it is an independent body funded by payroll tax contributions as well as contributions from the self-employed and farmers, and governmental budget contributions for the dependent (non-active) population.


Pharmaceutical distribution and reimbursement. Patients treated at polyclinics and health centres who require a pharmaceutical product receive a prescription and collect it from a private pharmacy. Private pharmacies procure products from private wholesalers. If the patient is insured (covered by the HII), the pharmacy will be partially or fully reimbursed for the price of the medicine. The patient pays the remainder out-of-pocket. Under the HII there is 100% reimbursement of prescription drugs for children 0–12 months, people with severe disabilities, military veterans, old age pensioners, as well as patients with cancer, tuberculosis, multiple sclerosis, anaemia caused by chronic kidney failure, major thalasaemia, and kidney transplantation. There is partial reimbursement ranging between 50% and 95% of prescription costs, dependent on therapeutic class for employees, the voluntarily insured, those with mild and moderate disabilities, social welfare recipients, children aged one year and over, students, expectant and new mothers and soldiers. The levels of reimbursement were last approved by the Council of Minister in February 2007. The percentage of reimbursement is calculated using a reference price which represents the lowest retail price of a generic drug (lowest CIF price + wholesale margin + retail margin). Moreover, military veterans can be prescribed any branded product (i.e. a registered drug, regardless of whether on the reimbursement list).). The current distribution margins in Albania are high compared to those of other countries – 18% for wholesale and 33% for retail. The current fixed margins create an incentive to distribute higher priced drugs. At the same time, a digressive margin system has been introduced for the most expensive drugs (about 20% of drugs on the reimbursement list), aimed at reducing this incentive to sell expensive drugs.


The Serbian pharmaceutical market is one of the poorest in the region in per capita terms, with spending similar to that found in Romania. However, the market is predicted to record a high growth rate over the next few years. The market is driven by strong import growth, although a decline was recorded in 2009.

The largest Serbian pharmaceutical manufacturers are Galenika, Hemofarm, Zdravlje and Zorka, which together account for around 90% of domestic drug production. Most companies are privately-owned. Foreign manufacturers are slowly increasing their presence in the country.

At the end of 2010, the Serbian subsidiary of PharmaSwiss started the construction of a pharmaceutical manufacturing unit in Belgrade, which will allow it to extend its operations in Serbia from mainly repackaging and distribution, to end-to-end manufacturing. In June 2010, Galenika opened a new solid pharmaceutical factory, which will assist the company in becoming a regional leader in the sector.

Health care:

Serbia – Low Cost Medical Tourism. Spheres:

  • Low Cost Cosmetic Surgery
  • Low Cost Dental Treatment
  • Low Cost Infertility Treatment
  • Low Cost Addiction Treatment
  • Low Cost Eye Surgery


Value of Bosnian Pharma Market Grows 12.6% Y/Y in 2010

A report has been published by the Bosnia and Herzegovina Agency for Medicines and Medical Devices (Agencija za lijekove i medicinska sredstva Bosne i Hercegovine: ALIMS BiH) on the country’s pharmaceutical market in 2010, including data from 44 of the 61 licensed pharmaceutical wholesalers involved in the import of pharmaceuticals, as well as eight domestic pharmaceutical producers in Bosnia and Herzegovina. According to this report, the value of the pharmaceutical market in Bosnia and Herzegovina during 2010 reached 526.147 billion convertible marks (US 389.41 million). This compares with the agency’s estimate of BAM 467.15 billion in 2009, although it is not clear whether either figure includes the autonomous Republika Srpska enclave. On the basis of these figures, the value of the Bosnian pharmaceutical market increased by 12.63% year-on-year (y/y) in 2010. The full report from the ALIMS BiH is available, in Bosnian, here.

As the figures show, the value of imported pharmaceuticals far outweighs that of domestically produced ones, with over 80% of the market accounted for by imports. Compared with the previous year, however, domestic producers fared somewhat better: in 2009, domestic companies accounted for only 16.7% of the market, as opposed to 19.4% in 2010.

Health care:

Until the beginning of 1990-ties, Bosnia and Herzegovina was well known and popular in entire region as a destination for health and spa tourism. Bosnia is apparently derived from an old Indo-European word ‘bosana’, meaning water.

In combination with untouched nature, clean and fresh air, traditional hospitality and service – many hot and mineral springs in the country make Bosnia and Herzegovina a pleasant and right place for those who are aware of importance of good health in life. These waters successfully treat cardiovascular diseases, rheumatism, stomach illnesses, diabetes, stimulate and accelerate recovery, help maintain health and improve stamina, gynaecological diseases, neurosis and neuralgia. This combination, together with good infrastructure make this country a perfect choice for sport teams from all around world during their pre-season preparations.

Bosnia and Herzegovina is heavily investing in modernizing its thermal spas facilities to offer our guests top quality spas services for only a fraction of the price of our other European neighbours. With full service facilities available in more than 15 locations there is always a relaxing spot for a massage or full range thermal treatment. Usually nestled in beautiful surroundings, these health resorts offer true rest and relaxation, in addition to health care. There are based on hot and mineral springs and are located in the areas of Olovo, Fojnica (incidentally there is an old saying „go to Fojnica for your health“), Bjeljina, Bihać, Srebrenica, Gradačac, Sarajevo, Kiseljak, Laktaši, Bosanska Dubica, Sanski Most, Teslić, Tuzla, Banja Luka and Višegrad.

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